Leon Trotsky

Theses on Industry

(April 1923)

Source: The Labour Monthly, July 1923, Vol.5, No.1.
Publisher: 162 Buckingham Palace Road, London. – Communist Party of Great Britain
Transcription/Markup: Brian Reid.
Public Domain: Marxists Internet Archive (2006). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.

(The following Report was presented to the Twelfth Congress of the Russian Communist Party
at Moscow in April, and was unanimously adopted)

Part I

1. The General Rôle of Industry in the Socialist Structure

THE mutual relations which exist in our country between the working class and the peasantry rest in the last analysis on the mutual relations between industry and agriculture. In the last resort the working class can retain and strengthen its rôle as leader not through the State apparatus or the army, but by means of the industry which gives rise to the proletariat. The Party, the trade unions, the youth associations, our schools, &c., have for their task the education and preparation of new generations of the working class. But all this work would prove as if built on sand did it not have for its basis a continually expanding industry. Only the development of industry creates the unshakable basis for the dictatorship of the proletariat. At present agriculture is of primary importance in the economic life of Soviet Russia, although the technical level on which it stands is still very low.

Only in proportion as industry makes real progress and as the heavy industries – which form the only firm basis of the proletarian dictatorship – are restored, and in proportion as the work of electrification is completed will it become both possible and, indeed, inevitable to alter the relative significance in our economic life of agriculture and industry and to shift the centre of gravity from the former to the latter. The Party must work systematically and perseveringly, whatever the sacrifice or labour, to accelerate this process, especially as regards the rapid restoration of heavy industry.

How long the period of the predominant importance of peasant economy in the economic system of our federation will last will depend not only upon our internal economic progress, which in view of the general conditions mentioned above can be but very gradual, but also upon the process of development taking place beyond the boundaries of Russia, i.e., before all, upon the way the revolution in the West and in the East will proceed. The overthrow of the bourgeoisie in any one of the most advanced capitalist countries would very quickly make its impress upon the whole tempo of our economic development, as it would at once multiply the material and technical resources for socialist construction. While never losing sight of this international perspective, our Party must at the same time never for a moment forget or omit to keep in mind the predominant importance of peasant economy, when it is estimating the consequences of any step it is on the point of taking.

Not only ignoring but even paying insufficiently close attention to this circumstance would involve incalculable dangers, both economic and political, since it would inevitably undermine or weaken that unity between the proletariat and the peasantry – that feeling of trust of the peasantry towards the proletariat which during the present historical period of transition is one of the most fundamental supports of the proletarian dictatorship. The preservation and strengthening of this unity is a fundamental condition for the stability of the soviet power and consequently represents the most fundamental task of our Party.

It is necessary to remember the resolutions passed by former Party congresses which very justly emphasised that the support of the peasants for socialist methods of production can only be won by actual ocular demonstration, during a number of years, that such methods are economically more advantageous, more rational, &c. In the domain of finance, the policy of economising State resources, of a correct system of taxation, of a correctly constructed budget – which we have now adopted and which must and shall be unflinchingly adhered to – will only achieve decisive results on the condition that the State industries show energetic development and substantial profits.

Owing to the extreme diminution of the army, now practically reduced to skeleton formations, and the consequent gradual transition to a militia system, the problem of national defence is reduced to a question of transport and war industries.

Consequently, the construction of our budget, the State credit policy, the measures taken with a view to the military protection of the State, in fact all State activity in general, must bestow its first and greatest care upon the planned development of State industry.

In view of the general economic structure of our country, the restoration of State industry is narrowly bound up with the development of agriculture. The necessary means for circulation must be created by agriculture in the form of a surplus of agricultural products over and above the village consumption before industry will be able to make a decisive step forwards. But it is equally important for the State industry not to lag behind agriculture, otherwise private industry would be created on the basis of the latter, and this private industry would in the long run swallow up or absorb State industry.

Only such industry can prove victorious which renders more than it swallows up. Industry which lives at the expense of the budget, i.e., at the expense of agriculture, could not possibly be a firm and lasting support for the dictatorship of the proletariat. The question of creating surplus value in State industry is the fateful question for the soviet power, i.e., for the proletariat.

An expanded reproduction of State industry, which is unthinkable without the accumulation of surplus value by the State, forms in its turn the condition for the development of our agriculture in a socialist and not in a capitalist direction.

It is therefore through State industry that the road lies which leads to the socialist order of society.

2. Active and Passive in the First Period of the New Economic Policy

The healthy effect of the new economic policy on the economic life of the country is incontestable. It is expressed in the revival of industrial activity, in increased production in many important branches of industry, in the rise in the productivity of labour and in the quality of the products, in the indubitably very considerable improvement in the position of the workers, and, above all, in the much more correct approach to both fundamental and detailed economic problems.

And this latter is the basic condition for their effective solution in the future. Nevertheless, the actual position of industry remains very serious. The revival of light industry, which naturally finds its explanation in the fact of the restoration of the market in conjunction with the satisfactory harvest, is very far from implying that all enterprises and branches of light industry can be guaranteed a further healthy development. In spite of the fact that the prices of the products of light industry are extremely high, especially in comparison with the prices of agricultural products, these high prices are often far removed from the price of reproduction, that is to say they do not guarantee the expansion of production. An increase in the activity of a whole number of trusts has been achieved at the expense of old stocks of raw materials, the replenishing of which is at the present time one of the most acute problems of State economic policy.

On the other hand, heavy industry has barely come into contact with the market. It depends essentially upon State orders, and needs for its restoration that the State should make large and well-thought-out investments in it. This also applies to a considerable extent to railway and water transport.

Thus, as a result of the total economic conditions, a healthy regulation of prices in light industries remains as yet unattained: This, and the backwardness of heavy industry in comparison with light industry, represents the chief items of the debit side of the first period of the new economic policy. It is as much the result of the general economic conditions, existing before the new economic policy, as of the inevitable crippling of economic relations during the transition to the new economic policy.

The attainment of a price regulation, on the basis of the market, better corresponding with the needs of industrial development, the establishment of more normal correlations between the branches of the light industry and those branches of industry and agriculture which provide it with its raw materials, and finally the straightening out of the front of the heavy and light industry – these are the root problems of the State in the sphere of industrial activity in the second period of the new economic policy now beginning. These problems can only be solved by a correct correlation between the market and the State industrial plan.

3. The Problems and Methods of Planned Industrial Activity

In Soviet Russia, where the chief means of industry and transport belong to one owner, the State, the active interference of the latter in industry must of necessity take the form of a State industrial plan. In view of the predominating rôle of the State as an owner and a master, the principle of a uniform plan acquires at the very outset an exceptional importance.

The whole of previous experience has shown, however, that a plan of Socialist economy cannot be established a priori in a theoretical or bureaucratic manner. A real Socialist economic plan embracing all branches of industry in their relations to one another, and in the relation of industry as a whole to agriculture, is possible only as a result of a prolonged, preparatory economic experience on the basis of nationalisation, and as the result of continuous efforts to bring into practical accord the work of different branches of industry, and to correctly estimate the results achieved.

Thus for the coming period our task is to determine the general direction, and is, to a considerable extent, of a preparatory character. It cannot be defined by any single formula, but presupposes a constant and vigilant adaptation of the guiding economic apparatus, of its basic tasks, methods and practice to the phenomena and conditions of the market. Only at the final stage of their development can and must the methods of planned industry subordinate the market to themselves, and by this very fact abolish it.

Hence we can perceive quite clearly two dangers accompanying the application of State methods of planned industry during the present epoch, viz., (a) If we try to outstrip economic development by means of our planned interference, and to replace the regulating function of the market by administrative measures which have no basis in actual experience, then partial or general economic crises are inevitable, such as occurred in the epoch of military communism; (b) If centralised regulation lags behind the clearly matured need for it, we shall have to solve economic questions by the wasteful methods of the market in cases where timely economic-administrative interference could obtain the same results in a shorter space of time and with a smaller expenditure of effort and resources.

In so far as we have adopted marked forms of economy, the State is bound to grant to individual enterprises the necessary freedom of economic activity in the market without trying to influence this free activity by administrative means. But if, on the one hand, each trust, in order to function successfully, must feel free to orientate itself and be conscious of full responsibility for its work, the State, on the other hand, must regard the trusts and other associations as organs subordinate to it, by means of which it is able to sound the market as a whole, and thus render possible a number of practical measures which transcend the market orientation of individual enterprises and associations. A central economic organ may, for instance, come to the conclusion that it is necessary to liquidate a certain trust long before experience brings home to the latter the hopelessness of its position.

The question of the mutual relations between light and heavy industry can by no means be solved in accordance with supply and demand, since this would lead in a few years to a smashing up of heavy industry with the prospect of its subsequent restoration as a result of market pressure, but, in that case, on the basis of private property.

Thus, in contra-distinction to capitalist countries, in our country the principal plan is not confined to individual trusts and syndicates, but embraces industry as a whole; more than that, the State plan must cover the mutual relations of industry, on the one hand, to agriculture, finances, transport, trade – home and foreign, on the other.

In other words, in so far as the State remains not only the owner but the active master-spirit with regard to the majority of the productive forces of industry and transport, and with regard to the means of credit, the principal plan under the conditions of the new economic policy will remain much the same as obtained during the epoch of military communism, but it differs in the most radical manner in its methods. The administration of the chief committees is substituted for economic manœuvring.

In its administrative application the campaign must develop in this sphere with extreme cautiousness by way of a very careful sounding of the ground.

The preparation must be based on economic foresight and consist in conveying instructions to the corresponding economic organs with regard to various phenomena which will either inevitably or in all probability arise at such and such an economic juncture (in connection with the appearance of corn of the new harvest on the market, with the flow of money to the village, &c., &c.), and in making such foresight as definite as possible in its application to individual branches of industry or to particular districts, in publishing model calendars supplying directions as to the necessary measures which are to be taken in order to make the best use of the expected situation.

It is quite evident that the fundamental planning of industry cannot be attained within the industry itself, i.e., by way of strengthening its guiding administrative organ (the Supreme Council of National Economy), but must form the task of a separate organisation which stands above the organisation of industry, and which connects the latter with finance, transport, &c. This is the function of the State Planning Commission. It is necessary, however, to define more clearly its position, to organise it more strongly, to give it more definite and incontestable rights and, especially, duties. It ought to be established as an immovable principle that not a single economic question which concerns the State as a whole may be dealt with in the higher organs of the Republic without consulting the State Planning Commission. This latter must in all cases, whether the initiative is taken by itself or by some other department, analyse the new question, form some project or proposition in connection with the whole of the remaining economic work, and by the means of this analysis define its specific gravity and its importance. It is necessary to take note in the most unflinching manner of the efforts of various departments and establishments, be it at the centre or in the provinces, to obtain this or that decision by a roundabout way under the pretext of urgency, of pressure of circumstances of improvisation – considering such efforts as manifestations of lack of economic foresight and as the most pernicious remnants of administrative partisanship.

In estimating the success of the work of each department, one must very largely take into consideration whether it presents its proposals in good time to the State Planning Commission for their detailed elaboration; the success of the work of the State Planning Commission itself must be estimated from the point of view of the timeliness with which it starts economic questions, of the correct foresight of what will take place to-morrow, and of how insistently it spurs other departments to a timely estimation of the forms of collaboration to be arranged between branches of their work.

It is necessary to fight by the means of the State Planning Commission against the creation of all sorts of temporary and casual commissions of inquiry, together with directive, advisory, and provisional committees, which are the greatest evil of our State work. It is necessary to secure regular work through normal and permanent organs. Only thus the improvement of these organs and the development of the necessary suppleness becomes possible – by way of their many-sided adaptation to the tasks allotted to them on the basis of continuous experience.

Without deciding beforehand the question whether it will be necessary to confer upon the State Planning Commission – the general staff of the State economy – this or that administrative right, it seems to be sufficient for the near future to lay it down that if compulsory force is necessary in order to exact conformity to the plan decided upon, the sanction for such compulsion must be obtained from the corresponding organs of the central power (from the individual economic commissariats – the Council of Labour and Defence, the Council of People’s Commissaries, the presidium of the All-Russian Central Executive Committee).

4. The Trusts, Their Rôle, and the Necessary Reorganisation

The State is the owner of the basic means of production and transport. Individual economic departments, and inside these departments the separate organs, establishments, and associations (the trusts), manage the sections of the State economy entrusted to them with that degree of independence which the requirements of management under present market conditions necessitate and which is determined from above, i.e., by the superior State organs.

The right of the State to dispose of the whole property of those trusts which are free from obligations and of the railways, &c., remains absolute. In practice the limit and form of State interference with the present work of the economic organs and of these latter with the present work of the independent establishments of the trusts, &c., are determined exclusively from the point of view of economic expediency and are regulated by corresponding statutes (or standing orders).

The greater part of State industry is organised in the shape of trusts, i.e., as associations which are endowed with a wide measure of economic autonomy and which appear on the market as free trading organisations. The fundamental problem of these economic associations, as well as of the separate enterprises of which the former are composed, is the extraction and the realisation of surplus value for the purpose of State accumulation which alone can guarantee the raising of the material level of the country and the socialist reconstruction of its whole economy.

The State enterprises which work for the immediate satisfaction of the most important needs of the State, as, for instance, its military needs, must also be completely subordinated to the requirements of the increase of the productivity of labour and of the decrease of the cost on each unit of production.

In view of the fact that the transition itself from military Communism to the new economic policy proceeded to a considerable extent by methods of military Communism, the grouping of the enterprises, their breaking up into trusts, the distribution of means among the trusts, possessed, and to a considerable extent possess even to the present day a provisional and bureaucratic character. From the point of view of economic work according to plan, these are but rough-draft essays, and it is not by speculative methods that they can and must be corrected and reshaped, but on the basis of examining them in the light of experience, in the light of the combined elements of commercial and administrative experience from day to day.

Complaints of the lack of means of circulation do but bear testimony to the fact that on the introduction of the new economic policy the State undertook the management of too great a number of industrial enterprises so that its strength was overtaxed, enfeebled as it was by several years of civil war and blockade. As a consequence, there is the instability of the enterprises, the work going on by fits and starts, and, what is still more important, the freighting is insufficient, which in its turn leads to a great increase of the cost of production and to the narrowing down of the market with all the economic difficulties ensuing therefrom.

The way out of the difficulty is a radical concentration of production on those enterprises which are technically the most perfect and geographically the most conveniently situated. All sorts of indirect and secondary considerations put forward against it, however essential they may be in themselves, must be pushed aside in front of the fundamental economic problem, namely, the providing of the State industry with the necessary circulating means, the lowering of the cost of production, the expansion of the market, the extraction of profit.

The re-examination of the construction and composition of the trust, both from the purely productive and from the commercial points of view, must be perfectly free from the prejudices in favour of a bureaucratic uniformity in the work of combining the enterprises either only according to the horizontal or according to the vertical principle alone. We must be guided in our revision not by formal but by material considerations with regard to the connection and the mutual dependence of the enterprises upon one another, to their relative geographical situations, and with respect to transport and market (combinations, &c.), and so on and so on. While sweeping aside departmental or local claims in so far as they come into conflict with the principle of a more advantageous and a more profitable organisation of production, it is necessary at the same time to take into careful consideration and listen attentively to the voice of the interested trusts and separate factories, in so far as their living experience has proved the necessity of withdrawing from some of our organisation projects.

The lowering of the cost of production must be aimed at, not for the sake of transient successes in the market, but with a view to the regeneration and the development of the economic power of the country.

A mode of calculation in which the prices of raw materials are falsified by being given according to out-of-date quotations, nothing to do with the lowering of cost, must be severely punished as a dissipation of State property.

Equally wrong and ruinous would be a policy of temporarily lowering prices at the expense of causing a direct or indirect loss to heavy industry. Without the restoration of the latter, light industry, as well as the whole process of economic construction, would be deprived of its foundation. Coal, naphtha, metal-these are the branches of industry the successful development of which will insure both the economic prosperity of the Republic and its external safety.

Only a firm and constant guidance of the trusts on the part of the Supreme Council of People’s Economy, uniting-in the spirit at he above directive principles-all the basic elements of industry; foreseeing and preparing their necessary combinations; guaranteeing the timely, full, and proper use of all the factors of production every stage (fuel, raw material, semi-manufactured articles, machines, labour power, &c.), will insure not only partial but general progress on the industrial front.

Part II

Source: The Labour Monthly, August 1923, Vol.5, No.2.

5. Industry and Trade

Without a properly organised sale, increased production will again lead to partial gluts, i.e., to crises of trading helplessness, which cannot be justified, even by the extremely limited market of the present day. The perfection of the lowest links of the trading apparatus, even though only capable of insuring the smallest number of genuine connections between industry and the peasant market, is of paramount importance. The formation of syndicates in the near future should be conducted with the greatest circumspection and with due consideration to the state of the market and the resources of the trusts. The transformation of the syndicates into trading “chief committees” would only obstruct trading activity and swell the burden of additional expenses. Compulsory syndication must be economically prepared for and commercially justified.

The increased operative independence of the trusts and separate enterprises, the more flexible activity of the syndicates, and the whole position of our industry in general require an incomparably greater co-ordination as to the relations between the purely productive and the purely commercial spheres of activity. This applies both to home and to foreign trade.

Without predetermining the forms of organisation that this co-ordination will take, it ought to be already established that the systematic study of the experience which is accumulating in this sphere and the elaboration of practical methods of co-ordinating industrial and commercial activity constitute a vital problem, the solution of which is possible only through the combined efforts of the Supreme Council of People’s Economy, the People’s Commissariat of Foreign Trade, the Commissariat of International Trade, and with the active participation of the State Planning Commission under the general guidance of the Council of Labour and Defence.

6. The Factory

The root of success or failure in production is to be found in the basic industrial unit, i.e., in the factory or mill. The question, therefore, of properly organising each separate enterprise, and that not only from the technical-productive, but also from the commercial point of view, is of decisive importance.

While retaining the general guidance of the enterprise in its hands and centralising those productive and commercial branches and operations which are ripe for it, the trust must at the same time avoid by all manner of means that sort of centralisation which strangles, which extinguishes initiative, and it must avoid mechanical invasions into the work of its enterprises.

The independent accounts of each factory must not only provide the means of determining its profits and its growth or decline, but must also serve as the general basis of a premium system strictly adjusted to the peculiarities of the enterprise.

7. Calculation, Balance, and Control

Under present conditions material results form the only serious and reliable empirical verification of whether mutual relations between the enterprises, the trusts, and the State are satisfactory, as well as providing the sole test of the success or otherwise of our methods of economic management as a whole. Only from the careful tabulation of balance sheets can we judge our commercial position, for without a system of correct book-keeping which embraces State economy from top to bottom, without scientific accounts to show the real cost of the products of State industry, there is no guarantee against the gradual dissipation or dilapidation of nationalised property, and the trusts in this case might but serve as channels for pumping over State property into private hands.

To work out methods of uniform book-keeping, to see to it that it be really carried out and made more and more accurate, all this must constitute one of the most important problems of the leading economic establishments in general and of the State Planning Commission in particular, this work having for its aim the attaining of a single real balance from which can be estimated the position of State industry, and, later on, of the whole State economy in general.

The Council of Labour and Defence must organise a State audit of commercial and industrial accounts and balance sheets. The absence of a competent and skilled control on such lines makes all other kinds of economic inspection useless, and spreads a sense of irresponsibility incompatible with a properly organised economy.

8. Wages

The system of wages adopted during the period that has just expired has on the whole confirmed the soundness of the decisions of the eleventh Party Congress and the fifth Trade Union Congress, as well as that of the conclusion of collective agreements between the trade unions and economic organisations.

During the year just elapsed a considerable increase of wages for all categories of workers can be recorded, and this has resulted in a considerable increase of the productivity of labour.

The general wages policy must for the future be directed towards a greater or smaller levelling up of the average wage in all branches of production with the necessary modifications on the basis of the average skill in such a manner that workers of similar or equivalent skill should be drawing approximately equal remuneration in different branches of industry, and as far as possible independent of the fluctuations of the market; at the same time the individual wage in reality should be proportional to the actual output. The corresponding State organs must, hand-in-hand with the trade unions, direct their efforts towards coming to a more favourable agreement in a given branch of industry which will serve the interests of the workers not only of this or that branch, but also those of the working class as a whole, by increasing the earnings in the backward branches and, above all, in the heavy industry and transport.

While striving in every way to improve the condition of the working class, the State organs and the trade unions must at the same time remember that a continuous and all-embracing improvement is possible only on the basis of their own development as a profit-bearing industry. From this point of view measures which retain poorly-furnished enterprises in operation, or employ in a mill a number of workers not proportionate to the actual productivity of the enterprise, constitute the most expensive and irrational form of social insurance, and are therefore against the interests of the future of the working class.

The burdening of industrial enterprises with all sorts of additional expenses neither necessitated by production itself nor provided for by law are highly detrimental to the enterprises in question and to the State, however important the purpose for which they are incurred, for they undermine the possibility of an accurate mode of calculation and impose upon the State in a semi-disguised manner an expenditure which under the present conditions it is beyond its strength to bear. Arbitrary donations on the part of the trusts, i.e., donations unauthorised and unregulated by the State, are nothing but a dissipation of State property, and as such must be punished by law.

It is necessary to undertake a close inquiry into the practical application under present conditions of the Labour Code and, in general, of all the statutes on labour power, wages, length of the working day for different categories, deductions for social insurance, cultural and educational needs, &c., &c., with a view, on the one hand, to satisfying the interests of the workers in the highest degree that is compatible with the present state of industry and, on the other hand, to setting aside or altering for the time being statutes which are manifestly unrealisable in existing circumstances. Industrial managers and trade unionists must co-operate in collecting, in the most objective manner, closely examined and well-sifted facts which would serve as a basis for the above-mentioned legislative alterations or administrative measures.

9. Finance, Credit, Custom Duties

A necessary condition for the restoration and development of industry, especially of heavy industry, is the proper drawing up of the State Budget in the sense of bringing it into close correspondence with the real State resources and with their expenditure according to plan.

It is necessary to do away completely with that greatest of evils – forced upon us, it is true, to a considerable extent by objective conditions – namely, the lack of unity and the discrepancy between our productive schemes and those resources which were at our disposal for their realisation. This sort of scheming inevitably spelt chaos – industrial and financial – and badly shook the stability of the most important economic establishments.

Exactly the same consequences resulted from the practice of requisitioning the products of industry (chiefly of the mechanical, metallurgical, and fuel industries) by the State – chiefly for the benefit of the military and the transport departments either without any payment at all or else at arbitrary prices which did not cover the cost of those products.

Should future discrepancies crop up between the incoming revenues and the estimated allocations, and should a necessity of curtailing expenditure result therefrom, the reductions should be effected not under some mask or other, but openly, by way of reconstructing the Budget and reducing allowances for transport and industrial enterprises, the army, &c., always according to a definite plan.

The system of providing industrial credit constitutes not only a financial or banking problem, but the most important part of activity in the business of organising and guiding industry. It is necessary, therefore, that the business of financing the State industry should be as far as possible concentrated in one credit establishment which should be very closely connected with the Supreme Council of People’s Economy.

The imposition of taxes and excise duties, in strict conformity to the ability of industry to pay and the capacity of the market, must be closely studied, while the effect which higher or lower duties on different imported articles may have on corresponding branches of home industry (from the point of view of protecting them) ought to be carefully considered.

Purchases and orders from abroad, even at prices which are lower than in the home market, must be unhesitatingly pushed aside in all those cases in which they are not absolutely necessary, for the placing of the order inside the country may serve as a considerable spur to the development of the corresponding branch of our State industry.

It is only a system of Socialist protectionism carried out in a consistent and determined manner that can insure at the present transitional period a real development of industry in our Soviet State, surrounded as it is by a capitalist world.

10. Foreign Capital

The experience of the past year has confirmed the fact that the process of State Socialist construction under the new economic policy is quite compatible (within certain by no means narrow limits) with the active participation of private – foreign as well as home – capital in the sphere of industry. Further systematic measures are necessary in order to attract foreign capital to industry in all those forms the expedience of which has already manifested itself up till now: concessions, mixed companies, leasing. A careful study of which domains of industry and which enterprises can be left to foreign capital and on what principles, with advantage to the general economic development of the country, is essential in the formulation of future plans by our leading economic organisations.

11. Managers, their Position and Problems; the Education of a New Generation of Technicians and Managers

The mutual relations between trade unions and administrative bodies defined by the resolutions of the eleventh Congress of the Party, the correctness of which is confirmed by the experience of last year, must continue to be developed and strengthened in the spirit of those resolutions.

The system of real unity of power must be carried through in the organisation of industry from top to bottom. The selection of workers and their transference or dismissal constitute in the hands of the leading administrative organs a necessary condition for the real guiding of industry and for enabling them to bear the responsibility for its fate. The recommendations and attestations of the trade unions must be fully and sympathetically taken into consideration, but they should under no circumstances release the corresponding administrative organs from their responsibility, as the existing statutes leave to the latter full freedom of selection and appointment.

Heaviness, immobility, lack of enterprising spirit form the weak side of the State industry and trade. The reason for it lies in the fact that the managing staffs are as yet very far from being the best fitted for their jobs, that they lack experience, and are not sufficiently interested in the progress of their own work. It is necessary to take regular and systematic measures towards improvement in all these directions. In particular, the remuneration of the managers of enterprises should be made to depend upon the credit or debit balance, as wages do upon output.

The work of leading administrative workers (trade-corporation controllers, directors of mills and factories, chairmen and members of the boards of trusts), in so far as their task consists in lowering the expenses of production and in extracting profit, is beset with extremely great difficulties frequently resulting in conflicts, dismissals, and transferences. Two dangers always confront an administrator: (a) that his strict demands will stir up against him the workers of the enterprise and their representative organs or the local Party and Soviet establishments; (b) that following the line of least resistance in questions of the productivity of labour, wages, &c., he will endanger the lucrativeness, and therefore the future, of the enterprise. It goes without saying that a director of a Soviet factory must take into the most sympathetic consideration the material and spiritual interests of the workers, their feelings and frame of mind. But at the same time he must never forget that his highest duty to the working class as a whole consists in raising the productivity of labour, in lowering the costs of production, and in increasing the quantity of material products at the disposal of the working-class State. It is the duty of the Party and of trade-union workers to give the Soviet director their whole-hearted support in this respect. Attention, perseverance, and economy are the necessary qualities of a Soviet administrative worker. His highest testimonial is to run the enterprise on a basis of soundly-balanced accounts.

It must be made plain to the mass of the workers that a director striving to make the enterprise profitable serves the interests of the working class just as much as a trade-union worker who strives to raise the workman’s standard of living and to safeguard his health.

The preparation of new administrative workers must assume a systematic and, at the same time, a highly specialised character. Summary methods, as when instruction was taken in in a hurry by merely watching others at their duties, must be replaced by systematic training according to an exact plan, coupled with a definite period of experience. Workers placed at their posts in the first period and who have not yet had time to acquire the necessary knowledge must be given the opportunity of filling the more serious gaps.

Specialisation in different kinds of practical activity, however, ought to be closely connected with a raising of the theoretical and political level and with a closer contact with the Party; otherwise specialisation might prove injurious to the Party as a superficial knowledge of everything is detrimental to any economic enterprise. The Party and the trade unions must pay the most serious attention to the question of increasing the number of working-men managers of industry and especially of Communists in managerial posts at all the stages in the economic hierarchy.

Technical training ought to be for the new generation not only a question of specialisation but also one of a revolutionary duty. Under the conditions of a workers’ State all the enthusiasm of the young working men which formerly used to be devoted to the revolutionary political struggle should now be directed towards the mastering of science and technical subjects. It is necessary that a student who neglects his studies should be treated in the same way as a deserter or blackleg was treated in the struggle against the bourgeoisie. The organisation of a Socialist economy is for the proletarian vanguard not a method of obtaining a career, but an heroic action.

12. Party Institutions and Economic Institutions

Without for one single moment forgetting its permanent revolutionary educational problems the Party must clearly realise that at the present constructive-economic period of the revolution its most fundamental work lies in guiding economic activity in the. basic points of the Soviet process of construction. The Party will accomplish its historic mission only if the economic experience of the whole Party grows together with the growth in size and complexity of the economic problems which the Soviet power has to face.

Therefore the twelfth Congress is of the opinion that not only a proper distribution of workers, but also the function of supervising every important branch of economic administration must be considered by the Party as its bounden duty, especially in view of the new economic policy, which creates the danger of degeneration for a part of the managing staffs and of perverting the proletarian line of policy in the process of economic reconstruction. Under no circumstances whatever should this guidance turn, in practice and as a matter of course, into frequent dismissals or transference of managers, into a meddling in the current every-day work of the administration, or into attempts at their direction.

Directions with regard to concrete questions imposed by Party organisations upon administrative machinery are inevitable and indispensable under existing conditions, but it is necessary constantly to strive that such guidance should bear the stamp of a broad plan, which would eventually lead to an actual diminution of the number of cases where there would be any necessity for direct administrative interference in independent or specialised questions of current practice.

The more regularly the administrative and economic work of the State itself proceeds in the execution of the plans brought forward by the Party, the more completely the leadership of the Party will, be safeguarded.

The twelfth Congress confirms the resolutions of the eleventh with regard to the necessity for a division of labour and a delimitation of the work in the economic sphere as between the Party and the Soviets, in particular, and insists that this resolution be carried out more completely and systematically both in the centre and locally. The twelfth Congress especially calls to mind that in accordance with the resolution of the eleventh Congress, the Party organisations “solve economic questions independently only in those cases and in so far as the questions imperatively demand a solution according to Party principles.”

One of the important problems before the Party is to give its support to an arrangement under which competent economic organisations would have not only a formal right, but a practical opportunity of gradually educating administrative workers and providing for their regular advancement in proportion as they gain in experience and develop their qualities.

This is only possible if workers are systematically selected according to their economic experience both in business and in skilled trades, and also if inside economic institutions the principles of discipline and of a corresponding system of coordination and subordination among the separate branches of the work and among the workers at the head of these branches are observed.

But in view of the particularly important and responsible work with which the administrative workers are charged at the present moment, the Party as a whole and all its organisations must give them the most hearty support, and systematically take care to create such an atmosphere as would exclude the possibility of groups of administrative workers breaking away from the Party.

13. The Printing Trade

The question of putting the printing trade on a sound basis is not only of economic but also of immense cultural importance. The Congress recognises the present state of the printing trade as unsatisfactory and considers it necessary to take decisive measures to improve it.

It is necessary first of all to raise the technique of those publications which are meant for a mass sale. The question of the organisation of the typographical trades must be solved as early as possible, and in such a way that the biggest and most important State publishing establishments should be able to put their work on a broad, regular, and technically satisfactory basis.

(The opening portion of the above report was published in the July issue of THE LABOUR MONTHLY, which can be obtained through any newsagent or for 8d. post free direct from the Publisher of THE LABOUR MONTHLY at 162 Buckingham Palace Road, London, S.W.1.)

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Last updated on: 4.1.2007