STATE CAPITALISM

LENIN; On State Capitalism, During the Transition to Socialism

From REPLY TO THE DEBATE ON THE REPORT ON CONCESSIONS DELIVERED TO THE R.C.P.(B.) GROUP AT THE EIGHTH CONGRESS OF SOVIETS
DECEMBER 21
Comrades, I have received quite a few notes and shall briefly answer those to which no replies have yet been given. But first let me read to you a note of an informative nature, which I think is characteristic:
At the Arzamas uyezd congress, Nizhni-Novgorod Gubernia, a non-Party peasant declared the following concerning concessions, which we communicate to you as a characteristic sign: “Comrades, we are delegating you to the All-Russia Congress and declare that we, peasants, are prepared to endure hunger and cold and do our duty for another three years but don’t sell Mother-Russia in the form of concessions!”

I think it would be very useful to quote this note in the official report to the Congress, and it ought to be done because it shows a side of the question which the capitalists overlook, and in connection with which we have no need whatever to conceal the fact that there is a danger here, and we have to be on our guard against it. I have already mentioned that these reminders sharpen the attention of the workers and peasants. The fact that such reminders are coming from the midst of the illiterate peasantry is of special importance, as it stresses a task which is of exceptional importance at the present time-1 mean about your having to examine the bills tabled in the Council of People’s Commissars for rendering assistance to peasant farming. We must learn to convince the non-Party peasants, win them over to our side and make them self-dependent. A note like this shows that we have every chance of achieving tremendous success here, and we shall achieve it.

Here is another note:

Won’t the capitalist concessionaires set the proletarian masses against the Soviet government, seeing that the economic crisis and chaos we are living through make it impossible for us to satisfy the needs of the workers the way the capitalists can?

I have said already that in the advanced countries, in most of them, the workers are better provided for than ours, yet the Russian workers in all the advanced countries are all eagerness to come to Soviet Russia, although they are well aware of the hardships the workers have to bear.

Won’t the Russian Ryabushinskys and the rest of the pack put in an appearance together with the English and American capitalists?

This has a bearing on the note which asks whether the concessionaires will be exterritorial. Of course not, we shall never grant them exterritoriality. This is granted only to ambassadors, and even then, on definite conditions. If Ryabushinsky banks on hiding himself from the proper authorities, I think he is mistaken.

Next, comrades, I want to tell you that Comrade Lezhava reports: “Vanderlip has presented a mandate from about a dozen big syndicates. This has been verified by our special authorities here. It has already been corroborated by Krasin in London, who has checked up on the seriousness of the groups for whom Vanderlip is acting.”

For the benefit of those comrades who ask why the agreement has not been published, I repeat that its publication is not to our advantage, because the capitalists, who are fighting among themselves, think there are far worse things in that agreement. The hullabaloo about it in the press bears this out. Let them go on believing it, we have no intention whatever of disillusioning them. Those who wish to familiarize themselves with this agreement have every possibility of doing so. Besides, 1 mentioned that the agreement will come into force after the new president of the United States of America has been sworn in. Our Party congress will be held in February. Consequently, the Party will have every opportunity of controlling and deciding things.
Please explain, if you can, for how long Kamchatka has been let (or is proposed to be let) and is there an economic, apart from a political, advantage in this for the R.S.F.S.R. and in what form?

Kamchatka has not been let and cannot be let until March. The economic gain is that according to the draft agreement they are obliged to give us a share of the mineral wealth which they will extract.

In granting concessions do we not thereby admit the durability of the capitalist states and do we not consider our thesis concerning the earliness of a world revolution to be incorrect?
Bukharin has replied to this. It is not a question of our admitting their durability; the point is that gigantic forces are driving them to the brink. Our existence and speedy release from the critical situation and famine are a gigantic force and a factor of revolution more powerful than those farthings—a mere crumb from the point of view of world economy-which they will get from us. An extra hundred or thousand machines and locomotives are of tremendous importance to us, for it will mean that transport repairs, which Trotsky planned over a period of four and a half years and reduced to three and a half, will be reduced by another year. Reducing the economic chaos and famine by a year is of colossal importance to us.
What if Japan, to prevent us letting Kamchatka to America, goes and occupies it with her troops and declares it her own?

As a matter of fact, she is in possession of Kamchatka right now, and if she could do it, but she can’t because she is afraid of America.

Where will the capitalist get his labour force? Will he bring it with him? Hardly. If he is going to employ Russian workers, not only will these be under the thumb of the capitalist, but it will upset our labour market, and this, in turn, will upset our integrated economic plan.

I can’t see how our economic plan will be upset by our workers going there to work. They won’t be able to go there apart from the trade unions, apart from our economic organisations and our Party. The workers at the advanced capitalist enterprises will train our workers in the best methods of production. In submitting to capitalist conditions of work, our workers will subordinate them to our code of labour laws or to special restrictive agreements and will not hesitate to quit if the conditions are bad. If the conditions are unfavourable, the workers will quit. Some comrades are afraid that the conditions will be good, others, that they will be bad. We shall look out, just like our workers and peasants, and take proper measures.

In granting concessions, when the concessionaires start working, will the activities of the R.C.P. in organising communist cells among those employed on the concession territory be open or only illegal?

Here is a wrong idea of concessions and concessionaires. The, concessionaire is not an authority. He does not get any territory other than that to be used for economic exploitation. All government bodies and all courts of law remain only in the hands of the R.S.F.S.R.

Should unemployment in America force a revolution, won’t our concessions be helping America to cope with this crisis, that is, hold up the revolution.
That argument has been disproved by Comrade Bukharin.

If the international bourgeoisie gets to know of the Soviet government’s tactics in concessions, what will the position of the Soviet government be? Won’t this be bad for us?
On the contrary, everyone in Europe has heard about the concessions, and the hullabaloo about it there only goes to show that the bourgeoisie is worried. They are anxious not to be late. All those capitalists who do not want to risk having dealings with Russia are now beginning to realise that they are lagging behind while the more enterprising people are getting in. And we are taking advantage of the contradictions among the capitalists.
Are there any plans or projects for concessions on large industrial enterprises in Moscow and in the centre generally? There is talk about three such concessions in Moscow, Yaroslavl and Lubertsi.
I know nothing about such concessions. There is an American factory in Lubertsi which has not been nationalised and never was, but there is no concession there. The only concession in the centre, which the S.E.C. comrades have spoken of as being possible, is a concession to the German chemists for developing dye works and letting one factory to them. In the Council of People’s Commissars all were agreed it was possible, but this talk has had no practical consequences.

Germany is so far ahead of our country that during the imperialist war even the advanced countries found them-selves in difficulties when the German chemical industry stopped supplying them. To get our chemical industry going we must be prepared to pay the German chemists well. The best way to learn is to grant the Germans a con-cession on one of our factories. No schools or lectures will help as much as practical work at a factory, where the workers can be trained in six months and then made to build another factory like its next door. To fear that the Germans of a single factory will do something to us, considering their international situation, is ridiculous. There were no differences of opinion in the C.P.C. In point of principle it is acceptable. Unfortunately, this question has not had practical results. I must stress the fact that we talk a great deal about concessions, but so far, we have not succeeded in granting a single one. We shall consider it a great success if we manage to grant at least one, and you will see the concrete conditions of the concession.

Further.

What countries can be granted concessions? Can we give a concession to Poland?
We believe they can be granted to all countries, Poland included.
Couldn’t the capitalists use the concessions to avert crises at home and thus stave off a social revolution?
If the capitalists could avert crises at home, then capitalism would he everlasting. They are decidedly blind pawns in the general mechanism-the imperialist war has shown that. Every month proves that the crisis of capitalism is deepening, disintegration throughout the world is spreading farther and farther, and Russia is the only country where an upswing towards a durable and serious improvement has started.
To sow dissension among the workers the concessionaires may place their workers in better conditions.
This won’t increase dissension among our people, we have grown much stronger.

Will trade union groups be organised on the concessionaire’s territory?
The concessionaires get economic exploitation, the authorities and laws remain Soviet ones.
Can you outline the conditions guaranteeing us against the danger of the Soviet state system being distorted and a capitalist set-up being introduced?
These conditions are the laws of the R.S.F.S.R. If a contracting party breaks them we have the right to cancel the agreement.
What is the gist of the tentative draft agreement with the American imperialists covering a concession on Kamchatka?
I said that the term of the concession is 50-60 years. We get a share of the produce, they the right to set up a military and naval base at the inlet near which there is an oil deposit.
You say that granting concessions to the capitalists of oppressed countries like Germany is more important than for other countries. But if the capitalists of oppressed countries use the concessions to improve their country’s economic position, don’t you think this will stave off the revolution in that country?
The international situation as regards revolution revolves around Soviet Russia’s struggle against the rest of the world, the capitalist countries. To strengthen Soviet Russia and make her invincible-that is what matters most as far as the struggle of the oppressed and colonial countries is concerned.
What role in concessions does Turkestan cotton play?

So far there is no question of granting a concession on Turkestan cotton. This question was not discussed.

Will concessions be granted for the rehabilitation of industrial enterprises and for taking over railways?
Such exigencies are ruled out. The railways are a single integrated enterprise.
Has there been any question of concessions on slaughter-houses? Not that I have heard of.
The protests against concessions in the local areas stand clearly revealed, not as healthy sentiments at all, but as patriotic feeling among a strong petty-bourgeois section of the countryside and among the urban middle classes.
The patriotism of a person who is prepared to go hungry for three years rather than surrender Russia to foreigners is genuine patriotism, without which we could not hold out for three years. Without this patriotism we would not have succeeded in defending the Soviet Republic, in doing away with private property and now getting as much as 300 million poods by means of the food surplus-appropriation system. This is the finest revolutionary patriotism. As for the kulaks being prepared to go hungry for three years to keep out the foreign capitalists, from whom they have something to gain-that is untrue. It is not the kulaks who are concerned, it is the non-Party middle peasant.
Vol. 42, pp. 239-40, '244-45