Denaturalization

Denaturalization 

in economics, the restoration of commodity-money relationships in an economy. Under socialism it may cover relations among sectors of the national economy, between the state and enterprises, and between the state and the population.

In the USSR an extensive denaturalization of economic relations was carried out during the transition to the New Economic Policy (NEP). The methods of “war communism,” which were based on naturalization of economic relations (including maximum centralization of national economic management, abolition of trade and its replacement by organized state distribution of the main industrial and food products according to social class affiliation, and institution of a rationing system for supply to the population), were forced and temporary. Under peacetime conditions they were incompatible with economic growth. Beginning in 1921 measures were carried out to develop commodity-money relations, employ material incentives, and introduce profit-and-loss accountability. The substitution of a tax in kind for the surplus-appropriation system made it possible to straighten out commodity relations between industry and agriculture. State enterprises were taken off budget financing and switched to the profit-and-loss accountability system, and in this way commodity-money relations among enterprises and between enterprises and the state were restored. Monetary taxes were gradually restored. In 1924 taxes in kind were completely replaced by monetary taxes. Steps were taken to put monetary circulation in order, restore credit relations, and ensure that state budgets were carried out without deficit.

In the 1950’s certain measures aimed at partial denaturalization were taken. For example, in connection with the reorganization of the machine and tractor stations in 1958, deliveries in kind were abolished; the transition was made to a monetary form of payment for labor at kolkhozes.

T. V. GUIDA