STATE CAPITALISM

LENIN; On State Capitalism, During the Transition to Socialism

REPLY TO THE DEBATE ON CONCESSIONS
Comrades, so many notes have been sent up that I cannot possibly answer them all. On the other hand, most of the arguments have already been refuted in the debate, so I shall first comment on the booklet On Concessions. I shall deal with this in greater detail. Comrade Lomov’s one-and-a-half page preface deals with the subject all too briefly. Then there is the decree itself of November 23, which sets forth the idea of the interests of world economy. “The process of restoring the productive forces of Russia, and at the same time, of world economy as a whole, can be accelerated many times over by enlisting the co-operation of foreign state and municipal institutions, private enterprises, joint-stock companies, co-operative societies and workers’ organisations of other countries in the extraction and processing of Russia’s natural resources.” Of course, this is merely of propaganda value, but it is economically indisputable. World economy has got to be restored. Capitalism acts in such and such a way, and we have our own proposals, but so far world economy remains capitalist.
We wanted to attract foreigners. Therefore, the end of the decree lists these conditions:

Point One: “The concessionaire is to receive reward in the form of a share of the produce stipulated in the agreement with the right of exporting it abroad.” Without this they won’t go. The share is not specified. There will be a fight over this, we shall bargain and each of us will try to get the best of it. Comrades here said we shall have to keep our eyes skinned, and that’s quite right.

Point Two: “In the event of special technical improvements being employed on a large scale the concessionaire will be granted trade priorities (such as the purchase of machinery, special agreements on large orders, etc.).” What do trade priorities mean? They mean we shall give this or that firm a priority agreement to the exclusion of another firm. And if the firm takes concessions, we can buy them out, we may pay them extra on the price. The main thing is that we shall be given machines. I think this consideration is clear enough, and here again we shall maintain elements of propaganda.

Point Three: “Depending on the nature and conditions of the concession prolonged concession terms will be granted to ensure full compensation for the concessionaire’s risk and technical facilities invested in the concession.” Here we have the duration of the concessions. It is quite an indefinite period, and we couldn’t give Kamchatka on any other conditions, and Comrades Fedotov and Skvortsov are right about this being a special concession, which we are granting for important political reasons. In granting them under such conditions we are willingly giving away what we do not need ourselves, and we shall be no worse off for the loss of it neither economically nor politically.

Point Four: “The Government of the R.S.F.S.R. guarantees that the concessionaire’s property invested in the enterprise shall not be subject to nationalisation, confiscation or requisition.” Haven’t you forgotten that we still have the law court? This is a well-considered phrase with which we were deeply concerned. We wanted to mention it at first, then thought better of it and decided to say nothing. Speech is silver but silence is gold. There won’t be confiscation or requisition, but there remains the law court, and that court is ours, and if I am not mistaken it is composed of people elected by the Soviets. Personally, I hold anything but a gloomy view about our court being a poor one. So, we shall make use of it.

Point Five: “The concessionaire shall have the right to hire workers and other employees for his enterprises in the R.S.F.S.R. with due observance of the code of labour laws or a special agreement guaranteeing workers definite conditions of work that protect their lives and health.” There is nothing cautious here. If the workers go on strike and that strike is a reasonable one, we shall then be able secretly to support the strikers. What threat do the capitalists use? “We’ll throw you out into the street and you will starve.” But here they may find themselves getting a ration from somewhere or other, it all depends on us. We can and shall give it to them. And if the strike is a silly one, unreasonable, we’ll have them up on the Soviet carpet and tell them off good and proper. It speaks here of a special agreement, but it is worded very carefully. By way of exception, however, it will have to be applied to Kamchatka, as we are not in a position to set up any Soviet bodies there. This is where Vanderlip was to demand a special agreement. We haven’t even started yet to apply our own laws to Kamchatka.

Point Six: “The Government of the R.S.F.S.R. guarantees the concessionaire against any unilateral change in the terms of the concession agreement by any order or decree of the Government.” We undertake not to change the terms of the agreement unilaterally, otherwise no one will sign it. This means there must be some go-betweens. Who? The neutral states are all capitalist states. Workers’ organisations? We may have to invite Menshevik workers’ organisations. In Western Europe they are in a majority. Maybe the Mensheviks will decide in turn-even number for the Bolsheviks, odd number for the capitalists. But if we don’t come to terms, the agreement may be broken. That danger remains, but if it is a property agreement there is no harm in that. According to the basic principles of international law this is a private agreement, and you can break it, paying compensation, of course. If you broke it, you’ve got to pay. There have been cases in the practice of international law when the ship of another country has been sunk by mistake during the war. It was taken for an enemy ship but proved to be a neutral vessel. What is to be done? Pay up. The same here, as a last resort you buy yourself off. There still remains withdrawal from the war, though. War, of course, in the final analysis, is the ultimate argument. Of course, so long as there are capitalists in the world you must be prepared for war, once you have a socialist state. Further, we here are worrying now, but no one has taken a concession yet. When certain comrades say, “Ah well, this is the end, they’ll all come crowding in now,” I repeat, it’s possible that no one will care to take it at all.

Section One: “Timber concessions in Western Siberia.” The Northern Sea Passage is open for shipping, but we have no merchant fleet. A comrade says representatives have arrived, wishing to receive 6000 dessiatines in checkered order. The northern booklet says that if we take the extra electric stations of Petrograd, we could use them for taking timber out of the northern districts and develop a production that would give us foreign currency to the value of five hundred thousand gold rubles a year. And total electrification, according to the estimate of the State Commission, will cost over a thousand million. It is a question whether we shall be able to do it. Concessions, however, will make this task easier. You don’t go about offering concessions because you find life good, and when that life is a hungry one, when you have to wangle things so as to give the people a respite, you have to argue differently.

Section Three: “Mining concessions in Siberia.” Siberia is fabulously rich in copper. Copper has an extremely high value in world economy and is one of the principal metals used in electrification. We are offering a concession but do not know who will take it. America or the Germans. America will think that if she doesn’t take it, Germany will.

When we carry through electrification, we shall be a hundred times stronger economically. We shall then speak a different language. We shall speak about redemption. They know that the socialist society is not only quick at creating a Red Army but can be quick in other things as well.

Further, separate concessions. Three million dessiatines in the European part of Russia alone. Of these, over 800,000 dessiatines in the former Don Cossack Region. There are no state farms or livestock. Whole stanitsas along the river Ural are ruined, splendid virgin lands are lying idle. Even if we give away three quarters of the wheat crop raised there, we shall receive one quarter. We must strengthen our transport and we can stipulate that tractors be delivered cheaper.

If we cannot put three million dessiatines of magnificent land to the plough, which will yield us 100 poods of wheat per dessiatine—then what sort of farming is it? What sort of policy is it?
The Italians are interested in this, and Italy is on the eve of a revolution. In Italy the main argument against a revolution is “We won’t be able to feed ourselves, the capitalist powers won’t give us any food”. But the socialist power says, “I have three million dessiatines of land, I have oil and benzine”. You must realise that you can agitate on various planes about capitalism being a dead thing, and that it must be strangled. We have seen a good deal. The European is living in the same conditions as the Russian did when he went towards revolution from the agonies of war. With them the war is over, they are living by robbing other peoples. All the more weight does this argument carry. They are unable to restore their economy, and we offer them to start restoring it now. We have here combined a political argument and socialist agitation, but in a different form. You must learn to carry on agitation, otherwise your economic plans will come to nothing. And we are not only agitators, we are a Socialist Republic standing up to all the capitalist states in the world. You can’t run your economy, but we can. There is a possibility of comparison here.
Vol. 42, pp. 232-37