L. Kamenev

The Situation of Soviet Russia

(January 1923)

From a speech delivered at the 10th All-Russian Soviet Congress.
From International Press Correspondence, Vol. 3 No. 10, 25 January 1923, pp. 75–77.
From International Press Correspondence (weekly), Vol. 3 No. 3, 26 January 1923, pp. 33–36
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive

This year we enter upon a fresh creative period of the revolution. In this period the tasks confronting the leaders of the first proletarian state consist in rapidly grasping the distinguishing features of the epoch, and safely and victoriously conducting the masses of workers and peasants through the innumerable difficulties and obstacles.

We must not forget that the severity and acuteness of the civil war was caused by the resistance offered by the bourgeoisie. We know today that the army and the resistance of the Russian bourgeoisie were trivial, and that the civil war could have been over in a few months, or even weeks, if the workers and peasants of Russia had been opposed by the Russian bourgeoisie only. The civil war dragged on for years; but this was due to the fact that the international bourgeoisie came to the aid of the Russian. It is only to-day that we can maintain that the first fundamental condition towards really peaceful and creative work has been fulfilled. For a long time there has no longer been heard with us the rattle of the White Guards’ machine guns, nor the roar of foreign cannon, and this has almost made us forget that it is but a short time since the cannon of the foreign occupants have been silenced in the Far East. The war was not ended when we defeated Denikin and drove Wrangel into the sea; it is only ended now, by the reconquest of the Far East. It is only now that we can assert that the working masses, from Vladivostok to Baku, from Batum to Petrograd, and from Odessa to Archangel, are united in one state organism under the red Soviet flag.

We are united, but this unity requires exact definition, demands strict state outlines. We now have the possibility of proceeding with this work, and one task of the 10th congress will be io solve the question of the creation of a Soviet Federal State. Our Federation will be an alliance such as the world has not yet seen. Cultural liberty, and the right of withdrawal from the federal state, are assured to every member. Tsarist Russia, which held its millions of people together by means of the knout, by means of prefects and governor generals, was forced to disappear. An alliance is arising over its ruins, an alliance based on equality of rights, on the recognition of the rights of every nation, on the unity of economic interests and of the goals being striven for.

Our second task is to strengthen our position with regard to foreign policy. We need peace. We are willing to adapt ourselves to the economic life of the whole world. When we look back to the months in which the conferences of Genoa and The Hague took place, we see that real prospects existed of effective agreements being reached at these conferences; and because there were such prospects, we sent our representatives. We were indeed convinced that these conferences really meant business, but when we inquired the price, we found it so high that we were obliged to retire from the bargain. Our will to peace induced us to agree to far-reaching concessions, but international imperialism appears to have hoped for still more. Genoa and The Hague were failures, and failed because our delegates declared: “We cannot concede one step further.”

Today, more than half a year since Genoa and The Hague, we are able to say: “Not only can we not concede one step further, but we are now no longer willing to grant the concessions which we offered before.” I believe that not only our friends, but also our enemies, are well aware that we are practical politicians, and when we make this declaration, it is solely because time has been working for us, because our position is becoming more and more secure, while that of our enemies is daily more shaken and insecure.

At the Genoa conference we entered into the Rapallo agreement, which we can set up as a model for future treaties to be made between Soviet Russia and bourgeois countries. This was the first treaty entered into by a bourgeois state laboring under the yoke of the conquerors. We also signed provisional treaties with Czecho-Slovakia, with Sweden, and with Norway, and are waiting patiently until the Parliaments of these countries follow their governments and ratify the treaties. On the other hand, we were obliged to decline the treaty with the Italian government for the reason that we were no longer in the position in which Soviet Russia found it necessary to sign any contract. The time is past when Soviet Russia, surrounded by enemies, was forced to make maximum concessions.

A certain change in the trend of feeling towards Russia may also be observed m America. We do not credit the bourgeois governments with cleverness, and no one will attempt to controvert me when I say that the bourgeois class, as a decaying class, has very little historical foresight; but still we must not deem our enemies so stupid that they can learn nothing from the fact that a proletarian republic has existed for live years. The American government applied to the Soviet government with the proposition that they send us a commission for the purpose of studying Russian conditions. The proposition was made in a very friendly form, and we therefore replied to it with equal politeness We replied that we can well comprehend the interest taken by the American bourgeoisie and the American government in our internal affairs, in the position of our market, and in our industry, but that we cannot but assume that they are equally capable of thinking logically, so that our answer is: “We agree that a commission come to us to investigate the conditions obtaining here, but only on condition that it is made possible for the Russian state, the Russian proletariat, and the Russian peasantry, to investigate American conditions through a special commission.”

At the present time we see a new phenomenon in America: After the new election a group appeared in Parliament which, although persecuting the communists in their own county, nevertheless demanded the de jure recognition of Soviet Russia. I speak of the group around Senators Borah and LaFollette. This shows that even in the American bourgeoisie a tendency is arising which at last recognizes the undeniable fact that the Soviet power is not to be overthrown, not even with the best of French or English bayonets.

The bourgeois world cannot manage without Soviet Russia, cannot even manage without a Russia which repudiates its debts. However sad this fact may be tor world capital, rt has to recognize it. Every day we are enabled to observe facts proving that Western capitalism is gradually beginning to sober down. The conference at Lausanne may serve as an example. As the Turkish peasants were fighting for their independence, as they carried off the victory against the imperialists after a severe struggle, we cannot but welcome the Turkish victory. The international conference, which is to be regarded as a result of this victory of the Turks, at the same time characterizes the general international situation, and shows what we have to expect from the methods employed by the superdiplomats of the “civilized” countries in solving international problems.

The Lausanne conference has become a duel between England and the Federation of Soviet Republics. The Turkish government has been driven into a position forcing it to sign the most humiliating conditions of peace, completely annulling alt the victories won by the Turkish people. What is the position of the Russian delegation? We came to Lausanne as friends of Turkey, and we will remain friends of Turkey so long as she will fight against the imperialists. We defend the full sovereignty of Turkey, even when the Turkish government cannot get up sufficient energy to defend the fruits of its national victories against Lord Curzon.

Miliukov wrote an article in Paris in which he was clever enough to demonstrate that the attitude adopted by us in Lausanne is not a Russian attitude, but a Turkish one. All this is of course nonsense. Of course we do not deny the importance of the Black Sea and the Straits for the economic reconstitution of Russia, but we deny that it is possible to solve this question by the occupation of the Dardanelles and Constantinople by England, Russia, or any other country. We recognize that the interests of Russia in the Black Sea and in the Straits could be protected exclusively by an alliance with a sovereign Turkey against the imperialism of England and other imperialist countries. Thus we act in the interests of the Russian workers when we defend the sovereignty of Turkey. We cannot pass over in silence the fact that when Lord Curzon insists on the freedom of the Dardanelles for the warships of all countries, tee is extending the area m which the next war wifi be fought It is our desire that the Black Sea and its coasts be secured against every possibility of becoming the stage of war. This can only be attained in one way: by throwing open the coasts of the Black Sea to commerce, and by closing the Straits to warships.

The fate of our disarmament proposals is still a recent memory. We know that the question of disarmament is a favorite question with the League of Nations. For more than three years the League has been busy with this question, but during this time the whole world is feverishly arming. In order to put the disarmament question on a proper footing, the Soviet government proposed to its neighbors to hold a special conference in Moscow. We proposed that philosophical and theoretical considerations be set aside, and that actual disarmament be commenced. But what happened? So long as it was a question of moral disarmament, our neighbours were very willing io negotiate with as. But as soon as we passed from the moral to the real, the bourgeois participators in the conference resorted to every means to break up the conference. As we are demonstrating our actual will to peace before the whole world by reducing the Red Army of the Soviet republic, we must do our utmost to improve the quality of the Red Army.

The report on our foreign policy can be briefly formulated as follows: We began this year actuated by the desire for peace. During the year we have pursued a policy of peace. We enter the new year with the sincerest desire to continue this peace policy, and to carry it through at any price. To this end we not only participate in international conferences, we are not only prepared at any moment to sign any effective agreement securing us peace and normal economic relations, but we are proceeding to reduce and have already actually reduced our Red Army. We threaten nobody, but we demand that nobody threatens us.

Before we pass to a description of the internal situation in Russia, I should like to touch upon the very important question of foreign trade. The international bourgeoisie, unable to overthrow the Soviet power by open attacks, has started on a fresh manoeuvre having for its object the transformation of Russia’s natural resources into sources of income for foreign capitalists; in other words, this manoeuvre aims at making Russia a colony of western capitalism. The Soviet government has only one weapon at its disposal against this nunoeuvre – the monopoly of foreign trade. This monopoly is exposed to countless dangers, but we must exert every endeavor to establish it more firmly, to develop its apparatus up to the maximum of Russia’s export capacity. Under no circumstances must we deviate from the principle of the monopoly itself. In this sphere we shall make no concessions. The capitalist world market must reckon with the fact that Soviet Russia’s foreign trade unions in the hands of the state.

We are informed by the chief concession committee that in the course of the past year about 500 applications were submitted, dealing with various concessions and with the establishment of mixed companies. Out of these many applications 25 were granted and 250 are still under consideration. The large number of applications, as well as the character of those granted, shows that it is possible for foreign capital to participate in the reconstruction of our industry and trade in the form provided by mixed companies.

When speaking of the many proposals made by foreign capital, I must not omit to mention the Urquhart concession. The chief reason why this concession was refused was that its extent and power implied the establishment of firm political relations with England. We are fully prepared to keep economics separate from politics, but in the case of this great concession it would not do to forget that England’s policy towards us at the same time was hostile. It is not improbable that when the political horizon clears, such conditions may be created as will enable us to reconsider the concrete proposals of this, and perhaps also of other concessions.

We must admit that we have done little in the sphere of concessions and mixed companies, but the reasons for this do not lie with the Soviet government. We know very well that capital can only come to us if it is given the opportunity of getting a return. We are quite willing to let it earn its profits, but we demand that this capital does not pursue political aim, that it is not a speculative capital, but a productive one, and that it takes actual part in the reconstruction of our economic life.

We have retained the fundamental branches of industry in our hands. We have taken up the struggle with private capital and have 430 trusts in our hands, comprising 4,100 untertakings employing about 1,300,000 workers. If we add the transport workers and the workers of the non-trust state undertakings to these, we have a total of about 3 million workers.

We are thus able to place the following batteries in the field against private capital: complete state ownership of the land, which is cultivated by the peasants; complete state ownership of the railways, 63,000 versts in length, and complete control oi all means of transport; the fundamental branches of industry retained by the state, and the whole import and export trade.

What has private capital at its disposal? There are about 4,000 undertakings, employing 70,000 workers, in the hands of private capital, with respect to commerce, private capital has 30 per cent of the total commercial turnover in its hands. To this we must add the not unimportant factor of the non-socialized agricultural surplus.

I need not further describe our activity in the sphere of foreign trade. I need only mention that the exports for 1922 exceeded by six times those of 1921; in this year we exported timber and naphtha lor the first time. We exported naphtha to the value of 14 million gold rubles, timber to the value of 16 millions, and various agricultural products, through the cooperative central, to the value of 15 millions. There is no doubt whatever that our policy has here led to good results. But another question arises: How have we met our imports? In the year 1921 our exports only covered 5 per cent of the imports, in the year 1922 this had improved to 25 per cent. That is a comparatively great success. But still it is too little, much too little; exports must be developed to a much greater extent.

How have we managed with transport? If we review the figures relating to the rolling stock, we find the following: in 1913 30,000 trucks were loaded daily, in 1918 7,500, in 1921 9,500, and in 1922 11,500. It may be seen from this that the lowest level of the year 1918 has been followed by a gradual improvement, and that one third of the pre-war traffic has now been attained. The supply of fuel for the railways reached almost 100 per cent during the past year, although, here there was not always everything which could be desired. In 1913 wood comprised 19 per cent of the total amount of fuel consumed by the railways, the remaining fuel consisting of naphtha and coal. In 1919 the percentage of wood rose to 88. The explanation of this lies in the complete stagnation of coal mining in the Don basin and of naphtha production in Baku. In 1920 the percentage of wood fell to 64, in 1921 to 50, and in 1922 to 40. Taking all in all, we can say that our means of transport and traffic are gradually improving.

I now pass to our most important sphere, to industry. We have produced very badly and very little. The total production of the whole of our industry has only attained 25 per cent of the pre-war standard. In 1912 industry produced finished goods to the value of 32 roubles per head of the population, in 1922 to the value of 6.50 roubles. But despite this, we are not stagnating, we are moving forwards, though slowly and with few alight relapses. In the years 1920 and 1921 we produced 442 million puds of coal, in 1922 588 millions (a 25 per cent increase); last year we produced 223 million puds of naphtha, in this year 280 millions (20 per cent increase); 90 million puds of peat were produced in pre-war times- to-day 125 millions; last year we produced 7 million puds of cast iron, in this year 10 million; iron and steel, – last year 10 million puds, this year 20 millions.

These figures are lamentable enough. Their significance must not be over-estimated. But these figures are none the less characteristic. We are still in the midst of the period in which we have been shaken to our foundations, we are just beginning to fed our way, but still we can say: “During this year we have even taken a few steps forward in heavy industry, that is, in that industry which does not work for the market.”

The statistics of light industry are much more gratifying. Last year, for instance, 1 million puds of cotton yarn were produced; this year 2,800,000 puds.

All our successes are due to the transition to systematic economics. It is true that the commercial basis often signifies a commercial basis with state support, but we must and are fighting against such things. At the beginning of the New Economic Policy we were confronted with complete chaos in jurisprudence, and consequently in the organizatory position of the whole of our economic apparatus. We must endeavor to attain to a clear rendering of accounts in state industry. This would signify a tremendous step forwards in the sphere of production.

Despite the many difficulties, and the chaos still ruling in industrial spheres, we can still maintain that on the whole: Our batteries have not fired badly, but certainty of aim must be increased.

A year ago comrade Lenin stepped forward with the slogan: Learn commerce! What have we been able to attain in our world of commerce? Let us take the market for articles of general and daily consumption for town and country. In 1914 the market had a turnover of about 4,200 million gold roubles; in 1921 this figure had fallen to 600 millions; to-day the market is again undoubtedly recovering, the sum of 1 billion roubles having been reached. Before the war the peasants put goods on the market to the value of about 2 milliards, in this year to the value of 375 millions. (This of course besides the taxes in kind.) Before the war industrial undertakings put goods on the market to the value of 2½ billion roubles, in this year only to the value of ½ billion.

Our market is exceedingly limited, and the chief cause of this lies in the unceasing depreciation of the rate of exchange; our market has no credit, for credit has been reduced to 1/100 of pre-war credits. And we have not even done good business in this small and disorganized market. There is no use hiding our shortcomings. A great part of the blame doubtless lies with the tack of circulating mediums. Goods had to be sold under cost price in order to obtain the means for paying the workers; there was no rendering of accounts, and so forth. Our material sources have been reduced. Who has profited by our faulty trading? We can only reply – the profiteers.

Let us now consider the character of our commerce. 65 per cent of our total commerce represents trade between the state organs themselves. 12 per cent, trade of state organs with the cooperative societies, and 23 per cent trade of state organs with private persons. Why is the trade with the cooperative societies less than that with private persons? This is a great secret. We must discover this secret, and put the cooperative societies in a position enabling them to push the private agents into the background, for the private agents bear the germ of a new bourgeoisie. Above all we must enlarge the market and increase the circulation of goods. Only thus can we increase the productivity of our industry. We must exert every endeavor to place the largest possible amount of agricultural products on the market, and to convert them into money. We shall not be victorious until we have a system of book-keeping showing us plainly what course is taken by the exchange between our state economic organs and the petty bourgeois elements surrounding our undertakings.

We have never made a fetish of law and juridicial standards, but as our market develops, organs must be created for the regulation of the market. We must have exact standards. The code of civil law, the regulations relating to civil law-suits, to solicitors, barristers, code of criminal law – all these have been created by the Soviet government in the course of one year.

But to put the market really in order, to render exact calculation at all possible, we must make it our first endeavor to give our market the right rate of exchange which has hitherto been lacking. Our rouble mirrors the whole disorganization and disproportion or our political economy. And at the same time the rouble plays a part in this disorganization. At the last congress the stabilization of the rouble was adduced as one of the tasks of the government, a task confirmed as imperative by the party conference, and actually forming the main task of the whole of the economic activity of the government. Until we have a stable rouble, systematic economics for the country are a delusion.

What are the prospects of stabilization? In January of this year 90 per cent of our revenue was represented by the issue of paper money, but in September only 53 per cent. This is a gigantic step forwards. It shows that we are not proceeding on the path along which the world bourgeoisie is pressing us. No, we have groped our way into the right path, and are going slowly but surely forwards. Our budget for 1921 showed a deficit of 84 per cent. During the first nine months of the year 1922 we reduced this deficit to 60 per cent, during the last quarter to 50 per cent. But we must proceed on the same path, or if we do not further reduce the deficit, we shall never be able to create a new and stabilized rouble.

We have no reason to maintain that we have attained any very great success in our internal economic structure. We must face the truth in cold blood, and admit that we are just beginning to work our way out of the jungle. I do not deny the danger attendant on the new economic policy, but we must separate political from economic dangers. The political danger of the new economic policy is non-existent.

We are convinced that the Russian peasantry will fully support the city proletariat if only the latter recognizes its fundamental duty, ana exerts all its energy to provide the peasantry with manufactured goods.

The new economic policy has proved eminently successful. Its aim is the establishment of close relations between workers and peasants. Every attempt of private capital to make a breach in this united front of workers and peasants is doomed to complete failure from the outset. We are confronted with the task of proving that the communists and Soviet organs not only destroy the bourgeois order, but are equally capable of building up a workers’ order.

Last updated on 4 May 2021