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The Political Economy of Utopia: Communism in Soviet Russia, 1918–1921

  • Peter J. Boettke
Chapter

Abstract

The Soviet experience from 1918 to 1921 represents a utopian experiment with socialism. The Bolshevik revolutionaries attempted to implement a Marxian social order. Examination of the texts of Lenin, Bukharin, Trotsky, and various other party documents of the time demonstrates the intent to build socialism immediately. The Bolshevik cadre possessed a strong faith in the imminent world revolution and therefore believed in the Trotskyite concept of “permanent revolution.”1 As Trotsky pointed out, “The Bolsheviks categorically rejected as a caricature the idea imputed to them by the Mensheviks of creating a ‘peasant socialism’ in a backward country. The dictatorship of the proletariat in Russia was for the Bolsheviks a bridge to a revolution in the West. The problem of a socialist transformation of society was proclaimed to be in its very essence international.”2

Keywords

Political Economy Economic Life Economic Organization Communist Society Russian Revolution 
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Notes

  1. 1.
    For Leon Trotsky’s views on the proletariat revolution and the importance of the European revolution for Russian success, see Our Revolution (1906): Extracts,in Marxism in Russia: Key Documents 1879–1906,ed. Neil Harding (New York: Cambridge University Press, 1983), 337–352. Also see Trotsky, Permanent Revolution (Calcutta: Atawar Rahman, 1947) and The History of the Russian Revolution,3 vols. (New York: Pathfinder Press, 1987[1932]), especially III: 351 ff.Google Scholar
  2. I would also like to point out that in the preface to the second Russian edition of the Communist Manifesto Marx and Engels wrote: “If the Russia Revolution becomes the signal for a proletarian revolution in the West, so that both complement each other, the present Russian common ownership of land may serve as the starting-point for a communist development.” See Marx and Engels, Selected Works,3 vols. (Moscow: Progress Publishers, 1969), I: 100–101.Google Scholar
  3. 2.
    Trotsky, The History of the Russian Revolution,III: 381.Google Scholar
  4. 3.
    See Mikhail Heller and Aleksandr Nekrich, Utopia in Power (New York: Summit Books, 1986), 50–110. Heller and Nekrich argue: Lenin believed that the spark of the Russian revolution would ignite the fire of world revolution. In his view, conflict with Poland, a potential “Red bridge” to the West, was inevitable. None of the Bolsheviks doubted the necessity of “forcing the Polish bridge”; the only question was when and how to do it. Trotsky, who had said, “The road to London and Paris goes through Calcutta,” declared at the end of 1919: “When we have finished off Denikin, we will throw all the strength of our reserves against the Polish front” (93). By such a continued assault Lenin became convinced he could bring communist independence to the world.Google Scholar
  5. This perspective can also help us understand the debate between Lenin and the left wing (Bukharin and others) within the Bolshevik party over the Brest-Litovsk peace agreement (signed March 3, 1918). At the time, Lenin agreed to peace with Germany in order to regroup the country’s resources and hold out until the world revolution began (which he argued might be within a few days or weeks). The peace was a necessary strategic retreat for Lenin, a retreat that would, in a short time, be reversed. Bukharin, on the other hand, argued that the conditions of peace would reduce the international significance of the Russian Revolution to nothing and that, therefore, the peace treaty should be annulled and the proper preparations be made to create a combat-ready Red Army that would help bring the revolution to the West. Both Lenin and Bukharin believed that the international workers’ revolution was essential to the success of the Russian Revolution. See the discussion between Lenin and Bukharin on the peace agreement in A Documentary History of Communism, 2 vols., ed. Robert V. Daniels (New York: Vintage Books, 1960), I: 135–143. Also see Robert V. Daniels, The Conscience of theRevolution ( Cambridge, MA: Harvard University Press, 1960 ), 70–80.Google Scholar
  6. 4.
    Daniels, The Conscience of the Revolution,53; emphasis added.Google Scholar
  7. 5.
    From Bukharin’s report on the War and the International Situation excerpted in A Documentary History, I: 95–96; emphasis added.Google Scholar
  8. 6.
    See A Documentary History,I: 97.Google Scholar
  9. 7.
    See Roberts, Alienation and the Soviet Economy ( Albuquerque: University of New Mexico Press, 1971 ), 26.Google Scholar
  10. 8.
    Polanyi, The Logic of Liberty (Chicago: University of Chicago Press, 1980[19511), 132, fn. 1.Google Scholar
  11. 9.
    Bettelheim, Class Struggles in the USSR, 1917–1923 ( New York: Monthly Review Press, 1976 ), 144.Google Scholar
  12. 10.
    See Eugene Zaleski, Planning for Economic Growth in the Soviet Union, 1918–1932 (Chapel Hill: University of North Carolina Press, 1971 [19621), 17.Google Scholar
  13. 11.
    This is where the standard account usually begins discussion of the nationalization of industry discounting the earlier nationalization efforts of the Bolsheviks; doing so has the effect of making the emergency interpretation more cogent.Google Scholar
  14. 12.
    See Zaleski, Planning for Economic Growth in the Soviet Union, 1918–1932,1620. Also see Maurice Dobb, Soviet Economic Development Since 1917 (New York: International Publishers, 1948), 106. The armistice with Poland was signed in October 1920, and the decree nationalizing small-scale industry was published in November 1920, after the civil war. As V. Sirotkin recently wrote: It has become a copybook maxim to assert that the policy of “War Communism” was imposed on the Bolsheviks by the Civil War and the foreign intervention. This is completely untrue, if only for the reason that the first decrees on introducing the “socialist ideal” exactly “according to Marx” in Soviet Russia were issued long before the beginning of the Civil War (the decrees of Jan. 28 and Feb. 14, 1918, on the nationalization of the merchant fleet and of all banks), while the last decree on the socialization of all small handicraftsmen and artisans was issued on Nov. 29, 1920, i.e., after the end of the Civil War in European Russia.Google Scholar
  15. See Sirotkin, “Lessons of NEP,” Izvestia (March 9, 1989), reprinted in The Current Digest of the Soviet Press,Vol. XLI, n. 10 (1989), 6.Google Scholar
  16. 13.
    Dobb, Soviet Economic Development,107.Google Scholar
  17. 14.
    See Thomas Remington, Building Socialism in Bolshevik Russia, 1917–1921 (Pittsburgh: University of Pittsburgh Press, 1984), 78 ff., for a discussion of the militarization of labor during this period.Google Scholar
  18. 15.
    See Zaleski, Planning for Economic Growth in the Soviet Union, 1918–1932, 18, fn. 27. While Dobb and Carr, as I documented in the last chapter, see this emission of paper money as a result of war emergency, Preobrazhensky argued that the breakdown of the capitalist system could be accomplished through inflationary destruction of the currency. See Preobrazhensky, Paper Money During the Proletarian Dictatorship ( Moscow, 1920 ). The importance of monetary policy for understanding the ideological interpretation of war communism will be brought out later in this chapter.Google Scholar
  19. 16.
    See Zaleski, Planning for Economic Growth in the Soviet Union, 1918–1932,24 ff. Also see Silvana Malle, The Economic Organization of War Communism, 19181921 (New York: Cambridge University Press, 1985), 202 ff.Google Scholar
  20. 17.
    Malle, The Economic Organization of War Communism,202.Google Scholar
  21. 18.
    Marx, Capital: A Critique of Political Economy (New York: The Modern Library, 1906[1867]), 92.Google Scholar
  22. 19.
    See Karl Marx and Frederick Engels, “Manifesto of the Communist Party,” Selected Works, I: 98–137; Marx, “The Class Struggles in France,” SW, I: 186–299; “The Eighteenth Brumaire of Louis Bonaparte,” SW, I: 394–487; “The Civil War in France,” SW, II: 178–244.Google Scholar
  23. 20.
    Marx, The Poverty of Philosophy (Moscow: Progress Publishers, 1978), 161; emphasis added.Google Scholar
  24. 21.
    Marx and Engels, “Manifesto of the Communist Party,” 126.Google Scholar
  25. 22.
    Marx, Capital, I: 837. Marx at times does not seem to recognize the “free rider” problem of collective action and the cost of revolution. Mancur Olson, in The Logic of Collective Action (Cambridge: Harvard University Press, 1965), 102–110, argues that this aspect of Marx’s thought represents a fundamental flaw in his theory of the state and class analysis. “Marxian class action,” Olson says, “takes on the character of any endeavor to achieve the collective goals of a large, latent group” and “as in any large, latent group, each individual in the class will find it to his advantage if all of the costs or sacrifices necessary to achieve the common goal are borne by others” (106). However, I do not think that Olson’s or Gordon Tullock’s The Social Dilemma (Blacksburg, VA: Center for the Study of Public Choice, 1974) analysis that “revolutions are carried out by people who hope for private gain and produce such public goods as they do produce as a byproduct” (46) captures fully the essence of revolutionary activity. The overcoming of the free-rider problem depends on the force of an ideological movement that serves as a point of unification; this might explain both Marx’s and Lenin’s emphasis on the educational role of the revolutionary party. This is also consistent with the work of Michael Taylor, Anarchy and Cooperation (New York: Wiley and Sons, 1976), who has suggested that free-rider problems can be overcome when a strong sense of community of purpose exists. Marx at times also seemed to recognize the importance of community of purpose in building revolutionary consciousness. “But the maintenance of wages, this common interest,” Marx stated, “which they have against their boss, unites them in a common thought of resistance-combinationchrw(133).In this struggle—a veritable civil war—all the elements necessary for a coming battle unite and develop. Once it has reached this point, association takes on a political character.” See Marx, The Poverty of Philosophy,159.Google Scholar
  26. 23.
    Some of the classic treatments of this question can be found in R.N. Carew Hunt, The Theory and Practice of Communism (Baltimore: Penguin Books, 1969 [1950]); Edmund Wilson, To the Finland Station (New York: Doubleday and Co., 1940); and Nicolas Berdyaev, The Origin of Russia Communism (Ann Arbor: University of Michigan Press, 1972[1937]). Also see Leszek Kolakowski, Main Currents of Marxism, 3 vols. (New York: Oxford University Press, 1985[1978]), II: 304–527; Alexander Rüstow, Freedom and Domination: A Historical Critique of Civilization (Princeton, NJ: Princeton University Press, 1980[1950–57]), 537–558, 564–584; Paul Johnson, Modern Times (New York: Harper and Row, 1983 ), 49–103, 261308; and Alain Besançon, The Rise of the Gulag: Intellectual Origins of Leninism ( New York: Continuum, 1981 ).Google Scholar
  27. 24.
    Lovell, From Marx to Lenin: An Evaluation of Marx’s Responsibility for Soviet Authoritarianism ( New York: Cambridge University Press, 1984 ), 197.CrossRefGoogle Scholar
  28. 25.
    Held, An Introduction to Critical Theory ( Berkeley: University of California Press, 1980 ), 35.Google Scholar
  29. 26.
    Jay, Marxism and Totality: The Adventures of a Concept From Lukacs to Habermas ( Berkeley: University of California, 1984 ), 537.Google Scholar
  30. 27.
    Habermas’s latest attempt to articulate this program can be found in The Theory of Communicative Action: Reason and the Rationalization of Society,Vol. 1, translated by Thomas McCarthy (Boston: Beacon Press, 1984). An excellent discussion of Habermas’s project can be found in Thomas McCarthy, The Critical Theory of Jürgen Habermas (Cambridge: The MIT Press, 1985).Google Scholar
  31. 28.
    Stojanovic, “Marx and the Bolshevization of Marxism,” Praxis International,Vol. 6, n. 4 (January 1987), 450–461. Stojanovic argues that: No matter how we look at it, Marx’s idea of the dictatorship of the proletariat was practicable only by having one group rule in the name of the proletariat as a whole. In the best of cases, it would rule in its interest and under its control. In the worst case, it would rule without any kind of supervision and against its vital interests. In conceiving a new state it is no small oversight to set out from the most optimistic assumptions, where no real thought is given to measures and guarantees against the abuse of power (453).Google Scholar
  32. Marxists need to deal with the terror inflicted upon the proletariat by the dictatorship in its name that occurred during the early years of the Soviet regime.Google Scholar
  33. 29.
    See Selucky, Marxism, Socialism, Freedom ( New York: St. Martin’s Press, 1979 ).Google Scholar
  34. 30.
    This line of reasoning is also consistent with basic Marxian materialist philosophy which argued that the material base (economic life) determines the super-structure (the realm of ideas). See Selucky, Marxism, Socialism, Freedom,74–80.Google Scholar
  35. 31.
    Alexander Rüstow provides an insightful discussion of the evolution of the Marxian heritage among the political elite within the first decade of Soviet rule, though I believe he does not address clearly enough the subtle point of how Stalinism can be seen as an unintended consequences of Marx’s project. See Freedom and Domination,571–572.Google Scholar
  36. 32.
    Lavoie, National Economic Planning: What Is Left ( Cambridge, MA: Ballinger Press, 1985 ), 18–19.Google Scholar
  37. 33.
    The gambling metaphor is important to keep in mind. It is not that the despotism was an unseen consequence of rationalization, just as it is not an unseen consequence of poker that one may lose a hand or money. Rather, the despotism in the gambling story was the possible outcome that the Bolsheviks, and specifically Lenin, were trying to avoid, just as the poker player tries to avoid losing. This has the result, I contend, of obscuring the economic problem that the Marxian social relations of production would have to confront in any socioeconomic situation no matter how favorable.Google Scholar
  38. 34.
    The classic presentation of this thesis is found in Karl Wittfogel, Oriental Despotism: A Comparative Study of Total Power (New Haven: Yale University Press, 1964[1957]), especially 369 ff. Wittfogel argues that Russia’s development since 1917 deserves the most careful scrutiny. For reasons of historical development, Wittfogel supports the February Revolution, but opposes October.Google Scholar
  39. 35.
    Daniels, The Conscience of the Revolution,9, emphasis added.Google Scholar
  40. 36.
    See Lavoie, “Political and Economic Illusions of Socialism,” Critical Review,Vol. 1, n. 1 (Winter 1986–1987), 1–2, 10.Google Scholar
  41. 37.
    For a criticism of this approach to social theory see F. A. Hayek, The Counter-Revolution of Science (Indianapolis: Liberty Press, 1979[1952]), especially 111152. Also see Ludwig von Mises, Theory and History,195, where he argues: History is made by men. The conscious intentional actions of individuals, great and small, determine the course of events insofar as it is the result of the interaction of all men. But the historical process is not designed by individuals. It is the composite outcome of the intentional actions of all individuals. No man can plan history. All he can plan and try to put into effect is his own actions which, jointly with the actions of other men, constitute the historical process. The Pilgrim Fathers did not plan to found the United States.Google Scholar
  42. Neither Marx nor Lenin planned to found the Soviet society of Joseph Stalin. Nevertheless that should not absolve them from responsibility or deny the important role they (or their ideas) played in the establishment of the system.Google Scholar
  43. 38.
    In fact, it is the belief that Russia had already begun its capitalist development that lead George Plekhanov to move from a populist (who believed the peasant commune could serve as the foundation of anarcho-socialism) to a Marxist by 1883. See Marxism in Russia, edited by Neil Harding, 41 ff., especially the extracts from Plekhanov ‘s writings. Also see Samuel Baron, “Between Marx and Lenin: George Plekhanov,” in Revisionism: Essays on the History of Marxist Ideas, ed. Leopold Labedz (New York: Praeger Publishers, 1962 ), 42–54, and his more elaborate treatment, Plekhanov: The Father of Russian Marxism ( Stanford, CA: Stanford University Press, 1963 ).Google Scholar
  44. 39.
    See Trotsky, The History,I: 332 ff.Google Scholar
  45. 40.
    See Alexander Rabinowitch, The Bolsheviks Come to Power (New York: Norton, 1978), for an excellent discussion of the events from the July uprisings to the October revolution. In particular, see Rabinowitch’s reflections upon the reasons for the Bolshevik success in 1917, 310 ff.Google Scholar
  46. 41.
    V.I. Lenin, “Political Parties in Russia and the Task of the Proletariat,” in Collected Works,45 vols.(Moscow: Progress Publishers, 1977), Vol. 24: 96–106. Hereafter cited as CW and within the text, for example, as (24: 96–106).Google Scholar
  47. 42.
    Lenin, “The Tasks of the Proletariat in the Present Situation,” CW (24: 21–26).Google Scholar
  48. 43.
    It is interesting to note that the name Bolshevik was an accident of history; during the 1903 conference Plekhanov sided with Lenin on the organization of the party and, thus, created the Bolshevik (majority in Russian) wing of the Social Democratic party. In reality the Bolsheviks constituted a minority of Social Democrats until their assumption of power in 1917.Google Scholar
  49. 44.
    Among other things, Lenin called for the immediate amalgamation of all banks into a single national bank, and that control over the bank be immediately turned over to the Soviets of Workers’ Deputies. The importance of this proposal will be brought out throughout this chapter.Google Scholar
  50. 45.
    Lenin, “Notes for an Article or Speech in Defense of the April Theses,” CW (24: 33; emphasis added).Google Scholar
  51. 46.
    Lenin, “Dual Power,” CW (24: 38–41). Also see Trotsky, The History, I: 206–215.Google Scholar
  52. 47.
    I am mainly documenting Lenin’s convictions on the ripeness issue, but it should be emphasized that Marx during his lifetime was constantly watching for revolutionary chances—even in France and Germany of the 1840s. Commenting on the rigid interpretation of historical preconditions that many “revisionist” Marxists held, Trotsky argued: “Apparently Marx in 1848 was a Utopian youth compared with many of the present-day infallible automata of Marxism!” as quoted in Richard Day, Leon Trotsky and the Politics of Economic Isolation (New York: Cambridge University Press, 1973), 8. Moreover, from a Marxist perspective this ripeness question represents a meek argument (allowing any failure of Marxism to be in principle excusable) and should be rejected as undialectical and not sufficiently materialist in its analysis. It represents an evasion for a theory that claims to be a critical social theory. Marxian theory is built (supposedly) on the connection between theory and praxis and any analysis that is neither grounded in historical praxis nor sufficiently self-critical is to be rejected. The historical-precondition response does not answer the questions raised by critical Marxists concerning the problems of the Soviet experience. See the discussion above of both the Frankfurt School and especially the Praxis group philosophers for a more fruitful approach to the problem at hand.Google Scholar
  53. 48.
    Lenin, “Letters on Tactics,” CW (24: 53), written in April 1917.Google Scholar
  54. 49.
    Lenin did not intend to abolish war planning but to transform it into a model of socialist organization. As he wrote in December 1916: The war has reaffirmed clearly enough and in a very practical waychrw(133)that modern capitalist society, particularly in the advanced countries, has fully matured for the transition to socialism. If, for instance, Germany can direct the economic life of 66 million people from a single, central institutionchrw(133)then the same can be done, in the interests of nine-tenths of the population, by the non-propertied masses if their struggle is directed by the class-conscious workerschrw(133).All propaganda for socialism must be refashioned from abstract and general to concrete and directly practical; expropriate the banks and, relying on the masses, carry out in their interests the very same thing the W.U.M.B.A. [i.e., the Weapons and Ammunition Supply Department] is carrying out in Germany.Google Scholar
  55. “Chernovoi proekt tezisov obrashchenia k internatsional’noi sotsialisticheskoi komissii i ko vsem sotsialisticheskim partiiam,” Polnoe sobranie sochinenii,Vol. 30, 278–279, as quoted in Alfred Evans, “Rereading Lenin’s State andRevolution,” Slavic Review,Vol. 46, n. 1 (Spring 1987), 18, fn. 79.Google Scholar
  56. 50.
    Lenin, “Resolution on the Current Situation,” CW (24: 309–312).Google Scholar
  57. 51.
    This reference is supplied in the explanatory reference notes of Lenin’s CW (24: 603, fn. 106; emphasis added).Google Scholar
  58. 52.
    Also see, Lenin, “Inevitable Catastrophe and Extravagant Promises,” CW (24: 424–430).Google Scholar
  59. 53.
    The `April days“ Trotsky argued, ”were the first candid warning addressed by the October to the February revolution. The bourgeois Provisional Government was replaced after this by a Coalition whose fruitlessness was revealed on every day of its existence. In the June demonstrations summoned by the Executive Committee on its own initiative, although perhaps not quite voluntarily, the February revolution tried to measure strength with the October and suffered a cruel defeat.“ See Trotsky, The History,I: 458.Google Scholar
  60. 54.
    Lenin’s program of control, which he argued could be established by a workers’ state by decree “in the first weeks of its existence,” consisted of: (1) nationalization of all banks and the creation of a central bank, (2) nationalization of syndicates, (3) abolition of commercial secrecy, (4) compulsory syndication, and (5) compulsory organization of population. The creation of a central bank, in particular, was essential to Lenin because the principal nerve center of modern economic life was the bank and one cannot regulate economic life without taking over banks-control over the bank allowed the unification of accountancy. See Lenin CW (25: 333 ff.).Google Scholar
  61. 55.
    Also see Lenin, “Who Is Responsible?” CW (25: 151–152), where he argues: “In times of revolution, procrastination is often equivalent to a complete betrayal of the revolution. Responsibility for the delay in the transfer of power to the workers, soldiers and peasants, for the delay in carrying through revolutionary measures to enlighten the ignorant peasants, rests wholly on the Socialists-Revolutionaries and Mensheviks. They have betrayed the revolutionchrw(133).”Google Scholar
  62. 56.
    Imperialism, CW (22: 185–304), was written from January to June 1916 and was published in Petrograd in late April 1917. The State and Revolution, CW (25: 384497), was written in August and September 1917.Google Scholar
  63. 57.
    This standard Marxist analysis of the operation of capitalism is based on faulty reasoning for the same theoretical reasons presented in chapter 2. Also see Murray N. Rothbard, Man, Economy and State: A Treatise on Economic Principles,2 vols. (Los Angeles: Nash Publishing, 1970[1962D, II: 547 ff. and 585–586. The problem of economic calculation puts a limit on the potential size of any firm within an economic system—the evolution of the economy into one big firm is not technically possible from an economic point of view.Google Scholar
  64. 58.
    In contrast, see the discussion of the economic and political reasons why the most meaningful definition of monopoly is a state grant or privilege given to a business enterprise to be the sole producer of a commodity or service: Rothbard, Man, Economy and State, II: 560–660; Dominick T. Armentano, “A Critique of Neoclassical and Austrian Monopoly Theory,” in New Directions in Austrian Economic, edited by Louis M. Spadaro (Kansas City: Sheed, Andrews and McMeel, 1978), 94110; Harold Demsetz, “Barriers to Entry,”American Economic Review, Vol. 72, n. 1 (March 1982), 47–57. For an historical discussion of “political capitalism” and the strategic use of the state by businessmen to either guarantee or protect their profits see Gabriel Kolko, The Triumph ofConservatism (New York: The Free Press, 1964 ) and James Weinstein, The Corporate Ideal in the Liberal State, 1900–1918 ( Boston: Beacon Press, 1968 ).Google Scholar
  65. 59.
    Although Lenin is a harsh critic, he gets most of his theoretical insights on the operation of finance capital from the Austro-Marxist Rudolf Hilferding, Finance Capital: A Study of the Latest Phase of Capitalist Development (London: Routledge & Kegan Paul, 1985[1910]).Google Scholar
  66. 60.
    Lenin concludes that “again and again the final word in the development of banking is monopoly” and he points to America where “two very big banks, those of the multimillionaires Rockefeller and Morgan, control” most of the capital (22: 219–220). It is true that the Morgan banks dominated the financial system in the United States, but this situation resulted from the system of political capitalism. The New York (Morgan) banks were losing their market share to the St. Louis and Chicago banks prior to 1913. They tried to keep their market share through a cartel arrangement, which would have allowed them to overissue notes, but the cartel could not be maintained. So they sought to establish a government enforced cartel and the Federal Reserve System (established in 1913) supplied just that for the “House of Morgan.” See Murray N. Rothbard, “The Federal Reserve as a Cartelization Device: The Early Years, 1913–1930,” in Money in Crisis,edited by Barry N. Siegel (Cambridge, MA: Ballinger Publishing, 1984), 89–136.Google Scholar
  67. 61.
    For the same theoretical reason that the realization of socialism is impossible and the assessment of increasing concentration of capital under capitalism is flawed, Lenin’s assessment of the desirability of central banking is also questionable. Central banking is not capable of bringing the economic life process under control—in fact, central banks operate in the dark. They are not well equipped to know whether an adjustment in the supply of money is needed or not because they lack the necessary economic knowledge. See George Selgin, The Theory of Free Banking (Totawa, NJ: Rowman and Littlefield, 1988), 89–107. The problem facing the central bank is a microcosm of the problem facing the comprehensive central planning board—neither can obtain the requisite knowledge to effectively accomplish the task it sets out to do, and, therefore it ends up relying on political rationales and not economic ones.Google Scholar
  68. 62.
    This argument of the economic logic of imperialism should be kept in mind, especially later when we discuss the internal imperialism advocated by Preobrazhensky, and later Stalin, during the Industrialization Debate.Google Scholar
  69. 63.
    As Marx argued in the “Critique of the Gotha Programme,” SW: What we have to deal with here is a communist society, not as it has developed on its own foundations, but, on the contrary, just as it emerges from capitalist society; which is thus in every respect, economically, morally and intellectually, still stamped with the birth marks of the old society from whose womb it emerges. The “first phase of communist society,” Marx later added, will have certain inevitable defects as it has “just emerged after prolonged birth pangs from capitalistic society” (III:19).Google Scholar
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    Barfield, “Lenin’s Utopianism: State and Revolution, Slavic Review,Vol. 30, n. 1 (March 1971), 45–56; emphasis added. Barfield argued that Lenin researched the book from January to February 1917, the notebooks that constitute `Marxism on the State.’ Barfield’s argument suggests that the utopianism evidenced in the State and Revolution permeates all of Lenin’s political writings—a sort of anarcho-libertarian belief in the masses. Though I would agree, I think Barfield places his finger upon the wrong utopianism. Lenin’s utopianism is better represented by the ease with which he thought Marx’s project of rationalization could be accomplished.Google Scholar
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  74. 68.
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  75. 69.
    Lenin here is discussing the idea that full democratic participation is impossible under capitalism because the state will be used to exploit the many for the benefit of the few, that is, the capitalists. Under socialism, however, classes will disappear, and with their disappearance formal institutions of democracy will also disappear. Polan has suggested that this theory of the state eliminates all possible checks against abuse and results in the lodging of power in the hands of a few—exactly what happened under Bolshevik rule. The crime of Lenin’s text, Polan argues, is not that it did not work; the crime is that it did work. Lenin’s theory eliminated any of the possible checks that would have made the Gulag less likely. See Polan, Lenin and the End of Politics,129–130.Google Scholar
  76. 70.
    Lenin seems completely naive in his understanding of the complexity of economic organization. As Polan, Lenin and the End of Politics,states: Lenin seems to suggest that the economic problem that can be resolved by the adoption of the model of the “postal service” is simply one of efficiency: where the multi-faceted confusions of the competitive mechanism have been removed, there is no “economic” problem of organization. However, the problem remains that the capitalist mechanism, in the form of the market, accomplished the task of allocation and distribution of rewards and resources, while this task remains to be performed in the absence of the market. Confident assertions of the possibility of extending the “postal” model to embrace the whole economy ignore the fact that the absence of a market forces the state to inherit a task of immense complexity (61–62; emphasis added).Google Scholar
  77. This is essentially the point of departure for Michael Polanyi’s criticism of central administration of economic life: see “The Span of Central Direction,” in The Logic of Liberty (Chicago: University of Chicago Press, 1980[1951]), 111 ff. On the nature of complexity in social relations also see Hayek, “The Theory of Complex Phenomena,” Studies in Philosophy, Politics and Economics (Chicago: University of Chicago Press, 1980[1967]), 22–42; Law, Legislation and Liberty, I: 35–54 and II: 107–132.Google Scholar
  78. 71.
    The Bolsheviks and their allies among the Left Socialist-Revolutionaries overthrew the Kerensky government on October 25 [November 7], 1917. The Council of People’s Commissars (Sovnarkom) was established with Lenin as Chairman and Trotsky as the Commissar of Foreign Affairs. The Revolutionary Military Committee of Petrograd Soviet of Workers’ and Soldiers’ Deputies declared that the provisional government had been overthrown and that “the cause for which the people have fought—the immediate proposal of a democratic peace, the abolition of landed proprietorship, workers’ control over production and the creation of a Soviet government—is assured.” SeeA Documentary History, 117. Also see Lenin, “The Bolsheviks Must Assume Power,” “Marxism and Insurrection,” “The Tasks of the Revolution,” and “Can the Bolsheviks Retain State Power?” all in CW (26: 19 ff.) and Trotsky, The History, III: 124 ff.Google Scholar
  79. 72.
    Trotsky provides an eloquent discussion of Lenin’s first appearance before the Congress after taking power: Lenin, whom the Congress has not yet seen, is given the floor for a report on peace. His appearance in the tribune evokes a tumultuous greeting. The trench delegates gaze with all their eyes at this mysterious being whom they had been taught to hate and whom they have learned without seeing him to love. “Now Lenin, gripping the edges of the reading-stand, let little winking eyes travel over the crowd as he stood there waiting, apparently oblivious to the long-rolling ovation, which lasted several minutes. When it finished, he said simply, `We shall now proceed to construct the socialist order.’”Google Scholar
  80. See Trotsky, The History,III: 325. Also see John Reed, Ten Days That Shook the World (New York: Penguin Books, 1985[1919]), 117 ff.Google Scholar
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  82. 74.
    Arthur Shadwell, The Breakdown of Socialism ( Boston: Little, Brown, and Co., 1927 ), 23.Google Scholar
  83. 75.
    See Laszlo Szamuely, First Models of the Socialist Economic Systems: Principles and Theories (Budapest: Akademiai 1974), 10 ff. Also see William Henry Chamberlin, The Russian Revolution,2 vols. (Princeton: Princeton University Press, 1987[1935D, II: 96 ff. Notice that prominence is not given to grain requestioning in this outline of the socialist program of the Bolsheviks from 1918 to 1921. Although grain requestioning was undoubtedly a major policy, it was not the major element in the program of socialist transformation. Concentration on the food-procurement policy of requisitioning while ignoring the various other components of the Bolsheviks economic and social policy leads to an overemphasis on the emergency aspect of gathering food for the Red Army. Cf., Lars Lih, “Bolshevik Razverstka and War Communism,”Slavic Review,Vol. 45, n. 4 (Winter 1986), 673688. Also see Malle, Economic Organization of War Communism,322–465, for a discussion of the ideology of food procurement and the military expediency of prodrazverstka.Google Scholar
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    See Glenn Paul Holman, “`War Communism,’ or the Besieger Besieged” (unpublished PhD thesis, Georgetown University, 1973), 7–10, for a discussion of the evolution of the terminology from communism (Bukharin and Kritsman) to militant communism (Alfred Meyer) to military communism (Trotsky) to war communism (Dobb, Can, and others). Also consider the following statement by Victor Serge, Memoirs of a Revolutionary, 1901–1941 (New York: Oxford University Press, 1963), 115: “The social system in these years was later called `War Communism.’ At the time it was called simply `Communism’, and any one who, like myself, went so far as to consider it purely temporary was looked upon with disdain.” Also see Vasil Selyunin, “Sources,” Novy Mir (May 1988), reprinted in The Current Digest of the Soviet Press, Vol. XL, n. 40 (1988), 14–17, and V. Sirotkin, “Lessons of NEP,” Izvestia (March 9, 1989), reprinted in The Current Digest of the Soviet Press, Vol. 41, n. 10 and n. 11 (1989), 6–7, 11–12.Google Scholar
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  86. 78.
    Pasvolsky, The Economics of Communism,26.Google Scholar
  87. 79.
    The following is a list and dates (Western calendar) of some of the major economic decrees and resolutions following the Bolshevik rise to power:Google Scholar
  88. November 8, 1917: The Council of People’s Commissars is formed.Google Scholar
  89. November 8, 1917: Decree on Land; abolished the landlords’ right of property and confiscated landed estates.Google Scholar
  90. November 27, 1917: Decree on Workers’ Control over production.Google Scholar
  91. December 15, 1917: Supreme Economic Council is established.Google Scholar
  92. December 27, 1917: Declaration of the Nationalization of Banks.Google Scholar
  93. January 15, 1918: Dividend and interest payments and all dealings in stocks and bonds are declared illegal.Google Scholar
  94. January 16, 1918: Declaration of the Rights of the Working and Exploited People; abolished the exploitation of man by man.Google Scholar
  95. February 10, 1918: Repudiation of all foreign debt.Google Scholar
  96. April 22, 1918: Nationalization of foreign trade.Google Scholar
  97. May 1, 1918: Abolition of inheritance.Google Scholar
  98. May 9, 1918: Decree giving the Food Commissariat extraordinary powers to combat village bourgeoisie who were concealing and speculating on grain reserves. June 9, 1918: Labor mobilization for the Red Army.Google Scholar
  99. June 28, 1918: Nationalization of large-scale industry and railway transportation. November 2, 1918: Decree on the Extraordinary Revolutionary Tax to support the Red Army and the International Socialist Revolution.Google Scholar
  100. March 22, 1919: The Party Programme of the Eighth Party Congress; called for increased centralization of economic administration.Google Scholar
  101. March 29 to April 4, 1920: The Outstanding Resolution on Economic Reconstruction is passed; called for increased centralization of economic administration to insure the unity of the plan necessary for the economic reconstruction after civil war and foreign intervention.Google Scholar
  102. November 29, 1920: Decree of the Supreme Economic Council on the nationalization of small industrial enterprises; all enterprises with mechanical power who employed five or more workers and all enterprises without mechanical power who employed ten or more workers were nationalized.Google Scholar
  103. March 1921: The Kronstadt Rebellion.Google Scholar
  104. March 8–16, 1921: Resolution on Party Unity abolishing factionalism within the party is accepted.Google Scholar
  105. March 23,1921: The Tax in Kind is established and the New Economic Policy is introduced.Google Scholar
  106. 80.
    CW (27: 259). Lenin invokes the Taylor system as an example of the technological innovations of capitalism that the Soviet system must experiment with and adopt. The Taylor system was expected to increase the productivity of labor, which was deemed a necessary condition for socialist construction. The Taylor system fit neatly into the social engineering bias of the Bolsheviks and other socialist thinkers at that time. Trotsky, for example, argued that the Minister of Trade and Industry should be a technician, an engineer, who would work under the overall control of the Council of People’s Commissars. See Trotsky’s memo to Commarade Sljapnikov in The Trotsky Papers,Vol. 1, 1917–1919 (London: Mouton & Co., 1964), 3. Also see the discussion in Remington, Building Socialism in Bolshevik Russia,113–145. This is also connected to Lenin’s reliance on the model of German War Planning as a means to achieve socialist planning. See Judith A. Merkle, Management and Ideology (Berkeley: University of California, 1980), 172 ff. The principle of one-man management (OMM) represents, both in military organization and technological management within the industry, the latest stage of scientific development.Google Scholar
  107. 81.
    Malle, The Economic Organization of War Communism,32–33.Google Scholar
  108. 82.
    Left-Wing’ Childishness and the Petty-Bourgeois Mentality,“ CW (27: 339). Lenin argues here that the Soviet dictatorship of the proletariat provides the political basis for social transformation, while the German war-planning machine provides the economic basis. The task of the Soviets, therefore, was to study the German system and ”spare no effort in copying it and not shrink from adopting dictatorial methods to hasten the copying of it“ (27: 340). Compare this with Adam Kaufman, ”The Origin of `The Political Economy of Socialism, Soviet Studies,Vol. 4, n. 3 (January 1953), 243–272, and Leon Smolinsky, “Planning Without Theory, 19171967,” Survey,n. 64 (July 1967), 108–128, who argue that neither Lenin nor the other Bolsheviks had any theoretical framework from which to develop an approach to economic planning.Google Scholar
  109. 83.
    As quoted in Shadwell, The Breakdown of Socialism,24.Google Scholar
  110. 84.
    Trotsky, Sochinenia (Moscow, 1927), XV: 215, as quoted in Smolinsky, “Planning without Theory,” 113.Google Scholar
  111. 85.
    Smolinsky, “Planning without Theory,” 112. Neither was the nationalization of the banks nor the inflationary monetary policy intended to be “simply used to finance government expenditures, just as in so many other countries,” as Malle seems to suggest, in The Economic Organization of War Communism,175.Google Scholar
  112. 86.
    See Marx Economic and Philosophic Manuscripts of 1844 (Moscow: Progress Publishers, 1977), 127 ff., and Grundrisse (New York: Vintage Books, 1973), 115 ff. Also see W. Francis Vorhies, “Marx and Mises on Money: The Monetary Theories of Two Opposing Political Economies” (unpublished PhD thesis, University of Colorado, 1982).Google Scholar
  113. 87.
    His reports were published in several articles and pamphlets during this time. See Nikolai I. Bukharin, “The Economics of the Transition Period,” in The Politics and Economics of the Transition Period,ed. Kenneth J. Tarbuck (Boston: Routledge & Kegan Paul, 1979[1920]), 212, fn. 5. These articles were collected and later (1928) published in the Soviet Union as Gosudarstvennyi kapitalizm voennogo vremeni v Germanii (1914–1918). Larin, who was a Bukharin’s father-in-law, died in 1932 before “the Terror” destroyed the rest of his colleagues of the war communism period. He was buried in the Kremlin Wall with honors. See Remington, Building Socialism in Bolshevik Russia,30. Also see the interview with Anna Mikhailovna, the widow of Bukharin, “He Wanted to Remake Life Because He Loved It,” Ogonyok,n. 48 (November 1987), reprinted in The Current Digest of the Soviet Press,Vol. 40, n. 5 (1988), 6–8.Google Scholar
  114. 88.
    As quoted in Lancelot Lawton, An Economic History of Soviet Russia,2 vols. (London: Macmillan, 1932), I: 108.Google Scholar
  115. 89.
    As quoted in Malle, The Economic Organization of War Communism,165.Google Scholar
  116. 90.
    Malle explains the policy of all-out nationalization of industry pursued in November 1920, after the armistice with Poland in October 1920, as an attempt to extend this cashless payment system. As she states: “One of the reasons for the overall nationalization of industry in November 1920 was the attempt to extend the system of non-monetary accounts to the sphere of small-scale and kustar’ industry, which had been working under war communism on the system of cash payments. A decree of Sovnarkom in July 1920 did, in fact, extend the rules of non-monetary payments to contracts negotiated with private institutions.” See Malle, The Economic Organization of War Communism,172.Google Scholar
  117. 91.
    “Bezdenzhnye raschety i ikh rol v finansovom khozyaistve,” Narodnoe Khozyaistvo,n. 1 and n. 2 (1920), as quoted in Szamuely, First Models of the Socialist Economic System,34; emphasis added. Also see Malle, The Economic Organization of War Communism,174, where she quotes Krestinskii, who was one of the Commissars of Finance, as arguing that the Bolshevik’s financial policies during war communism were a result of their conviction that “the period had begun in which monetary tokens would become unnecessary and it would be possible to get rid of them without any damage to the economy. From such a perspective originated our easy attitude towards monetary issue and our lack of concern to increase the value of the ruble.”Google Scholar
  118. 92.
    See Bukharin and Preobrazhensky, The ABC of Communism (Ann Arbor: University of Michigan Press, 1966[1919]). The appendix of this book contains the adopted party program, 373 ff. Bukharin wrote all of Part One, the theoretical exposition on the decay of capitalism. He also wrote the introduction to Part Two, which concerns itself with the dictatorship of the proletariat and the building of communism. Bukharin also wrote the chapters on the organization of industry, the protection of labor, and public hygiene. Preobrazhensky wrote the remaining chapters.Google Scholar
  119. 93.
    The ABC of Communism,70; emphasis added. It is this program of rationalization that Milyutin announced with pride in June 1920 had been accomplished. “All enterprises and all industrial branches,” he stated, “are considered like a single enterprise. Instead of competition, instead of struggle, Soviet Power with determination implements the principle of unity of the national economy in the economic field.” As quoted in Malle, The Economic Organization of War Communism, 19181921,320, fn. 27. It is also this very project of achieving ex ante coordination that Mises directly challenged; while Bukharin stated that the planner would know in advance how, what and for whom to allocate resources, Mises merely asked the planners how, in the absence of monetary calculation, they would know which projects are economically feasible and which ones were not. As we will see, it is the Bolsheviks’ disregard of economic calculation that finally led to the collapse and the retreat to NEP.Google Scholar
  120. 94.
    The ABC of Communism,74. Bukharin does, however, admit that two or three generations would have to grow up under the new conditions before the project is fully realizable, and “the bureaucracy, the permanent officialdom, will disappear” and the state would wither away. Bukharin, at least here, did not seem to understand the threat of the growing bureaucracy associated with the communist scheme. For a discussion of the bureaucratization of social life under Soviet rule, see Bruno Rizzi, The Bureaucratization of the World (New York: The Free Press,1985 [19391); Milovan Djilas, The New Class (New York: Praeger, 1957); and George Konrad and Ivan Szelenyi, The Intellectuals on the Road to Class Power (New York: Harcourt Brace Jovanovich, 1979).Google Scholar
  121. 95.
    The ABC of Communism,72. Also see Bukharin, “The Economics of the Transition Period,” 155, where Bukharin argues that: “Money represents the material social ligament, the knot which ties up the whole highly developed commodity system. of production. It is clear that during the transition period, in the process of abolishing the commodity system as such, a process of `self-negation’ of money takes place. It is manifested in the first place in the so-called devaluation of money and in the second place, in the fact that the distribution of paper money is divorced from the distribution of products, and vice versa. Money ceases to be the universal equivalent and becomes a conventional—and moreover extremely imperfect—symbol of the circulation of products.”Google Scholar
  122. 96.
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  123. 97.
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  125. 99.
    Program of the Communist Party of Russia,“ 397. Also see Lenin, ”Draft Programme of the R.C.P.(B.),“ CW (29: 98–140). Lenin proposed that ”the R.C.P. will strive as speedily as possible to introduce the most radical measures to pave the way for the abolition of money, first and foremost to replace it by savings-bank books, cheques, short-term notes entitling the holders to receive goods from the public stores and so forthchrw(133).“ (115–116). Lenin argued for the eventual elimination of hand-to-hand currency and its replacement by a system of cashless accounting, that is, sophisticated barter.Google Scholar
  126. 100.
    See the Appendix: Documents of the Revolution in Chamberlin, The Russian Revolution, II: 490.Google Scholar
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    Decree of the Supreme Economic Council on the Nationalization of Small Industrial Enterprises, of November 29, 1920,“ Chamberlin, The Russian Revolution,11: 494.Google Scholar
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    Bukharin would try to “apologize” for the economic destruction—not by reference to civil war or foreign intervention, but by reference to the dialectics of the transition period. This goes for his theory of expanded negative reproduction as well as his justification of noneconomic coercion. The contradiction inherent in the transition period —“where the proletariat has already left the confines of capitalist compulsion, but has not yet become a worker communist society”—demand it. See Bukharin, “The Economics of the Transition Period.”Google Scholar
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  130. 104.
    Wells, Russia in the Shadows (New York: George H. Doran, 1921), 137. Wells, however, blames the debacle upon the civil war and foreign blockade. This reminds me of the scene in the movie Reds where Emma Goldman and John Reed are having a conversation over the debacle of war communism. Reed argued that the 4 million deaths from famine between 1919 and 1920 were a result of the capitalist (imperialist) blockade. Goldman, however, responds that the people did not starve to death because of the blockade, but because of a system that cannot work. My sympathies lie with Goldman’s interpretation of the Soviet experience with Marxian socialism.Google Scholar
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  133. For example, Boris Pasternak’s Doctor Zhivago and Ayn Rand’s We the Living give explicit details of the destruction of economic and social life under Soviet rule during this period. Also see the memoirs of Emma Goldman, My Disillusionment in Russia (New York: Doubleday, Page and Co., 1923) and My Further Disillusionment in Russia (New York: Doubleday, Page and Co., 1924) and Arthur Ransome, Russia in 1919 (New York: B.W. Huebsch, 1919).Google Scholar
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    As early as 1912 Mises had argued the essential organizational connection between private property in the means of production and monetary calculation. See Mises, The Theory of Money and Credit (Indianapolis: Liberty Press, 1980[1912D, 41, where he states: “The phenomenon of money presupposes an economic order in which production is based on division of labor and in which private property consists not only in goods of the first order (consumption goods), but also in goods of the higher order (production goods).”Google Scholar
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    “Etapy revoliutssi,” Izvestiya (March 12, 1921), as quoted in Daniels, The Conscience, 144.Google Scholar
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    Avrich, Kronstadt 1921,163. Avrich seems to think this naive, but given the evidence presented above concerning the economic program of the Bolsheviks, and the economic coordination problems that program ran into, the Kronstadter’s assessment might not be so naive after all. Avrich also seems to suggest that the Kronstadt rebellion was a result of the “failure” of the Bolsheviks to implement a Marxian socialist program, but this is because he interprets the socialist project to be one of a radical democratic decentralization of economic and political life. The Marxian ideal of both the rationalization of economic and political life is thus misunderstood. Nevertheless, Avrich provides perhaps the best history of the rebellion. Also see Daniels, The Conscience,137–153.Google Scholar
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© Springer Science+Business Media New York 1990

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  • Peter J. Boettke

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