IN HIS speech at the last party congress he attended, Lenin said:
Here we have lived a year, with the state in our hands, and under the New Economic Policy has it operated our way? No. We don’t like to acknowledge this, but it hasn’t. And how has it operated? The machine isn’t going where we guide it, but where some illegal, or lawless, or God-knows-whence-derived speculators or private capitalistic businessmen, or both together, are guiding it. A machine doesn’t always travel just exactly the way, and it often travels just exactly not the way, that the man imagines who sits at the wheel.
In those words was given the criterion by which we ought to judge the fundamental problems of our politics. In what direction is the machine travelling? The State? The power? Is it travelling in the direction that we, Communists, expressing the interests and will of the workers and the enormous mass of the peasants, desire? Or not in that direction? Or “not exactly” in that direction?
In these years since the death of Lenin, we have more than once tried to bring the attention of the central organs of our party, and afterward the party as a whole, to the fact that, thanks to incorrect leadership, the danger indicated by Lenin has greatly increased. The machine is not going in the direction demanded by the interests of the workers and peasants. On the eve of the new congress we consider it our duty, notwithstanding all the persecution we are suffering, to call the party’s attention with redoubled energy to this fact. For we are sure that the situation can be corrected, and corrected by the party itself.
When Lenin said that the machine often goes where it is directed by forces hostile to us, he called our attention to two facts of supreme importance. First, that there exist in our society these forces hostile to our cause – the kulak, the Nepman, the bureaucrat – availing themselves of our backwardness and our political mistakes, and relying upon the support of international capitalism. Second, the fact that these forces are so strong that they can push our governmental and economic machine in the wrong direction, and ultimately even attempt – at first in a concealed manner – to seize the wheel of the machine.
Lenin’s words laid upon us all the following obligations:
Since Lenin uttered his warning, many things have improved with us, but many also have grown worse. The influence of the state apparatus is growing, but with it also the bureaucratic distortion of the workers’ state. The absolute and relative growth of capitalism in the country and its absolute growth in the cities are beginning to produce a political self-consciousness in the bourgeois elements of our country. These elements are trying to demoralize – not always unsuccessfully – that part of the Communists with whom they come in contact at work and in social intercourse. The slogan given by Stalin at the Fourteenth Party Congress, “Fire to the left!” could not but promote this union of the right elements in the party with the bourgeois Ustrialov elements in the country.
The question, “Who will beat whom?” will be decided in a continuous struggle of classes on all sectors of the economic, political, and cultural fronts – a struggle for a socialist or a capitalist course of development, for a distribution of the national income corresponding to one or the other of these two courses, for a solid political power of the proletariat or a division of this power with the new bourgeoisie. In a country with an overwhelming majority of small and very small peasants, and small proprietors in general, the most important processes of this struggle will frequently go on in a fragmentary and underground manner, only to burst “unexpectedly” to the surface all at once.
The capitalist element finds its primary expression in a class differentiation in the country, and in a multiplication of private traders in the city. The upper levels in the country and the bourgeois elements in the city are interweaving themselves more and more closely with the various links of our state-economic apparatus. And this apparatus not infrequently helps the new bourgeoisie to wrap up in a statistical fog its successful effort to increase its share in the national income.
The trade apparatus – state, co-operative, and private – devours an enormous share of our national income, more than one-tenth of the gross production. Furthermore, private capital, in its capacity as commercial middleman, has handled in recent years considerably more than a fifth of all trade – in absolute figures, more than five milliards a year. Up to now, the general consumer has received more than 50 per cent of the products he needs from the hands of the private capitalists. For the private capitalist this is the fundamental source of profit and accumulation. The disparity (scissors’) between agricultural and industrial prices, between wholesale and retail prices, the rupture between prices in the different branches of agriculture in the different regions and seasons, and finally the difference between domestic and world prices (contraband), are a constant source of private gain.
Private capital is collecting usurious interest on loans and is making money on government bonds.
The role of the private capitalist in industry is also very considerable. Even though it has decreased relatively in the recent period, still it has grown absolutely. Registered private capitalistic industry shows a gross production of 400 millions a year. Small, home, and handicraft industries show more than 1,800 millions. Altogether, the production of the non-state industries constitutes more than a fifth of the whole production of goods, and about 40 per cent of the commodities in the general market. The overwhelming bulk of this industry is bound up one way or another with private capital. The various open or concealed forms of exploitation of the mass of handicraft workers by commercial and home-enterprise capital are an extremely important and, moreover, a growing source of accumulation for the new bourgeoisie.
Taxes, wages, prices, and credit are the chief instruments of distribution of the national income, strengthening certain classes and weakening others.
The agricultural tax in the country is imposed, as a general rule, in an inverse progression: heavily upon the poor, more lightly upon the economically strong and upon the kulaks. According to approximate calculations, 34 per cent of the poor peasant proprietors of the Soviet Union (even omitting provinces with a highly developed class differentiation, such as the Ukraine, Northern Caucasus, and Siberia) receive 18 per cent of the net income. Exactly the same total income, 18 per cent, is received by the highest group, constituting only 7.5 per cent of the proprietors. Yet both these groups pay approximately the same amount, 20 per cenf each of the total tax. It is evident from this that on each individual poor farm the tax lays a much heavier burden than on the kulak, or the “well-to-do’ proprietor in general. Contrary to the fears of the leaders of the Fourteenth Congress, our tax-policy by no means strips’ the kulak. It does not hinder him in the least from concentrating in his hands a continually greater accumulation in money and kind.
The role of the indirect taxes in our budget is growing alarmingly at the expense of the direct. By that alone the tax-burden automatically shifts from the wealthier to the poorer levels. The taxation of the workers in 1925-1926 was twice as high as in the preceding year, while the taxation of the rest of the urban population diminished by 6 per cent.  The liquor tax falls, with more and more unbearable heaviness, precisely upon the industrial regions. The growth of income per person for 1926 as compared with 1925 – according to certain approximate calculations – constituted, for the peasants, 19 per cent; for the workers, 26 per cent; for the merchants and the industrialists, 46 per cent. If you divide the “peasants’ into three fundamental groups, it will appear beyond a doubt that the income of the kulak increased incomparably more than that of the worker. The income of the merchants and industrialists, calculated on the basis of the tax data, is undoubtedly represented as less than it is. However, even these somewhat coloured figures clearly testify to a growth of class differences.
The “scissors”, representing the disparity of agricultural and industrial prices, have drawn still farther apart during the last year and a half. The peasant received for his produce not more than one and a quarter times the pre-war price, and he paid for industrial products not less than two and one-fifth times as much as before the war. This over-payment by the peasants, and again predominantly by the lower level of the peasants, constituting in the past year a sum of about a milliard rubles, not only increases the conflict between agriculture and industry, but greatly sharpens the differentiation in the country.
On the disparity between wholesale and retail prices, the state industry loses, and also the consumer, which means that there is a third party who gains. It is the private capitalist who gains, and consequently capitalism.
Real wages in 1927 stand, at the best, at the same level as in the autumn of 1925. Yet it is indubitable that during the two years intervening the country has grown richer, the total national income has increased, the kulak levels in the country have increased their reserves with enormous rapidity, and the accumulations of the private capitalist, the merchant, the speculator have grown by leaps and bounds. It is clear that the share of the working class in the total income of the country has fallen, while the share of other classes has grown. This fact is of supreme importance in appraising our whole situation.
Only a person who believes at the bottom of his heart that our working class and our party are not able to cope with the difficulties and dangers can affirm that a frank indication of these contradictions in our development, and of the growth of these hostile forces, is panic or pessimism. We do not accept this view. It is necessary to see the dangers clearly. We point them out accurately, precisely in order to struggle with them more effectively and to overcome them.
A certain growth of the hostile forces, the kulak, the Nepman, and the bureaucrat, is unavoidable under the New Economic Policy. You cannot destroy these forces by mere administrative order or by simple economic pressure. In introducing the NEP and carrying it through, we ourselves created a certain place for capitalistic relations in our country, and for a considerable time to come we still have to recognize them as inevitable. Lenin merely reminded us of a naked truth which the workers have to know, when he said:
While we continue to be a small peasant country, there is a more solid basis for capitalism in Russia than for communism. That we must remember ... We have not torn out capitalism by the roots, and we have not undermined the foundation and basis of the internal enemy. 
The supremely important social fact here indicated by Lenin cannot, as we said, be simply destroyed, but we can overcome it by way of a correct, planned and systematic working-class policy, relying upon the peasant poor and an alliance with the middle peasant. This policy basically consists in an all.round strengthening of all the social positions of the proletariat, in the swiftest possible elevation of the commanding centres of socialism, in closest possible connexion with the preparation and development of the world proletarian revolution.
A correct Leninist policy also includes manoeuvring. In struggling against the forces of capitalism, Lenin often employed a method of partial concession in order to outflank the enemy, temporary retreat in order afterwards to move forward more successfully. Manoeuvring is also necessary now. But in dodging and manoeuvring against an enemy that could not be overthrown by direct attack, Lenin invariably remained upon the line of the proletarian revolution. Under him the party always knew the causes of each manoeuvre, its meaning, its limits, the line beyond which it ought not to go, and the position at which the proletarian advance should begin again. In those days, under Lenin, a retreat was called a retreat – a concession, a concession. Thanks to that, the manoeuvring proletarian army always preserved its unity, its fighting spirit, its clear consciousness of the goal.
In the recent period there has been a decisive departure on the part of leaders from these Leninist ways. The Stalin group is leading the party blindfold. Concealing the forces of the enemy, creating everywhere and in everything an official appearance of success, this group gives the proletariat no prospect – or, what is worse, a wrong prospect. It moves in zigzags, accommodating itself to and ingratiating itself with hostile elements. It weakens and confuses the forces of the proletarian army. It promotes the growth of passivity, distrust of the leadership and lack of confidence in the forces of the revolution. It disguises, with references to Leninist manoeuvring, an unprincipled jumping from one side to the other, always unexpected by the party, incomprehensible to it, weakening its strength. The only result is that the enemy, having gained time, moves forward. The “classical’ examples of this kind of manoeuvre on the part of Stalin, Bukharin and Rykov, are their Chinese policy and their policy with the Anglo-Russian Committee, on the international field, and within the country, their policy towards the kulak. On all these questions, the party and the working class found out the truth, or a part of the truth, only after the heavy consequences of a policy that was false to the bottom had crashed over their heads.
At the end of these two years in which the Stalin group has really determined the policies of the central institutions of our party, we may consider it fully proven that this group has been powerless to prevent:
The direct guilt of the Stalin group is that instead of telling the party, the working class, and the peasants the whole truth about the situation, it has concealed the facts, minimised the growth of the hostile forces, and shut the mouths of those who demanded the truth and laid it bare.
The concentration of fire to the left, at a time when the whole situation indicates danger on the right, the crudely mechanical suppression of every criticism expressing the legitimate alarm of the proletariat for the fate of the proletarian revolution, the outright connivance in every deviation to the right, the sapping of the influence of the proletarian and old-Bolshevik nucleus of the party – all these things are weakening and disarming the working class at a moment which demands above all activity of the proletariat, vigilance and unity of the party, faithfulness to its real inheritance of Leninism.
The party leaders distort Lenin, improve upon him, explain him, supplement him, according as it is necessary to conceal each successive mistake that they make. Since Lenin’s death a whole series of new theories has been invented, whose meaning is solely this: that they give theoretical justification to the departure of the Stalin group from the course of the international proletarian revolution. The Mensheviks, the Smienaviekhovtsy and finally the capitalistic press see and welcome in the policies and new theories of Stalin-Bukharin-Martynov a movement “forward from Lenin” (Ustrialov), “statesmanlike wisdom”, “realism”, a renunciation of the “utopias” of revolutionary Bolshevism. In the cutting off from party leadership of a number of Bolsheviks – Lenin’s comrades in arms – they see and openly welcome a practical step towards changing the fundamental course of the party.
Meanwhile the elemental processes of the NEP, not restrained and directed by a firm class policy, are preparing further dangers of the same kind.
Twenty-five million small farms constitute the fundamental source of the capitalist tendencies in Russia. The kulak stratum, gradually emerging from this mass, is realizing the process of primitive accumulation of capital, digging a deep mine under the socialist position. The further destiny of this process depends ultimately upon the relation between the growth of the State economy and the private. The falling behind of our industry vastly increases the tempo of class-differentiation among the peasants and the political dangers arising from it.
In the history of other countries the kulaks have more than once restored the power to landlords, Tsars, priests and capitalists. It has been so in all previous European revolutions, where, in consequence of the weakness of the workers, the kulaks have succeeded in reverting from a republic to monarchy, from the rulership of the toiling masses to the omnipotence of the exploiters, the rich, the parasites.
You can reconcile the kulak with the landlord, the Tsar, and the priest easily enough, even though they’ve had a quarrel, but with the working class, never. 
Whoever fails to understand this, whoever believes in “the kulak’s growing into socialism’, is good for just one thing – to run the revolution aground.
There exist in this country two mutually exclusive fundamental positions. One, the position of the proletariat building socialism, the other, the position of the bourgeoisie aspiring to switch our development on to capitalist lines.
The camp of the bourgeoisie and those layers of the petty bourgeoisie who trail after it are placing all their hopes upon the private initiative and the personal interest of the commodity producer. This camp is staking its play on the “economically strong’ peasant, aiming to make the co-operatives, industry and our foreign trade serve this peasant’s interest. This camp believes that socialist industry ought not to count upon the state budget, that its development ought not to be rapid enough to injure the interest of accumulation by the farmer capitalist. The struggle for an increased productivity of labour means to the daily consolidating petty bourgeois putting pressure on the muscles and nerves of the workers. The struggle for lower prices means to him a cutting down of the accumulation of the socialist industries in the interest of commercial capital. The struggle with bureaucratism means to him the dissipation of industry, the weakening of the planning centres. It means the pushing into the background of the heavy industries – that is, again, an adjustment in favour of the economically strong peasant, with the near prospect of an abandonment of the monopoly of foreign trade. This is the course of the Ustrialovs. The name of this course is capitalism on the instalment plan. It is a strong tendency in our country, and exercises an influence upon certain circles of our party.
The proletarian course was described by Lenin in the follow-words:
We can consider the victory of socialism over capitalism, and its permanence, guaranteed, only when the proletarian state power, having conclusively suppressed the resistance of the exploiters and assured itself of their complete subjection and its own complete stability and authority, reorganizes the whole of industry on the basis of large-scale collective production and the latest technique (based on electrification of the entire economy). Only this will make possible such a far-reaching technical and social assistance rendered by the cities to the backward and undifferentiated country as will create the material basis for an immense increase of the productiveness of agricultural and rural labour, impelling the small peasants, by the strength of example and their own interest, to pass over to large-scale, collective, mechanized agriculture. 
The whole policy of our party ought to be built up upon this principle – budget, taxes, industry, agriculture, domestic and foreign trade, everything. That is the fundamental stand of the Opposition. That’s the road to socialism.
Between those two positions – every day drawing nearer to the first – the Stalinists are tracing a line consisting of short zigzags to the left and deep ones to the right. The Leninist course is a socialist development of the productive forces in course is a development of the productive forces on a capitalist continual struggle with the capitalist element. The Ustrialov course is a development of the productive forces on a capitalist basis by way of a gradual eating away of the conquests of October. The Stalin course leads, in objective reality, to a delaying of the development of the productive forces, to a lowering of the relative weight of the socialist element, and thus prepares for the final victory of the Ustrialov course. The Stalin course is the more dangerous and ruinous, in that it conceals a real deviation under the mask of familiar words and phrases. The completion of our restoration process has brought forward the whole fundamental question of our economic development and thus has undermined the position of Stalin, which is completely inadequate to meet great problems – whether the revolution in China or the reconstruction of basic capital in the Soviet Union.
Notwithstanding the tension of the situation, heightened in the extreme by the crude mistakes of the present leadership, matters can be put right. But it is necessary to change the line of the party leadership, and change it sharply, in the direction indicated by Lenin.
1. Viestnik Finansol 1927, No.2, p.52.
2. 11th Congress of the RCP(B), Volume XVII, p.428.
3. Comrade Workers, Let’s Join in the Final and Decisive Battle, publications of the Lenin Institute, pp.1-2.
4. Resolution of the Second Congress of the Communist International.
Last updated on: 22.2.2007