1922 - the last genuinely communist Congress
The Fourth Congress of the Communist (Third) International opened in Petrograd in November 1922. It met for most of its sessions in Moscow, attended by 408 delegates, of whom 343 had a full vote. These represented 58 Communist organisations from various countries, along with delegations from various other non-affiliated organisations.
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| The rally in Red Square, 7 November 1922. |
On the fifth anniversary of the 1917 October Revolution, a mass rally welcoming the Congress was held in Moscow's Red Square.Trotsky gave the main platform speech, which was greeted with 'thunderous cheers'. Looking back in 1936 at this Fourth Congress, a document written for the First International Conference of the Fourth International, where the genuine forces of Marxism - Trotsky and his supporters - were now gathered, noted that:
"The Third Congress [had] condemned ultra-left adventures and issued the slogan, 'To the masses', recognising that the first great post-war wave (1917-1920) was now ebbing, and that a breathing space had occurred which it was necessary to utilize by preparing better and more thoroughly for the coming struggles ... The Fourth Congress reaffirmed the lessons of the Third Congress and dealt with them more thoroughly and concretely [and] was able to look back on tremendous organisational results. In the course of three years [since the First Congress in 1919], in all continents and in practically all countries, sections had been created, and apart from this, the Red International of Trade Unions and the Young Communist International had been built up. The Communist parties in a number of countries were at that time leading mighty revolutionary mass actions."
However, this proved to be the last genuinely communist congress of the Third International. By the time that the Fifth Congress was held, in 1924, Stalinist reaction had taken its hold. The 'New Economic Policy' (necessarily applied to the Soviet economy as discussed below) had always risked a strengthening of the wealthier 'kulak' peasant layer and the speculators and middlemen, the so-called 'NEP-men'. In turn, and especially with the loss of so many of the experienced working-class cadres needed to provide the check of genuine workers' democracy, owing to the civil war, there was a growing danger of control being handed over to an unchecked party officialdom and state bureaucracy, a danger that Lenin had warned of before he died in January 1924. But the NEP was not the key factor in the rise of Stalinism. That was the ongoing isolation of the embattled workers' state following the defeat of the 1923 German revolution.
The defeat of the German revolution signalled the point where the necessary risks inherent in the NEP became ones that could not be kept in check. As the 1936 document quoted above put it in summary, its defeat "weakened the positions of the international proletariat and of its vanguard" while, at the same time, "acted to strengthen the tendencies of the Soviet bureaucracy to become an independent force. This accounts for the fact that the Fifth World Congress of the Comintern signifies above all the subjection of the Comintern to the yoke of the Russian bureaucracy. The Comintern itself became bureaucratised and was brought into complete dependence on the bureaucratic centre in Moscow. The theory of 'socialism in one country,' advanced by Stalin, the head of the bureaucracy, in the autumn of 1924 in glaring contradiction to the entire theory and practice of Marxism-Leninism, became for the newly formed social layers (bureaucracy, kulaks, specialists etc.) the ideological expression of their nationally-limited interests".
However, the records of the Fourth (1922) Congress remain principled guidance for genuine revolutionaries to re-read and apply today. In particular, the discussions - around and during the Congress - about the economic transition from a revolutionary overturn of capitalism to a fully planned economy are definitely of relevance for future events in the twenty-first century.
The Soviet Economy and the 'New Economic Policy'
The 1936 document on the 'Evolution of the Comintern', referred to in the introduction to the post, described how the "NEP (New Economic Policy) of the Soviet Union, following on 'War Communism,' which had to be introduced under the pitiless pressure of circumstances, supplied the immensely important experience of necessary tactical retreats even after the winning of power, an experience which most probably will have its validity not only for backward Russia, but also for more advanced countries".
In the same year, Trotsky had written his analysis of the rise of Stalinism, 'Revolution Betrayed'. In that book, he commented that 'War Communism' had been based on "utopian hopes" of being able to "continue on a planned, organised and state-wide scale to replace trade by the distribution of products" (quoting from the agreed Bolshevik policy of March 1919). However, he adds that "the theoretical mistake of the ruling party remains inexplicable, however, only if you leave out of account the fact that all calculations at that time were based on the hope of an early victory of the revolution in the West. It was considered self-evident that the victorious German proletariat would supply Soviet Russia, on credit against future food and raw materials, not only with machines and articles of manufacture, but also with tens of thousands of highly skilled workers, engineers and organizers".
Trotsky continues that "Lenin explained the necessity of restoring the market by the existence in the country of millions of isolated peasant enterprises, unaccustomed to define their economic relations with the outside world except through trade. ... A planned economy cannot rest merely on intellectual data. The play of supply and demand remains for a long period a necessary material basis and indispensable corrective".
Lenin speaks to the Congress
And, returning to 1922, it was Lenin, who had been too unwell to attend the opening sessions of the Fourth Congress, who, in a short speech on 13 November, explained to delegates why the NEP - in short, granting "the peasants freedom to trade" - had been introduced. He explained how, as the Civil War was drawing to a victorious conclusion at the start of 1921, it was clear that there was rising discontent amongst the peasants, and some workers too, because of the economic pressures on them, which included severe famine in some rural areas.
Lenin explained how the party leadership had recognised that "in our economic offensive we had run too far ahead ... we had not provided ourselves with adequate resources ... the direct transition to purely socialist forms, to purely socialist distribution, was beyond our available strength, and that if we were unable to effect a retreat so as to confine ourselves to easier tasks, we would face disaster".
He pointed to the successes that the NEP had already achieved - the rouble had begun to stabilise, and light industry had started to revive, with a consequent improvement in workers' conditions. Above all, the policy had succeeded in not only reversing the famine but in the state now receiving significant stocks of grain as 'tax in kind' "without employing any measures of coercion". Heavy industry, however, was another matter. Lenin pointed out that, under capitalism, development of plant and factories would only be done through significant loans - loans unavailable to Soviet Russia. Instead, a budget was being put aside to provide the state subsidies that were required.
Lenin concluded by explaining that "the most important thing for us was to lay the economic foundation for socialist economy. We could not do it directly. We had to do it in a roundabout way". However, he also hinted at the dangers of having a state bureaucracy that was not really under workers' control: "We now have a vast army of government employees, but lack sufficiently educated forces to exercise real control over them. In practice it often happens that here at the top, where we exercise political power, the machine functions somehow; but down below government employees have arbitrary control and they often exercise it in such a way as to counteract our measures". Sadly, through the international defeats that left the workers' state in continuing isolation, that bureaucracy was only to grow in strength.
Trotsky gives the main report on the NEP
The following day, Trotsky gave the main report on the NEP to the Congress. Firstly, he explained the reasons for what might appear as a "zigzag course" of economic policy. Firstly because 'War Communism' had been driven by "what was politically necessary and unavoidable [which] did not always run parallel to what was economically expedient". In order to defeat the counter-revolution, "the bourgeoisie was not expropriated gradually, in systematic fashion, at a pace corresponding to our capacity to organise and make good use of their property". Instead, the workers' state "had expropriated far more than we were capable of utilising. ... We faced the necessity of somehow organising this large and rather chaotic inheritance. The civil war still raged, and organisation of the economy was subject to the demands of the military-economic requirements of civil war. That is how war communism was born".
Trotsky stresses that a fully planned socialist economy has to be able to correctly "allocate productive resources and labour power among the different branches of the national economy" and that, "under capitalism, productive forces are allocated according to the laws of the free market, competition, supply and demand". After taking power, "we take over the capitalists’ methods and material apparatus of production, the organisation of the economy, the allocation of production and productive forces". It is only over time that the workers' state can start to dispense with these market methods and allocate resources through economic planning alone. "To allocate and organise these forces in socialist fashion requires methods that the victorious proletariat – even in the most developed countries – will need years and perhaps decades to develop".
Yes, Trotsky acknowledges, the NEP brings with it the danger of a growth in private capital over state capital, and that the "speculators, go-betweens, and lessees are genuine capitalists". But the strength of 'state capital', the enterprises fully owned and operated by the state, plus the state control of land and transport, far outweighed the strength of 'private capital'. "The workers’ state has greater advantages; it holds the trumps".
Trotsky points out that main risk would be if world capitalism was able to intervene and use its purchasing power to pull that balance in the direction of private capital. But he explains that "there are always two parties to a purchase: the one that buys and the one that sells. Power is in the hands of the workers’ state. A monopoly exists in the most important industries and in foreign trade. This monopoly is therefore for us a matter of principle. It is our defence against a capitalism that wants to buy out our incipient socialism!"
Trotsky adds that "we must and can confidently say that if concessions to capitalist methods on the one hand and the capitalist world on the other continue to develop, accumulate, deepen, compound, and multiply, eventually we could come to a point where the foundations would have suffered such changes that the superstructure of the workers’ state would necessarily collapse. But that is simply the dialectical character of this situation. For the superstructure, once created, itself becomes a factor influencing the foundation, which for its part gains a firm footing in the superstructure. And secondly, we are not talking here about eternity, but about a defined historical period, until the appearance on stage of the great Western reserves, destined to become the vanguard".
Of course, those 'Western reserves' - of the revolution in Germany and elsewhere never did appear on the stage. That's why, in 'Revolution Betrayed' in 1936, Trotsky wrote that "two opposite tendencies are growing up out of the depth of the Soviet regime. To the extent that, in contrast to a decaying capitalism, it develops the productive forces, it is preparing the economic basis of socialism. To the extent that, for the benefit of an upper stratum, it carries to more and more extreme expression bourgeois norms of distribution, it is preparing a capitalist restoration". Eventually, as we know, such a restoration did take place. However, that was certainly not destined in the development of the NEP, a policy required, in Lenin's words, "to lay the economic foundation for socialist economy".
State Capitalism?
In his speech, Lenin used the phrase 'state capitalism' as shorthand for the NEP - a description used by some to describe the nature of Stalinism. However, even then Lenin heavily qualified this by saying that "I have already said that our state capitalism differs from state capitalism in the literal sense of the term in that our proletarian state not only owns the land, but also all the vital branches of industry".
But Trotsky makes clear in his speech that "in my own opinion this term [i.e. state capitalism] is neither exact nor happy. Comrade Lenin has already underscored in his report the need of enclosing this term in quotation marks, that is, of using it with the greatest caution. This is a very important injunction because not everybody is cautious enough".
Why was Trotsky unhappy with the term? "For a very obvious reason. In using this term it is impermissible to ignore the class character of the state ... Today in Russia the power is in the hands of the working class. The most important industries are in the hands of the workers’ state. No class exploitation exists here, and consequently, neither does capitalism exist although its forms still persist. The industry of the workers’ state is a socialist industry in its tendencies of development, but in order to develop, it utilizes methods which were invented by capitalist economy and which we have far from outlived as yet. Under a genuine state capitalism, that is, under bourgeois rule, the growth of state capitalism signifies the enrichment of the bourgeois state, its growing power over the working class. In our country, the growth of soviet state industry signifies the growth of socialism itself, a direct strengthening of the power of the proletariat".
Trotsky returned to this point in 'Revolution Betrayed'. He wrote, "we often seek salvation from unfamiliar phenomena in familiar terms. An attempt has been made to conceal the enigma of the Soviet regime by calling it 'state capitalism'. This term has the advantage that nobody knows exactly what it means" (!) Trotsky explains that the term 'state capitalism' can be applied "when a bourgeois state takes direct charge of the means of transport or of industrial enterprises". But what does not occur - as had happened in Soviet Russia, was "the expropriation of the class of capitalists".
He also explains why it was wrong, therefore, to describe the Soviet bureaucracy as a class of 'state capitalists'. No, the source of its power and income was the state property, not private capital, stocks and bonds. It was a parasitic caste, not a capitalist class. He added that the "Soviet Union is a contradictory society halfway between capitalism and socialism" and that "to define the Soviet regime as transitional, or intermediate, means to abandon such finished social categories as capitalism (and therewith “state capitalism”) and also socialism. But besides being completely inadequate in itself, such a definition is capable of producing the mistaken idea that from the present Soviet regime only a transition to socialism is possible. In reality a backslide to capitalism is wholly possible". And Trotsky was right.
Theses presented to the Fourth Congress
In concluding the discussion, the Congress received a summary report by Trotsky drawing up a balance-sheet of this necessary 'tactical retreat'. Here are the key points:
1) Thanks to the lead given by its revolutionary working-class, Russia had become "the first country to enter the path of socialist development", despite its general economic and cultural backwardness. The fledgling soviet republic had been surrounded since birth by hostile capitalist powers without other successful revolutions coming to its aid.
2) These conditions had "tended to convert the petty bourgeoisie into a reservoir for the landlord-bourgeois counter-revolution. Under these conditions the resistance of the landlords and the bourgeoisie could be broken, and the Soviet power maintained, by no other means than the complete expropriation of the bourgeoisie and the exploiting upper layers in the villages." This had meant that the new workers' state had taken under its control "all the industrial enterprises down to the very smallest ones". Many of these had already been distorted by the demand for war production and now often also lacked the managers and specialists who had fled to the side of the counter-revolution.
3) This rapidly centralised but shattered economy was the basis of the initial phase of 'War Communism', which, in order to feed the cities and the army under civil war conditions, amounted to "the régime of a beleaguered fortress". The Theses point out that to fight their own war, the Tsarist state had already replaced 'free trade' in grain by a monopoly. The workers’ state, had to operate in the same way, on the basis of compulsory confiscation of the peasant grain surpluses and a crude distribution through uniform state rations. At the same time the best that could be extracted from the ruined factories was obtained through a very basic unified plan. "This “communism” was rightly called War Communism not only because it replaced economic methods by military ones but also because it served military purposes above all others. It was not a question of assuring a systematic development of economic life under the prevailing conditions but of securing the indispensable food supply for the army at the fronts and of preventing the working class from dying out altogether".
4) The 'New Economic Policy' had meant shifting "from the methods of War Communism to the methods of the market. The compulsory collections of grain surpluses have been replaced by taxes in kind, enabling the peasantry to freely sell its surpluses on the market; monetary circulation has been restored and a number of measures taken to stabilize the currency; the principles of commercial calculation have been reintroduced into the state-owned enterprises and the wages again made dependent on skill and output of workers; a number of small and medium industrial enterprises have been leased to private business. The gist of the New Economic Policy lies in the revival of the market, of its methods and of its institutions."
5) The use of market methods inevitably meant that there would be a competition between private capital and state capital. However, as long as its expansion into industry was resisted, at first this competition would be mainly "in the sphere of trade only" with, based on rough and ready estimates, "about 30 per cent of the total trade turnover falls to private capital, with the remaining 70 per cent consisting of sums owned by the state organizations and the co-operatives closely connected with the state". However, all land, industrial enterprises (although with some smaller ones now being leased to private owners), the railways and foreign trade were in the hands of the workers' state. So, in the struggle for the goods produced for the market by the peasantry, "the proletariat has mighty advantages on its side: the country’s most highly developed productive forces and the state power. On the side of the bourgeoisie lies the advantage of greater proficiency and to a certain extent of connections with foreign capital, particularly that of the White Guard émigrés".
6) Trotsky's theses were clear that this "political retreat on the economic front became absolutely unavoidable as soon as it became finally established that soviet Russia was confronted with the task of building her economy with her own organisational and technical forces and resources during the indefinite period required to prepare the European proletariat for the conquest of power". But, in fact, this transitional policy was one which the Soviet government "would doubtless have pursued in 1918-19 had not the implacable demands of the civil war obliged it to expropriate the bourgeoisie at one blow, to destroy the bourgeois economic apparatus and to replace the latter hastily by the apparatus of War Communism".
7) The NEP was far from being a 'capitulation' to capitalism as claimed by some of the opponents of the workers' state. "In reality, however, the development of soviet Russia proceeds not from socialism to capitalism but from capitalism – temporarily pressed to the wall by the methods of so-called War Communism – to socialism". "There is no ground whatever for assuming that state accumulation will proceed more slowly than private capitalist accumulation and that private capital will thus be likely to emerge from the struggle as the victor".
8) The NEP was already having a positive effect on the economy, encouraging the peasantry to produce grain and other foodstuffs, and assisting light industry in particular in the first place. Heavy industry and transport were key areas for the workers' state to concentrate on and develop through centralised state control. A planned economy was being built while also, at this stage, using the market - "the elemental interplay of supply and demand ... as the basic form of distribution of goods and regulation of production ... so that by basing itself on the market, the state may aid in eliminating the market as quickly as possible. The quicker that state industries could provide products to meet the needs of the peasantry, the quicker this transition could be achieved. In particular, "the socialist principle can gain complete victory in agriculture only through the electrification of agriculture which will put a salutary end to the barbaric disjunction of peasant production".
8) Trotsky's theses emphasises that there will inevitably be a lengthy period of transition during which elements of market methods will need to be utilised. "All workers’ states will, in a greater or lesser degree, have to pass through this stage, on the road from capitalism to socialism ... The speed with which the workers’ state traverses this stage ... will depend, separate and apart from the military and political situation, upon the level of organisation and culture and the conditions of the productive forces existing when the workers’ state comes into power. It is absolutely clear that the higher both of these levels are, all the more rapidly will the workers’ state accomplish the transition to socialist economy and from this to complete Communism".
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