Nikolai Bukharin

Programme of the World Revolution

Chapter XV
The End of the Power of Money.
“State Finances” and Financial Economy in the Soviet Republic

Money at the present time represents the means of obtaining goods. Thus those who have much money can buy many things; they are rich. However low the rate of money falls, it is always easier to live for the man who has much of it. The rich classes who even now have an abundance of money can live at their ease. In towns, traders, merchants, capitalists and speculators: in the country the “kulaks” (rich peasants), the sharks and sweaters who have fattened on the war to an incredible degree, having saved hundreds of thousands of roubles. Things have reached such a pitch that some buried their money in the ground in boxes or glass jars.

The workers’ and peasants’ State, on the other hand, is in need of money. Additional issues of paper money depreciates its value: the more paper money is printed the cheaper it gets. And yet the works and factories must be maintained by these paper tokens; workers must be paid, the administration must be kept going, the employees must get their wages. Where is the money to come from? To get the money it is necessary first of all to tax the rich. An income and property tax, that is to say, a tax on big profits and on large property, must be the principal tax; a tax on the rich, a tax on those who receive a surplus income.

But at the present time, when everybody is living through a revolutionary fever, when it is difficult to arrange for the regular imposition of taxes, any means of obtaining money is reasonable and admissible. For instance, the following is quite an excellent measure. The Government declares that up to a certain date all money must be exchanged for new, and that the old money has lost its value. That means that everybody must empty his boxes and jars and cupboards and bring his hoard to the bank to be exchanged. And here the following system should he carried out; the savings of poor people must be untouched, a new rouble being paid for every old one; but beginning with a certain sum a part must be deducted for the benefit of the State. And the larger the amount of money saved up, the greater will be the sum retained. Let us propose the following scheme: up to 5,000 the exchange is to be a rouble for a rouble; of the following 5,000 a tenth part is deducted; from the third 5,000 a seventh part; from the fourth a fourth part; from the fifth a half; from the sixth three-quarters; and beginning with a definite sum, the whole is confiscated.

Thus the power of the rich would be considerably undermined, additional means for the needs of the Workers’ State would be obtained, and everybody would be more or less equalised with regard to income.

In a time of revolution the imposition of contributions on the bourgeoisie is justifiable. It is certainly not at all advisable for one local Soviet to tax the bourgeoisie according to one system, whilst the other does so in accordance with another system, and a third according to a third. This would be as bad as if there were varying forms of levying taxes in a given locality.

We must strive towards a uniform system of taxation, suitable for the whole Soviet Republic. But if in the meantime we have not been able to build up such machinery, contributions are admissible. There is a Russian proverb which says: “When you can’t get fish, a lobster will do.” We must bear in mind that the duty of the party and of the Soviets, as well as that of the working class and the poorest peasantry, consists in uniting and centralising on one definite plan, the collection of taxes, thereby systematically driving the bourgeoisie out of their economic stronghold.

We must, however, note that the more successful the organisation of production on new labour principles, the more will the importance of money decrease. Formerly, when private enterprises were the dominating institution, these private enterprises sold their goods to one another. The tendency now is for various branches of industry to unite and become different departments of general social production. Products may be exchanged between the different departments simply by a process of book-keeping without the need of using money at all. This method is actually in process between the different branches of capitalistic trusts or combines.

Combined enterprises are those which embrace several varying branches of production. In America, for instance, there arc enterprises which own metal works, coal mines, iron mines, and steamship companies. One branch of the enterprise supplies the other with raw materials or transports its manufactured products. But all these separate branches represent but parts of one enterprise. It is, of course, understood that one part does not sell its products to another branch of the enterprise, but distributes it according to the orders of the central head office of the various departments. Or let us take another example: the works of one department transfer the half-finished product to another, yet within the works no kind of purchase and sale transaction takes place. The same sort of thing will be established in the general plan of production. The main branches of production will be organised into huge social enterprises under the management of the workers. A systematic distribution of the necessary means of production will take place between the different branches; this will include fuel, raw materials, half-finished products, auxiliary materials, and so on. And that will mean that money will lose its importance. Money is important only when production is unorganised; the more organised it becomes the smaller becomes the part played by money, and the need for it gradually decreases.

What about the workers’ pay? we shall be asked. The same thing will hold good here. The better production is organised by the working class, the less will social workmen be paid in money and the more they will be paid in kind, that is to say, in products. We have already spoken of co-operative communes and of labour registers. Products required by workers will be issued without any money whatever, simply upon the evidence that such an such a man has worked and is working; they will be given out by the co-operative stores in accordance with such entries in the labour registers. This, of course, cannot be organised all at once. It will be long before we are able to organise this into proper working order. It is a new plan that has never been worked before, and is therefore exceptionally difficult to carry out. But one thing is clear: in proportion as the workers come into possession of production and distribution, the need for money will become less and less and subsequently will gradually die out altogether.

An “exchange” of goods must then begin between town and country, without the agency of money; municipal industrial organisations send out textile, iron and other goods into the country, while the village district organisations send bread to the towns in exchange. Here, too, the import-unco of money will ho lessened in proportion as the town and country labour organisations of the workers and peasants become more closely united.

But at present, at this very moment, the workers’ Government needs money, and needs it badly. That is because the organisations of production and distribution is only just getting into working order, and money still plays a most important part. Finances, including income and expenditure of State money, are at present of the utmost importance. And that is why the question of taxes is so acute at the present time; they must be exacted by every means. The confiscation of surplus incomes of the town and country bourgeoisie is inevitable, as is also periodical taxation.

But in the future taxation will also become obsolete. To the extent that production becomes nationalised, so capitalists’ profits cease; as there are no more landowners, the “so-called land tax is abolished. Property holders are deprived of their houses, and thus another source of taxation is gone. Superfluous wealth is confiscated, the rich are losing their main support, and the whole population is gradually becoming employed by the proletarian State organisations. (Later on, with complete Communism, when there is no State, people, as we have seen, will become equal comrades, and the very memory of the division of society into bourgeoisie will vanish.)

When such a state of things exists it will be much simpler to deduct the necessary taxes immediately from salaries than to deduct considerable sums in the way of taxes or dues. It is not worth while spending both time and money on the senseless transaction of giving with one hand and taking away with the other.

We have seen, on the other hand, that when production and distribution are thoroughly organised, money will play no part whatever, and as a matter of course no kind of money dues will be demanded from anyone. Money will have generally become unnecessary. finance will become extinct.

We repeat that that time is a long way off yet. There can be no talk of it in the near future. For the present we must find means for public finance. But we are already taking steps leading to the abolition of the money system. Society is being transformed into one huge labour organisation or company to produce and distribute what is already produced without the agency of gold coinage or paper money. The end of the power of money is imminent.

Last updated on 7.8.2008