*In his brief recollections of this episode—apparently its only mention in Soviet literature—Chicherin, while confirming Helfferich’s account, indicates that the matter was settled by Lenin personally: “Lenin i vneshniaia politika,” Mirovaia politika v 1924 godu (Moscow, 1925), 5. See also his article in Izvestiia, No. 24/2059 (January 30, 1924), 2–3.
*Kurt Riezler, who at this point fades from the picture, returned after the war to his professorship in Frankfurt. When Hitler took power, he emigrated to the United States, where until his death in 1955 he taught at the New School for Social Research in New York City.
*Baumgart, Ostpolitik, 315–16. Vatsetis served as Soviet CIC until the summer of 1919, when he was arrested on charges of participating in a “counterrevolutionary conspiracy.” After being released, he taught at the Soviet Military Academy. In 1938, during a classroom break, he was rearrested and soon afterward executed: Pamiat’, No. 2 (1979), 9–10.
At about the same time the Cheka, then directed by the Latvians M.I. Latsis and Ia. Kh. Peters, engaged in a classic Russian police provocation. It sent a Latvian officer to Lockhart to say that his men were ready to abandon the Bolsheviks. Lockhart turned them over to the British intelligence agent Sidney Reilly, who gave them a considerable sum of money. This ploy was later used to justify Lockhart’s arrest. See IA, No. 4 (1962), 234–37, and Uldis Germanis, Oberst Vacietis (Stockholm, 1974), 35.
*The text of the treaty, minus one of the three secret clauses, is reproduced by J. Wheeler-Bennett in Brest-Litovsk: The Forgotten Peace (New York, 1956), 427–46.
*This clause was first published in Europäische Gespräche, IV, No. 3 (1926), 149–53. It is reproduced in Wheeler-Bennett, Forgotten Peace, 436.
* Europäische Gespräche, IV, No. 3 (1926), 150. Ioffe’s acceptance: Europäische Gespräche, 152. Cf. H. W. Gatzke in VZ, III, No. 1 (January 1955), 96–97.
†Baumgart, Ostpolitik, 203. This third secret clause became public knowledge only after World War II. It was first published by Baumgart in Historisches Jahrbuch, LXXXIX (1969), 146–48.
*Ioffe in VZh, No. 5 (1919), 45. Because of his close association with Trotsky, Ioffe later fell into disgrace: he committed suicide in 1927. See Lev Trotskii, Portrety revoliutsionerov (Benson, Vt, 1988), 377–401.
*This point is vigorously and persuasively argued by Brian Pearce in How Haig Saved Lenin (London, 1987).
15
“War Communism”
The term “War Communism” has acquired over the years in Communist and non-Communist literature a precise meaning. In the words of the Soviet Historical Encyclopedia:
War Communism:
The name given to the economic policy of the Soviet Government during the years of the civil war and foreign intervention in the U.S.S.R., 1918–20. The policy of War Communism was dictated by the exceptional difficulties caused by the civil war [and] economic devastation.
1
The notion that War Communism was “dictated” by circumstances, however, does violence to the historical record, as shown by the etymology of the term. The earliest official use of “War Communism” dates to the spring of 1921—that is, to the time when the policies so labeled were being abandoned in favor of the more liberal New Economic Policy. It was then that the Communist authorities, in order to justify their sudden turnabout, sought to blame the disasters of the immediate past on circumstances beyond their control. Thus, Lenin in April 1921 wrote: “ ‘War Communism’ was imposed by war and ruin. It was not and could not be a policy that corresponded to the economic tasks of the proletariat. It was a temporary measure.”2 But this was hindsight. While some of its measures were indeed taken to meet emergencies, War Communism as a whole was not a “temporary measure” but an ambitious and, as it turned out, premature attempt to introduce full-blown communism.3
That Bolshevik economic policies in the first years of the regime were neither improvisations nor reactions is confirmed by no less an authority than Trotsky. Allowing that War Communism entailed “systematic regimentation of consumption in a besieged fortress,” he goes on to say that
in its original conception it pursued broader aims. The Soviet Government hoped and strove to develop these methods of regimentation directly into a system of planned economy in distribution as well as production. In other words, from [War Communism] it hoped gradually, but without destroying the system, to arrive at genuine communism.
4
This view is corroborated by another Communist authority. War Communism, he says,
was not only a product of war conditions and of other, spontaneously acting forces. It was also the product of a definite ideology, the realization of a sociopolitical design to construct the country’s economic life on entirely new principles.
*
Nothing attests more convincingly to the long-range Communist goals of the policies which the Bolsheviks pursued during the Civil War than the systematic assault on the institution of private property. The laws and decrees to this end, passed at a time when the Bolshevik regime was fighting for its life and which contributed nothing to its survivability, were inspired by an ideological belief in the need to deprive the citizens of ownership of disposable assets because they were a source of political independence. The process of expropriation began with real estate. The so-called Land Decree of October 26, 1917, deprived non-peasant owners of landed property. This was followed by decrees concerning urban real estate, which was first (December 14, 1917) withdrawn from commerce and later (August 24, 1918) expropriated on behalf of the state.5 In January 1918 all state debts were repudiated. A decree of April 20, 1918, forbade the purchase, sale, and leasing of commercial and industrial enterprises. Another decree on that day required securities and bonds in private possession to be registered.6 A major step in the abolition of private property was taken on May 1, 1918, with a decree outlawing inheritance.7 None of these fell into the category of “emergency measures”: each was intended to deprive private persons and associations of title to productive wealth and other assets.
In its mature form, which it attained only in the winter of 1920–21, War Communism involved a number of sweeping measures designed to place the entire economy of Russia—its labor force as well as its productive capacity and distribution mechanism—under the exclusive management of the state, or, more precisely, the Communist Party. It was intended both to undercut the economic base of the opposition to the Communist regime and to enable that regime to reorganize the national economy in a thoroughly “rational” manner. These measures were:
1. The nationalization of (a) the means of production, with the important (albeit temporary) exception of agriculture, (b) transport, and (c) all but the smallest enterprises.
2. The liquidation of private commerce through the nationalization of the retail and wholesale trade, and its replacement by a government-controlled distribution system.
3. The elimination of money as a unit of exchange and accounting in favor of a system of state-regulated barter.
4. The imposition on the entire national economy of a single plan.
5. The introduction of compulsory labor for all able-bodied male adults, but on occasion also for women, children, and elders.
These unprecedented measures, pursued not because of but despite the Civil War, were designed to provide Soviet Russia with a coherent and rational economic system conducive to most efficient productivity as well as fairness in distribution.
War Communism had several sources of inspiration. State control (though not ownership) of production and distribution of commodities and labor had been introduced by Imperial Germany during World War I. These emergency policies, known as “War Socialism” (Kriegssozialismus), made a great impression on Lenin and his economic adviser, Iurii Larin. The replacement of the free market for commodities with a network of state-run distribution centers was patterned on the ideas of Louis Blanc and the ateliers introduced in France in 1848 under his influence. In spirit, however, War Communism resembled most the p
atrimonial regime (tiagloe gosudarstvo) of medieval Russia, under which the monarchy treated the entire country, with its inhabitants and resources, as its private domain.8 For the mass of Russians, who had never really been touched by Western culture, state control of the economy was more natural than abstract property rights and the whole complex of phenomena labeled “capitalism.”
If one were to take at face value the flood of Soviet economic decrees issued between 1918 and 1921, one would likely conclude that by the end of this period the country’s economy was completely state-managed. In fact, Soviet decrees of that time often reflected only intentions: the discrepancy between law and life was never greater. There is ample evidence that alongside the ever-expanding state sector there flourished a private sector which withstood all attempts at its elimination. Money continued to circulate even in an allegedly “moneyless” economy, and bread was sold on the open market despite the regime’s claim to a grain monopoly. The central economic plan was never put into practice. In other words, in 1921, when it had to be given up, War Communism was only very incompletely realized. Its failure was only in part due to the government’s inability to enforce its laws. No lesser a role was played by the realization that strict enforcement, even if it were possible, would bring about economic catastrophe: Communist sources conceded that without the illicit trade in food, which supplied the urban population with two-thirds of its bread, the cities would have starved. War Communism, under a new name and with fresh slogans, became a reality only ten years later, when Stalin resumed economic regimentation at the point where Lenin had left off.
The goal of War Communism was socialism or even communism. Its proponents had always believed that the socialist state would abolish private property and the free market, replacing them with a centralized, state-run and planned economic system. The main difficulty which the Bolsheviks faced in implementing this program derived from the fact that Marxism envisioned the abolition of private property and the market as the end result of a lengthy process of capitalist development which would concentrate production and distribution to such an extent that they could be nationalized by legislative fiat. But in Russia, at the time of the Revolution, capitalism was still in its infancy. Her overwhelmingly “petty bourgeois” economy, dominated by tens of millions of self-employed communal peasants and artisans, was further exacerbated by the Bolshevik policy of breaking up large estates for distribution to peasants and giving workers control of industrial enterprises.
Lenin gave ample proof of being an extraordinarily astute politician, but when it came to economic matters he revealed himself to be remarkably naïve. His knowledge of economics derived entirely from literary sources, such as the writings of the German socialist Rudolf Hilferding. In his influential Finance Capital (1910), Hilferding maintained that as capitalism entered its most advanced stage, that of “finance capitalism,” it concentrated all economic power in the hands of banks. Once it reached its logical conclusion, “this trend would produce a situation in which a bank or a group of banks would have at their disposal the entire monetary capital. Such a ‘central bank’ would thereby secure control over the entire social production.”9 Connected with the notion of “finance capitalism” was an exaggerated view of the role of syndicates and trusts. Lenin and his associates believed that in Russia syndicates and trusts virtually controlled industry and trade, leaving market forces a small and diminishing scope.
From these premises it followed that nationalizing banks and syndicates would be tantamount to nationalizing the country’s economy, which, in turn, meant laying the foundations of socialism. In 1917, Lenin argued that the concentration of economic power in the hands of banking institutions and cartels in Russia had attained a level at which finance and commerce could be nationalized by decree.10 On the eve of the October coup, he made the astonishing statement that the creation of a single state bank would provide, in and of itself, “nine-tenths of the socialist apparatus.”11 Trotsky confirms Lenin’s optimism:
In Lenin’s “Theses on the Peace,” written in early 1918, it says that “the triumph of socialism in Russia [required] a certain interval of time,
no less than a few months
.” At present [1924] such words seem completely incomprehensible: was this not a slip of the pen, did he not mean to speak of a few years or decades? But no: this was not a slip of the pen.… I recall very clearly that in the first period, at Smolnyi, at meetings of the Council of People’s Commissars, Lenin invariably repeated that we shall have socialism in half a year and become the mightiest state.
12
During the first six months in power Lenin thought of introducing into Russia a system which he called “state socialism.” It was to be modeled on German Kriegssozialismus, with this difference that it would embrace the entire economy, not only the sector directly relevant to the war effort, and work for the benefit not of “capitalists and Junkers” but of the “proletariat.” In September 1917, on the eve of the coup, he thus described what he had in mind:
Besides the predominantly “oppressive” apparatus of the standing army, police, officialdom, there exists in the contemporary state an apparatus, especially closely connected with banks and syndicates, which carries out a great deal of work of accounting and registering, if one may put it this way. This apparatus cannot and should not be smashed. It must be removed from its subjection to the capitalists, it must be
cut off…
from the capitalists with their threads of influence, one must
subordinate
it to the proletarian soviets, one must make it more comprehensive, more all-embracing, more national. And this
can
be done, leaning on the achievements already accomplished by large-scale capitalism.… The “nationalization” of the mass of employees of banks, syndicates, commercial societies, etc., is fully realizable both technically (thanks to preparatory work done for us by capitalism and finance capitalism) and politically under the condition of
Soviet
control and supervision.
13
In late November 1917, Lenin jotted down the outline of an economic program:
Questions of Economic Policy
1. Nationalization of banks
2. Compulsory syndication
3. State monopoly of foreign trade
4. Revolutionary methods to combat looting
5. Publicizing financial and bank looting
6. Finance industry
7. Unemployment
8. Demobilization—of army? industry?
9. Supply
14
This draft made no mention of state monopoly of domestic trade, or of nationalization of industry or transport, or of moneyless economy, which were to become the hallmarks of War Communism. Lenin at this time believed that the nationalization of financial institutions and the syndication of industrial and commercial enterprises would suffice to set the socialist economy on its way.
On October 25, 1917—that is, before he had even obtained from the Second Congress of Soviets the authority to form a government—Lenin approached Iurii Larin, a Menshevik recently turned Bolshevik. In socialist circles, Larin was considered an expert on the German wartime economy. “You have occupied yourself with questions of the organization of the German economy,” Lenin said to him, “syndicates, trusts, banks. Study this subject for us.”15
Soon afterward, Larin published in Izvestiia an impressionistic sketch of the Bolshevik economic program. It centered on the compulsory syndication of all raw material production, consumer industries, transport, and banks, each subordinated to a comprehensive national plan. Private shares in enterprises would be exchanged for syndicate shares, which would be traded on the open market. In the provinces, organs of self-rule (presumably soviets) would either syndicate or municipalize retail trade and residential quarters. The peasants too would be “syndicated” for the distribution of foodstuffs and agricultural equipment.16 Under this program, the government
would control private enterprise, but not abolish it.
At Lenin’s request, Larin and his associates initiated discussions with Alexis Meshcherskii, one of Russia’s most powerful industrialists. A self-made man, Meshcherskii under the old regime had been a typical “progressive” businessman who despised the bureaucracy and wanted Russia to become a free, democratic country, capable of realizing her immense productive potential.17 Although not personally wealthy, he had considerable managerial responsibilities as director of the giant Sormova-Kolomna Metal Works, owned by Russian and foreign, mainly German, capital, employing 60,000 workers. At Larin’s invitation, Meshcherskii drew up a blueprint for a joint venture involving private enterprise and the Bolshevik Government. He envisioned the creation of a Soviet Metallurgical Trust with a capital of one billion rubles, half supplied by private investors, half by the state, and managed by a board, on which the former would have 60 percent of the seats. The trust, employing 300,000 workers, was to manage a network of industrial enterprises, as well as coal and iron mines, and devote itself, in the first instance, to providing rolling stock for Russia’s ailing railroad system.18 In March, the Communist authorities discussed a similar joint venture with the directors of the Stakheev Group, which controlled some 150 industrial, financial, and commercial enterprises in the Urals. Its management proposed a trust to exploit the mineral deposits of the Urals financed with funds supplied by the Soviet Government as well as Russian and American interests.19
These proposals, which would have pushed the Soviet economy toward a mixed model, were aborted by the opposition of Bolshevik “purists.” Under their pressure, government negotiators demanded an ever-greater proportion of the shares in the proposed Metallurgical Trust, until nothing was left for private capital. Meshcherskii and his associates were so eager for a deal with the Bolshevik regime that they agreed to concede the government even 100 percent of the trust’s shares as long as they were promised priority should the government ever decide to sell them. Even this modest proposal was rejected. According to a Communist account, on April 14, 1918, with what is cryptically described as a “near majority of votes,” the Supreme Council of the National Economy voted to terminate discussions.*
The Russian Revolution Page 104