A few days ago I re-read the book of Lenin's final years’ speeches and letters. The book covers the years 1922 and 1923 (Lenin died in January 1924). I grabbed the book simply because I saw it on my bookshelf and having read it probably twenty years ago I could not remember exactly what was there, and thought, as I was proof-reading the section on inequality in socialism in my forthcoming “Visions of inequality”, that there could be something in the Lenin book that might be relevant for my chapter. In reality, there was nothing.
The issues raised by this post are very important and extremely complex. They cannot be fully discussed in a comment section.
There are very serious Western scholars who consider Deng Xiaoping's reforms (which were actually not his, but the Party's; Deng only gave the general political direction to the reforms) a very similar form of NEP. I think this hypothesis is in the right direction and is certainly more true than the "China restored to capitalism" hypothesis that is dominant in the West nowadays. But it is incomplete.
It is crucial to have in mind that "China's NEP" was built on a very different -- much more favorable -- material base than the Soviet Union's. Most, if not all, of the modern-day Chinese capitalist class came from the poor/common peasantry, and they owe their position and status entirely to the socialist system. This is a totally different scenario because that means the Chinese capitalist class doesn't have a capitalist culture, set of ideas or political cohesion (organization). In the West, we have the old nobility who became the capitalist class or, in America, the nations were founded by capitalists (slaveowners), that is, the American nation-states were already born capitalist (liberal). During the Lenin era, the USSR had the problem of the kulak, rich peasants who owed their privileges to the czar's capitalist reforms of the 1860s and, by the time of his death, already had generations (life expectancy in Russia was extremely low; 64 years meant some four or five generations) of experience in ideology, politics and organization.
But Lenin's writings leave us a hole when we want to compare NEP with modern-day China. He died in early 1924. Later that year, the NEP got much deeper and worrisome, the capitalists seemingly taking over in a smooth and fast process. The situation was certainly worse than in today's China, many writings of the time giving socialism as finished. How the USSR managed to save socialism from NEP is one of the questions Edward Carr admits he didn't have an answer: he simply attributes it to sheer willpower of the Bolsheviks. Either way, if one wants to completely understand the NEP, one has to concentrate his or her studies in the years of 1924-1926, not 1923.
Besides, comparing Reform and Opening Up to the NEP doesn't answer the crucial question: why did NEP collapse in 1926-28, while R&OU is still alive and well today, more than 40 years later? Because few people in the West remind the fact that the NEP was never abolished from above: it collapsed under its own inner contradictions. The rise of Stalin (i.e. the rise of Socialism in One Country) only came after the fall of NEP, not during or before. It was the fall of NEP that created the vacuum SOC could fill, not the rise of SOC that imploded the NEP.
What sources would you recommend reading about the implosion of the NEP before SOC? No snark, I've just never heard this before, perhaps because it's so poorly understood in the West.
My go-to work for the history of the USSR up to 1929 is Edward H. Carr's “A History of Soviet Russia” (preferably the fourteen-volume complete version, not the abridged one-volume one).
I remember sitting in a Belgrade cafe with some Very Leftist Friends having a discussion somewhat like this. I had just read Mann's Buddenbrooks, his novel covering several generations of a German bourgeois merchant family. There's a scene in which a Buddenbrook (as burgermeister) has to confront a red mob of peasants and workers who demand a republic. 'You have a republic' is all he says in reply. It's a good illustration of the trench between radical social politics and 'dollar rationality.' The Buddenbrooks were businessmen and knew how to calculate costs, work shipping and trade, make deals, etc. etc. I realized reading that book that actually 'running the economy' (or even a minor import-export firm) is a kind of knowledge entirely different from the socialist point of view. I brought up all this to my well-meaning and battle-scarred friends, but they all kind of demurred (there was plenty of rakija, I admit) but still, no one had any reply to that point. It's kind of a big deal, too, for any leftist concerned with anything real...
Great post, and great speeches- the theoretical importance of which is often overlooked in the West. The below is crucial:
“Communists do not know how to run the economy… they are inferior to the ordinary capitalist salesmen who have received their training in… big firms”
This is what gave socialist experiments in the 20th century their distinctive weirdness in terms of economic efficiency. To state the obvious, when capitalists became ascendant in the previous centuries, they knew exactly how to manage the economy because they had already developed a distinctive capitalist economic logic at the intra- and inter-firm level.
Socialists did not have this. I would argue that this strange occurrence can be attributed to a mistaken analysis on the part of Marxists. They saw increasing unionisation and labour organisation (knowing to organise themselves as a class and on the shop-floor) as amounting to the same thing as knowing how to run a factory and the economy as one giant factory. They also saw the secular trend toward trustification/cartelisation in the run-up to the 1st World War as a sign that opportunity for a fully operational socialist economy were rapidly maturing.
All capitalist firms converge into trusts and cartels -> workers organised into unions take over cartels -> planned, socialised economy -> socialism
With hindsight we can tell this was a little naive to say the least. By the beginning of the 20th century, capitalism had barely got started, and a distinctive socialist logic of economic organisation that actually works was not yet ready for prime-time. And it arguably still isn't, although if Cockshott etc are to be believed economic coordination via planning may now be technically feasible.
That was essentially Preobrazhensky's thesis: that, in the case of capitalism, the economic "revolution" came before the political "revolution" (the economic one happened in the early 1500s; the political one in 1688 or 1776-1789, depending on your taste in liberalism). In the case of socialism, the "political" revolution came first (1917), the "economic" revolution only then being built (i.e. x>1917).
That's why some Marxists claim the October Revolution was "premature".
Great discussion! Many thanks for the Lenin quotes.
In 1949, Mao wrote President Truman, “China must industrialize. This can only be done by free enterprise. Chinese and American interests fit together, economically and politically. America need not fear that we will not be co-operative. We cannot risk any conflict”. He repeated the invitation to Presidents Truman and Eisenhower but they, too ignored his pleas. Not until 2001 would the US permit China to trade normally, and then under humiliating conditions.
A few niggles:
1. “The problem was that the incentive structure is very different for a bureaucrat or a manager who runs a large state-owned company from the incentive structure faced by an individual capitalist”. The incentive structures for Chinese SOE CEOs is unusual. C-suite posts go to civil servants ambitious to demonstrate their management skills and win promotion. Some of the world's biggest, most valuable, most profitable companies are SOEs.
2. "The social structure of the Chinese elite had enormously evolved between the late 1980s and 2013"? There has only been one Chinese elite for the past 1500 years, officials. Nothing changed that.
3. "look at Xi Jinping’s policies as an attempt at the reassertion of the power of the state vs. the capitalist sector and the rich"? You assume that the rich have power. They do not.
Interesting analysis, and I tremendously appreciate the critiques of the Deng Xiaoping neoliberalizations. I find myself disagreeing heavily however with the premise that NEP was good/necessary, and I think material data plays out. Marxist historian Loren Goldner has pointed out how the NEP was actually quite a failure and a re-institution of exploitative capitalism over the peasantry that led to famine conditions in 1921-1922, and price crises in 1923 and 1925. The basic problem was that, as you said, it was a state capitalism controlled by the Party and by the proletariat. Not the peasantry. So this meant the party pursued policies favorable to Moscow and Petrograd, not Berdyansk or Kazan. They bought grain on quota at low fixed prices, and sold industrially-produced equipment at high prices. If you're a proletarian, this is great. Value for your labor, and cheap food. I suspect this is why many admirers of USSR and China that I encounter tend to praise the urban planning, and have almost nothing to say about the countryside. But if you're a Ukrainian peasant in rural Dnipropetrovskaya oblast, and you need to keep growing enough wheat to meet party quotas, but you make shit money and when your plough breaks a new one costs an arm, a leg, and a trip to Aleksandrovsk, it's going to be a bad time. And the famines in southern Ukraine and Tatarstan of 1921-1922 certainly did not do anything to help a rift between peasantry and party. Indeed the problem here is state control, I argue, because the state easily reproduces a new capitalism or maintains existing capitalism. Certainly over the course of the russian civil war, the rise of the Bolsheviks and their bureaucratic management over the workers' councils (power to the workers' councils was not restored after the war, and any autonomous councils were heavily criminalized in the years after 1921). This is why, in my view, the only way do do communism correctly is either Rosa Luxemburg-ist (or Pannekoekist or any other of the "Left communist" theoreticians) or anarcho-communist.
And this brings me then to my critique of Xi Jinping as well- his rule is less about this kind of "state control" that will help bring control back to the proletariat (but at the expense of peasantry), and more about what sociologist Ivan Szelényi calls "political capitalism", which features the privatization of state-run industries, often for dirt cheap, the consolidation of a new capitalist ruling class which rules by extracting insider rent from territories it stakes out- in these territories, are the former state-run enterprises, which now are owned by this "political capitalist" ruling class. Xi Jinping's crackdown on corruption (as he called it) can be understood in this context too, as a way for him to use state repression against anyone who would stand in the way of the development of his political capitalist ruling class. I do not think we can expect to see conditions for workers in China improve very much at all under Xi Jinping, in fact, I expect them to continue to deteriorate, barring a mass movement for increased workers' rights and workplace democracy, something more in the spirit of Pannekoekist council communism. Of course, the Chinese state is well aware of this and that is why Marxist students who try to unionize factories in special economic zones get arrested, and why anarchism is basically as criminalized as methamphetamine in the U.S.
For anyone interested in the economic background of the NEP and the road towards it there are some interesting books
Alec Nove - An Economic History of the USSR
R.W. Davies - From Tsarism to the New Economic Policy: Continuity and Change in the Economy of the USSR
R.W. Davies - The Economic Transformation of Soviet Union 1913 - 1945
Silvana Malle - The Economic Organization of War Communism 1918-1921
Alan M. Ball - Russia's Last Capitalists: The Nepmen, 1921-1929
Since I have been trying to make a case for China’s economic policy being a modified version of Lenin’s NEP for over a decade I would be much interested in the arguments of Branko Milanovic, who pointed out that he has been arguing along the same lines. Hints to where these could be found would be much appreciated…
Ah, Lenin's logic makes sense if you add партия нового типа, the party of a new kind, effectively a closed kinghts order, if one wants to wax lyrical. He assumes, that the governing body of the party will remain incorruptible. It is an axiomatic assumption, as far as I can tell, at least I haven't found anything in his works that gives a mechanism for keeping it pure. I think Stalin, being a practical man, solved this problem with practical solutions, aka purges. And it worked in that sense, while creating its own problems.
The Chinese, as far as I can tell, use the same method, the purges done by Xi have been quite significant. Whether it's enough or not, I don't know. But so far the power seems to remain within the CPP.
Well, no. Actually, Lenin's concept of party was defeated after his death: the CPSU became a mass party instead of a vanguard party.
The irony was even greater because the event that transformed it into an "anti-Leninist Party" was called "The Lenin Enrollment". We now know, with a good dose of hindsight, that Lenin was right and Stalin was wrong, because the post-Stalin "sclerotic" generation of general-secretaries were mainly (if not all) from this generation of uneducated rank-and-file new party members. Gorbachev was the poster boy of the peasant turned head of state, being the first and only general-secretary born after 1917.
The CPC keeps the Lenin's concept of a vanguard party, which, of course, raises countless accusations from the West (leftists or not) of a "princeling class", when actually, the party itself has almost 100 million members -- which would make it, by far, the largest political party in the West. But don't let this enormous figure fool you: the CPC rejects a lot of requests of affiliation; if it wanted to, it would have a lot more than those almost 100 million members.
Until 1937 there was clear distinction between old bolsheviks and new blood, so the party kept the vanguard party traits. However, the old bolsheviks were purged, and all that got mixed up.
The issues raised by this post are very important and extremely complex. They cannot be fully discussed in a comment section.
There are very serious Western scholars who consider Deng Xiaoping's reforms (which were actually not his, but the Party's; Deng only gave the general political direction to the reforms) a very similar form of NEP. I think this hypothesis is in the right direction and is certainly more true than the "China restored to capitalism" hypothesis that is dominant in the West nowadays. But it is incomplete.
It is crucial to have in mind that "China's NEP" was built on a very different -- much more favorable -- material base than the Soviet Union's. Most, if not all, of the modern-day Chinese capitalist class came from the poor/common peasantry, and they owe their position and status entirely to the socialist system. This is a totally different scenario because that means the Chinese capitalist class doesn't have a capitalist culture, set of ideas or political cohesion (organization). In the West, we have the old nobility who became the capitalist class or, in America, the nations were founded by capitalists (slaveowners), that is, the American nation-states were already born capitalist (liberal). During the Lenin era, the USSR had the problem of the kulak, rich peasants who owed their privileges to the czar's capitalist reforms of the 1860s and, by the time of his death, already had generations (life expectancy in Russia was extremely low; 64 years meant some four or five generations) of experience in ideology, politics and organization.
But Lenin's writings leave us a hole when we want to compare NEP with modern-day China. He died in early 1924. Later that year, the NEP got much deeper and worrisome, the capitalists seemingly taking over in a smooth and fast process. The situation was certainly worse than in today's China, many writings of the time giving socialism as finished. How the USSR managed to save socialism from NEP is one of the questions Edward Carr admits he didn't have an answer: he simply attributes it to sheer willpower of the Bolsheviks. Either way, if one wants to completely understand the NEP, one has to concentrate his or her studies in the years of 1924-1926, not 1923.
Besides, comparing Reform and Opening Up to the NEP doesn't answer the crucial question: why did NEP collapse in 1926-28, while R&OU is still alive and well today, more than 40 years later? Because few people in the West remind the fact that the NEP was never abolished from above: it collapsed under its own inner contradictions. The rise of Stalin (i.e. the rise of Socialism in One Country) only came after the fall of NEP, not during or before. It was the fall of NEP that created the vacuum SOC could fill, not the rise of SOC that imploded the NEP.
What sources would you recommend reading about the implosion of the NEP before SOC? No snark, I've just never heard this before, perhaps because it's so poorly understood in the West.
My go-to work for the history of the USSR up to 1929 is Edward H. Carr's “A History of Soviet Russia” (preferably the fourteen-volume complete version, not the abridged one-volume one).
I remember sitting in a Belgrade cafe with some Very Leftist Friends having a discussion somewhat like this. I had just read Mann's Buddenbrooks, his novel covering several generations of a German bourgeois merchant family. There's a scene in which a Buddenbrook (as burgermeister) has to confront a red mob of peasants and workers who demand a republic. 'You have a republic' is all he says in reply. It's a good illustration of the trench between radical social politics and 'dollar rationality.' The Buddenbrooks were businessmen and knew how to calculate costs, work shipping and trade, make deals, etc. etc. I realized reading that book that actually 'running the economy' (or even a minor import-export firm) is a kind of knowledge entirely different from the socialist point of view. I brought up all this to my well-meaning and battle-scarred friends, but they all kind of demurred (there was plenty of rakija, I admit) but still, no one had any reply to that point. It's kind of a big deal, too, for any leftist concerned with anything real...
Great post, and great speeches- the theoretical importance of which is often overlooked in the West. The below is crucial:
“Communists do not know how to run the economy… they are inferior to the ordinary capitalist salesmen who have received their training in… big firms”
This is what gave socialist experiments in the 20th century their distinctive weirdness in terms of economic efficiency. To state the obvious, when capitalists became ascendant in the previous centuries, they knew exactly how to manage the economy because they had already developed a distinctive capitalist economic logic at the intra- and inter-firm level.
Socialists did not have this. I would argue that this strange occurrence can be attributed to a mistaken analysis on the part of Marxists. They saw increasing unionisation and labour organisation (knowing to organise themselves as a class and on the shop-floor) as amounting to the same thing as knowing how to run a factory and the economy as one giant factory. They also saw the secular trend toward trustification/cartelisation in the run-up to the 1st World War as a sign that opportunity for a fully operational socialist economy were rapidly maturing.
All capitalist firms converge into trusts and cartels -> workers organised into unions take over cartels -> planned, socialised economy -> socialism
With hindsight we can tell this was a little naive to say the least. By the beginning of the 20th century, capitalism had barely got started, and a distinctive socialist logic of economic organisation that actually works was not yet ready for prime-time. And it arguably still isn't, although if Cockshott etc are to be believed economic coordination via planning may now be technically feasible.
That was essentially Preobrazhensky's thesis: that, in the case of capitalism, the economic "revolution" came before the political "revolution" (the economic one happened in the early 1500s; the political one in 1688 or 1776-1789, depending on your taste in liberalism). In the case of socialism, the "political" revolution came first (1917), the "economic" revolution only then being built (i.e. x>1917).
That's why some Marxists claim the October Revolution was "premature".
Great discussion! Many thanks for the Lenin quotes.
In 1949, Mao wrote President Truman, “China must industrialize. This can only be done by free enterprise. Chinese and American interests fit together, economically and politically. America need not fear that we will not be co-operative. We cannot risk any conflict”. He repeated the invitation to Presidents Truman and Eisenhower but they, too ignored his pleas. Not until 2001 would the US permit China to trade normally, and then under humiliating conditions.
A few niggles:
1. “The problem was that the incentive structure is very different for a bureaucrat or a manager who runs a large state-owned company from the incentive structure faced by an individual capitalist”. The incentive structures for Chinese SOE CEOs is unusual. C-suite posts go to civil servants ambitious to demonstrate their management skills and win promotion. Some of the world's biggest, most valuable, most profitable companies are SOEs.
2. "The social structure of the Chinese elite had enormously evolved between the late 1980s and 2013"? There has only been one Chinese elite for the past 1500 years, officials. Nothing changed that.
3. "look at Xi Jinping’s policies as an attempt at the reassertion of the power of the state vs. the capitalist sector and the rich"? You assume that the rich have power. They do not.
Interesting analysis, and I tremendously appreciate the critiques of the Deng Xiaoping neoliberalizations. I find myself disagreeing heavily however with the premise that NEP was good/necessary, and I think material data plays out. Marxist historian Loren Goldner has pointed out how the NEP was actually quite a failure and a re-institution of exploitative capitalism over the peasantry that led to famine conditions in 1921-1922, and price crises in 1923 and 1925. The basic problem was that, as you said, it was a state capitalism controlled by the Party and by the proletariat. Not the peasantry. So this meant the party pursued policies favorable to Moscow and Petrograd, not Berdyansk or Kazan. They bought grain on quota at low fixed prices, and sold industrially-produced equipment at high prices. If you're a proletarian, this is great. Value for your labor, and cheap food. I suspect this is why many admirers of USSR and China that I encounter tend to praise the urban planning, and have almost nothing to say about the countryside. But if you're a Ukrainian peasant in rural Dnipropetrovskaya oblast, and you need to keep growing enough wheat to meet party quotas, but you make shit money and when your plough breaks a new one costs an arm, a leg, and a trip to Aleksandrovsk, it's going to be a bad time. And the famines in southern Ukraine and Tatarstan of 1921-1922 certainly did not do anything to help a rift between peasantry and party. Indeed the problem here is state control, I argue, because the state easily reproduces a new capitalism or maintains existing capitalism. Certainly over the course of the russian civil war, the rise of the Bolsheviks and their bureaucratic management over the workers' councils (power to the workers' councils was not restored after the war, and any autonomous councils were heavily criminalized in the years after 1921). This is why, in my view, the only way do do communism correctly is either Rosa Luxemburg-ist (or Pannekoekist or any other of the "Left communist" theoreticians) or anarcho-communist.
And this brings me then to my critique of Xi Jinping as well- his rule is less about this kind of "state control" that will help bring control back to the proletariat (but at the expense of peasantry), and more about what sociologist Ivan Szelényi calls "political capitalism", which features the privatization of state-run industries, often for dirt cheap, the consolidation of a new capitalist ruling class which rules by extracting insider rent from territories it stakes out- in these territories, are the former state-run enterprises, which now are owned by this "political capitalist" ruling class. Xi Jinping's crackdown on corruption (as he called it) can be understood in this context too, as a way for him to use state repression against anyone who would stand in the way of the development of his political capitalist ruling class. I do not think we can expect to see conditions for workers in China improve very much at all under Xi Jinping, in fact, I expect them to continue to deteriorate, barring a mass movement for increased workers' rights and workplace democracy, something more in the spirit of Pannekoekist council communism. Of course, the Chinese state is well aware of this and that is why Marxist students who try to unionize factories in special economic zones get arrested, and why anarchism is basically as criminalized as methamphetamine in the U.S.
For anyone interested in the economic background of the NEP and the road towards it there are some interesting books
Alec Nove - An Economic History of the USSR
R.W. Davies - From Tsarism to the New Economic Policy: Continuity and Change in the Economy of the USSR
R.W. Davies - The Economic Transformation of Soviet Union 1913 - 1945
Silvana Malle - The Economic Organization of War Communism 1918-1921
Alan M. Ball - Russia's Last Capitalists: The Nepmen, 1921-1929
Since I have been trying to make a case for China’s economic policy being a modified version of Lenin’s NEP for over a decade I would be much interested in the arguments of Branko Milanovic, who pointed out that he has been arguing along the same lines. Hints to where these could be found would be much appreciated…
Ah, Lenin's logic makes sense if you add партия нового типа, the party of a new kind, effectively a closed kinghts order, if one wants to wax lyrical. He assumes, that the governing body of the party will remain incorruptible. It is an axiomatic assumption, as far as I can tell, at least I haven't found anything in his works that gives a mechanism for keeping it pure. I think Stalin, being a practical man, solved this problem with practical solutions, aka purges. And it worked in that sense, while creating its own problems.
The Chinese, as far as I can tell, use the same method, the purges done by Xi have been quite significant. Whether it's enough or not, I don't know. But so far the power seems to remain within the CPP.
But all in all, it comes back to that
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Well, no. Actually, Lenin's concept of party was defeated after his death: the CPSU became a mass party instead of a vanguard party.
The irony was even greater because the event that transformed it into an "anti-Leninist Party" was called "The Lenin Enrollment". We now know, with a good dose of hindsight, that Lenin was right and Stalin was wrong, because the post-Stalin "sclerotic" generation of general-secretaries were mainly (if not all) from this generation of uneducated rank-and-file new party members. Gorbachev was the poster boy of the peasant turned head of state, being the first and only general-secretary born after 1917.
The CPC keeps the Lenin's concept of a vanguard party, which, of course, raises countless accusations from the West (leftists or not) of a "princeling class", when actually, the party itself has almost 100 million members -- which would make it, by far, the largest political party in the West. But don't let this enormous figure fool you: the CPC rejects a lot of requests of affiliation; if it wanted to, it would have a lot more than those almost 100 million members.
And yet relative to population 16 million of cpsu members even in 1991 is less than 100 million of cpc members now.
Until 1937 there was clear distinction between old bolsheviks and new blood, so the party kept the vanguard party traits. However, the old bolsheviks were purged, and all that got mixed up.