Preface
Researchers - even the majority of Marxist-Leninists - have long recognized that the state capitalism was a characteristic of the Soviet economy. Some return this time to the Stalin era and some to the Khrushchev.
In fact, the criticism of the Soviet Union as a monopolistic state capitalism dates back to Lenin's era.
Let us now examine Lenin's thesis and his discussion with the Bolshevik and German lefts about the necessity and importance of state capitalism in the Soviet Union.
The Soviet economy represented state capitalism. And the state capitalism was only the starting point for the monopoly of the workers' means of production by the state. The development of the state capitalism is an essential process for removing producers from their means of production, completely removing the entire society from property and making them all state’s wage laborer.
Marxist-Leninists talk about history in a very mysterious way. Their conclusion of Soviet socialism is based on idea and theory, not history. The question, however, is historic, not theoretic.
According to Lenin himself, it is not possible to record successes in the development of state capitalism, without crushing the main enemy: the small landlords. That is the same historical movement of the industrialization that transforms producers into wage laborers, although it will differ in different environments, different countries.
The NEP (New Economic Policy), which was nothing more than a strengthening of the system of militarization of production, was Lenin’s first attempt for labor productivity. This policy was impossible in the history of the Soviet, without the agonizing suffering of the workers. Most production sectors between 1921-1934 were subject to scientific management (Taylorism). That is the myth of the 20th century of socialism. That is the caricature of Lenin’s socialism.
Anwar
Excerpts of State Capitalism by Lenin
Lenin addresses the Bolshevik left, his opponents in the party and says:
The polemic is now superfluous and I omit it, leaving what appertains to the discussion on, ”state capitalism” and the main elements of our present-day economy, which is transitional from capitalism to socialism ……
State capitalism would be a step forward as compared with the present state of affairs in our Soviet Republic. If in approximately six months’ time state capitalism became established in our Republic, this would be a great success and a sure guarantee that within a year socialism will have gained a permanently firm hold and will have become invincible in this country.
I can imagine with what noble indignation some people will recoil from these words. . . . What! The transition to state capitalism in the Soviet Socialist Republic would be a step forward? . . . Isn’t this the betrayal of socialism? ……….
The question arises: What elements predominate? Clearly, in a small-peasant country, the petty-bourgeois element predominates and it must predominate, for the great majority—those working the land—are small commodity producers. The shell of state capitalism (grain monopoly, state-controlled entrepreneurs and traders, bourgeois co-operators) is pierced now in one place, now in another by profiteers, the chief object of profiteering being grain. The petty bourgeoisie oppose every kind of state interference, accounting and control, whether it be state-capitalist or state-socialist. This is an unquestionable fact of reality whose misunderstanding lies at the root of many economic mistakes ……….
We know that the million tentacles of this petty-bourgeois octopus now and again encircle various sections of the workers, that instead of state monopoly, profiteering forces its way into every pore of our social and economic organism…………..
The petty bourgeois who hoards his thousands is an enemy of state capitalism. He wants to employ these thousands just for himself, against the poor, in opposition to any kind of state control. And the sum total of these thousands, amounting to many thousands of millions, forms the base for profiteering, which undermines our socialist construction. Let us assume that a certain number of workers produce in a few days values equal to 1,000. Let us then assume that 200 of this total vanishes owing to petty profiteering, various kinds of embezzlement and the evasion by the small proprietors of Soviet decrees and regulations. Every politically conscious worker will say that if better order and organisation could be obtained at the price of 300 out of the 1,000 he would willingly give 300 instead of 200, for it will be quite easy under the Soviet power to reduce this “tribute” later on to, say, 100 or 50, once order and organisation are established and the petty-bourgeois disruption of state monopoly is completely overcome ……………………
… State capitalism would be a gigantic step forward even if we paid more than we are paying at present (I took the numerical example deliberately to bring this out more sharply), because it is worth paying for “tuition”, because it is useful for the workers, because victory over disorder, economic ruin and laxity is the most important thing, because the continuation of the anarchy of small ownership is the greatest, the most serious danger, and it will certainly be our ruin (unless we overcome it), whereas not only will the payment of a heavier tribute to state capitalism not ruin us, it will lead us to socialism by the surest road. When the working class has learned how to defend the state system against the anarchy of small ownership, when it has learned to organise large-scale production on a national scale along state-capitalist lines, it will hold, if I may use the expression, all the trump cards, and the consolidation of socialism will be assured.
In the first place economically state capitalism is immeasurably superior to our present economic system.
In the second place there is nothing terrible in it for the Soviet power, for the Soviet state is a state in which the power of the workers and the poor is assured. . . .
To make things even clearer, let us first of all take the most concrete example of state capitalism. Everybody knows what this example is. It is Germany. Here we have “the last word” in modern large-scale capitalist engineering and planned organisation, subordinated to Junker-bourgeois imperialism. Cross out the words in italics, and in place of the militarist, Junker, bourgeois, imperialist state put also a state, but of a different social type, of a different class content—a Soviet state, that is, a proletarian state, and you will have the sum total of the conditions necessary for socialism.
Socialism is inconceivable without large-scale capitalist engineering based on the latest discoveries of modern science. It is inconceivable without planned state organisation which keeps tens of millions of people to the strictest observance of a unified standard in production and distribution. We Marxists have always spoken of this, and it is not worth while wasting two seconds talking to people who do not understand even this (anarchists and a good half of the Left Socialist-Revolutionaries).
At the same time socialism is inconceivable unless the proletariat is the ruler of the state …..……………
While the revolution in Germany is still slow in “coming forth”, our task is to study the state capitalism of the Germans, to spare no effort in copying it and not shrink from adopting dictatorial methods to hasten the copying of Western culture by barbarian Russia, without hesitating to use barbarous methods in fighting barbarism ………………
At present petty-bourgeois capitalism prevails in Russia, and it is one and the same road that leads from it to both large-scale state capitalism and to socialism, through one and the same intermediary station called “national accounting and control of production and distribution” …………….………..
And this new society is again an abstraction which can come into being only by passing through a series of varied, imperfect and concrete attempts to create this or that socialist state.
It is because Russia cannot advance from the economic situation now existing-here without traversing the ground which is common to state capitalism and to socialism (national accounting and control) that the attempt to frighten others as well as themselves with “evolution towards state capitalism” is utter theoretical nonsense …………………………..
In order to convince the reader that this is not the first time I have given this “high” appreciation of state capitalism and that I gave it before the Bolsheviks seized power, I take the liberty of quoting the following passage from my pamphlet, The Impending Catastrophe and How To Combat It, written in September 1917.
“Try to substitute for the Junker-capitalist state, for the landowner-capitalist state, a revolutionary-democratic state, i.e., a state which in a revolutionary way abolishes all privileges and does not fear to introduce the fullest democracy in a revolutionary way. You will find that, given a really revolutionary-democratic state, state-monopoly capitalism inevitably and unavoidably implies a step . . . towards socialism. . . .
“For socialism is merely the next step forward from state-capitalist monopoly. . . .
“State-monopoly capitalism is a complete material preparation for socialism, the threshold of socialism, a rung on the ladder of history between which and the rung called socialism there are no intermediate rungs” (pp. 27 and 28).
Please note that this was written when Kerensky was in power, that we are discussing not the dictatorship of the proletariat, not the socialist state, but the “revolutionary democratic” state. Is it not clear that the higher we stand on this political ladder, the more completely we incorporate the socialist state and the dictatorship of the proletariat in the Soviets, the less ought we to fear “state capitalism”? Is it not clear that from the material, economic and productive point of view, we are not yet on the “threshold” of socialism? Is it not clear that we cannot pass through the door of socialism without crossing the “threshold” we have not yet reached? . . ………………
But Bukharin went astray because he did not go deep enough into the specific features of the situation in Russia at the present time—an exceptional situation when we, the Russian proletariat, are in advance of any Britain or any Germany as regards political system, as regards the strength of the workers’ political power, but are behind the most backward West-European country as regards organising a good state capitalism, as regards our level of culture and the degree of material and productive preparedness for the “introduction” of socialism ………..…………
The alternative (and this is the only sensible and the last possible policy) is not to try to prohibit or put the lock on the development of capitalism, but to channel it into state capitalism. This is economically possible, for state capitalism exists—in varying form and degree—wherever there are elements of unrestricted trade and capitalism in general.
Can the Soviet state and the dictatorship of the proletariat be combined with state capitalism? Are they compatible?
Of course they are. This is exactly what I argued in May 1918. I hope I had proved it then. I had also proved that state capitalism is a step forward compared with the small proprietor (both small-patriarchal and petty-bourgeois) element. Those who compare state capitalism only with socialism commit a host of mistakes, for in the present political and economic circumstances it is essential to compare state capitalism also with petty-bourgeois production.
The whole problem—in theoretical and practical terms—is to find the correct methods of directing the development of capitalism (which is to some extent and for some time inevitable) into the channels of state capitalism, and to determine how we are to hedge it about with conditions to ensure its transformation into socialism in the near future.
In order to approach the solution of this problem we must first of all picture to ourselves as distinctly as possible what state capitalism will and can be in practice inside the Soviet system and within the framework of the Soviet state.
Concessions are the simplest example of how the Soviet government directs the development of capitalism into the channels of state capitalism and “implants” state capitalism. We all agree now that concessions are necessary, but have we all thought about the implications? What are concessions under the Soviet system, viewed in the light of the above-mentioned forms of economy and their interrelations? They are an agreement, an alliance, a bloc between the Soviet, i.e., proletarian, state power and state capitalism against the small-proprietor (patriarchal and petty-bourgeois) element …………………..…………
Soviet power, pilfering and widespread petty (the most dangerous) profiteering, etc. By “implanting” state capitalism in the form of concessions, the Soviet government strengthens large-scale production as against petty production, advanced production as against backward production, and machine production as against hand production ………………………………
Compared with other forms of state capitalism within the Soviet system, concessions are perhaps the most simple and clear-cut form of state capitalism. It involves a formal written agreement with the most civilised, advanced, West European capitalism ……………………………………
Difficulties there certainly are, and mistakes will probably be inevitable at the outset. But these are minor difficulties compared with the other problems of the social revolution and, in particular, with the difficulties arising from other forms of developing, permitting and implanting state capitalism.
The most important task that confronts all Party and Soviet workers in connection with the introduction of the tax in kind is to apply the principles of the “concessions” policy (i.e., a policy that is similar to “concession” state capitalism) to the other forms of capitalism—unrestricted trade, local exchange, etc.
Take the co-operatives. It is not surprising that the tax in kind decree immediately necessitated a revision of the regulations governing the co-operatives and a certain extension of their “freedom” and rights. The co-operatives are also a form of state capitalism, but a less simple one; its outline is less distinct, it is more intricate and therefore creates greater practical difficulties for the government ………………
But, unlike private capitalism, “co-operative” capitalism under the Soviet system is a variety of state capitalism, and as such it is advantageous and useful for us at the present time—in certain measure, of course. Since the tax in kind means the free sale of surplus grain (over and above that taken in the form of the tax), we must exert every effort to direct this development of capitalism—for a free market is development of capitalism—into the channels of co-operative capitalism. It resembles state capitalism in that it facilitates accounting, control, supervision and the establishment of contractual relations between the state (in this case the Soviet state) and the capitalist. Co-operative trade is more advantageous and useful than private trade not only for the above-mentioned reasons, but also because it facilitates the association and organisation of millions of people, and eventually of the entire population, and this in its turn is an enormous gain from the standpoint of the subsequent transition from state capitalism to socialism …………………….
Take a third form of state capitalism. The state enlists the capitalist as a merchant and pays him a definite commission on the sale of state goods and on the purchase of the produce of the small producer. A fourth form: the state leases to the capitalist entrepreneur an industrial establishment, oilfields, forest tracts, land, etc., which belong to the state, the lease being very similar to a concession agreement. We make no mention of, we give no thought or notice to, these two latter forms of state capitalism, not because we are strong and clever but because we are weak and foolish ……………………….……..
Those who achieve the best results in this sphere, even by means of private capitalism, even without the co-operatives, or without directly transforming this capitalism into state capitalism, will do more for the cause of socialist construction in Russia than those who “ponder over” the purity of communism, draw up regulations, rules and instructions for state capitalism and the co-operatives, but do nothing practical to stimulate trade ……………….………….
The state capitalism, which is one of the principal aspects of the New Economic Policy, is, under Soviet power, a form of capitalism that is deliberately permitted and restricted by the working class. Our state capitalism differs essentially from the state capitalism in countries that have bourgeois governments in that the state with us is represented not by the bourgeoisie, but by the proletariat, who has succeeded in winning the full confidence of the peasantry.
Unfortunately, the introduction of state capitalism with us is not proceeding as quickly as we would like it. For example, so far we have not had a single important concession, and without foreign capital to help develop our economy, the latter’s quick rehabilitation is inconceivable …..................………………
When in the spring of 1918, for example, in our polemics with a number of comrades, who were opposed to concluding the Brest peace, we raised the question of state capitalism, we did not argue that we were going back to state capitalism, but that our position would be alleviated and the solution of our socialist problems facilitated if state capitalism became the predominant economic system in Russia……………………………………
One of the first decrees at the end of 1917 was that which established a state monopoly of advertising. What did that decree imply? It implied that the proletariat, which had won political power, assumed that there would be a more gradual transition to the new social and economic relations—not the abolition of the private press, but the establishment of a certain amount of state control that would direct it into the channels of state capitalism. The decree which established a state monopoly of advertising thereby assumed that privately owned newspapers would continue to exist as a general rule, that an economic policy requiring private advertisements would continue, and that private property would remain—that a number of private establishments which needed advertising and advertisements would continue to exist. That is what the decree on the state monopoly of private advertising meant, and it could have meant nothing else. There was something analogous to this in the decrees on banking, but I shall not go into that, for it would only complicate my example.
What was the fate of the decree establishing a state monopoly of private advertising issued in the first weeks of the Soviet government? It was soon swept away. When we now recall the course of the struggle and the conditions under which it has proceeded since then, it is amusing to think how naïve we were to talk then, at the close of 1917, about introducing a state monopoly of private advertising ……………
The political situation in the spring of 1921 revealed to us that on a number of economic issues a retreat to the position of state capitalism, the substitution of “siege” tactics for “direct assault", was inevitable ……………….……
… it became perfectly clear that we could not proceed with our direct socialist construction and that in a number of economic spheres we must retreat to state capitalism. We could not continue with the tactics of direct assault, but had to undertake the very difficult, arduous and unpleasant task of a long siege accompanied by a number of retreats. This is necessary to pave the way for the solution of the economic problem, i. e., that of the economic transition to socialist principles …………………………..
The development of production in the Donets Basin shows a considerable general improvement over last summer’s catastrophic position; and this is largely due to the improvement of production in small mines, to their being exploited along the lines of state capitalism. I cannot here go into all the data on the question, but this example should clearly illustrate to you some of the practical results that have been achieved by the change of policy ……….…………
I shall now go back and develop my main idea. Is our transition to the New Economic Policy in the spring, our retreat to the ways, means and methods of state capitalism, sufficient to enable us to stop the retreat and prepare for the offensive? No, it is not yet sufficient. And for this reason. To go back to the analogy I gave at the beginning (of direct assault and siege in war), we have not yet completed the redeployment of our forces, the redistribution of our stores and munitions, etc.; in short, we are not yet fully prepared for the new operations, which must be conducted on different lines in conformity with the new strategy and tactics. Since we are now passing to state capitalism, the question arises of whether we should try to prevent the methods which were suitable for the previous economic policy from hindering us now. It goes without saying, and our experience has proved it, that that is what we must secure. In the spring we said that we would not be afraid to revert to state capitalism, and that our task was to organise commodity exchange ………….………….
We must admit that we have not retreated far enough, that we must make a further retreat, a further retreat from state capitalism to the creation of state-regulated buying and selling, to the money system ……….……………..
Now we find ourselves in the position of having to retreat even a little further, not only to state capitalism, but to the state regulation of trade and the money system. Only in this way, a longer way than we expected, can we restore economic life ……..……………………….
Next, the first lesson, the first stage which we had reached by the spring of 1921—the development of state capitalism on new lines. Here certain successes can be recorded; but there are still unprecedented contradictions. We have not yet mastered this sphere of activity.
And third, after the retreat from socialist construction to state capitalism, which we were obliged to make in the spring of 1921, we see that the regulation of trade and the money system are on the order of the day. Remote from communism as the sphere of trade may seem to be, it is here that a specific problem confronts us. Only by solving that problem can we get down to the problem of meeting economic needs that are extremely urgent; and only in that way shall we be able to restore large-scale industry—by a longer and surer way, the only way now open to us ………………..…….
Source:
https://www.marxists.org/archive/lenin/works/1922/nov/14b.htm
https://www.marxists.org/archive/lenin/works/1921/apr/21.htm
Researchers - even the majority of Marxist-Leninists - have long recognized that the state capitalism was a characteristic of the Soviet economy. Some return this time to the Stalin era and some to the Khrushchev.
In fact, the criticism of the Soviet Union as a monopolistic state capitalism dates back to Lenin's era.
Let us now examine Lenin's thesis and his discussion with the Bolshevik and German lefts about the necessity and importance of state capitalism in the Soviet Union.
The Soviet economy represented state capitalism. And the state capitalism was only the starting point for the monopoly of the workers' means of production by the state. The development of the state capitalism is an essential process for removing producers from their means of production, completely removing the entire society from property and making them all state’s wage laborer.
Marxist-Leninists talk about history in a very mysterious way. Their conclusion of Soviet socialism is based on idea and theory, not history. The question, however, is historic, not theoretic.
According to Lenin himself, it is not possible to record successes in the development of state capitalism, without crushing the main enemy: the small landlords. That is the same historical movement of the industrialization that transforms producers into wage laborers, although it will differ in different environments, different countries.
The NEP (New Economic Policy), which was nothing more than a strengthening of the system of militarization of production, was Lenin’s first attempt for labor productivity. This policy was impossible in the history of the Soviet, without the agonizing suffering of the workers. Most production sectors between 1921-1934 were subject to scientific management (Taylorism). That is the myth of the 20th century of socialism. That is the caricature of Lenin’s socialism.
Anwar
Excerpts of State Capitalism by Lenin
Lenin addresses the Bolshevik left, his opponents in the party and says:
The polemic is now superfluous and I omit it, leaving what appertains to the discussion on, ”state capitalism” and the main elements of our present-day economy, which is transitional from capitalism to socialism ……
State capitalism would be a step forward as compared with the present state of affairs in our Soviet Republic. If in approximately six months’ time state capitalism became established in our Republic, this would be a great success and a sure guarantee that within a year socialism will have gained a permanently firm hold and will have become invincible in this country.
I can imagine with what noble indignation some people will recoil from these words. . . . What! The transition to state capitalism in the Soviet Socialist Republic would be a step forward? . . . Isn’t this the betrayal of socialism? ……….
The question arises: What elements predominate? Clearly, in a small-peasant country, the petty-bourgeois element predominates and it must predominate, for the great majority—those working the land—are small commodity producers. The shell of state capitalism (grain monopoly, state-controlled entrepreneurs and traders, bourgeois co-operators) is pierced now in one place, now in another by profiteers, the chief object of profiteering being grain. The petty bourgeoisie oppose every kind of state interference, accounting and control, whether it be state-capitalist or state-socialist. This is an unquestionable fact of reality whose misunderstanding lies at the root of many economic mistakes ……….
We know that the million tentacles of this petty-bourgeois octopus now and again encircle various sections of the workers, that instead of state monopoly, profiteering forces its way into every pore of our social and economic organism…………..
The petty bourgeois who hoards his thousands is an enemy of state capitalism. He wants to employ these thousands just for himself, against the poor, in opposition to any kind of state control. And the sum total of these thousands, amounting to many thousands of millions, forms the base for profiteering, which undermines our socialist construction. Let us assume that a certain number of workers produce in a few days values equal to 1,000. Let us then assume that 200 of this total vanishes owing to petty profiteering, various kinds of embezzlement and the evasion by the small proprietors of Soviet decrees and regulations. Every politically conscious worker will say that if better order and organisation could be obtained at the price of 300 out of the 1,000 he would willingly give 300 instead of 200, for it will be quite easy under the Soviet power to reduce this “tribute” later on to, say, 100 or 50, once order and organisation are established and the petty-bourgeois disruption of state monopoly is completely overcome ……………………
… State capitalism would be a gigantic step forward even if we paid more than we are paying at present (I took the numerical example deliberately to bring this out more sharply), because it is worth paying for “tuition”, because it is useful for the workers, because victory over disorder, economic ruin and laxity is the most important thing, because the continuation of the anarchy of small ownership is the greatest, the most serious danger, and it will certainly be our ruin (unless we overcome it), whereas not only will the payment of a heavier tribute to state capitalism not ruin us, it will lead us to socialism by the surest road. When the working class has learned how to defend the state system against the anarchy of small ownership, when it has learned to organise large-scale production on a national scale along state-capitalist lines, it will hold, if I may use the expression, all the trump cards, and the consolidation of socialism will be assured.
In the first place economically state capitalism is immeasurably superior to our present economic system.
In the second place there is nothing terrible in it for the Soviet power, for the Soviet state is a state in which the power of the workers and the poor is assured. . . .
To make things even clearer, let us first of all take the most concrete example of state capitalism. Everybody knows what this example is. It is Germany. Here we have “the last word” in modern large-scale capitalist engineering and planned organisation, subordinated to Junker-bourgeois imperialism. Cross out the words in italics, and in place of the militarist, Junker, bourgeois, imperialist state put also a state, but of a different social type, of a different class content—a Soviet state, that is, a proletarian state, and you will have the sum total of the conditions necessary for socialism.
Socialism is inconceivable without large-scale capitalist engineering based on the latest discoveries of modern science. It is inconceivable without planned state organisation which keeps tens of millions of people to the strictest observance of a unified standard in production and distribution. We Marxists have always spoken of this, and it is not worth while wasting two seconds talking to people who do not understand even this (anarchists and a good half of the Left Socialist-Revolutionaries).
At the same time socialism is inconceivable unless the proletariat is the ruler of the state …..……………
While the revolution in Germany is still slow in “coming forth”, our task is to study the state capitalism of the Germans, to spare no effort in copying it and not shrink from adopting dictatorial methods to hasten the copying of Western culture by barbarian Russia, without hesitating to use barbarous methods in fighting barbarism ………………
At present petty-bourgeois capitalism prevails in Russia, and it is one and the same road that leads from it to both large-scale state capitalism and to socialism, through one and the same intermediary station called “national accounting and control of production and distribution” …………….………..
And this new society is again an abstraction which can come into being only by passing through a series of varied, imperfect and concrete attempts to create this or that socialist state.
It is because Russia cannot advance from the economic situation now existing-here without traversing the ground which is common to state capitalism and to socialism (national accounting and control) that the attempt to frighten others as well as themselves with “evolution towards state capitalism” is utter theoretical nonsense …………………………..
In order to convince the reader that this is not the first time I have given this “high” appreciation of state capitalism and that I gave it before the Bolsheviks seized power, I take the liberty of quoting the following passage from my pamphlet, The Impending Catastrophe and How To Combat It, written in September 1917.
“Try to substitute for the Junker-capitalist state, for the landowner-capitalist state, a revolutionary-democratic state, i.e., a state which in a revolutionary way abolishes all privileges and does not fear to introduce the fullest democracy in a revolutionary way. You will find that, given a really revolutionary-democratic state, state-monopoly capitalism inevitably and unavoidably implies a step . . . towards socialism. . . .
“For socialism is merely the next step forward from state-capitalist monopoly. . . .
“State-monopoly capitalism is a complete material preparation for socialism, the threshold of socialism, a rung on the ladder of history between which and the rung called socialism there are no intermediate rungs” (pp. 27 and 28).
Please note that this was written when Kerensky was in power, that we are discussing not the dictatorship of the proletariat, not the socialist state, but the “revolutionary democratic” state. Is it not clear that the higher we stand on this political ladder, the more completely we incorporate the socialist state and the dictatorship of the proletariat in the Soviets, the less ought we to fear “state capitalism”? Is it not clear that from the material, economic and productive point of view, we are not yet on the “threshold” of socialism? Is it not clear that we cannot pass through the door of socialism without crossing the “threshold” we have not yet reached? . . ………………
But Bukharin went astray because he did not go deep enough into the specific features of the situation in Russia at the present time—an exceptional situation when we, the Russian proletariat, are in advance of any Britain or any Germany as regards political system, as regards the strength of the workers’ political power, but are behind the most backward West-European country as regards organising a good state capitalism, as regards our level of culture and the degree of material and productive preparedness for the “introduction” of socialism ………..…………
The alternative (and this is the only sensible and the last possible policy) is not to try to prohibit or put the lock on the development of capitalism, but to channel it into state capitalism. This is economically possible, for state capitalism exists—in varying form and degree—wherever there are elements of unrestricted trade and capitalism in general.
Can the Soviet state and the dictatorship of the proletariat be combined with state capitalism? Are they compatible?
Of course they are. This is exactly what I argued in May 1918. I hope I had proved it then. I had also proved that state capitalism is a step forward compared with the small proprietor (both small-patriarchal and petty-bourgeois) element. Those who compare state capitalism only with socialism commit a host of mistakes, for in the present political and economic circumstances it is essential to compare state capitalism also with petty-bourgeois production.
The whole problem—in theoretical and practical terms—is to find the correct methods of directing the development of capitalism (which is to some extent and for some time inevitable) into the channels of state capitalism, and to determine how we are to hedge it about with conditions to ensure its transformation into socialism in the near future.
In order to approach the solution of this problem we must first of all picture to ourselves as distinctly as possible what state capitalism will and can be in practice inside the Soviet system and within the framework of the Soviet state.
Concessions are the simplest example of how the Soviet government directs the development of capitalism into the channels of state capitalism and “implants” state capitalism. We all agree now that concessions are necessary, but have we all thought about the implications? What are concessions under the Soviet system, viewed in the light of the above-mentioned forms of economy and their interrelations? They are an agreement, an alliance, a bloc between the Soviet, i.e., proletarian, state power and state capitalism against the small-proprietor (patriarchal and petty-bourgeois) element …………………..…………
Soviet power, pilfering and widespread petty (the most dangerous) profiteering, etc. By “implanting” state capitalism in the form of concessions, the Soviet government strengthens large-scale production as against petty production, advanced production as against backward production, and machine production as against hand production ………………………………
Compared with other forms of state capitalism within the Soviet system, concessions are perhaps the most simple and clear-cut form of state capitalism. It involves a formal written agreement with the most civilised, advanced, West European capitalism ……………………………………
Difficulties there certainly are, and mistakes will probably be inevitable at the outset. But these are minor difficulties compared with the other problems of the social revolution and, in particular, with the difficulties arising from other forms of developing, permitting and implanting state capitalism.
The most important task that confronts all Party and Soviet workers in connection with the introduction of the tax in kind is to apply the principles of the “concessions” policy (i.e., a policy that is similar to “concession” state capitalism) to the other forms of capitalism—unrestricted trade, local exchange, etc.
Take the co-operatives. It is not surprising that the tax in kind decree immediately necessitated a revision of the regulations governing the co-operatives and a certain extension of their “freedom” and rights. The co-operatives are also a form of state capitalism, but a less simple one; its outline is less distinct, it is more intricate and therefore creates greater practical difficulties for the government ………………
But, unlike private capitalism, “co-operative” capitalism under the Soviet system is a variety of state capitalism, and as such it is advantageous and useful for us at the present time—in certain measure, of course. Since the tax in kind means the free sale of surplus grain (over and above that taken in the form of the tax), we must exert every effort to direct this development of capitalism—for a free market is development of capitalism—into the channels of co-operative capitalism. It resembles state capitalism in that it facilitates accounting, control, supervision and the establishment of contractual relations between the state (in this case the Soviet state) and the capitalist. Co-operative trade is more advantageous and useful than private trade not only for the above-mentioned reasons, but also because it facilitates the association and organisation of millions of people, and eventually of the entire population, and this in its turn is an enormous gain from the standpoint of the subsequent transition from state capitalism to socialism …………………….
Take a third form of state capitalism. The state enlists the capitalist as a merchant and pays him a definite commission on the sale of state goods and on the purchase of the produce of the small producer. A fourth form: the state leases to the capitalist entrepreneur an industrial establishment, oilfields, forest tracts, land, etc., which belong to the state, the lease being very similar to a concession agreement. We make no mention of, we give no thought or notice to, these two latter forms of state capitalism, not because we are strong and clever but because we are weak and foolish ……………………….……..
Those who achieve the best results in this sphere, even by means of private capitalism, even without the co-operatives, or without directly transforming this capitalism into state capitalism, will do more for the cause of socialist construction in Russia than those who “ponder over” the purity of communism, draw up regulations, rules and instructions for state capitalism and the co-operatives, but do nothing practical to stimulate trade ……………….………….
The state capitalism, which is one of the principal aspects of the New Economic Policy, is, under Soviet power, a form of capitalism that is deliberately permitted and restricted by the working class. Our state capitalism differs essentially from the state capitalism in countries that have bourgeois governments in that the state with us is represented not by the bourgeoisie, but by the proletariat, who has succeeded in winning the full confidence of the peasantry.
Unfortunately, the introduction of state capitalism with us is not proceeding as quickly as we would like it. For example, so far we have not had a single important concession, and without foreign capital to help develop our economy, the latter’s quick rehabilitation is inconceivable …..................………………
When in the spring of 1918, for example, in our polemics with a number of comrades, who were opposed to concluding the Brest peace, we raised the question of state capitalism, we did not argue that we were going back to state capitalism, but that our position would be alleviated and the solution of our socialist problems facilitated if state capitalism became the predominant economic system in Russia……………………………………
One of the first decrees at the end of 1917 was that which established a state monopoly of advertising. What did that decree imply? It implied that the proletariat, which had won political power, assumed that there would be a more gradual transition to the new social and economic relations—not the abolition of the private press, but the establishment of a certain amount of state control that would direct it into the channels of state capitalism. The decree which established a state monopoly of advertising thereby assumed that privately owned newspapers would continue to exist as a general rule, that an economic policy requiring private advertisements would continue, and that private property would remain—that a number of private establishments which needed advertising and advertisements would continue to exist. That is what the decree on the state monopoly of private advertising meant, and it could have meant nothing else. There was something analogous to this in the decrees on banking, but I shall not go into that, for it would only complicate my example.
What was the fate of the decree establishing a state monopoly of private advertising issued in the first weeks of the Soviet government? It was soon swept away. When we now recall the course of the struggle and the conditions under which it has proceeded since then, it is amusing to think how naïve we were to talk then, at the close of 1917, about introducing a state monopoly of private advertising ……………
The political situation in the spring of 1921 revealed to us that on a number of economic issues a retreat to the position of state capitalism, the substitution of “siege” tactics for “direct assault", was inevitable ……………….……
… it became perfectly clear that we could not proceed with our direct socialist construction and that in a number of economic spheres we must retreat to state capitalism. We could not continue with the tactics of direct assault, but had to undertake the very difficult, arduous and unpleasant task of a long siege accompanied by a number of retreats. This is necessary to pave the way for the solution of the economic problem, i. e., that of the economic transition to socialist principles …………………………..
The development of production in the Donets Basin shows a considerable general improvement over last summer’s catastrophic position; and this is largely due to the improvement of production in small mines, to their being exploited along the lines of state capitalism. I cannot here go into all the data on the question, but this example should clearly illustrate to you some of the practical results that have been achieved by the change of policy ……….…………
I shall now go back and develop my main idea. Is our transition to the New Economic Policy in the spring, our retreat to the ways, means and methods of state capitalism, sufficient to enable us to stop the retreat and prepare for the offensive? No, it is not yet sufficient. And for this reason. To go back to the analogy I gave at the beginning (of direct assault and siege in war), we have not yet completed the redeployment of our forces, the redistribution of our stores and munitions, etc.; in short, we are not yet fully prepared for the new operations, which must be conducted on different lines in conformity with the new strategy and tactics. Since we are now passing to state capitalism, the question arises of whether we should try to prevent the methods which were suitable for the previous economic policy from hindering us now. It goes without saying, and our experience has proved it, that that is what we must secure. In the spring we said that we would not be afraid to revert to state capitalism, and that our task was to organise commodity exchange ………….………….
We must admit that we have not retreated far enough, that we must make a further retreat, a further retreat from state capitalism to the creation of state-regulated buying and selling, to the money system ……….……………..
Now we find ourselves in the position of having to retreat even a little further, not only to state capitalism, but to the state regulation of trade and the money system. Only in this way, a longer way than we expected, can we restore economic life ……..……………………….
Next, the first lesson, the first stage which we had reached by the spring of 1921—the development of state capitalism on new lines. Here certain successes can be recorded; but there are still unprecedented contradictions. We have not yet mastered this sphere of activity.
And third, after the retreat from socialist construction to state capitalism, which we were obliged to make in the spring of 1921, we see that the regulation of trade and the money system are on the order of the day. Remote from communism as the sphere of trade may seem to be, it is here that a specific problem confronts us. Only by solving that problem can we get down to the problem of meeting economic needs that are extremely urgent; and only in that way shall we be able to restore large-scale industry—by a longer and surer way, the only way now open to us ………………..…….
Source:
https://www.marxists.org/archive/lenin/works/1922/nov/14b.htm
https://www.marxists.org/archive/lenin/works/1921/apr/21.htm