STATE CAPITALISM

LENIN; On State Capitalism, During the Transition to Socialism

TO WASHINGTON VANDERLIP
Moscow, March 17, 1921

Mr. Washington B. Vanderlip Dear Sir,

I thank you for your kind letter of the 14th and am very glad to hear of President Harding's. favourable views as to our trade with America. You know what value we attach to our future American business relations. We fully recognise the part played in this respect by your syndicate and also the great importance of your personal efforts. Your new proposals are highly interesting, and I have asked the Supreme Council of National Economy to report to me at short intervals about the progress of the negotiations. You can be sure that we will treat every reasonable suggestion with the greatest attention and care. It is on production and trade that our efforts are principally concentrated, and your help is to us of the greatest value.

If you have to complain of some officials, please send your complaint to the respective People's Commissary who will investigate the matter and report if necessary. I have already ordered special investigation concerning the person you mention in your letter.

The Congress of the Communist Party has taken so much of my time and forces that I am very tired and ill. Will you kindly excuse me if I am unable to have an interview with you just now. I will beg Comrade Chicherin to speak with you shortly.
Wishing you much success I remain. Yours truly,

W.l. Lenin
Vol. 45, pp. 98-99

TELEGRAM TO G. K. ORJONIKIDZE
Code Orjonikidze

Your reply is neither full nor clear.61 Please send out the de tails from the Georgian Revolutionary Committee. First, has the Soviet Government of Georgia confirmed the concession on the Tkvarcheli mines to the Italians, when, on what terms, reply briefly by telegram, details by letter? Second, about the Chiatura manganese mines: have the German owners been transferred to the status of lessees or concessionaires, when, on what terms? It is extremely important to have the speediest decisions on these and similar other matters. This is of tremendous importance both for Georgia and for Russia, because the concessions, especially to Italy and Germany, are absolutely necessary, as is e exchange of goods for oil, on a large scale with these countries, and subsequently, with others as well.

Please, keep me informed about the measures taken by the Georgian Revolutionary Committee.
Lenin
5 /IV. 1921
Vol. 45, p. 115

TENTH CONGRESS OF THE R.C.P.(B.)62 MARCH 8-16, 1921
1
From REPORT ON THE POLITICAL WORK OF THE CENTRAL COMMITIEE OF THE R.C.P.(B.)
MARCH 8
Up to now, we have been adapting ourselves to the tasks of war; we must now adapt ourselves to the conditions of peace. The Central Committee is faced with this task—the task of switching to the tax in kind in conditions of proletarian power, and it is closely bound up with the question of concessions. You will be having a special discussion on this problem, and it requires your special consideration. By granting concessions, the proletarian power can secure an agreement with advanced capitalist states. On it depends our industrial growth, without which we cannot hope to advance towards communism. On the other hand, in this period of transition in a country where the peasants predominate, we must manage to go over to measures giving economic security to the peasants and do the most we can to ease their economic condition. Until we have remolded the peasant, until large-scale machinery has recast him, we must assure him of the possibility of running his economy without restrictions. We are now in a transitional phase, and our revolution is surrounded by capitalist countries. As long as we are in this phase, we are forced to seek highly complex forms of relationships. Oppressed by war, we were unable to concentrate on how to establish economic relations between the proletarian state power, with an incredibly devastated large-scale industry, and the small farmers, and how to find forms of coexistence with them, who, as long as they remain small farmers, cannot exist without their small economy having some system of exchange. I believe this to be the Soviet Government’s most important question in the sphere of economics and politics at the present time. I believe that it sums up the political results of our work, now that the war period has ended and we have begun, in the year under review, to make the transition to peace.

This transition is bound up with such difficulties and has so clearly delineated this petty-bourgeois element, that we must take a sober view of it. We view this series of events in terms of the class struggle, and we have never doubted that the relations between the proletariat and the petty bourgeoisie are a difficult problem, demanding complex measures or, to be more accurate, a whole system of complex, transitional measures, to ensure the victory of the proletarian power. The fact that we issued our tax in kind decree at the end of 1918 proves that the Communists were aware of this problem but were unable to solve it because of the war. With the Civil War on, we had to adopt war-time measures. But it would be a very great mistake indeed if we drew the conclusion that these are the only measures and relations possible. That would surely lead to the collapse of the Soviet power and the dictatorship of the proletariat. When the transition to peace takes place in a period of economic crisis, it should be borne in mind that it is easier to build up a proletarian state in a country with large-scale production than in one with a predominantly small-scale production. This problem has to be approached in a whole number of ways, and we do not close our eyes to these difficulties, or forget that the proletariat is one thing, and the small-scale producer, another. We have not forgotten that there are different classes, that petty-bourgeois, anarchist counter-revolution is a political step to white guard rule. We must face this squarely, with an awareness that this needs, on the one hand, maximum unity, restraint and discipline within the proletarian party, and on the other, a series of economic measures which we have not been able to carry out so far because of the war. We must recognise the need to grant concessions, and purchase machinery and equipment to satisfy agriculture, so as to exchange them for grain and re-establish relations between the proletariat and the peasants which will enable it to exist in peace- time conditions. I trust that we shall return to this problem, and I repeat that, in my view, we are dealing here with an important matter, and that the past year, which must be characterised as a period of transition from war to peace, confronts us with some extremely difficult problems.

Vol. 32, pp. 188-90

From SUMMING-UP SPEECH ON THE SUBSTITUTION OF THE TAX IN KIND FOR THE SURPLUS APPROPRIATION MARCH 15

I now come to concessions. They signify a bloc with capitalism in the advanced countries. We must be clear in our minds about the nature of concessions. They signify an economic alliance, a bloc, a contract with advanced finance capital in the advanced countries, a contract that will give us a slight increase in products but will also result in an increase in the products of the concessionaires. If we give the latter ore or timber, they will take the lion’s share and leave us a small share. But it is so important for us to increase the quantity of products at our command that even a small share will be an enormous gain for us. Even a slight improvement in the condition of the urban workers, which will be guaranteed in the concessions agreement, and will not present the slightest difficulty to foreign capital, will be a gain and will serve to strengthen our large-scale industry. And this, as a result of its economic influence, will serve to improve the condition of the proletariat, the class which is wielding political power.

There is no ground to fear that small-scale agriculture and small industry will grow to dimensions that may prove dangerous for our large-scale industry. There must be certain signs for the rise of industry.
If we have a bad harvest (I have already mentioned Popov’s pamphlet), and our resources are as scanty as they were last year, an abatement of the crisis and development of small industry are out of the question: capitalist relations can be restored only if agricultural industry yields a surplus. That is possible, and this is very important, for it represents a material gain for us. The question of whether small or large-scale production will gain more will be determined by the extent to which we succeed in coordinating and combining the utilisation of our funds and the development of the market, which we shall achieve by means of concessions agreements with capitalism; and this will result in an increase in agricultural production for us. The result will depend upon which side makes the best use of these resources. I think that if the working class, which controls the most important branches of large-scale industry, concentrates on the key ones, it will gain more than small industry, even if the latter does have a relatively faster growth. The situation in our textile industry was such that at the end of 1920 there were obvious signs of an improvement, but there was a shortage of fuel. Otherwise we should have obtained about 800 million arshins [Arshin is equal to 28 inches. —Translator] of cloth and would have had materials of our own manufacture to exchange for farm products.

Owing to the fuel crisis, however, there has been an enormous drop in production. Although we have succeeded in purchasing coal abroad, and ships with this cargo will arrive in a week or two, we have nevertheless lost several weeks or even months.

Every improvement in the state of large-scale production and the possibility of starting some large factories will strengthen the position of the proletariat to such an extent that there will be no need to fear the petty-bourgeois element, even if it is growing. We must not be afraid of the growth of the petty bourgeoisie and small capital. What we must fear is protracted starvation, want and food shortage, which create the danger that the proletariat will be utterly exhausted and will give way to petty-bourgeois vacillation and despair. This is a much more terrible prospect. If output is increased the development of the petty bourgeoisie will not cause great harm, for the increased output will stimulate the development of large-scale industry. Hence, we must encourage small farming. It is our duty to do all we can to encourage small farming. The tax is one of the modest measures to be taken in this direction, but it is a measure that will undoubtedly provide such encouragement, and we certainly ought to adopt it. (Applause.)

Vol. 32, pp. 236-38