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John G. Wright

The Economic Consequence of
the Stalin-Hitler Pact in the U.S.S.R.

(September 1939)

From Socialist Appeal, Vol. III No. 73, 26 September 1939, p. 3.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

The ratification of the Stalin-Hitler pact at the fourth session of the Supreme Council in Moscow was accompanied by the passage of two laws, one extending the conscription age and the other levying a stiff tax on collective and individual farmers. The connection between the extension of the military term of service and the Stalin-Hitler alliance is self-evident. But it does seem at first sight surprising that Stalin and his clique should have chosen the moment when they are faced with their first major historical test – war – to introduce the severest legislation in recent years against that section of the population to whom they have been catering the most, that is, the peasantry.

The new agricultural tax supersedes the law passed on May 31, 1934, the primary intent of which was to assuage the peasantry, and which placed a relatively light burden on them. The new law more than doubles the tax hitherto paid by collective farmers whose income is 2,000 rubles a year. Those whose income is higher will pay three, four, five and even six times the previous amount. Furthermore, the tax falls most heavily on income derived from “privately operated holdings, handicraft enterprises, and all other income derived outside the collectives.” (Pravda, August 28)

Why the Legislation at This Time

Whereas the tax on collectives grades from 5% to 13.5% of the total, all income from other sources is subject to 11%–25% tax, and in some cases it is as high as 30%.

If I am not mistaken, it is the sharpest legislation enacted against the peasantry since the days of enforced collectivization. Legislation of this nature will hardly meet with the approval of the peasants, and Stalin knows it. Why then the law?

Is it because the kulak danger is abroad again? It is unquestionable that this danger exists. But even though the term “kulak” and “speculator” has reappeared in the Soviet press, that is not the reason for Stalin’s law. He has relied most heavily in recent years on the well-to-do peasant.

But the peasants, both in the collectives and outside, have again been accumulating grain and the flow of commodities from the city to the village has been far from adequate to impel the peasants to disgorge their grain hoards. There have been periodic shortages in the cities, but these have been winked at from above. Now Stalin must have foodstuffs not only for the cities but also to supply Hitler. Hence the sudden squeeze on the peasantry. Otherwise the Kremlin would be unable to live up to the terms of its agreement with Adolf Hitler, and assure the flow of foodstuffs into Germany. But to meet his obligations to Hitler, Stalin has had to deal his regime a blow internally, by alienating the peasantry.

Stalin Moving Toward Collisions with Peasants

It remains to be seen whether this initial law will produce the desired results. Whatever its effects, it can only act as a stop-gap. More and more grain will be required. The vast army already mobilized by Stalin will drain the accumulated grain reserves and place an additional strain on agriculture. Stalin has no other measures than administrative ones to rely upon for obtaining the foodstuffs for the cities, for the Red Army and – for Hitler. We can therefore forecast with certainty not only that increasingly harsh administrative measures will be applied but also that the Stalin regime is moving towards a head-on collision with the peasantry.

Will Stalin perhaps be able to lean on the proletariat? It is noteworthy that in recent days there has been no mention in the official press of the stringent labor laws passed last December. The Pravda no longer speaks of the heed of enforcing them in order to bolster up industrial production, as was the case a few months ago. Early this year, the lag in production was explained above all by the laxity of factory managements in enforcing these laws.

Not that production has improved. Just the contrary. If in 1938 the output lagged some 33% behind the plan as compared with 1937, the production for the first 8 months in the current year has lagged almost as much behind the plan.

The failure to accomplish the plan for 1939 is openly admitted. One week prior to the convocation of the Supreme Council, on August 22nd, Pravda stated editorially:

“Despite the colossal assistance rendered by the party and the Government to the All-Union coal-bin – the Donbas – and other coal regions, they still function unsatisfactorily; the metallurgists fail systematically (sic) to fulfill the plan and in the oilfields the tempos of oil production have been lowered.”

Such is the condition in coal, oil and metal – the key industries!

Yet faced with this critical situation, the bureaucracy for the time being does not dare to apply the measures which were enacted only a few months ago and which were designed to overcome this very situation. Instead they have resurrected the old slogan of “Socialist Competition,” which is being supplemented by feeble attempts to revive the ballyhoo about Stakhanovism. Failure to produce is nowadays being explained as due to the failure of the management to introduce Stakhanovist methods in the plants, plants, mills and mines. This change of tone can be due only to sharp resistance by the workers to the labor laws and their enforcement. These laws have not stopped the enormous turnover of labor.

The People’s Commissar of Heavy Machine Industry admitted that his particular branch was practically crippled by this turnover.

“From January to May of the current year,” states Commissar Malyshev, “the enterprises in our commissariat lost more than 3,000 workers a month.” (Izvestya, August 24)

War Increases Conflict in Industry

The army mobilization is not going to improve the conditions in labor supply. Furthermore, the few production indices that are still made public show that a sharp decline is again beginning to evince itself in industry. Now that the war has added its gigantic link to the developments and placed an ever-increasing burden on the country’s productive machinery, the crisis in industry can only be aggravated.

If today the output in coal and oil is dropping, how will Stalin be able to supply Hitler with these items? He can do so only to the further damage of internal economic life.

Finally, the transport system, which collapsed so catastrophically last winter, is giving signs that it is about to fold up again. The railroads will hardly bear up under the additional demands of troop movements, army supplies, traffic to Germany, etc. Waterway transport, especially sea routes, have become indispensable to Stalin above all to meet his obligations to Hitler. The Baltic is the one avenue still open. Thus the fate of Esthonia and other border countries with outlets to the Baltic becomes bound up with the inextricable web of the bureaucracy’s difficulties. An assault upon Estonia is indicated by the traffic emergency.

It may well be asked: How much of a load can Stalin place on the shoulders of the Russian masses in order to fulfill his pledges to his latest imperialist ally, Nazi Germany?

At the very outbreak of the war, the Stalin regime finds itself in a blind alley. From every standpoint it is the weakest and most unstable regime in the world today.

Last updated: 6 March 2016