When a Soviet republic was set up in Azerbaijan in April 1920, Lenin proposed that foreign concessionnaires should be invited to restore the Baku oilfields to production. Since 1918 he had seen ‘concessions’ as vital to economic recovery, but his suggestion now caused outrage among Bolshevik leaders in the Transcaucasus. If Baku oil were to be exploited again by the Alfred Nobel Company, hardly any non-private industry would be left in Baku.53 Lenin also urged, at the Eighth Congress of Soviets in December 1920, that richer peasant households should be materially rewarded for any additional gains in agricultural productivity rather than be persecuted as kulaks. The Congress was horrified and most of Lenin’s scheme was rejected.54 The party leadership at the centre and the localities was determined to maintain existing economic policy.
And so it came about that the great controversy in the Bolshevik party in the winter of 1920–21 was not about grain requisitioning or about the return of foreign companies but about the trade unions. In November, Trotski had proposed that the unions should be turned into agencies of the state. Strikes would be banned; wage increases would be forgone. The Workers’ Opposition criticized this as yet another sign of the bureaucratization of the October Revolution. Others in the party, including Lenin, simply felt that Trotski’s project was unrealizable at a time of turmoil in the country. Ferocious debate broke out within the party. But as Bolshevik leaders haggled over Marxist doctrine on the labour movement, the Soviet economy moved towards catastrophe and a growing number of peasants, workers, soldiers and sailors rebelled against the victors of the Civil War.
7
The New Economic Policy
(1921–1928)
The basic compound of the Soviet order had been invented by Lenin and his fellow communist leaders within a couple of years of the October Revolution. There had been created a centralized, one-ideology dictatorship of a single party which permitted no challenge to its monopoly of power. The Bolshevik party itself was strictly organized; the security police were experts at persecution and there was systematic subordination of constitutional and legal propriety to political convenience. The regime had also expropriated great segments of the economy. Industry, banking, transport and foreign trade were already nationalized and agriculture and domestic trade were subject to heavy state regulation. All these elements were to remain intact in ensuing decades.
The Civil War had added to the pressures which resulted in the creation of the compound. On taking power in 1917, the communist leaders had not possessed a preparatory blueprint. Nevertheless they had come with assumptions and inclinations which predisposed them towards a high degree of state economic dominance, administrative arbitrariness, ideological intolerance and political violence. They also lived for struggle. They wanted action; they could barely contain their impatience. And they were outnumbered by enemies at home and abroad. They had always expected the party to be ‘the vanguard’ of the Revolution. Leadership was a key virtue for them. If they wanted to prevail as the country’s rulers, the communists would have been pushed into introducing some kind of party-run state even in the absence of a civil war — and, of course, the way that the October Revolution had occurred made a civil war virtually certain.
This in turn meant that once the Civil War was over, the party-state was unlikely to be dismantled by the Russian Communist Party. The party-state was at the core of the Soviet compound. Without the party-state, it would not be long before all the other elements in the compound underwent dissolution.
Even as things stood, not all the elements were as yet sustainable — at least, not in their entirety — in the harsh conditions of 1920–21. Popular discontent could no longer simply be suppressed. Even among those segments in society which had preferred the Reds to the Whites in the Civil War there were many people unwilling to tolerate a prolongation of wartime policies. Administrative disorder was increasing. Whole nations and whole regions were supervised only patchily from Moscow. The technical facilities for control were in a ruinous state: transport and communications were becoming a shambles. Most industrial enterprises had ceased production: factory output in 1920 was recorded as being eighty-six per cent lower than in 1913. Agriculture, too, had been reduced to a shabby condition. The grain harvest of 1920 was only about three fifths of the annual average for the half-decade before the Great War.1
By the start of 1921, strategical choice could no longer be avoided. Lenin, having had conversations while visiting peasants, at last recognized the enormity of the emergency. For him, the ultimate alarm bell was sounded by the rural revolt in Tambov province. The last great peasant risings in Russia had occurred in the seventeenth and eighteenth centuries under the leaderships of Razin, Bolotnikov and Pugachev. Ancient Russia now confronted the Bolsheviks in struggle. Lenin foresaw that force alone would not be enough to quell the peasants, and he decided that in order to sustain the political dictatorship he had to offer economic relaxations.
In his opinion, the peasantry had to be placated by the replacement of grain requisitioning with a tax in kind. Knowing that this would evoke intense opposition in his party, he initially limited the discussion to the Politburo. On 8 February 1921 he convinced its members of the need for urgent measures and a resolution was passed calling for a partial re-legalization of ‘local economic exchange’ in grain.2 Such fussiness of language was necessary to avoid offending the ideological sensibilities among fellow Bolsheviks. But the underlying purpose was unmistakable: the Politburo intended to restore private commercial activity. In addition, the tax-in-kind was to be set at a much lower level than the grain-requisitioning quotas and would secure only the minimum of the state’s requirements on behalf of civilian consumers. These measures were the core of what quickly became known as the New Economic Policy (or NEP).
Some such gamble was essential for the regime to survive. The Politburo permitted a press campaign to commend the NEP’s merits to the rest of the party. Having had his fingers burnt in the Brest-Litovsk controversy, Lenin for some weeks distanced himself from the policy by getting obscure party officials to put his case; and the commission established by the Politburo to elaborate the details was headed not by himself but by Kamenev.3
But thereafter Lenin, supported by Trotski and Kamenev, canvassed for the NEP. It was of assistance to him that the party had exhausted itself in the winter’s dispute about the trade unions. A desire for unity had emerged before the opening of the Tenth Party Congress on 15 March 1921, a desire stiffened by news of the outbreak of a mutiny by the naval garrison on Kronstadt island. The sailors demanded multi-party democracy and an end to grain requisitioning. Petrograd was affected by discontent and strikes broke out in its major factories. Those many Congress delegates who had not accepted Lenin’s arguments were at last persuaded of the argument for economic reform. Lenin anyway stressed that he did not advocate political reform. Indeed he asserted that the other parties should be suppressed and that even internal factions among the Bolsheviks should be banned. The retreat in economics was to be accompanied by an offensive in politics.
Congress delegates from all factions, including the Workers’ Opposition, volunteered to join the Red Army units ordered to quell the Kronstadt mutineers. Mikhail Tukhachevski, a commander who had recently returned from the Polish front, clad his soldiers in white camouflage to cross the iced-over Gulf of Finland undetected. In the meantime a depleted Party Congress ungratefully condemned the Workers’ Opposition as an ‘anarcho-syndicalist deviation’ from the principles of Bolshevism.
Lenin had got his way at the Congress in securing an end to grain requisitioning. And yet there was trouble ahead. The NEP would remain ineffective if confined to a legalization of private trade in foodstuffs. Other economic sectors, too, needed to be removed from the state’s monopolistic ownership and control. Peasants would refrain from selling their crops in the towns until they could buy industrial goods with their profits; but large-scale state- owned factories could not quickly produce the shoes, nails, hand-ploughs and spades that were wanted by the peasantry. Rapid economic recovery depended upon a reversion of workshops and small manufacturing firms to their previous owners. There was no technical impediment to this. But politically it would be hard to impose on local communist officials who already at the Party Congress had indicated their distaste for any further compromises with the principle of private profit.4
Lenin had to come into the open to persuade these officials to soften their stance. Indefatigably he tried to attract Western capitalists to Soviet Russia. On 16 March, after months of negotiation, an Anglo-Soviet Trade treaty was signed; and Soviet commercial delegations were established in several other European countries by the end of the year. Lenin also continued to push for the sale of ‘concessions’ in the oil industry in Baku and Grozny. The Red Army’s defeat in the war in Poland convinced him that temporary co-operation with international capitalism would
