Manchester Guardian Correspondent[1]
Written Between October 27 and November 5, 1922
First Published: Version 1: Published in The Manchester Guardian No. 23797, November 22, 1922; First published in Russian in 1930; Translated from the manuscript; Version 2: Pravda No. 17, January 21, 1926; Published according to a typewritten copy with corrections and additions by Lenin
Source: Lenin’s Collected Works, 2nd English Edition, Progress Publishers, Moscow, 1965, Volume 33, pages 400-409
Translated: David Skvirsky and George Hanna
Transcription\HTML Markup:
David Walters &
R. Cymbala
Copyleft: V. I. Lenin Internet Archive (www.marx.org) 2002. Permission is granted to copy and/or distribute this document under the terms of the GNU Free Documentation License
First Version
1. Question. I find considerable economic activity; everybody is buying and selling, and evidently, a new trading class is arising. My question is—how is it that the Nepman is not, and shows no signs of aspiring to become, a political force?
Answer. Your first question reminded me of a conversation I had long, long ago, in London. It was on a Saturday night. I was taking a stroll with a friend; that was some twenty years ago.[2] The streets were thronged. Traders were lined all along the curbs, and their stalls were lit up by small metal tubes, filled with naphtha, or something of that sort. The lights were very pretty. The traffic in the streets was really extraordinary. Everybody was buying or selling.
In Russia at that time there was a trend that we called Economism. By this rather slangy term we meant the childish vulgarisation of Marx’s views on historical materialism. My friend was an Economist, and he at once began to show off his knowledge. This extraordinary economic activity, he argued, should create a desire for political power. I laughed at this interpretation of Marx. The abundance of small traders and their extremely lively activities, I said, do not prove in the least that this class is a great economic force, from which one could infer a desire for “political power”. London, probably, became the world’s commercial centre, both economic and political, in a somewhat more complicated way than my friend imagined, and the London street traders, their remarkable activity notwithstanding, were rather far from being a “political” force, and even from the desire to become one.
I am afraid that your question as to why our Nepmen (i.e., street traders? petty hucksters?) “show no signs of aspiring to become a political force” will raise a smile here; and our answer will be—for the very same reason that the Saturday night crowd buying and selling in the streets of London did not, in Britain, “show signs of aspiring to become a political force”.
2. Question. I get the impression that in Russia, today, buying and selling and barter are highly profitable, whereas production is possible only in very rare cases. Buying and selling and barter are in the hands of the Nepmen. In most cases profitable production is conducted on a small scale, and is in the hands of private individuals. Unprofitable production is in the hands of the state. My question is—does this not presage a continuous increase in the economic power of the Nepmen and a continuous diminution of the power of the state?
Answer. I am afraid that you formulate your second question also from an almost Economist angle in the sense indicated above. It was Bastiat, I think, who seriously held the opinion that “the ancient Greeks and Romans lived by plunder”. The “economic” question as to where the loot obtained by the people who lived by plunder came from did not trouble him very much.
You “get the impression that in Russia, today, buying and selling and barter are highly profitable, whereas production is possible only in very rare cases”.
I was very surprised to read such a conclusion drawn from observation of what goes on in the streets of Moscow. I thought to myself—what about the millions and millions of Russian peasants? The fact that they sow crops is not a rare, or very rare case, but the commonest case in Russia, is it not? Is it not “even” commoner than the “buying and selling” of the Nepmen? And, probably, peasant production is not only “possible” in Russia, but extremely “profitable", is it not? If it were not so, how could our peasants have obtained the means to pay the tax in kind, amounting to hundreds of millions of poods of grain, which they have already delivered to the government so very quickly and easily? How is one to explain the universal acceleration of building activity observed by everybody, both in town and country, throughout boundless Russia?
Does not the questioner take for “highly profitable selling and barter” the petty trade in which a small trader sometimes makes millions and millions of profits in depreciated Russian currency, when on the free market a million rubles is worth less than a ruble was before? It is scarcely possible to slip into such an error, for our government is now—has been for the last few months already—striking out the “superfluous” noughts of our paper currency.[3] One day the figure is a million million; four noughts are struck out and it becomes a hundred million. The state does not become richer as a result of this operation, but it is very strange to assume that it “becomes weaker", for this operation is an obvious step towards stabilising the currency, and the Nepmen are beginning to see that the ruble is becoming stabilised; this was to be seen in the summer, for example. The Nepmen are beginning to understand that the “striking out” of noughts will continue, and I doubt whether their “aspiration to become a political force” will hinder it.
To return to the question of production. In this country the land belongs to the state. The small peasants who occupy the land are paying the tax splendidly. Industrial production—in so-called light industry—is obviously reviving; and this production is partly in the hands of the state and managed by its employees, and partly in the hands of lessees.
Thus, there are no grounds for anticipating “a continuous diminution of the power of the state”.
You must draw a distinction not between production and trade, but between production in light industry and that in heavy industry. The latter is really unprofitable, and this is actually creating serious difficulties for the country. Of this, more below.
3. Question. It is being hinted that an attempt is to be made (by means of taxation) to compel the Nepmen to subsidise industry. My question is—will not this merely result in a rise in prices and increased profits for the Nepmen, which will indirectly create the necessity of raising wages—thus causing a return to the former situation?
Answer. The government has at its command hundreds of millions of poods of grain. That being the case, it is wrong to anticipate that taxes will “merely ” result in a rise in prices. The taxes will also provide us with revenues, obtained from the Nepmen and manufacturers, which will be used for industry, particularly heavy industry.
4. Question. Judging by usual capitalist standards, the economic situation should be worse. Judging by communist standards, the situation should also be worse (decline of heavy industry). And yet, everybody I meet admits that his conditions are better than they were a year ago. Evidently, something is taking place that neither capitalist nor communist ideology allows for. Both presuppose progress. But what if, instead of progressing, we are receding? My question is—is it not possible that we are not marching forward to new prosperity, but are reverting to the old conditions? Is it not possible that Russia is going back to the period of agricultural production approximately commensurate with her needs, and to a brisk home trade only slightly affected by foreign imports? Is not such a period conceivable under the proletarian dictatorship as it was formerly under the feudal dictatorship?
Answer. Let us first “judge” by “usual capitalist standards”. Throughout the summer our ruble remained stable. This is an obvious sign of improvement. Furthermore, the revival of peasant production and of light industry is beyond doubt. This, too, is an improvement. Lastly, the State Bank has obtained a net revenue of no less than 20,000,000 gold rubles (this is at the lowest estimate; actually, it obtained a larger sum). A small sum, but the improvement is beyond doubt. A small sum, but it undoubtedly marks the beginning of an increase in the funds available for heavy industry.
To proceed. Let us now judge by communist standards. All the three circumstances enumerated above are assets also from the communist viewpoint, for in this country political power is in the hands of the workers. The step towards the stabilisation of the ruble, the revival of peasant production and light industry and the first profits obtained by the State Bank (i.e., the state) are all assets from the communist viewpoint too.
How is it that although capitalism is the antithesis of communism, certain circumstances are assets from the two opposite viewpoints? It is because one possible way to proceed to communism is through state capitalism, provided the state is controlled by the working class. This is exactly the position in the “present case”.
The decline of heavy industry is a loss to us. The first profits obtained by the State Bank and the People’s Commissariat of Foreign Trade mark the beginning of an improvement in this field, too. The difficulties here are enormous; but the situation is by no means hopeless.
Let us proceed further. Is it possible that we are receding to something in the nature of a “feudal dictatorship"? It is utterly impossible, for although slowly, with interruptions, taking steps backward from time to time, we are still making progress along the path of state capitalism, a path that leads us forward to socialism and communism (which is the highest stage of socialism), and certainly not back to feudalism.
Foreign trade is growing; the ruble is becoming more stable, although the progress is not altogether without interruptions; there is an obvious revival of industry in Petrograd and Moscow; a small, a very small beginning has been made in accumulating state funds for the purpose of assisting heavy industry, and so on, and so forth. All this shows that Russia is not receding, but advancing, although, I repeat, very slowly, and not without interruption.
5. Question. Or are we witnessing a deplorable squandering of capital that should be utilised in production?
Answer. This question has already been answered in the foregoing.
6. Question. In addition to these questions The Manchester Guardian would be interested to obtain direct from you a refutation of the rumours now freely circulating in Moscow that the ration system will be reintroduced this winter and that all Nepman stocks are to be requisitioned.
Answer. I readily affirm that the rumours to the effect that we intend to revert to the ration system or that we intend to “requisition all Nepman stocks” are groundless.
They are fairy-tales, nothing more. We are not contemplating anything of the sort.
Nothing of the sort is conceivable in present-day Russia. These rumours are being maliciously circulated by people who are very angry with us, but are not very clever.
7. Question. Lastly, am I right in assuming that the agreement with Urquhart has not been finally rejected, but has only been shelved until normal, friendly relations have been established with the British Government?
Answer. You are absolutely right about Urquhart. I shall repeat what I recently told Farbman.[See Interview Given to Michael Farbman, Observer and Manchester Guardian Correspondent] We have not finally rejected the proposal for a concession to Urquhart. We have rejected it only for the political reasons we have publicly announced. In our press we have started a discussion of all the pros and cons. And we hope that after this discussion we shall arrive at a definite opinion on both the political and economic aspects.
Yours,
Lenin
November 5, 1922
Second Version (Unfinished)
In reply to your questions:
1. I think that the “Nepman", i.e., the representative of the trading system developing under the “New Economic Policy", would like to become a political force, but shows no signs of this, or shows them in such a way as to conceal his aspirations. He is compelled to conceal his aspirations, for otherwise he would run the risk of meeting with the stern opposition of our state authorities, or perhaps even worse than opposition, i.e., downright hostility.
I am of the opinion that with the concentration of the bulk of the means of production in the hands of our state what the petty bourgeoisie actually needs, economically is freedom to buy and sell consumer goods. Our laws grant the petty bourgeoisie this freedom.
The term “Nepman” that you use leads to some misunderstanding. This word is made up of the abbreviation NEP, which stands for “New Economic Policy", and the word “man”. Together it means “a man, or representative, of this New Economic Policy”. This term first arose as a journalese nickname for the small huckster, or individual who took advantage of the free market for all sorts of abuses.
Outwardly, what strikes the eye most in the New Economic Policy is that people like the “Nepmen", that is, people of all sorts who “buy and sell", as you say, come to the fore.
But the actual economic activities of the actual majority of the population by no means consist in this. For example, it is sufficient to point to the activities of the vast masses of the peasantry who, precisely at the present time, are displaying tremendous energy and self-sacrifice in restoring their tillage, their agricultural implements, their houses, farm buildings, etc. On the other hand, at this very moment the industrial workers are displaying equal energy in improving their tools, in replacing worn out tools by new ones, in restoring wrecked, dilapidated or damaged buildings, etc.
The “Nepmen", if we are to employ this term, which belongs rather to the realm of journalese than to the realm of serious political economy, make more noise than their economic power warrants. I am therefore afraid that anybody who in a vulgarised way applied to our “Nepmen” the proposition of historical materialism that economic power must be followed by political power, is in danger of falling into serious error, and even of becoming the victim of a series of ridiculous misunderstandings.
The real nature of the New Economic Policy is this—firstly, the proletarian state has given small producers freedom to trade ; and secondly, in respect of the means of production in large-scale industry, the proletarian state is applying a number of the principles of what in capitalist economics is called “state capitalism ”.
I think that the “Nepmen” who draw from this the conclusion that they should aspire to become a political force are in danger not only of falling into error, but also of becoming a butt for newspaper quips about their vulgar conception of Marxism.
2. It seems to me that your impression that in Russia today buying and selling are highly profitable, “whereas production is possible only in very rare cases” is likely to call forth well-deserved ridicule over Mister Nepman’s political economy.
If I am not mistaken, the overwhelming majority of the population of Russia are small peasants, who have now thrown themselves into production with extraordinary zeal, and have achieved (partly due to the assistance the government has given them by way of seed, etc.) enormous, almost incredible success, particularly if we bear in mind the unprecedented devastation caused by the Civil War, the famine, and so forth. The small peasants have been so successful that they delivered the state tax amounting to hundreds of millions of poods of grain with extraordinary ease, and almost without any coercion.
I therefore think that it would be more true to say that the overwhelming majority of the population, whose production is conducted on a very small scale and is concentrated in private hands, obtains very large profits. This applies to peasant farming as a whole. The same, or slightly smaller, profits are obtained from industrial production—part of which is in private hands and part in the hands of lessees from the state or state factories producing consumer goods for the rural population.
The only really unprofitable production in the hands of the state is that part which, to employ the scientific terminology of political economy, should be called the production of means of production (ores, metals, etc.), or the production of fixed capital. Under capitalist economy the renewal of this form of capital usually requires government loans, which at one stroke provide extremely large sums (hundreds of millions of rubles, or even dollars) for the reorganisation of a number of enterprises capable of restoring damaged means of production.
In our case, the restoration of the damaged means of production promises no profit whatever for a long time to come, and is “unprofitable", as you express it. For a long time we shall have to resort to revenues obtained from concessions, or state subsidies, for the purpose of restoring our fixed capital.
Such is the actual economic situation at present. As you see, my view of this situation is quite different from yours. I am afraid that your opinion that in this country there is a “continuous increase in the economic power of the Nepmen” and a “continuous diminution of the power of the state” would probably have prompted Marx to make some caustic remarks about vulgar political economy.
I still stick to my old idea that after Marx you can drag in non-Marxian political economy only for the purpose of fooling philistines, even if they are “highly civilised” philistines.
I am rounding off on the question of “political power”. The basis of political power in Russia is the workers and peasants. In all capitalist countries the peasants are robbed by the landowners and capitalists. As the peasants become more politically educated they understand this better. That is why the bulk of the population will not follow the lead of the “buying and selling” Nepmen.
3. Will not the tax on the “Nepmen” merely result in increased wages and prices, instead of providing funds for production?
No, because prices will be based on grain. A certain part of this grain is in the hands of the state, collected in the form of a tax. The Nepmen cannot directly influence prices because they are not producers. The foreign trade monopoly, I must say in passing, will help us to keep the Nepmen in hand, for, without consulting them, prices will be determined by the price of production abroad plus the extra charge imposed by the state for the purpose of subsidising production.
I am afraid that you sometimes imagine that the Nepmen are forcing up prices although the rise in prices is actually due to the depreciation of our paper currency, caused by increased issues. That would be a mistake.
[1] Arthur Ransome, Manchester Guardian correspondent, came to Soviet Russia in October 1922 with the express purpose of interviewing Lenin. On October 26 he was asked to write down the questions that he wanted answered. On the next day Ransome wrote seven questions which he sent to Lenin.
Lenin received Ransome in the evening of November 3. They spoke of the parliamentary elections in Britain and the fascist coup in Italy, but mostly the talk was around the questions submitted by Ransome. Lenin said that he had not yet answered all the questions, but promised to do so before Ransome left the country. On Sunday, November 5, Lenin wrote his answers to all of Ransome’s seven questions.
[2] Lenin and his wife Nadezhda Krupskaya lived in London from April 1902 to April 1903. The friend that Lenin mentions is K. M. Takhtarev, a Social-Democrat, member of the St. Petersburg League of Struggle for the Emancipation of the Working Class and one of the leaders of Economism.
The Economists were representatives of an opportunist trend in the Russian Social-Democratic movement of the close of the19th and beginning of the 20th century. The Economists incorrectly assessed the relation between economics and politics and belittled the role of the political revolutionary struggle. They said that the working class should confine itself to an economic struggle for higher wages, better working conditions and so forth, maintaining that the political struggle was a matter for the liberal bourgeoisie. They rejected the idea that the party of the working class plays the leading role, that socialist political consciousness must be brought into the working-class movement. They thereby cleared the road for bourgeois ideology. Economism held out the threat of steering the proletariat away from the road of revolution and making it politically dependent on the bourgeoisie. This trend was completely routed ideologically by Lenin.
[3] On October 24, 1922, the Council of People’s Commissars passed a decision to put into circulation banknotes dated 1923. Under the new decision, signed by Lenin, one 1923 ruble was equal to a million rubles of the banknotes that had been removed from circulation or one hundred 1922 rubles.