The communist world | 16 | The Origins of the Twenty First Century

ABSTRACT

Lenin died in January 1924 and left the Soviet Union a diﬃcult legacy: a party dictatorship, an economy in a state of disarray after the Revolution and the civil war, and almost total isolation from the outside world. Curiously, the only exception to this isolation was the so-called Rapallo Pact, signed with Germany in 1922. At the Genoa economic conference, where the gold exchange standard was recommended, there had been abundant recriminations leveled in particular at the Russians, who had repudiated the tsarist debts, and at the Germans, who were delaying their reparation payments. When this conference ended, the Russian and German delegations met in Rapallo, a port near Genoa, and signed a treaty establishing diplomatic recognition, reciprocal assistance, and cancellation of previous debts. The pact between former enemies, both defeated in the war, contained a secret military assistance clause which Germany used to rearm itself surreptitiously. Russia, in violation of the Treaty of Versailles, sent weapons to Germany and helped train German troops. Lenin also left behind a complicated economic situation. In 1921 with the

New Economic Policy, as we saw in Chapter VIII, he had taken a step back on his path towards total state control of the economy. The NEP was a pragmatic measure and the right action to take when considering economic recovery, but it presented certain exceptionally serious political and economic problems. In the ﬁrst place, although in many economic aspects the NEP turned out

to be a success, the Bolsheviks could not avoid feeling profound resentment towards it due to its capitalist character. In eﬀect, in spite of the fact that the Communist Party tightened its hold on power after the Kronstadt rebellion, agriculture was liberalized under the NEP, and that produced unease among the staunchest and most loyal Bolsheviks. During the 1920s there was among them an intense debate concerning what to do with the Soviet economy. In short, some wanted to maintain the NEP, that is, large-scale industry under state control and ownership, with the major distribution of goods and all the economic policy levers in the hands of the state as well (that is, the Central

Committee of the Communist Party), but the small distribution and industrial businesses, plus agriculture, in private hands. This implied the survival of the market, since the country was overwhelmingly agricultural, although with strong state controls. Others, on the contrary, were in favor of the state owning and controlling the entire economy and managing it according to periodic and detailed plans, eliminating all traces of a free market. Discussion of these matters within the Communist Party and the various economic oﬃces was very lively during those years, and, in addition, it had considerable scientiﬁc value; however, as we shall see, the ﬁnal decision was of a political nature. Another problem to emerge under the NEP was that of prices. As far as

agriculture is concerned, the NEP was quite successful. When peasants noticed that they could sell their products on the market and that they were not subject to arbitrary exactions, they started to produce in large quantities. A consequence of this was the so-called “scissors crisis” in 1923: in the midst of general inﬂation, agricultural prices fell in relation to industrial prices. The government felt compelled to intervene in order to maintain peace in the countryside and decreed a price freeze of industrial products. The remedy was worse than the disease: those industrial goods which were produced and distributed privately continued selling at ever higher prices, since the risk of breaking the law made them less available and thereby more expensive. For state companies, whose prices were more readily controlled, a price freeze during the inﬂationary period frequently meant having to sell products at below cost. Either the factories would close or state subsidies would be needed. This last solution was the one adopted, but it contributed to inﬂation. Even after the 1924 stabilization, the inﬂation problem continued due to shortages, caused mainly by the price ceilings. Deﬁnitely, the system of market prices turned out to be a nightmare for the Bolsheviks in power. Their economic incompetence led them to intervene in economic matters, constantly obtaining results which were the exact opposite of those they had intended to achieve (Johnson and Temin 1993). Finally, the NEP presented the problem of “equity.” With the relative

freedom of the market, some farmers became wealthy. They had either acquired large tracts of land or they had learned to take advantage of the ups and downs in prices; the fact was that there appeared a group of wealthy peasants, able to use hired hands on their land, and to attain power and a standard of living superior to that of those around them. These were called kulaks, and were very unpopular at the time. Kulak in Russian means “ﬁst”; the kulaks, therefore, were depicted as greedy and tightﬁsted in the popular imagination. Other NEP new rich folk were simply called nepmen, generally businessmen and middlemen, who became wealthy through trade. They were not liked much, either, and the average Communist was oﬀended by the apparent inequality which the NEP had created. In reality, the problems derived from peasant inequality due to the NEP were less signiﬁcant than Soviet writers have indicated and less signiﬁcant as well than their

contemporaries thought (Borodkin and Svischov 1992), but they formed the pretext for the great collectivization of the ﬁrst Five Year Plan. Behind all of these economic problems, what really mattered was the poli-

tical struggle. The NEP years were the years of Stalin’s ascent to absolute dictatorship. Although at the time of Lenin’s death Stalin already was in the key position in the Communist Party (Secretary of the Central Committee), there were still many obstacles in his path to absolute power. As we have seen, in the Soviet Union there was not even a hint of democracy, but the truth is that at that time there was no single-person dictatorship either. The “dictatorship of the proletariat” was in reality the dictatorship of the Communist Party or, more precisely, the dictatorship of the Politburo, selected by the party’s Central Committee. The Politburo was essentially a permanent committee, formed by half a dozen members, where the principle of majority rule prevailed. During Lenin’s time he called the shots because of his personal prestige. That was Stalin’s problem. Almost all of the members of the Politburo were more prestigious than he was. In order to seize control he had to gradually eliminate the most powerful individuals with the assistance of the other members. His main rival was Trotsky, number two in the party while Lenin was alive, and his heir apparent. Trotsky, however, for a number of reasons, could not count on the support of the Politburo’s majority. Trotsky was the super-leftist, who hung on to the ideas of permanent revolution and world revolution, since for him there could be no true revolution if it occurred only in Russia; the NEP, therefore, was nothing more than a temporary expedient which had solved the problem of scarcity after the war but which would inevitably lead the Soviet Union down the path of a bourgeois economy. As a consequence, Trotsky believed in keeping the essence of the Revolution in Russia by expropriating all private property and by having the state plan the economy. It should be made clear that Marx had said nothing about how a socialist

economy should be organized, except that private property in the means of production would be abolished. State planning of the economy was a corollary that Russian communists had postulated after their experience of “wartime communism,” which had led them to create a series of organizations for the central direction of the economy: the Supreme Council of the National Economy (known by its Russian acronym, VSNKh, Vesenkha) and the Gosplan. The latter, more a study group than an administrative body, gathered the best economists: Preobrashenski, Leontief, Popov, Groman. In the Ministry of Finance there was another brilliant group of economists, led by Nikolai Kondratieﬀ, who worked on cyclical problems, but who participated in the debates of the time (the last important economic debates in the history of the Soviet Union) and who, in addition, produced fundamental works on the history of economic cycles (Kondratieﬀ 1992). The attitudes of these two groups were in opposition: those in the Gosplan supported Trotsky’s line in favor of total planning; Kondratieﬀ and his group wanted to save the NEP and favored agricultural development. This, expressed in Western

of the Twenty-ﬁrst

economic terms, meant that they supported balanced growth. A developed agriculture would provide exportable surpluses and demand industrial goods. This would permit industrialization and agricultural growth to occur simultaneously, as had happened during the Industrial Revolution in Britain and in the majority of other Western countries. The Politburo member who shared Kondratieﬀ’s position was Nikolai Bukharin, the youngest and the one best versed in economic matters. But Russia had a tradition of unbalanced growth. Since Peter the Great

there had been antecedents of an industrialization determined by the demands of the state and essentially at the expense of the peasantry, an industrialization geared to the production of military goods at the expense of civil consumption: a textile industry devoted to the production of uniforms and canvas, and a metallurgical industry geared to the production of weapons. The same thing happened with industrialization under Sergei Witte at the end of the nineteenth century, aimed, however, at railroad construction. Only the industrialization which preceded the Great War took place under the banner of agricultural development and popular consumption growth, after Piotr Stolypin’s agricultural reforms. Industrialization in Russia would be carried out again, under the Communists, following Peter the Great’s and Sergei Witte’s state-supported blueprint. The ﬁrst battle, however, was won by Bukharin. In 1926 it was convenient for Stalin to ally himself with Bukharin in order to eliminate the dangerous leftist Trotsky. In the summer of that year Trotsky and those on his side, such as Zinoviev and Radek, lost votes on several issues and were expelled from the Politburo. A year and a half later they were expelled from the party. The purges had started, although at this stage they were still bloodless. It must be pointed out, however, that not a single member of the Politburo at the time of Lenin’s demise, except Stalin, died a natural death or, at least, in bed. (As we shall see there are those who claim that Stalin was poisoned.) Those who were not executed in the purges ten years later (Zinoviev, Kamenev, Radek, Bukharin) committed suicide (Tomsky) or were murdered by Stalin’s agents (Trotsky). In 1926, after being eliminated from the Politburo, Trotsky was forced to leave Moscow and later, in 1927, the country. In the meantime, Stalin noticed the impatience of the Communists with the

NEP, due, in the ﬁrst place, to the reasons we have seen, and, in the second place, to the fact that Bukharin’s and Kondratieﬀ’s program deferred industrialization to a more or less distant future. The Russian Communists were in a hurry to achieve the country’s industrialization for two reasons; one was ideological and the other had to do with immediate political problems. Many people have understood industry as the essence of economic devel-

opment. After all, the great economic renovation of the modern period is called the Industrial Revolution. The Communists were not the ﬁrst nor would they be the last revolutionaries or reformers in power to consider the industrialization of their country as a fundamental goal. On the other hand, the Marxism professed by the Communists is an industrialist ideology that

sees industrial workers as the protagonists of the revolution and the redeemers of humanity. In Chapter VIII we saw that, after the civil war, there were hardly any industrial workers left in the Soviet Union; the Communist Party clung to power tenaciously, but its social base was very narrow: the new army, the police, and the bureaucracy were its main supporters, quite eﬃcient, for sure, but a minority in the country. The party could count as well on the benevolent support of the peasantry, which constituted a majority, but this support was conditional on the continued existence of the NEP. Industrialization seemed to be the most logical manner to achieve a social and economic base via the creation of a proletariat which would be the backbone of the party’s power. In addition, there was an immediate reason for the Communists’ insistence

on industrialization at top speed. In 1927 Britain, which had established diplomatic relations with the Soviet Union in 1924, broke them oﬀ because it considered the propaganda put about by the Soviet Union through the Comintern to be intolerable. The country’s diplomatic isolation, considerable already, increased, and with it the Soviet leaders’ alarm increased as well. It should not be forgotten that during the civil war the “Whites” received assistance from Western countries, which made no secret of their antipathy towards the Communists. On the other hand, these Communists deﬁned themselves as the enemies of the bourgeois powers, i.e., all nations except the Soviet Union. For the Communists, therefore, the threat of a new invasion was very real, and the only way to repel it was ﬁghting as they had done during the civil war. For this reason they viewed arming themselves as necessary. To import the required amount of weapons was impossible, because the great powers did not want to reinforce their enemies’ potential. The Soviet Union had to arm itself by itself, and for that it needed a weapons industry, which required engineering, mining, textiles, explosives, etc. Industrialization was urgent and indispensable for military reasons, as it had been in the time of Peter the Great. The slow pace proposed by Bukharin’s and Kondratieﬀ’s program left industrialization for later generations: what would happen if the Soviet Union were invaded before industrialization was achieved? Farewell revolution. For this motive, it was decided in 1928 to construct “socialism in only one country,” something which just ten years earlier would have been considered insane.