Private Capital in the USSR -1927, Yuri Larin
State publishing houseOvergrowth and ideology.
We have already shown above the present limits of the growth of definitely capitalist production out of simple (labor) commodity production in our agriculture. But growing into a capitalist entrepreneur is, of course, not limited to the very process of agricultural production. Having established itself here, the agricultural production entrepreneur begins to use the accumulated funds to organize a local rural capitalist industry for processing agricultural products. He begins to operate with the provision of credit, acting as a mercilessly enslaving usurer. Selling the goods of his own farm, he at the same time begins to buy goods from smaller producers for resale.
Below, in the section on trade, we will touch upon the question of what proportion private capitalist procurement constitutes in the total procurement in the countryside, and what part of the industrial products received by the countryside in general passes through private merchant hands. The support and agent for both is primarily the same thin upper capitalist stratum of the peasantry, whose role in agricultural and livestock production and in their marketable products was discussed above. Here I want to note only the incorrectness and superficiality of a fairly common method of considering a private village merchant as some kind of abstract category of
ʺpure tradeʺ.
At the same time, they usually take the entire turnover of private village trade, divide it equally among all merchants, not even separating the manual peddlers from the rest, and joyfully conclude: this is how insignificant the average turnover and, consequently, the “capital” of the village merchant. There are two wrongs here. First, there are a lot of manual traders, and their turnover is insignificant. Their mere selection already gives a different picture for judging the village shopkeeper.
Secondly, and most importantly, this shop cannot be considered in isolation from the rest of its ownerʹs economy.
In reasoning divorced from reality, it is possible to create in the village a category of “pure merchants” who do nothing but their shop, but in fact, in most cases, the shop is only a part of the owner’s economy. Growing out of the production process of simple (labor) commercial agriculture and turning into a capitalist entrepreneur, the representative of the top 2% of peasant households complicates and expands his entrepreneurial operations. He is at the same time a farmer, and a usurer, and a shopkeeper, and a buyer, and a tenant, and an industrial entrepreneur, and even an agricultural ʺpiecework worker.ʺ But all this is only different forms of application of one and the same capital. The connecting thread of all parts of his economy is the non‐labor nature, that is, the use of his own resources for the exploitation of the labor of others. Individually, the ʺtrading partʺ of his capital is often small, but it is not a stable value either. The owner now directs his capital more into usury, then into trade, then into buying, etc., depending on the profitability under the given circumstances. It has its own “planned economy”, its own maneuvering. A correct idea of this capitalist elite in the countryside can only be obtained by taking its economy as a whole, and not by isolated (isolated) pieces, with each piece considered as an independent magnitude. Individually, the owner may have a small handicraft enterprise, only two or three workers, and in agriculture there are only two or three seasonal laborers, and the shop does not turn over thousands, and the debts of neighboring yards to him are absolutely not so great, etc. But for a correct idea about the ʺspiderʺ and about the reasons for the hatred of the ordinary peasantry towards him, we must take all this together. Otherwise, the result is not a real picture, but an unconscious or deliberate “statistical” sweetening of the rural capitalist as a very, very small kulak, downright “poor
kulak”, which, in fact, would not be worth talking about if they didn’t raise a “noise” about him.
As applied to rural handicraft industry, we have the opportunity to illustrate on a mass basis how the gradual growth of the capitalist entrepreneur from a simple commodity producer proceeds in the countryside on the basis of the processing of agricultural products. The material is a survey of the small rural industry of the USSR, carried out by the CSO in 1925, published on pages 250‐272 of the ʺHandbook of the CSO for 1927ʺ. True, here we have the result of the development of only the first four years of NEP, meanwhile, according to all reviews and individual available materials, (precisely the two years following this survey (1925‐1927) were a time of especially strong growth of this phenomenon in rural industry.
By the beginning of the NEP, it can be said that there was no capitalistically organized rural handicraft industry. Wage labor began to appear in it only gradually. Moreover, first of all and most of all, it appears precisely in those branches of rural industry that consist in the direct processing of agricultural products (flour and cereals, oil, and leather industries). This is reflected in the connection with the growth of capitalist elements in the process of agricultural production.
If we divide the entire rural industry into two parts—the indicated three branches (purely processing from peasant raw materials) and all the others (production of footwear, clothing, wood, metal, and pottery, etc.), then we get the following result. The first three branches account for about 60% of all agricultural products; (not counting the price of raw materials, auxiliary materials, and fuel, and with them even about 75%).
Of all the people employed in these three industries, wage workers in 1925 were already 14.5%. And in the rest of the small rural industry, only 4% of the persons employed in it were
wage workers, a share that was three and a half times smaller. Thus, by 1925, no less than a seventh of the three main branches of rural industry were organized capitalistically, or rather, more than a seventh, because in some cases minor members of the owner’s family also participate in production (11.5% of those employed in the entire small rural industry ) and the owners themselves; moreover, the output per average worker in these larger enterprises is greater than in the others. It must also be borne in mind that the data on wage‐workers do not cover the type of capitalist organization of handicraft industry which is carried out by the so‐called distributing offices.
But what is of interest to us here is not a complete idea of the scope of capitalist processes in handicraft industries (more on this in the section on industry), but a characterization of the fact that in small rural industry in general, it is precisely those three branches that began to be put on the capitalist footing most of all and most quickly. which are associated with the direct (primary) processing of products of the peasant economy. These three branches in 1925 accounted for about half of the wage‐workers in all small‐scale rural industry. These three industries (mills, tanneries, and vegetable oil factories) are exactly the three industries where the state recognizes the role of private capital as definitely harmful and seeks to reduce it.
The capitalist entrepreneurship of large peasants in agriculture under Soviet conditions had already by 1927 worked out a peculiar ideology. Its originality lies in the manner of the usual bourgeois aspirations to serve in Soviet attire. The demand for private ownership of land is presented in a modest form, spoofing the Soviet wish for ʺsustainability of land use.ʺ The demand for the abolition of the right of workers to land appears under the guise of the need to ʺinterest the producer in improving production.ʺ The desire to put an end to the dangers of collectivization and to provide agriculture more widely with
cheap laborers acts as an attempt to slip bourgeois content under the Soviet line to overcome the adverse consequences of the unlimited fragmentation of the economy under its current system. And all this, of course, in the name of the greater triumph of ʺnationalizationʺ and even for the sake of the ʺpoorʺ.
The upper stratum of the peasantry, being the most economically active, literate, and cultured, also shows great social activity in preaching its own ideological orientation with the means available to it. Rising from below, at the top, these sentiments are generalized and more clearly formulated by such epigones of populism as prof. Kondratiev, bluntly formulating: too much industrialization. But the “village elite” itself is bombarding the “city” with its appeals for the introduction of an extended system of bourgeois relations in the countryside, with the actual throwing overboard of our course of the outgrowth of socialist elements in agricultural production.
11) Of course, this meets with full support in the foreign Socialist‐ Revolutionary White Guard literature. The hatred with which they cannot stand the very words ʺstate farmsʺ and ʺcollective farmsʺ is characteristic. Here, for example, is what the Paris organ of Avksentiev, Bunakov and other prominent Socialist‐Revolutionaries writes about me on this subject. “Modern Notes” in No. 28 for 1926: “Yu. Larin adjoins the left wing of the ruling Bolshevik group. It is to him that the primacy belongs in the ill‐fated idea of creating state farms; he is still a fierce defender of the plan for the collectivization of peasant farms ... His tactics are calculated on the political split actively organized in the countryside ... (with fists.—Yu. L.). Reading (my writings.—Yu. JI.) is especially unpleasant,” etc. (pp. 521‐522).
In connection with the discussion of the question of a new law on labor land tenure and the commune, various press organs, which concentrate the discussion of these questions in Moscow, receive a great many letters of this nature and even articles from
the countryside. Here is a typical work of this kind by a real peasant. He writes: “At present, there is no definite owner of the land. On the one hand, the land has been nationalized, on the other hand, the landed society disposes of it, and, thirdly, the individual peasant thinks of it as his own. These contradictions stick out more and more strongly.
Further: ʺThe cultural growth of agriculture is closely, inseparably connected with the transfer of oneʹs labor into monetary calculation ... Without understanding this, progress in agricultural culture is not conceivable at all.ʺ And for this, in the opinion of our author, ʺother land ordersʺ are needed, such orders are needed when ʺpeasants on a contractual basis with the state own the land, that is, on a lease basis.ʺ
He calls this ʺsustainability of land useʺ and says: ʺ... such land use lays the foundationʺ for money economy in the countryside. This is the whole essence, which we will not bypass and will not bypass, no matter how much we would like to.” If there is no mediastination between the state and the peasant in the form of a landed society, if the peasant receives directly from the state what he has on rent, then no one will encroach on this. He will pay rent for this land, and it will be his land. “It will be clearer for every peasant where his interests are and how he can protect them.”
“How can this reform be carried out in practice, how concretely can the approach itself be thought of?” the author asks and answers: “Competition for the possession of this or that piece will be the opportunity to achieve a correct assessment of the land”—a correct assessment. And he concludes: “... there will no longer be a reason for splitting farms into small ones ...”, etc.
Another peasant author puts the same demands on the full and open involvement of the land in bourgeois circulation in the form, as he puts it, of ʺthe right to sow.ʺ Just as in cities there is
the right to build, when some plot of land with the right to build is allotted, so in the countryside it can be introduced so that the land ʺalthough not sold, but so that the right to sow on it is sold to other persons.ʺ
It goes without saying that the endless fragmentation of the economy into smaller and smaller pieces, while the intensity of the economy remains unchanged, is unprofitable. But we point out a way out of this situation in the combination of small farms, in collectivization, in the growth of labor intensity and intensity of farming. And the ideology of personal capitalist entrepreneurship points out the way out in the forced indivisibility of individual farms, thereby creating a brake on collectivization and the very right to land, but on the other hand it provides the current user with the opportunity to preserve the current backward system without switching to more intensive farming.
Compulsory indivisibility, as put forward by the capitalist circles of the peasantry, is essentially a cover for private ownership of land and serves the purpose, as indicated, to dispense with the transition to more intensive forms that allow a painless lowering of the average land norm per capita and eliminate the growth of agrarian overpopulation. .
This is not only socially reactive, but also productive and of the aspirations to nullify the governing rights of the landed society. The ordinary laboring peasant economy, relying on the labor force of its family and not on capital, cannot support the introduction of this order and the abolition of the regulation of the use of land by rural society. To fight against the disadvantages of the reduction of the land area of individual farms, ʺʺ in order to remain in line with the class interests of the ordinary middle peasantry, the poor, and the proletariat, it is possible and necessary by intensifying, collectivization n and cooperating.
The strengthening of measures directed in this direction is absolutely necessary,1 and in this direction, and are directed primarily by the resolutions of the IV, Congress of Soviets of the SS R on the question of the division of allotments. (See the resolution of the IV Congress of the USSR on the report of Comrade Kalinin.)
What has been said above about the role of capitalist entrepreneurs in agricultural production and peasant waste does not completely exhaust the influence of private capital on agriculture. There still remains a vast and important field of capitalist procurements in the countryside, organized from the city; the role of urban private capital in supplying the countryside with industrial products; attempts by non‐agricultural capitalists to subjugate the rural peasant handicraft industry by advancing it, supplying it, and organizing sales. We will deal with all this in the sections on> industry and trade. At the same time, the mediation of urban private capital in the matter of accommodating so‐called ʺpeasant loansʺ in the countryside, which were later accepted in payment of the agricultural tax, is also left unaccounted for—albeit a very modest one.