Counter-Theses on the Five-Year Plan

Add a subpage to this text

Read the help page for usage.

 

4. The “Starting Point”

The next defect of the CC theses consists of their complete failure to elucidate the present economic situation. Without a proper survey of the results of the economic management of the last two years, and without an analysis of the deficiencies of this management, no economic verification of planned economic activity is possible.

In the resolution passed by the July plenum in 1927 we read: “The overall economic results of the current year, so far as these can be judged from the provisional data, appear to be favorable, and on the whole economic activity has developed during the current year without crises. This demonstrates the considerable improvement that has taken place in planned economic management.”

These assertions have been refuted by actual facts.

During the past year, the official press has unanimously asserted that the goods famine in our country has been considerably alleviated, if not altogether overcome.

This theory that the goods famine has been overcome was necessary for the purpose of refuting the Opposition's theses on the failure of industry to keep pace with the growing economic needs of the population and of the national economy.

As a matter of fact there has been no alleviation of the goods famine; all that has been achieved is an apparent pacification of the goods market during the first half of the economic year 1926-27, brought about by measures artificially limiting demand. The result has been that in the second half of the year the goods famine revealed itself with full force.

The most striking proof of this goods famine is the lines to be seen outside the shops in the towns, and the entirely inadequate supply of industrial goods to the rural districts. The triumph of the People’s Commissariat of Trade over the market, proclaimed by the bureaucratic optimists, has suffered complete shipwreck.

In 1925-26, 584.4 million poods of grain were bought by the state and cooperative grain supply organizations [one pood = 36 pounds]. Besides this the amount bought by private and small cooperative buyers was about 300 million poods. In 1926-27 these same supply organizations brought in less grain than in the previous year.

Although 1927-28 is the third year in a row with a good harvest, the situation in the grain market has begun to worsen since the end of September. The collections dropped and are at present 10 percent below last year’s level. When we take into account that the number of private and small purchasers have also declined considerably in comparison with last year, the deficit in supply becomes even greater. The decline in the total collection of grain products is on the one hand a clear sign of the profound disturbances in the relations between town and countryside, and on the other a source of new and threatening dangers. The destruction of our export plans, and thus of our import plans, involving the slowing down of industrialization, is an obvious result of this state of affairs (in the fourth quarter of 1926-27 the amount of grain exported was only 23 percent of the amount for the corresponding quarter of the previous year). To this must be added the unexampled gap between the purchase and consumption prices.

“In 1927 the consumer pays for a pood of flour 1 ruble 14 kopeks more than the price paid to the peasant for a pood of rye. In the case of wheat the difference is 2 rubles 57 kopeks. This difference is two and a half times greater than that of prewar prices” (Pravda, July 1927). Do the present leaders of our economy understand the real meaning of this? No, they do not understand it. They say that in 1927 we began to “eat a great deal” (Rykov, in his report at the Profkhorovka factory); that the war danger has upset the economy (If that is the case, what will happen in time of war? But happily it is not so); and that the apparatus is bad (which is true enough). These explanations do not rise beyond the level of ideas of a conventional-minded farmer. Three facts alone serve to explain the difficulties in the grain market: the goods famine (backwardness of industry); the accumulation of reserves by the kulaks (differentiation in the countryside) and an imprudent policy in the sphere of money circulation (excessive issue of currency). If this is not grasped, the country will be plunged into an economic crisis. “Practically speaking, a good harvest — in the absence of industrial goods — could mean greater utilization of grain for clandestine distillation of alcohol and longer lines in front of shops in the cities. Politically, this would signify a struggle by the peasant against the monopoly of foreign trade, i.e., against socialist industry* [“Amendments to Rykov’s Resolution: On the Economic Situation in the USSR,” p. 50 of the present volume; emphasis added by Trotsky].

Subsequent events have fully confirmed the fears of the Opposition. Comrade Stalin attempted to misrepresent the purport of these warnings, and to sweep them aside with a cheap sneer. “Comrade Trotsky,” said Comrade Stalin, “seems to believe that our industrialization will be realized, in a manner of speaking, by some sort of ‘crop failure’ ” (Stenographic report of the Fifteenth National Conference of the AUCP, p. 459).

All these grave errors and miscalculations of our economic leaders have brought about a disorganization of the commodities and money markets, and threaten the stability of the chervonets. The demand for gold is growing among the peasantry, and the village shows an increasing distrust of the chervonets. As the peasant has no opportunity to exchange the chervonets for goods, he prefers to sell less, and this leads to the decline of the grain and raw material supplies, to increased prices, to the restriction of export, and to the disorganization of the whole economic system.

Is it possible to simply ignore such facts when assessing our economic situation, and when drawing up a five-year plan? To hide these facts from the party merely because they throw too glaring a light on the policy of the CC during the past few years would be more than an error — it would be a crime against the party. …

8. The Roots of Our Difficulties

The chief and general cause of our difficulties may be briefly formulated as follows: Industry has developed too slowly during the last few years, and fails to keep pace with the overall development of the national economy. The city cannot supply enough commodities in exchange for the products of the countryside. The incorrect political line that has been adopted, especially the incorrect taxation policy, makes it easy for the kulak to concentrate the great bulk of the grain and other reserves in his hands. This disproportion is a constant source of growth of parasitic elements, speculators, and gigantic profits of the capitalist strata.

At the same time there is a rapid growth of the capitalist elements among the small agricultural producers. Owing to this, the dependence of the state economy on kulak and capitalist elements is growing, as regards food, exports, and supplies of raw materials.

The kulak elements, relying on their improved economic position and on their growing reserves, join their capitalist allies in the city to sweep aside the economic plans of Soviet power, place restrictions on export — and thereby on capital investments and on the rate of industrialization — which actually retard the process of building socialism.

A further aspect of these basic phenomena is the weak development of export, the insufficient import of means of production, the lack of fresh capital for the construction of new factories and for the expansion and reequipment of the old ones, the continuous growth of unemployment in town and countryside. The result is that at the end of this decade we have not only economic success to record — as, for instance, the uninterrupted growth of production in state industry; the increase of capital investment and of building activity; the growth of commerce between town and countryside, accompanied by the absolute and relative growth of the cooperatives and of state industry; and the improvement of the material position of the middle peasantry — but we have at the same time to record an indubitable growth of difficulties of a social and class character.

The Opposition demanded a more rapid development of industry by a more powerful and systematic taxation pressure on the kulak and NEPman, and by cutting back the enormous bureaucratic apparatus. The majority of the CC accused the Opposition of “super-industrialization,” and “panic” over the kulak. The majority drifted along without sail or rudder, trusting to chance. The present difficulties are the penalty for the procrastinating policy of the leaders.

At the beginning of the present year 800 to 900 million poods of agricultural products lay accumulated in the villages, mainly in the hands of the kulaks and better-off peasants. These reserves far exceed the security store required, are growing rapidly, and will increase by 200 to 300 million poods, reaching a billion by the end of the present agricultural year. This fact is a threatening symptom of the stagnation of commodity circulation in the village, and its end result is bound to present obstacles to increasing the area under cultivation.

Here we have a consequence of the inadequate development of industry, which is not in a position to provide an exchange fund for these stocks in the village. The slow development of industry retards the development of agriculture.

This accumulation of agricultural products in the village is closely connected with the question of our inadequate exports and the frustration of our export and import plans by the better-off peasants and kulaks. When Comrade Kamenev very correctly explained our failure to carry out our grain export plan in 1925 by referring to the fact that the kulak was holding back his grain, thereby thwarting the plan, he was overwhelmed with an avalanche of attacks and statistics intended to “refute” his statement. But the present accumulation of agricultural products in the village, inaccessible to government purchasers, has reached such a point that Comrade Kamenev’s assertion has become a platitude recognized by every economist. And not only that: his successor, Comrade Mikoyan, will be faced this year by the frustration of the original grain export plan, and by the prospect of the failure of an import plan already considerably cut down. This second “miscalculation” is all the more unpardonable in that it has been made two years after the first, that is, under conditions when the consequences of the differentiation in the countryside have become more obvious to everyone. Comrade Mikoyan, in his article in no. 252 of Pravda, pointed out very rightly that “our foreign trade turnover is the boundary limiting the speed of our industrial development.” But who establishes this boundary? The extent of our foreign trade is determined to a certain degree by the extent of our industrial export (35.8 percent in 1925-26), hut chiefly by the extent of agricultural export, which comprised 64.2 percent of our total exports in 1925-26. And since our supplies of grain and raw material surpluses for export are chiefly obtained from the better-off peasants, while precisely these strata are most determined to hold back their grain, the result is that we are being “regulated” by the kulak and the well-to-do peasant.

Foreign trade is rightly designated as one of the key leading positions of our state economy. The growth of capitalism in the countryside results in a certain extremely important section of this key position (made important by the fact that ours is an agrarian country) passing into the hands of our class enemy. Here, the working class is confronted with one of the most dangerous results of the policy pursued by the CC since the Fourteenth Party Congress under the slogan of “Fire Against the Left.” This devastating result is comprehensible to the simplest workers. It means: cutting down exports at a time when a billion poods of grain reserves are on hand; difficulties in importing the raw material necessary for the textile, wool, and leather industries and for producing articles of mass consumption; difficulties in importing the most necessary machinery; difficulties in settling credit obligations abroad; worsening of the goods famine in town and countryside.

The objective result of the economic policy of the CC during the last two years has been to protect the accelerated growth of capitalist elements, especially in agriculture, now reaching a point at which these elements exert a noticeable pressure on the economic plans of the Soviet state, and even thwart them. Even the blindest can see this (see the above-quoted declaration of Comrade Mikoyan, and other passages from the same article).

But only those who refuse to see can fail to observe that the above-named difficulties all tend in one direction — the foreign trade monopoly.

There are only two means of escape from the situation thus created, and the situation as it stands cannot last.

The first way is that proposed by the Opposition, a compulsory grain loan from the wealthiest 10 percent of kulak farms, totaling from 150 to 200 million poods. After the needs of the towns have been satisfied, the remainder of this grain is to be exported, raw materials and machinery bought with the proceeds, and in this way the additional volume of commodities required to meet the goods famine in the countryside and the lack of food supplies in the cities can be produced within the country itself.

Those who reject this way are left with the sole alternative of abandoning the foreign trade monopoly, of resorting to foreign capital for export and import, and of importing foreign goods for the villages in exchange for the export of the accumulated reserves of grain. The present majority of the CC, with its policy of marking time in one spot, is organically incapable of making a timely choice, either to the left or to the right. This irresoluteness leads to decisions being made at the last moment in panicky haste, and then inevitably in the direction of a right policy.

The Opposition has never at any time or place said that the CC has resolved to annul the foreign trade monopoly, to recognize old debts, etc. The idea of the annulment or modification of the foreign trade monopoly has never been officially suggested, either in meetings or in the press. But in the offices of various officials, or in narrower business circles, even among Communists, a “reform” of the foreign trade monopoly, a “modification,” is being referred to with increasing frequency as a necessary prerequisite for the growth of agricultural export and the development of the productive forces of the country (it need not be said, on capitalist and not on socialist lines). The overall direction of the CC’s policy and its objective consequences are stronger than all its assurances on paper. The Opposition warns the party against the impending turn to the right on the question of the foreign trade monopoly. …