Vladimiro Giacché: Lenin's Reflections on the Construction of a Socialist Economy in Backward Countries
After the October Revolution of 1917, facing internal strife, foreign aggression, and an economy on the brink of collapse, the Soviet Russian government implemented the policy of "War Communism" from 1918 to 1920. Subsequently, due to changing circumstances and after thorough consideration, Lenin began implementing the New Economic Policy (NEP) in March 1921 to replace War Communism and facilitate the transition to socialism. A vital component of the NEP was the replacement of the surplus appropriation system with a grain tax, which significantly lightened the burden on the peasantry. Simultaneously, the NEP permitted foreign-capital enterprises to manage firms that the state was temporarily unable to operate, restored commodity-money relations, and regulated production. Drawing upon Lenin’s reports and writings regarding the NEP from 1922 to 1923, as well as the classic works left during the final moments of his life—"On Cooperation" and "Better Fewer, But Better"—this article analyzes his reflections on how to conduct socialist economic construction in a backward country.
I. Challenges of the New Economic Policy and the New Meaning of State Capitalism
On March 27, 1922, representing the Central Committee, Lenin delivered a political report to the 11th Congress of the Russian Communist Party (Bolsheviks), summarizing three points of experience from one year of implementing the NEP. The NEP was a major turning point in Soviet Russian economic policy, marking the end of War Communism during the period of internal strife and foreign aggression.
(1) The Three Great Experiences of the NEP
The first point was the most gratifying: "finding the link [1] between the new economy, which we are building with great effort, and the peasant economy." Lenin noted, "previously this link did not exist, so now we must first establish it." Economic construction must "combine our socialist work in large-scale industry and agriculture with the work in which every peasant is engaged." For Lenin, this was the first fundamental political lesson of the NEP: "to join with the peasant masses, with the ordinary laboring peasants, and begin to move forward together—even if it is much slower, infinitely slower than we expected, the entire mass will truly move forward with us."
The second experience was actually a challenge and an inevitable result of the NEP: "testing the management level of Communists through the competition between state-owned enterprises and capitalist enterprises." Lenin openly stated that the problem lay in the fact that "we do not know how to manage." However, in joint-stock companies (consisting of both state and private capital, and both foreign and Russian capitalists) as well as in broader fields of production, passing this test was critical: "either we pass this examination in competition with private capital, or we fail completely." In any case, the lesson to be drawn here was to "learn from the beginning."
The third point of experience emphasized by Lenin involved state capitalism. In part, both this report and other works from the surrounding months provided a new elaboration on this theme. Engaging in polemics against Bukharin’s dogmatic position, Lenin pointed out that books "write about state capitalism under the capitalist system; not a single book has been written about state capitalism under the communist system. Even Marx did not think to write a single word on this matter; he died without leaving any definitive text for quotation or irrefutable instructions. Therefore, we must find the way out ourselves." In fact, "according to the explanation of all economic works, state capitalism is a type of capitalism under the capitalist system where the state power directly controls certain capitalist enterprises. But our country is a proletarian state; it relies on the proletariat, gives the proletariat various political priorities, and through the proletariat, attracts the lower-level peasantry to its side." In other words, "although our society has left the capitalist track, it has not yet embarked on the new track; however, the one leading this country is no longer the bourgeoisie, but the proletariat. We are unwilling to understand that when we speak of 'the state,' this state is us—it is the proletariat, the vanguard of the working class... State capitalism is the capitalism that we must bring within certain boundaries, but until now we have not had the skill to bring it within those boundaries. This is the whole problem. What kind of state capitalism this will be in the future depends on us." Lenin pointed out that in the Soviet state, the nature and limits of state capitalism are decided by the vanguard of the working class—the Communist Party. But this vanguard must be able to do this, and so far, it has lacked this skill. Lenin’s idea was to establish a dual political structure between private capitalism (which must be permitted: "we must allow the capitalist economy and capitalist circulation to operate as they usually do, because this is what the people need; they cannot live without it") and state power. However, if those in power are incompetent, the state power under a dual political structure faces the danger of losing control. It is worth noting that for Lenin, this power was economic power. It is precisely in the economic field that it must defeat private capital. This victory is not achieved through decrees, but through the ability to organize the economy better than private capital (which must be demonstrated in practice).
(2) A New Type of State Capitalism
During the 11th Congress of the RCP(B), Lenin spoke again on the issue of state capitalism, this time in the "Closing Remarks on the Political Report of the RCP(B)" during a polemic with Preobrazhensky. Preobrazhensky argued that "state capitalism is capitalism; it can only be understood this way and should be understood this way." Lenin retorted that this was a scholastic [2] assertion, as the development of Russia after the revolution presented new characteristics that "neither Marx nor any Marxist could have foreseen." In fact, state capitalism in Soviet Russia "is a very unexpected type of capitalism that absolutely no one could have foreseen, because no one could foresee that the proletariat would seize power in a country belonging to the least developed; it initially tried to organize large-scale production and distribution for the peasants, but later, limited by cultural conditions and unable to complete this task, it had to adopt capitalism." In short, "our current state capitalism is not the state capitalism described by the Germans. It is capitalism permitted by us." Therefore, "we should ensure that state capitalism in a proletarian state cannot and dare not exceed the boundaries and conditions prescribed for it by the proletariat in its own interest."
Lenin believed that the reason Soviet Russia could meet this challenge was due to substantive objective factors: the state controlled the land and the most important industrial sectors. As he stated in his report to the Fourth Congress of the Communist International on November 13, 1922: "The state capitalism we implement in our country is a special kind of state capitalism. It differs from the usual concept of state capitalism. We hold all the commanding heights [3] of the economy... The difference between our state capitalism and state capitalism understood literally is that our proletarian state holds not only the land but also all the most important industrial sectors."
This basically explained Lenin’s speech at the Third Congress of the Communist International: "State capitalism in a society where power belongs to capital and state capitalism in a proletarian state are two different concepts. In a capitalist country, so-called state capitalism means that capitalism is recognized and supervised by the state, thereby benefiting the bourgeoisie and disadvantaging the proletariat. In a proletarian state, the practice is the same, but it benefits the working class for the purpose of countering and struggling against the still-powerful bourgeoisie." However, in his speech at the Fourth Congress of the Communist International, Lenin mentioned even more. He clearly pointed out that in a proletarian state, the major means of production belong to the state, which is the specific characteristic of the proletarian state.
Despite Lenin’s clarifications and distinctions, the use of the term "state capitalism" remained controversial within the Party. Trotsky delivered a report titled "The New Economic Policy of Russia and the Prospects of World Revolution" at the Fourth Congress of the Communist International, which Lenin appreciated, suggesting it be published in newspapers and pamphlets as he believed Trotsky’s report was "particularly suitable for promoting our NEP to a foreign public." However, Trotsky himself stated in the report that under the conditions of Soviet Russia, he could not accept the use of the term "state capitalism."
(3) Successes and Failures
Lenin’s report at the Fourth Congress of the Communist International was of great significance. This was because Lenin not only reflected on state capitalism in the report but also provided an important opportunity for everyone to summarize the successes of the NEP after a year and a half of implementation.
For Lenin, the first success was overcoming Soviet Russia’s most serious internal political crisis. Here, Lenin particularly emphasized freedom of trade and then mentioned the good results achieved in collecting the grain tax, with almost no peasant protests or uprisings occurring. "Before 1921, peasant uprisings were a universal phenomenon in Russia, whereas today they have almost completely disappeared. The peasants are satisfied with their current situation. We can make this assertion with confidence." These statements by Lenin have basically been accepted by modern historical circles: "With the implementation of the NEP, approximately 22 million peasant families not only realized the dream of owning land (they now owned 95% of the land, with each family holding over 8 hectares), but also realized the desire to use this land and arrange their lives according to their own will... In short, the new situation was more favorable to the peasants than at any time in the past." Light industry saw a general upsurge. In contrast, the situation in heavy industry remained grim, partly because the Soviet Union was cut off from international capital markets. However, Lenin emphasized that the state had begun to allocate funds (though still insufficient) to rebuild heavy industry.
However, Lenin's speech, as always, was completely devoid of that sense of self-satisfied triumphalism characteristic of various later stages of Soviet history; it was full of reflections on blunders, mistakes, and their roots: "There is no doubt that we have done, and will continue to do, many stupid things." There were four main reasons: "First, we are a backward country. Second, the level of education in our country is extremely low. Third, we receive no foreign aid. Not a single civilized country is helping us; on the contrary, they are all working against us. Fourth, due to the faults of our state apparatus staff." Looking closely, each of these problems refers negatively to what Lenin considered the prerequisites for achieving socialism: the necessity of developing productive forces, the development of the masses' culture, the Western revolution, and a break from the state apparatus left over from the Tsarist period. However, when talking about the last issue, Lenin spoke with both anxiety and irony: "It is our misfortune that we took over the old state apparatus staff. The state apparatus staff often work against us. The situation is that after we seized power in 1917, the state apparatus staff practiced sabotage against us. At that time, we were frightened and pleaded: 'Please come back to us.' So they all came back, and this is our misfortune. Now we have a large number of employees, but we lack people with real talent and learning to manage them effectively. In practice, it often happens that here, at the top, where we hold the state power, the apparatus staff barely perform their duties, but down below, they do whatever they want, and often work against our measures... In this regard, there is no way out in the short term—this is beyond doubt. In this area, we must make efforts for many years to improve the apparatus, change its face, and absorb new forces." Here, the fourth point is linked to the second point—improving the cultural level of the masses: "We have established Soviet schools and workers' preparatory courses, where hundreds of thousands of youth are studying. Perhaps they are learning too fast, but at least the work has begun, and I think this work will surely yield results."
II. Lenin’s Reflections on Cooperatives, State Transformation, and Cultural Work during the Final Stage of His Life
When Lenin delivered his report in German to the Fourth Congress of the Communist International, he had already been ill for some time. By the end of 1920, serious health problems had manifested, appearing as migraines, insomnia, and difficulty concentrating. In December 1921, Lenin originally planned to take a week’s leave in Gorki, but the actual recovery time far exceeded expectations. The 11th Congress of the RCP(B) held in March 1922 was the last congress Lenin was able to attend, although his ability to read and converse with delegates had declined. On May 27, 1922, Lenin suffered his first stroke, temporarily losing the capacity for clear speech and writing. In the months that followed, his health improved. On October 2, Lenin was able to return to work at full capacity and participated in the Fourth Congress of the Communist International in November. However, in mid-December, a second stroke again deprived him of the ability to write. From then on, under strict medical supervision, Lenin could only work for a few hours a day, leaving him with no choice but to dictate his manuscripts. Only a portion of the manuscripts written by secretaries based on his dictations during the final months of his life were published while he was still alive. From the perspective of his economic thought, two of these are particularly important: the first is "On Cooperation," published in January 1923; the second is "Better Fewer, But Better," completed by dictation on March 2, 1923. A few days later, on March 6, 1923, a third stroke deprived Lenin of the ability to communicate with others until his death on January 21, 1924.
1. Soviet Power and the New Role of Cooperatives
The article "On Cooperation" expounds on the new role of cooperatives within the context of the New Economic Policy (NEP), and its importance goes beyond the specific themes it addresses. Lenin’s starting point was as follows: the ideals of the old cooperative workers contained many illusions that rightly deserved criticism from socialists. But why were these illusions detached from reality? Because they "did not understand the fundamental significance of the political struggle of the working class to overthrow the rule of the exploiters." In short, the utopianism of the cooperative members lay in the belief that socialism could be realized solely through the development of the cooperative system. However, now that state power is in the hands of the working class, and all means of production are in the hands of the working class, the situation is completely different. In the NEP, "we have made a concession to the peasant as a trader, i.e., to the principle of private trade... now we have found that degree of combination of private interest, the interest of private trade, with state supervision and control of this interest, and the degree of its subordination to the common interest, which was formerly the stumbling-block for very many socialists." In this new context, the cooperative ("which we used to look down upon as a matter of trading") becomes "all that is necessary for the building of a complete socialist society." He adds, "this is not yet the building of socialist society, but it is all that is necessary and sufficient for it." The important thing is to have every member of the population join the cooperatives. Lenin spoke bluntly: to achieve this goal, "a whole historical epoch will be required. At best we can get through this epoch in one or two decades," and to achieve this goal, the state must give the cooperatives "all kinds of privileges—economic, financial and banking."
The question of cooperatives also provided Lenin with an opportunity to restate his views on state capitalism. On the one hand, he distinguished between "ordinary state capitalism" and "that special, even extraordinary state capitalism," while on the other hand declaring that a "successive link" existed between these two types of state capitalism. Under three different social systems, cooperatives possess different natures and roles: "Under private capitalism, cooperative enterprises differ from capitalist enterprises as collective enterprises differ from private enterprises"; "Under state capitalism, cooperative enterprises differ from state-capitalist enterprises in that they are first, private enterprises, and second, collective enterprises"; "Under our present system, cooperative enterprises differ from private capitalist enterprises because they are collective enterprises, but they do not differ from socialist enterprises if the land on which they are situated and the means of production they use belong to the state, i.e., the working class." In this context, Lenin did not equate the Soviet Russian system with state capitalism. Based on the above points, Lenin concluded: "under our conditions, a cooperative is often entirely identical with socialism."
2. Transforming State Organs and Cultural Work
With the establishment of Soviet power, it was not just the concept of cooperatives that needed to change. In Lenin's view, "we have to admit that there has been a radical change in our whole outlook on socialism. This radical change lies in this: formerly we placed, and had to place, the main emphasis on the political struggle, on revolution, on seizing power, etc.; now the emphasis is changing and shifting to peaceful, organizational, 'cultural' work. I should say that emphasis is shifting to educational work, were it not for our international relations, were it not for the fact that we have to fight for our positions on a world scale. If we leave that aside and confine ourselves to internal economic relations, the emphasis in our work is certainly shifting to education."
Lenin pointed out, "two main tasks which constitute eras confront us." The first task is "to reorganize our state apparatus, which is utterly useless, and which we took over in its entirety from the preceding epoch; during the five years of struggle we did not, and could not, do anything serious in this field." The second task is "educational work among the peasants. And the economic object of this educational work among the peasants is to organize them in cooperative societies. If the whole of the peasantry were organized in cooperatives, we would by now be standing with both feet on socialist soil." The end of the article mentions the concept of a "cultural revolution" and elucidates its cultural and material prerequisites: "Now it is enough to actually carry out this cultural revolution to become a fully socialist country; but for us this cultural revolution presents incredible difficulties of a purely cultural (for we are illiterate) and material character (for to be cultured we must achieve a certain development of the material means of production, must have a certain material base)."
It is worth noting that the article "On Cooperation"—and more specifically, the point that the development of cooperatives is equivalent to the development of socialism—was used by Stalin and Bukharin in 1925 to prove that Lenin was once convinced that Russia possessed all the elements for building socialism and did not require foreign capital.
3. Achieving the Victory of Socialism Between Tactics and Strategy
In his final work, "Better Fewer, But Better," Lenin raised a question regarding this: "Can we save ourselves from the impending conflict with these imperialist countries... in our situation of small and very small peasant production, and in our situation of economic ruin, can we hold out until the West-European capitalist countries consummate their development toward socialism?" Lenin acknowledged that the Western countries would not complete this process of development "as we formerly expected." They would complete it not through a steady "maturing" of socialism in those countries, but through "the exploitation of the first of the countries to be defeated in the imperialist war combined with the exploitation of the whole of the East." Furthermore, by inciting civil war, the capitalist powers achieved at least part of what they wanted in Russia: "They did not overthrow the new system created by the revolution, but they did prevent it from at once taking the big step forward that would have justified the forecasts of the socialists, that would have enabled the socialists to develop the productive forces with enormous speed, to develop all the potentialities which, taken together, would have produced socialism; socialists would have thus proved to all and sundry that socialism contains within itself gigantic forces and that mankind had now entered into a new stage of development of extraordinary brilliant prospects." Russia was thrown back to past economic levels, and "the general level of labor productivity is now considerably below the pre-war level."
Given this, "What are we to do?" This question was clearly posed for the sake of response and defense. Lenin first urged caution: "What tactics does this situation prescribe for our country? Obviously the following: we must display extreme caution so as already to preserve our workers' government and to retain our small and very small peasantry under its prestige and leadership."
In this article, as in his earlier works, Lenin offered extraordinary insight into the world-historical significance of the uprisings of the exploited peoples of Asia: "In the last analysis, the outcome of the struggle will be determined by the fact that Russia, India, China, etc., account for the overwhelming majority of the population of the globe." Lenin believed that on this basis (rather than on the basis of the results of revolutionary victory in the West), the final victory of socialism is "fully and absolutely assured."
But the question the Russian Communist Party had to pose was tactical, not strategic: "We are not as much interested in the inevitability of this ultimate victory of socialism. We are interested in the tactics which we, the Russian Communist Party, we, the Russian Soviet Government, should pursue to prevent the West-European counter-revolutionary states from crushing us." Lenin's answer to this question boiled down to several points: on the one hand, "we must strive to build a state in which the workers retain the leadership of the peasants, in which they retain the confidence of the peasants"; on the other hand, "we must reduce our state apparatus to the utmost degree of economy. We must banish from it all traces of extravagance, of which so much has been left over from tsarist Russia, from its bureaucratic capitalist apparatus." The humility shown in these tactics led Lenin to pose a question—"Will this not be a reign of peasant limitations?" His answer was a clear no: "No. If we see to it that the working class retains its leadership over the peasantry, we shall be able, by exercising the greatest possible thrift in the economic life of our state, to use every saving we make to develop our large-scale machine industry, to develop electrification." In short, the guidance given by Lenin in his final work was a path of internal accumulation through gradual and steady development. This path regarded the maximum reduction of the bureaucratic apparatus as one of its fundamental prerequisites.
III. Conclusion
In the years following, the Soviet Union underwent an unprecedented process of internal accumulation and economic modernization. However, this process was not gradual, and it was not without social trauma. This process was characterized by the expansion of the bureaucratic apparatus and its social and political influence. Of course, the theme of this article does not permit a more specific critique here, but there is no doubt that the expansion of the bureaucratic apparatus did not conform to the final instructions of the founder of Soviet Russia.
Nevertheless, the theoretical contributions made by Lenin in the final year of his leadership of Soviet power were destined to influence the subsequent development of the world socialist movement. These included the following themes: the complexity of socialist construction; the ability to redefine the opposition to dogmatism as a theoretical category emerging from the understanding of capitalist social and economic reality starting from a post-revolutionary social context; the two interrelated issues of state transformation and the cultural emancipation of workers; and the uprising of the exploited peoples of Asia, destined to change from objects of history into its subjects, which is crucial for the worldwide victory of socialism. A century later, these themes remain of practical significance and importance today.