I said that state capitalism would be our salvation; if we had it in Russia, the transition to full socialism would be easy, within our grasp, because state capitalism is something centralized, calculated, controlled and socialized, and that is exactly what we lack.…23
The economic program that Lenin favored was thus much more moderate than the one that the Bolsheviks would actually adopt. Had he had his way, the “capitalist” sector would have been left essentially intact and placed under state supervision. The resulting cooperation, which posited the inflow of foreign (mainly German and American) capital, was meant to bring the Bolshevik economy all the benefits of advanced “capitalism” without its political side effects. The proposal had many features in common with the New Economic Policy introduced three years later.
But this was not to be. Lenin and Trotsky ran into fanatical opposition from a number of groups, of which the Left Communists were the most vociferous. Led by Bukharin, and comprising an important segment of the party’s elite, the Left Communists had suffered a humiliating defeat over Brest-Litovsk, but they continued to operate as a faction within the Bolshevik Party and to argue their case in the pages of their organ, Kommunist. The group, which included Alexandra Kollontai, V. V. Kuibyshev, L. Kritsman, Valerian Obolenskii (N. Osinskii), E. A. Preobrazhenskii, G. Piatakov, and Karl Radek, saw itself as the “conscience of the Revolution.” It believed that, since October, Lenin and Trotsky were sliding toward opportunistic accommodation with “capitalism” and “imperialism.” Lenin treated the Left Communists as Utopians and fantasts, victims of a “childhood disease of socialism.” But the faction enjoyed powerful support among workers and intellectuals, especially in the Moscow party organization, who felt threatened by Lenin and Trotsky’s proposals to introduce “capitalist” methods. The proposed changes calling for the dismantling of Factory Committees and the abandonment of “workers’ control” in favor of a return to responsible individual management inevitably reduced the power and privilege of party officials. Lenin could ill afford to alienate these intellectuals and their supporters among the workers at a time when the Bolsheviks were under fire for Brest and had lost majorities in all the soviets. He could hardly insist on a course which commonsense recommended to him when he heard a metalworker say about the negotiations with Meshcherskii: “Comrade Lenin, you are a great opportunist, if you allow for a breathing spell also in this field.”*
The elements of the War Communist system that actually won out found reflection in an essay which Larin published in April 1918. Although he pretended merely to elaborate on the principles enunciated in his November 1917 article, Larin now presented a new and different economic program. All Russian banks were to be nationalized. So was industry, branch by branch: there was to be no collaboration between the state and private trusts. “Bourgeois” specialists could work for the economy only as technical personnel. Private trade was. to be abolished and replaced by cooperatives working under state supervision. The economy would be subjected to a single national plan. Soviet institutions would keep accounts without reference to money. In time, state control would be extended to agriculture, beginning with the unused land of ex-landlords. The only concession to private capital would be to foreign interests which would be permitted to participate in Soviet Russia’s economic development by providing technical personnel and granting loans for the importation of equipment.24
With this program, the Left Communists in April 1918 overruled Lenin, plunging Russia headlong into the utopia of instant socialism.
Bukharin remained the leader of the Left Communists, but after suffering defeat over the Brest Treaty, he yielded to others the opposition to Lenin’s state capitalism. The principal theorist of Left Communism was Valerian Obolenskii, better known by his pen name, N. Osinskii.† Born in 1887 the son of a veterinarian with radical sympathies, he joined the Bolsheviks at the age of twenty. He spent one year in Germany studying political economy, which, in his mind, qualified him to write on economic subjects, notably Russian agriculture. Immediately after their coup, the Bolsheviks appointed him director of the State Bank, which post he held until March 1918, when he resigned in protest against the Brest Treaty.
His Construction of Socialism, written in the summer of 1918 and published that fall, provided the blueprint for War Communism.25 The regime’s economic tasks, as Osinskii defined them, involved three operations: seizing control of the “strategic points” of the capitalist economy, purging it of unproductive elements, and imposing on the country a comprehensive economic plan.
Following Hilferding, Osinskii placed at the top of his priorities the seizure of banks, the “brain of capitalism.” They were to be transformed into clearing agencies of the socialist economy.
Next came the nationalization of private property in the means of industrial and agricultural production, both large-scale and small. This meant not only the legal transfer of property titles but a purge of the personnel, with the previous owners and managers being replaced by workers. These measures would strike at the very heart of capitalism and, at the same time, make it possible to rationalize production, through the appropriate allocation of resources.
The next step, the nationalization of commerce, was the most difficult. The government would take over all commercial syndicates and large trading companies. Exercising a monopoly on wholesale trade, it would set prices on commodities; in time, all commodities would be distributed by state organs, preferably free of charge. The elimination of the free market was an essential measure:
The market is the nidus of infection from which constantly ooze germs of capitalism. Mastery of the mechanism of social exchange will eliminate speculation, the accumulation of fresh capital, the emergence of new proprietors.… A correctly realized monopoly on all products of agriculture, under which it will be forbidden to sell on the side a single pound of grain, a single bag of potatoes, will make it utterly senseless to carry on independent village agriculture.26
Liquidation of retail trade called for a fourth step: compulsory consumer communes enjoying a monopoly on articles of prime necessity. This institution would do away with speculation and “sabotage” and deprive capitalists of yet another source of profit.
Finally, it would be necessary to introduce compulsory labor. Its guiding principle would be simple: “No one has the right to refuse work assigned to him by the [labor] bureau.” Compulsory labor was not necessary, for the time being, in the rural areas, which had an excess of hands, but it was indispensable in the cities. Under this system, the “labor obligation … becomes a means of compelling people to work, replacing the old ‘economic’ stimulus, which, in plain language, meant the fear of dying from hunger.”
It was a basic premise of Osinskii’s plan that for political as well as economic reasons the economy could not be organized on a part-capitalist, part-socialist basis: a clear choice had to be made. Even so, in deference to Lenin, he called his program, not “socialism” or “War Communism,” but “state capitalism.”