“So you regarded as unnecessary something which the Soviet Government regarded as necessary, and you agitated in favor of your opinion against the decisions of the Party and the Government?”
“Yes, that’s true enough, though I wouldn’t have called it agitating, exactly.”
“So you admit having conducted counterrevolutionary agitation? At last you’re coming to your senses. Thank goodness for that.”
“For the life of me I can’t see anything counterrevolutionary in what I said or did. I didn’t want to overthrow the revolution, which I supported, but the rationing system, which I regarded as a cumbrous nuisance.”
“I’m not very much interested in how clever you are, Alexander Semyonovitch. You think you can distort the simplest facts with your dialectics, but you can’t.”
“But at the end of 1934 the Soviet Government itself recognized the situation and abolished ration cards.”
Ryeznikov sprang to his feet indignantly.
“Really, Alexander Semyonovitch, I don’t think I’ve ever heard such insolence in my life. You come here in the service of a foreign power and you think you can tell our Party and our Government what to do. Understand once and for all that I’m not here to argue with you. That’s got to stop. I’m here to expose your crimes and all you’ve got to do is to admit your guilt and call a spade a spade. Go away now. I’ve really had enough of you for the time being. Think things over, and remember: we’ve not got all the time in the world for you. We’ve got to bring this business to a close quickly.”
I was still upset at the final clash when I got back to the cell, and I told Rozhansky all about it. He, too, was indignant at my attitude.
“Alexander Semyonovitch!” he exclaimed. “I’ve been in prison for years now and I’ve seen hundreds of cases, but I’ve never known one like yours before. And after all that you try to tell me there’s nothing against you! Don’t you know that having had anything whatever to do with Bukharin has sent thousands to Siberia? There’s no more material against any of us than there is against you. Why, you even admit the discussions he mentions!”
“Yes, of course, but they didn’t have the character he wants to make out.”
“Do you really think you’re sitting here in a literary salon engaged in polite criticism or something? Why don’t you realize that Ryeznikov is a Bolshevik? It’s his duty to protect the Party and the Government. If he accepted your fine distinctions in the matter of counterrevolutionary discussions he’d soon be in here with us.”
I was in despair. I knew perfectly well that in the matter of rationing I had been right, and my views, which had been counterrevolutionary agitation in 1933, were praised in the whole Soviet press in 1934 as an example of the great wisdom and forethought of the Leader.
“In 1933 your attitude was most certainly counterrevolutionary,” declared Rozhansky with determination, “and a great danger to the political stability of the country. By December, 1934, the abolition of rationing had become an economic necessity. That is all. The Central Committee isn’t caught napping. It is aware all the time of the historical interests of our country and of the working class of the world. When a measure becomes necessary the Politburo issues the right instructions at precisely the right moment.”
I was flabbergasted. Rozhansky was a highly intelligent man, and he certainly couldn’t believe that. I wanted to argue with him, but he refused and unobtrusively indicated Denin.
When I arrived in the Soviet Union in March, 1931, the Five-Year Plan and agricultural collectivization were already in their third year. The import of consumer goods had been stopped so that all foreign exchange could be used to buy machinery. At the same time agricultural exports were being increased to the utmost. That was quite enough to cause a big shortage of foodstuffs and clothing, but it was only a contributory cause of the famine. The main cause was the enforced collectivization, which destroyed the basis of Russian agriculture. When they were compelled to surrender their land and join the collectives the peasants slaughtered their cattle rather than give them up. And when after the first collective harvest they received in return for a year’s hard work perhaps a pair of sports shoes, instead of the heavy top boots they needed, and perhaps a few low-quality cotton goods, they simply stopped working. At that time the principle of distribution in the collectives was according to the number of mouths in a family and not according to labor performance. If the weather was bad many peasants just stayed at home and let others do the work. The end result was, of course, the complete disorganization of Russian agriculture. Every succeeding harvest was smaller, until by 1932 it was far below the normal average.
But the Soviet Government paid little attention to the situation in the villages and ruthlessly requisitioned what it needed for the towns and for export. In that period industrialization was financed in part by increasing the volume of money in circulation. Naturally, prices began to rise, because up to 1928 the market was free. The Government then fixed maximum prices and introduced a system of rationing. By 1932 the ruble on the free market had fallen to one-fiftieth of its 1927 value. Inflation had already ended by 1931 but the persistent subnormal production in agriculture diminished the supplies of goods. The authorities requisitioned agricultural produce at ridiculously low prices and peasants often had to go to town to buy themselves bread, and they had to pay more for two pounds of bread than they had received from the Government for a hundred pounds of grain.
In 1932 the process of collectivization was completed. All incomes now came exclusively from sources directly controlled by the state. The obvious move therefore was to revise prices in accordance with supply and to abolish rationing, which had lost all point but still burdened the economic system with a vast parasitic apparatus involving a great deal of corruption. Many ration cards were stolen from the distribution centers, and even people who would never have dreamed of stealing, say, money, had no moral scruples about buying stolen ration cards to obtain food to which they were not entitled. At the same time the few consumer goods being produced by the manufacturing industries, which were still very backward, disappeared from the market into channels which were very difficult to control. The working people got very little and distribution went by favor. I was quite convinced that a frank recognition of the deterioration of money and a revision of the price system would permit a return to a free market with all-round benefit. If that were done there would once again be one valid measure for productivity—namely, money—and the Soviet Government could distribute money income exactly as it pleased. It could, for instance, pay engineers, who were urgently needed for industrialization, or members of the G.P.U., who were needed for security, more than it paid, say, doctors and teachers, who were regarded as of less importance in the period of reconstruction. As it was, certain strata were greatly privileged though nominally incomes remained the same, and as this system was covert its effect was demoralizing. For instance, with their five hundred rubles a month G.P.U. men could buy more than, say, teachers could buy with their six thousand rubles in a whole year, because in addition the G.P.U. men received special ration cards with which they could buy consumer goods at low prices in special shops open only to them. In other words, there were two sorts of money: the ruble and the special ration card. In fact, there were hundreds of different sorts of money because each category of goods required a different card, and so there were hundreds of cards. Prices were fixed arbitrarily by administrative decree and the economic system had no real price criteria. At the same time the Government had no means of obtaining a complete picture of the distribution of the national product. Money income was no longer an incentive to increase production. The small amount of money a worker was allowed to spend in co-operative or Government shops, where prices were low, was limited, and he earned it in any case. Any surplus had to be spent on the free market, where prices were fifty times higher, which meant that the extra was so little that it was not worth working for.
Let us oversimplify for the sake of cla
rity. A worker who earned only fifty rubles a month had quite enough to buy the very small quantities he was allowed to buy in co-operative shops at low prices. If he exerted himself and earned three times as much it did not mean that he could buy three times as much food, and the extra one hundred rubles he had earned would go to buy bread on the free market at fantastic prices. In the spring of 1933 his extra one hundred rubles bought on the free market that amount of bread which would have cost him two rubles in a co-operative shop. In other words, although he earned one hundred and fifty rubles, its purchasing power was only that of fifty-two rubles, and in such wage conditions all the encouraging agitation for increased production remained ineffective.
When rationing was finally abolished people once again began to appreciate the value of money, and to work hard to get it, whereas previously all they had been interested in was getting extra food cards. Now for the vast majority of the people the only way to get more money was to work harder, and before long production figures began to rise sharply. Many people still do not realize what happened: it was merely that money had once again been made the measure of value. That, and that alone, was the basis for the great wave of rationalization which is known to the outside world in connection with the name of Stakhanov.
I had discussed this question of abolishing rationing on many occasions with economists, Party members, scientists and officials. Some Communists felt that a return to the free market was equivalent to a return to capitalism even though the whole distributive apparatus was in the hands of the state. They believed that socialism necessarily meant the distribution of consumer goods by the state and not their purchase at the free choice of the individual. There was no official Party opinion on the point because the matter had never been officially discussed. The Central Committee decreed the introduction of rationing and later it decreed its abolition without consulting the Party on either occasion.
I awaited the night with some impatience in order to hear Rozhansky’s real views on the subject. At first Rozhansky repeated the sort of thing most people who have never really thought about the matter say when the question of economic control arises: up to the harvest of 1933 there had been a shortage of bread; rationing had made a just distribution possible; without rationing and price control bread would have soared out of reach of the poor; even bourgeois States adopted rationing when economic need arose—for instance, in wartime.
“Listen, Rozhansky,” I said, “there’s a fundamental difference between the Soviet Union and capitalist countries. Since the completion of collectivization the Soviet Government has been in a position to determine who shall be poor and who shan’t. The Government distributes the entire money income of the country, and it can distribute it just as it pleases, so why does it have to bother with two methods of control—ration cards and rubles—when one will do?”
Then the battle was joined. He denied that the Soviet Government had full control of all sources of income, but steadily I forced him into a corner and then he began to make one excuse after the other. Finally I grew impatient.
“My views on this matter may be right or wrong,” I declared. “I think them right, but no matter. Tell me one thing at least: What’s it got to do with revolution and counter-revolution? Surely we must be able to discuss freely whatever economic measures we propose to adopt or discontinue in a socialist country? Surely it’s impossible to discuss them objectively if we have to fear the secret police?”
“Alexander Semyonovitch,” he replied, “you’re a strange fellow. You’ve been in the Soviet Union seven years and in that time you’ve got to know our Soviet economic organism better than most Soviet citizens, but there are some sides of Soviet life you just don’t understand at all. You talk as though the Soviet Union were a sort of large-scale debating society, a sort of Fabianism.”
“I really don’t understand what you’re driving at; tell me plainly what’s in your mind.”
“There are certain things one just doesn’t say plainly. There is a certain conspiracy of silence which binds the Party leadership to the totality of the Party members. Anyone who breaks that conspiracy—even if it’s only by putting awkward questions—is called a counterrevolutionary.”
“Stop talking in riddles. Tell me what you really mean.”
“Alexander Semyonovitch, do you really think the Soviet Government wasn’t just as much aware of the disadvantages of inflexible control, rationing, soft and hard prices, and all the rest of the economic evils as you were? Do you really think the Party comrades with whom you discussed these things couldn’t see them just as well as you could?”
“If they could why did they pretend not to?”
“Soviet Party members are trained to appreciate the hidden significance of a measure without being officially told what it is.”
“Rozhansky, I’ve had enough of this. Talk plainly or don’t talk at all.”
He edged nearer and lowered his voice still further.
“Alexander Semyonovitch, millions of peasants starved to death in the spring of 1933 and the real wages of urban workers fell to a tenth part of what they were in 1926-27. Ought we to have published that openly for all the world to know?”
“What’s that got to do with rationing?”
“Just that rationing helped us to conceal the facts from the rest of the world, and—what was much more important—from our own people. Nominal food prices in the co-operatives remained the same. Nominal wages were rising, and at the Central Committee meeting in January, 1933, on the results of the first Five-Year Plan Stalin was able to say quite truthfully that compared with 1928 workers’ wages had increased by over sixty per cent. Do you remember?”
I certainly did remember the boiling indignation with which I read the report of that session. The crisis was at its height. Peasants who had come into Kharkov from the hunger districts in the hope of finding food were collapsing in the streets, and so were the horses. Even the workers looked like walking skeletons. And in this situation Stalin had the monstrous insolence to declare calmly that the general well-being of the people had increased. There was one criterion against which to measure the depreciation of the ruble and that was the so-called Torgsin ruble. In 1930 the Soviet Government established certain shops in which foodstuffs and textile goods could be bought for foreign money or gold at world-market prices. At first these so-called Torgsin shops were used exclusively by foreigners, but later on hungry Russians began to bring in their last pieces of gold, ornaments, rings, etc., for sale. These were paid for in units which were generally known as Torgsin rubles, and before long this currency could be bought on the free market for ordinary rubles. A Torgsin ruble could buy as much as an ordinary ruble had been able to buy before the currency depreciation in 1927. Now on the free market in Moscow or Kharkov toward the end of 1932 the Torgsin ruble cost between fifty and seventy paper rubles. It was sixty per cent more of these paper rubles the workers received in 1927 to justify Stalin’s boas-t. True, prices in the co-operatives had remained stable, but all the workers could buy there was a limited amount of bread and just over two pounds of sugar a month per ration card.
If the non-privileged worker wanted meat, or fats or milk, he had to go with his rubles to the free market and pay fifty times more. But even bread wasn’t available in the co-operatives in sufficient quantity. Twice a year, on the great holidays of the Soviet Republic, May 1st and November 7th, there were extra rations: a little margarine, jam, fish, etc. For the rest of the year the co-operative window displays consisted of dusty, fly-blown dummies flanking a portrait of Stalin, while inside there were empty shelves and dirty counters around which careworn women milled to purchase their small rations of bread and perhaps a little sauerkraut. The European and American press had lost all criteria for judging Russian economic conditions: wages had risen and the official prices in the co-operative shops had remained the same. The fact that there was little or nothing to buy for the ordinary people was concealed from the eyes of foreign observers by an ingeni
ous system of privileged shops. Perhaps, after all, Rozhansky was right and the ration-card system served only to conceal these facts and its defects were therefore deliberately accepted.
“But, Comrade Rozhansky, surely it wasn’t worthwhile to suffer all that merely for foreign propaganda. The system of double prices distorted all market relations and blinded the officials of the state factories, trusts and distributive organizations to economic reality. As director of construction for our Institute I could tell you hair-raising things. Everything you could buy from the state at hard prices was fantastically cheap, with the result that the demand was enormous. In the end every engine, every lathe, every transformer was obtainable only with a special prikaz signed by the Commissar himself.
That led to senseless and cumbrous centralization. How could Piatakov or Ordzhonnikidze know I needed, say, a lathe more urgently than some factory in the Donetz Basin or in the Urals? I got the machine because I was more energetic than my colleague in the Donetz Basin or the Urals, and better able to press my case in the Commissariat for Heavy Industry. Very likely my colleagues in the Donetz Basin or the Urals needed the machine even more urgently than I did, but they had to go without.”
“Such things are inevitable in a centralized economy, Alexander Semyonovitch.”
“No, they’re not. With the abolition of the double-price system and the re-establishment of a free market, even under state control, for capital goods as well as consumer goods, the price of that machine would have been very high, and I should have considered very carefully before I bought it. On the other hand, my colleague in the Donetz Basin or in the Urals might well have bought it at once because he had already reckoned how much the machine would save him. I should then have had to get on with a less modern machine, shall we say, and that would have been a good thing for Soviet economy. And further, the Commissar himself wouldn’t have been worried by us all trying to get the machine, and he would have been able to devote his time to more important things. As it is, construction directors, supply managers and factory heads spend months of their time in Moscow every year trying to get the machinery and raw materials. People come all the way from Vladivostok perhaps half a dozen times a year on such missions. Their time and expenses just increase the costs of production. Perhaps two hundred thousand such people are constantly in Moscow. The present system of distribution leads to excessive bureaucracy in every factory and office. And all you have to do to avoid it is to establish a free market for state products with proper prices.”
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