Huang Lifu: Did Lenin Solve the Issue of Market Under Socialism? Why Was NEP Abandoned?
Feb, 2018
Huang Lifu (researcher, Institute of world history, Chinese Academy of Social Sciences)
Abstract:
The experiment of using market economy mechanism in the backward agricultural socialist countries began with the new economic policy implemented by Russia in the spring of 1921. But this great innovation initiated by Lenin only lasted for 7 or 8 years and was later stopped. Why was it stopped? It is generally argued that Lenin put forward a complete blueprint, but Stalin did not grasp the essence of the new economic policy, and only regarded it as a “expedient” measure to get rid of the economic crisis, so Stalin abandoned the NEP. I don’t quite agree with this view, because the premise of this view is Lenin has built a model for building socialism by using market economy mechanism in backward agricultural countries and that Lenin’s model was clear enough and complete, I think it needs to be further discussed.
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Part 1 Lenin left behind the theoretical problems of “two and a half” that Means Lenin Only solved only 0.5/3.0 or 1/6
There are three basic points about socialism in Marxist classical theory: to eliminate private ownership, eliminate the bourgeoisie and eliminate the market economy. After the October Revolution, Soviet Russia carried out the nationalization of the means of production, eliminated the landlord and the bourgeoisie, abandoned the relationship of commodity and money in the period of building socialism, and embarked on a road in line with the traditional Marxist understanding.
Due to the destruction of the civil war and the serious violation of the interests of the peasants by the War-Communism Policy during the war, at the end of the civil war in 1920, the Russian economy was on the verge of collapse, the peasant uprisings swept across Russia, and there was a mutiny in Kornstadt. In the spring of 1921, in order to get rid of this crisis, Lenin turned to the new economic policy of using market economy mechanism. The main measures of NEP were : to implement grain tax in rural areas, the surplus grain after tax can be freely exchanged; to return the nationalized enterprises to small owners; Allow the development of private and cooperative handicraft and small industries; Leasing some factories, mines, forests and oil fields that the state is unable to develop and operate to foreign capitalists for operation; Leasing small and medium-sized enterprises that cannot be operated by the state to cooperatives and individual citizens.
Many Chinese scholars argue that Lenin’s “new economic policy” abandons the thought of eliminating commodity economy and abandoned directly passing into communism, and puts forward an indirect path of transition to socialism by developing economy through state capitalism in backward agricultural countries. They say that : Lenin’s new economic policy made use of the market economy, breaking through the traditional socialist theory of eliminating the commodity economy, this innovation from Lenin was brave and great.
However, it is not a complete model of building socialism by using market economy, because there are two other basic points of traditional socialism – one, the elimination of private ownership and second, the elimination of the bourgeoisie. Lenin did not explain how to look at these two aspects and what to do after using the market economy mechanism.
In the period of NEP, there were problems in these two aspects. After using the market economy mechanism, it seems that magic was released and the economy recovered rapidly. For example, in the field of employment, private enterprises provided nearly twice as many jobs as state-owned enterprises, and have 50% – 90% higher labor productivity than state-owned enterprises. Private owners in the rural areas, also known as Nepmans, have also grown rapidly.
According to the statistics at that time, in 1924, the “industrial and commercial commission earning group” accounted for 8.5% of the total population, which was close to 10.4% of the working class. The development of private economy and Nepman has aroused a very contradictory reaction in the Soviet society: in the official propaganda and in the mass consciousness, private ownership was the category of capitalism, and nepman was the private owner and the bourgeoisie, both of which are the targets of socialism to be eliminated. But in our daily life, we can’t do without the private economy and private owners – the goods that can’t be bought in the state-owned stores and cooperatives or with better quality can be bought in the shops of Nepman. People often have to deal make business and shopping with Nepmans.
Therefore, although people despises and hated Nepmans, they have to admit that its products were better. One citizen scolded: “businessmen are mean and greedy, but their products are really good…” As a result, he prayed for “the prosperity of state-owned business” and cursed “the plight of Nepman”. This representative attitude reflects the contradictions in the NEP period. So, is it to stick to the Marxist formula or to develop the economy? The market economy has thus come to a crossroads.
Part II. Three main questions
At this crossroads, we see three main questions: First, in theory, is market economy only equal to capitalism or can it be compatible with socialism?
Second, in terms of economy, does socialism only allow the existence of a single collective public ownership, or does it allow the development of private ownership and other forms of ownership, in tandem?
Third, in terms of politics and society, are private owners of means of production and enterprise managers simply equal to the bourgeoisie, and the party will use them for some certain period and later quickly eliminate them, or can they become builders of socialism?
To solve these three questions, we need to make a systematic theoretical innovation of traditional socialist understanding of Marxism theory. In his later years, in 1923 March Lenin wisely proposed that “the development of cooperatives is equal to the development of socialism”, which contains the idea that socialism can be compatible with market economy, but he did not explicitly put forward this conclusion. (see. On Cooperation ). In other words, on the relationship between market economy and socialism, Lenin had only made half of the theoretical innovation:
Lenin had given no new formulation on how to deal with the two problems of private ownership and private owners. Therefore, he left us the unsolved question the (2 and ½) two and a half theoretical problems to be solved by later generations. In this sense, we have to say that although Lenin put forward the general direction of using the market economy for building socialism, he did not give full solution and did not have time to put forward a complete model for the backward agricultural countries to take the path of socialist market economy.
POLİTİCAL ASPECT:
Stalin believed that after the party’s political line is determined, leading cadres are the determining factor. Therefore, the most important measure for the construction of the leading cadre team during the new economic policy period was to create and use a highly centralized cadre appointment and removal system to exclude members of non-worker and peasant origins and non-communist members, so that party members and workers who are workers and peasants become leaders and the main body of cadres.
In the early days of the new economic policy, due to the lack of party leading cadres, non-proletarian staff members had an overwhelming majority (approximately 70%) in the highest administrative organs of the Soviet Union (the official cadres appointed by the central government). It is 88.0% in the Finance Ministry, 91.8% in the Foreign Trade Ministry, and 92.1% in the Foreign Affairs Ministry. In order to exclude leading cadres from non-proletarian backgrounds, the party abandoned the relative appointment system of leading cadres and created an absolute appointment system with the power of appointment and removal focused on the party’s central government. Leading cadres of worker and peasant origin rose to 80.9%, while employee with other class origin dropped to 18%.
Ideology, education and culture aspect.
The Bolshevik party was well aware of the importance of public opinion in seizing and consolidating power. During the period of the new economic policy, the party paid close attention to the thought trends among the intellectuals, cleaned up non-Marxist and non-proletarian intellectuals with intensive measures, built an education system for the proletariat, and cultivated a contingent of proletarian intellectuals. In the field of culture and education, we must resolutely clean up the opponents of academics and college students. Taking the “Potemkin Ship Mutiny” incident in August 1922 as a representative, a group of famous non-Marxist intellectuals who did not want to change their positions after the October Revolution were expelled to foreign countries or remote areas of Russia.
The Soviet regime believed that a large number of scientists (including academicians) held anti-Soviet positions, so it often carried out “cleaning” work in the Soviet Academy of Sciences system. Throughout the 1920s, dismissed scholars from the Soviet Academy of Sciences reached 11% of the total establishment. In response to the frequent “strikes” by professors and college students who have fought for “university autonomy” in universities around the world, in 1922, a “cleansing” policy was introduced in colleges to eliminate non-proletarian college students. The above measures have played a powerful deterrent role, allowing intellectuals remaining in the country to change their positions and cooperate with the Soviet regime.
In September 1919, Russia opened a department of workers affiliated with higher schools and secondary schools as a preparatory institution for universities for workers. At the same time, enrolling college students implement a class policy that stipulates a strict class birth examination system. Students must be born in a family of workers and peasants. They must be working in factories, transportation, agricultural enterprises or working peasants. These measures changed the social component of the intellectuals : 40% of the students in colleges and universities in the Soviet Union in the 1925-1926 school year was graduated from the workers class.
Social sphere.
During the period of the new economic policy, the CPSU only decided on the major policy of social organization issues, leaving more room for social organizations to exercise relative autonomy. Regulations promulgated on August 3, 1922 stipulate that as long as they are social organizations that do not violate the Constitution and other laws, they shall be legally registered and operate.
And in May 1924, the 13th Congress of the Russian Communist Party (Bolsheviks) passed a resolution that for the first time clearly stipulated that the party organization must become the ideological and political leader of social mass organizations.
From then until the end of 1929, the party and government sent leaders to social organizations, created top-down organizations that assisted the Soviet regime, excluded and eliminated voluntary social organizations. The face of social mass organizations has changed radically, from voluntary organizations to become helping the organs of state power, big majority was so : from 1924 to 1928, the former only increased three times, while the latter increased 76 times. On February 6, 1928, social organizations were re-registered, and most of the voluntary social organizations during the new economic policy period were revoked, which formed a unitary social organization system that helped and supported the Soviet regime.
Since 1928, the management system of social organizations has fundamentally changed: the leadership, comprehensiveness and institutionalization of social organizations by the CPSU; the admission criteria for social organizations have changed from complying with the relatively relaxed conditions of the Soviet laws to those criteria that must be guided by Marxism and based on the CPSU ideology and state policy.
Economic sphere.
At the beginning of the implementation of the new economic policy, in the resolution of the Ninth Congress of the All-Russian Soviet at the end of 1921, it was emphasized that “the nationalized state industry should adapt to market conditions and market competition methods”, and fight against private business “to win decisive dominance”. In the document of the 13th Congress of the Russian Communist Party (Bolsheviks) in 1924, the tasks of developing cooperatives and state-owned commerce, seizing private commercial capital positions, and restricting private capital development through various measures were identified.
By July 1926, it was proposed to “completely eliminate the remnants of the political influence of bourgeois elements (Nepman, rich peasants, and bourgeois intellectuals) upon the working people”. At the end of 1927, the Fifteenth Congress proposed that Capitalism and the elimination of rural capitalism. From 1921 to 1927, the class struggle to defeat the private merchant Nepman and seize the position of Nepman had become tighter, and this attitude toward Nepman became more and more severe.
In economic practice, at the beginning of the new economic policy, Nepman faced a discriminatory policy and restricted its development. The first was to restrict the establishment of private enterprises, and state-owned industries also enjoy priority in obtaining bank loans. In addition, the repayment requirements for private enterprise loans were also very strict, requiring 16% to 18% of the annual repayment amount, while state-owned enterprises and cooperative enterprises only need to repay 8% to 10%. At the same time, high taxes were imposed on private enterprises: in 1923 / 24, the tax revenue of private businesses in industry sector increased by 16 times, and the tax revenue by income tax increased by 5 times.
In terms of politics and education, etc.,
NEPMAN was always a discriminated class: Without the right to vote, cannot serve in the military, to join trade unions, to join housing cooperatives, to publish their own publications, and even to attend the same school as children of other social classes.
Public opinion and publicity
NEPMAN has always been imaged as an intolerable enemy. In official propaganda and mass culture, there were many themes against them. At that time, there were many propaganda pictures against NEPMAN, who crouched and crawled under the hammer of the proletarian masses; many anti NEPMAN themed dramas were staged in the theaters, and caricatures were displayed in the exhibition hall. For example, at the end of 1922, the Artists Association displayed an art painting exhibition named “death of nepman”. In a word, through a series of efforts, at the end of 1927, the leading cadres of the party took the background of workers and peasants as the absolute main body, the children of workers and peasants and the background of workers and peasants are increasingly in the mainstream group among the intellectuals, the vast majority of social organizations are organizations that help the political power, the number and influence of nepman’s private businesses in the economic field decreased rapidly, and private businesses were condemned by the public opinion.
Although the Bolshevik party allowed the development of “capitalism” to a certain extent in economy, in other fields besides economy, it has not expanded the social forces supporting the new economic policy, but expanded the forces not understanding, supporting or even opposing the new economic policy, which has made political, social and public opinion preparations for ending the new economic policy. Since the market economy only marches forward in the business sector of the economic field alone, without the support of other fields, its fate of death was inevitable.
The result was obvious:
First, the fundamental reason for the abandonment of the new economic policy lies not only in Stalin’s failure to understand the essence of Lenin’s thought, but also in Lenin’s failure or delay in making a theoretical explanation of the breakthrough and innovation of the three basic points of Marx’s model socialism comprehensively, and in his failure or delay in making a complete blueprint for building socialism through market economy in backward agricultural countries.
Secondly, due to the lack of systematic theoretical innovation and an all-round policy support, the market economy of the Soviet Union finally died. This lesson has important enlightenment significance for the future socialism building:
In theory, Marx’s scientific socialism is the unity of internal logic in various fields of economy, politics and society. In practice, it is the whole of close contact and interaction in all fields of society. After the market-oriented reform is started in the economic field, only when the theoretical innovation and reform can be extended to the political and social fields and other spheres of superstructure can all fields of socialism building work together , and can achieve ultimate success.