MIA > Archive > Preobrazhensky
From International Press Correspondence, Vol. I No. 19, 23 December 1921, pp. 156–158.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Public Domain: Marxists Internet Archive (2019). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.
Recently we have seen that the process by which a farming class was coming into existence in Russia, having been interrupted by the revolution, is developing again under the new economic system which re-establishes the freedom of enrichment and of wealth accumulation, and which signifies the exploitation of labor in the small industries of the city in those regions which have rich crops just as much as in the famished regions. Where there is a good harvest the well-to-do peasant profits more than the others because he has rented more land, has cultivated it better inasmuch as he has used this or that unploughed parcel of land belonging to those peasants who own no horses. In those regions which are suffering from famine, the poor people migrate, whereas the village usurer remains, buys up the cattle and other property for next to nothing, and will indeed have so much land in 1922 that it will by far surpass even the dreams of the village usurer of a year ago. As far as labourers are concerned, there will be plenty of them because of the withdrawal of a part of the poor peasants from the ranks of the active farmers in the village on account of the bad harvests and the shortage of cattle. And there is already an ever increasing demand for labourers particularly in the frontier provinces.
The development of village capitalism must under the new conditions inevitably lead to a rearrangement of the village elements. First of all the number of poor villagers which was brought down to a minimum after the expropriation of the village capitalists and the levelling of the classes in the village, will increase; once again will the village be transformed from a homogeneous a heterogeneous one. It is also possible that the village capitalist will be succeeded by that part of the peasant middle class which has become very nervous over the success of the former, and which will feel that it has only reached the preparatory class in the school of wealth accumulation. On the other hand there is no doubt but that the impoverished section of the village will enter into a bitter conflict with the village usurer, in the land questions as well as in the question of the lax in kind, in the question of local taxes, and obligations, and will inevitably compel the Soviet powers to take their side in the struggle. Independently of this the village capitalists will come to open blows with the Dictatorship of the Proletariat inasmuch as the workers will through their lax policy hinder the speculation on the part of the village capitalist and will stand in the way of the latter’s advance on capitalist lines. In the meanwhile, however, the banditry ceases and with it the last glow of the past period of open war between the village capitalist and the Soviet powers is extinguished. Instead of supporting bandits, that is, instead of supporting a hopeless bankrupt enterprise, the village capitalist will carry on a more profitable business, namely, that of accumulating wealth within those limits set by the new economic policy. But as soon as those limits prove too narrow for him, he will again resort to the “Ruschniiza”, the infantry rifle with sawed-off barrel, the usual weapon of the bandit-bands in the Ukraine.
As far as the city is concerned, the “natural law of movement” in a capitalist direction, in a form ideal to the bourgeoisie and with the ideal speed of the process, assumes the following shape: the retail capitalist fortifies himself on all positions in the field of distribution, with the exception of the territory occupied by the state and the cooperatives. The result is that the retail machine takes care of the distribution of the great mass of goods consisting of the farmer’s surplus after the deduction of the tax in kind and of the government and cooperative provision supply has been made, of the entire production of the workers and of the peasant trades and of the production of the medium enterprises let to private persons and partly of the production of the government enterprises, to the extent that these reach the open market. The competition within the retail trade leads to incorporation and to the accumulation of considerable means in the hands of individuals. But as far as trading capital as a whole is concerned, it will very quickly outgrow the limits of exchange trade, will soon reach the boundaries set to it by the insufficient agricultural production and will find an outlet in industry. The field of leased enterprises will become very crowded because it yields great profits and requires no initial outlays. The number of small and middle-sized enterprises will also increase. The result will be that the trading class of the city and the middle-sized capitalist enterprises will become a vital factor in economic life. Upon their efficiency will depend the supplying of millions of people as well as the wage earning of tens of thousands of workers. This class will also inevitably come into conflict with the Soviet Power inasmuch as the workers will hinder its further development by means of their tax and railroad policy, and inasmuch as they refuse to give the desired guarantees for the free exploitation of the working-class and refuse to re-establish that standard of law necessary for the free accumulation of wealth.
Foreign capital is at first drawn in as a partner to the Socialist industries on a large scale, in order to increase productive capacity on the basis of mass-production, as against the primitive condition of small scale production. But as soon as foreign capital will have established itself in certain positions and will find itself compelled to use the domestic market for making certain purchases as well as for purposes of selling a part of its products, it will open business relations with the capitalist circles and at a certain moment it will change its position. Under no circumstances will the capitalist class be able to accumulate an amount of capital stock sufficient to enable it to acquire the possession of our large industries in a short period of time. The only candidate for acquiring such possession would possibly be foreign capital, which is in a position to lend to the petty-bourgeoisie a capitalistic super-structure which in terms of production would be closely related to it. The unnatural alliance between the Socialist government and foreign capital then comes to naught and is substituted by the natural alliance between the latter and all the bourgeois forces of Russia. Then the hour for the decisive struggle between this alliance and the Socialist government strikes and the outcome of this depends upon the relation of forces within the country and on an inter national scale. Let us now visualize an ideal development at the other pole, in the field of Socialist production and distribution. After the Socialist island within the country has started the economic reconstruction in the most important branches of the large industries and of the transportation system, it begins Io expand al the expense of its own developed forces as well as at the expense of the petty-bourgeois class by means of a systematic taxation of the latter’s income. After the Soviet government has begun the economic reconstruction on the basis of the lax in kind and on the basis of the limited exchange of goods it is then in a position, thanks to its large industries, to increase the second source which supplies the industries with agricultural products. At the same lime, an ever-increasing fuel supply is created for the growing industries, through success in the field of coal, naphtha and peat production, together with the electrification of Petrograd, Moscow and other districts.
The taxation of the petty-bourgeois is increased at the same rate as these incomes grow. The tax in kind will during the first years of industrial reconstruction remain on the old basis, inasmuch as the tax, depending upon the harvest fluctuations becomes smaller. Economically this is admissible when we consider the general forward movement in the increase of peasant cultivated areas. On the other hand the tax on artisans’ and peasants’ production, on trade and private industry, is constantly increasing. This is also economically possible because of the growth of the productive forces and of the income in this field. At first these branches of industry will be taxed to the same extent that the Socialist industries are in supporting the Government machine, the transportation system and those enterprises which are run at loss, but which are social necessities. Then these taxes are increased so that they leave to the lessee a profit equal to the income of a good professional man, and take from the production carried out on a small scale that large part which under other circumstances would go to make up the funds of capitalistic accumulation. The result is that the surplus coming from the usurious village economy and from private industry, mainly flows into the stores of socialist accumulation. At the same time the Republic plays an ever growing part in foreign trade, and a new economic factor now looms up, that of socialist trade-profit. As agricultural reconstruction goes on, bread becomes the most important trade article. By selling grain to foreign markets and by selling foreign manufactured articles to the peasantry, the Soviet Government, besides covering all organization expenses, gains a considerable and ever increasing profit. Under the influence of the increased production in the large industries and an increased possibility of exchanging goods with the village the Soviet state acquires a steady foreign exchange, thanks to the taxes, the limited government issue of money and the extension of the exchange of goods on the open market. The Soviet Government issues money only in such amounts as will not cause a fluctuation in the value of the ruble, and will get that quantity of goods from the small industries out of circulation and into the Socialist stores of accumulation as will correspond to the amount of capital accumulated by the private industries. As far as the concession capital is concerned, the Soviet state, after having begun to draw foreign capital into its production, will have become convinced, during the actual reconstruction of its industries, of the economic disadvantages and of the political danger which lies at the bottom of this method of drawing in foreign capital as compared with the system of borrowing goods. The borrowing of goods which our industries underwent because of the great risk which the creditors took, will on the contrary, become the chief form of using foreign capital in Russia when the Socialist industries will have reached an advanced stage, and will serve as the strongest stimulant to our entire industrial and agricultural life, in spite of the usurious interest charges.
Due to the quick reconstruction of our large industries and the creation of favorable material conditions for the proletariat. and on the other hand, in view of the industrial crisis in foreign countries, and in view of the unemployment and the suppression of the most class-conscious ranks of the proletariat, a mass immigration of foreign workers into Russia will begin; this will be of great aid to the growing industries which lack skilled labor. The growth of the proletariat as class proceeds not only quantitatively, but also qualitatively.
The success on the industrial field accelerates the process of socialization in the agricultural field. The Soviet economic structure is given a foundation; we see a quantitative and a qualitative growth in the Soviet economic management of the factories, the communal agriculture of the cities grows; the gradual displacement of horse-power by tractors and electric plows increases the islands of collective agricultural management. With this slow process another but quicker one is developed. The state create, a new type of Soviet economy on the neglected land of the frontier regions, by putting tractors and foreign workers to work there. Under the influence of the new heterogeneity of the village, the communal tendency among the poor peasantry is intensified with the growing general consciousness. This takes place at a time when the proletarian power has to a greater degree than before become capable of aiding in this process by supplying the Communards with machines, artificial fertilizers and farm-labor.
Thus the proletarian foundation of the Soviet power grows from day to day. On the other hand, compared with the small industries, the large Socialist industries gain in importance in the national economy. At first the production increases in both, without coming into sharp conflict. Besides, the production of the large industries not only increases with that of the small industries, but it begins to do so at the expense of the latter. At this point the Soviet Government suspends the leasing of this or that medium enterprise, not on principle, but because the lessees are becoming too burdensome, it does not renew the contract after it terminates, and then begins to manage smaller enterprises. The retail trade which is carried on together with cooperation is to a considerable degree subordinated to large-scale production. Not only trade, but the small and medium industries are also dependent upon the state; both of them are financed by the stale bank and are thus tied to the Soviet State. This process of systematically limiting and supplanting the private industries carried on on a small and medium scale, and the continual pressure upon the rich peasant, in conjunction with the high taxes etc., causes great indignation among that part of the petty-bourgeoisie, which strives to acquire the unlimited freedom of capitalistic accumulation. Then the counter-revolution of the village bourgeois breaks out and in view of the existing relations of power the rich peasantry can be completely destroyed as a class. After this the “Socialist reaction” (if we may use the term) sets in. The new economic policy is reduced to certain limits; after a period of partial denationalization a stronger nationalization begins, which nationalizes that which is beneficial to the Soviet state. The critical period has been passed. Socialism is victorious on the entire front.
Last updated on 14 February 2019