An important document in the history of the Soviet experience. The 15th Congress of the Communist Party of the Soviet Union held in late 1927 initiated the first Five Year Plan. While under the New Economic Policy, a multi-faceted debate on implementing industrialization had been going on in the Party. Very broadly speaking, two tendencies had developed on how to proceed. One, the so-called ‘genetic approach’ based the plan on existing trends within the largely peasant economy (Rykov, Bukharin, Bazarov, Kondratyev, and initially Stalin); another, the so-called ‘teleological approach’ sought to transform the existing economy through rapid industrialization (Kuibyshev, Strumilin Trotsky–expelled at the Congress, and Krzhizhanovsky, who would give a co-report at the Congress which should be read with this). Rykov, here at the pinnacle of his authority, gives the ‘majority’ report. The debate accelerated after this Congress as 1927’s bad harvest created a crisis. 1928 saw Stalin dramatically switch course and support the ‘teleological’ transformation, including forced collectivization of agriculture. That policy in particular led to the split between Stalin and Bukharin and Rykov, who would be accused of ‘right deviationism’ and decisively lose power in the struggle that followed.

‘Directions for Drawing Up the Five Years’ Plan of National Economy’ by Alexi Rykov from International Press Correspondence. Vol. 8 No. 2. January 12, 1928.  

1. THE QUESTIONS OF THE ECONOMIC SITUATION.

A peculiar feature of the present economic situation is the existence of a number of negative and unsound developments in our inner goods traffic, which made their appearance during the last quarter of the past economic year, and still continue. The quantity of goods being placed on the market this year is much greater than last. But in spite of increasing supplies there is still a certain shortage of goods. The discrepancy between supply and demand has made its appearance on a higher rung of the ladder of economic development, and on a higher level of the necessities of the broad masses of the people. According to the control figures issued by the State Planning Commission, in 1927/28 the production articles of consumption is to be increased by more than 13 per cent. This increase of supplies encounters however a still greater increase of demand, caused on the one hand by the increased income of the population, the reduced prices of industrial articles, the higher wages and income of the peasantry resultant on the realisation of agricultural products, on supplementary work, etc., and on the other hand by a certain influence exercised by extra-economic factors (crises in foreign political relations).

It is at the same time typical of our economy that the juncture at which the main mass of agricultural products has appeared on the market does not synchronise with the increase of industrial production.

The data which I have adduced show the situation in the market in the fourth quarter to be as follows, as compared with the corresponding period in 1925/26: The production of mass articles of consumption increased the reductions of prices taken into account by a total of one half per cent, the wage funds of the workers employed in State industry increased by 16 per cent; the income of the peasantry (from the systematic grain supply service, after deduction of taxes) rose by 31 per cent. The total buying reserves of town and country increased by over 20 per cent.

These figures throw light on that disparity between supply and demand which became apparent in the autumn, showing that at the moment when the village demand was at its highest, industrial goods were put on the market in insufficient quantities. The stagnation of industrial production during the summer (repairs, holidays, etc.) further increased this insufficiency. The increase in industrial output did not follow until later, and its effect can only be felt in the first months of the new economic year. The negative results of such a disparity between supplies and demand can only be avoided by an adequate reserve stock of goods. We had thought to be better equipped for the realisation of the crops in this respect this year, and have been accumulating reserves since last spring. But the whole of the reserves which we had thus only begun to accumulate, and which are necessary to us for the successful realisation of the crops, were used up before the agricultural campaign began, the international complications having greatly increased the demand.

Are these difficulties and interruptions in the development of goods traffic symptoms of a general economic crisis? Is the traffic in goods between town and country destroyed in its totality? These are questions which arise when we endeavour to form a judgment of the present status of the economy of the Soviet Union. In my opinion this pessimistic estimate is unfounded. In analysing the economic relations between town and country, we operate as a rule solely with the figures of the grain supply service, although the income derived from this is scarcely more than 20 per cent. of the total income of the peasantry. The peasant has other sources of income: cattle breeding, cultivation of technical plants, and other work. If we examine the relations of town and country not only from the standpoint of the sale and purchase of grain, but take into consideration cattle breeding, technical plants, and other agricultural products, we find that, during the past year the traffic in goods with the rural districts has been much greater than formerly.

The increased income of the rural population has of course the effect of lessening the need of the village to sell agricultural products in order to pay taxes and buy industrial products.

Goods traffic with the village has therefore increased on the whole as a result of the increased returns for technical plants, livestock products, etc., and there is no general crisis in the relations between town and country. There is, however, a partial crisis confined to the grain supply service.

During the first five months of this year’s grain supply campaign about 25 per cent. less grain was purchased than in the corresponding months of last year. In comparison with 1925 we have bought up somewhat more grain; but when we take into account the fact that in this year private grain purchases played a much smaller part, we find that the amount of grain thrown on the markets by the peasantry scarcely exceeds that of 1925.

What are the causes of this phenomenon? The main cause is the shortage of industrial goods. When industrial goods are scarce, the peasantry endeavour to obtain as much cotton fabrics, agricultural machinery, etc. as they can, in the way which they find most advantageous for them. And for them it is more advantageous to sell cattle; for them it is more advantageous to earn by side occupations; for them it is more advantageous to sell technical plants and oil seeds (and to build up their traffic in goods with the city on these), than to put grain on the market. This fact finds clear expression in the comparative price index figures for the various agricultural goods. The price index figure for rye is 101, for wheat 113, whilst the figures for technical plants is 135, for livestock pro- ducts 186, for butter 171, for eggs 215. At such prices it is naturally more advantageous for the peasant to turn his attention to other branches than the growing of corn.

Is this ration of prices among the various agricultural products normal? I believe that it is fundamentally correct to place higher prices on technical plants and livestock products, as this is a spur to the progress of improved and intensive methods of agriculture, and is an absolute gain both to agriculture and to the industries whose raw material basis is se- cured and extended. We already experience less difficulty in supplying our industries with raw materials than last year. But the question of whether this year’s price system is the most favourable solution of the problem is one which can only be answered by actual experience, and we must compile the data not only for the whole country, but with due attention to the individual data of the separate republics and districts. Our starting point for the revision of the existing price system must be the adaption of the prices of all other agricultural products to the stable bread prices. The negative aspect of the present price ratios is the retardative effect on the grain supplies.

I need not enter into the various causes unfavourably affecting our grain supplies. I may however point out the fact of the unfavourable geographical distribution of the grain crops. In a number of districts there has been a total failure of crops. This is, however, no disaster, as there are grain reserves laid by the peasants in former years, and since the goods traffic of these districts suffices to cover their requirements in grain.

The strained situation in the grain supply service can and must be removed, for in the first place the peasantry has now expended to a great extent the means earned by the sale of technical plants and other products, and in the second place we have taken measures for increasing the supply of industrial goods bought by the village, cotton and woolen fabrics, and a number of other goods. Thanks to these measures, we shall be able to alleviate the goods famine, and shall in all probability increase the offer in mass articles of consumption as compared with the plans hitherto projected, to the value of about 100 to 120 million roubles.

We must devote special attention to the grain supplies apparatus and its work, and never forget for a moment that our grain supply determines to a great extent the fate of our exports, and the possibility of accumulating reserves for bad years, and for possible international complications. A grain supply securing the daily needs of the population is not sufficient; we must attain more than this, and must secure both home reserves and a surplus for export.

One proof that there is no general crisis in our economy is the uninterrupted development of our industry.

Has our credit system been in any difficulties? A few months there were moments when our credit system ago appeared to be strained. This had two causes. Firstly, when drafting the industrial finance plan for 1926/27, we had over-rated the ability of our industry to obtain larger returns with a small amount of working capital. The factory prices were reduced without a corresponding decrease in the costs of production, and the limits of the capital investment provided by the plan were exceeded, so that industry encountered financial difficulties leading to an increased demand for industrial credit. Secondly, the supplanting of private trade in the sphere of goods circulation increased the need of financial means for our state and co-operative purchasing and trading institutions.

The strained situation in credit and money traffic may be regarded as past.

The improved credit and financial situation of the last quarter of a year may be seen from the fact that it has not been necessary to make use of even half of the bank note issue provided for this quarter, and the current accounts of our economic organisations have increased beyond all expectations. November brought a great increase in savings bank investments. We have undoubted proofs of the firmness of our ‘credit system and the stability of our currency. Our chervonetz does not yet completely fulfil the functions of accumulation and savings, but it is a perfectly stable circulating medium. The fact of the increase of savings investments in the credit organs (savings banks) collecting the small savings of the broad masses of the population, shows that confidence is increasing in the chervonetz as a means of accumulation.

Apart from the immediate difficulties connected with the realisation of the crops, we must clearly recognise those other difficulties which we shall encounter for some time to come, probably for the next one or two years. To these must be counted the difficulties arising from two causes: In the first place the necessity of expending more on the industrialisation of the country, without receiving immediate results in a simultaneous corresponding increase of output; in the second place, the necessity of expending considerable means on the defence of the country.

The expenditure of the sums required for these two purposes withdraws from circulation considerable means which could otherwise be used for our national economy, and only the most rational and exact of methods can make this outlay possible. It involves a great strain on our State finances, and demands a certain increase of taxation of the well-to-do strata of the population. I am of the opinion that the agricultural uniform tax can be raised somewhat next year, without of course withdrawing any of the privileges granted to the propertyless population of the village, or altering the enactment laid down in the Manifesto of the Central Executive Committee, exempting 35 per cent. of the peasant farms completely from the agricultural uniform tax.

The State budget expenditure, amounting according to some estimates to over 5900 million roubles, will be increased by these plans, whose execution will require from the whole Soviet apparatus, from top to bottom, and from the whole Party, the utmost possible effort and the intensest work. The revenues from the realisation of loans occupy a considerable place in the budget income of the current year, amounting to about 500 million roubles. For this reason the development of State credit operations must be accorded special attention.

The experience gained in the industrialisation loan shows us what can be accomplished in this sphere. Many of us and I myself was among the guilty ones had certain doubts as to the possibility of placing a 200 million loan among the working population, especially the working and employee class. This loan is already more than covered. The success of this loan shows that we must keep our eyes open to our own possibilities. The positive results of the realisation of the industrialisation loan must be the pledge for new achievements in this direction, and the experience gained with this loan must be utilised in our further loan policy. We must follow up the success of the State loans in the cities, and try to place a loan to the value of 50 to 100 million roubles among the peasantry during the coming year. (A voice: “Hear, hear!”.) We must study how to make this loan comprehensible, suitable, and attractive to the peasantry.

What are the main conclusions to be drawn from the above characterisation of our present economic position? My general estimate of our economic conditions may be summed up in the statement that we are not suffering from any general crisis in the goods traffic between town and country, and still less from any general economic crisis. Our traffic in goods has increased; the peasantry is placing greater quantities of other agricultural products than grain on the market. whilst on the other hand there is a certain decline in the “metabolism” between town and country with respect to grain. The credit system is perfectly stable. This estimate of our economic status does not, however, release us from the obligation to extent every effort to improve it. Our grain supply service in particular demands intense and energetic effort, and no less important are the tasks of providing the country with a sufficiency of industrial goods, and covering this year’s greatly increased budget.

Our chief task in the sphere of foreign trade is to secure our grain export; should we not be successful in this, then our export plans must be realised by forcing export in other goods.

We must devote the utmost attention to the cultivation of grain, especially of wheat. in the leading bread corn districts, and must take energetic measures (through the co-operatives, the people’s Commissariat for Agriculture, seed corn reserves, supplies of machines, credit) for the accomplishment of radical changes, including a considerable extension of the grain sown area from this coming spring onwards.

This concludes my characterisation of our economic position, and I pass on to the questions of the Five Years’ Plan.

II. THE PROBLEMS OF THE FIVE YEARS’ PLAN.

We have already had several variations of the Five Years” Plan submitted to us; no fewer than five have come to my knowledge. Comrades better informed than I on the subject state that there are seven. The latest variation, distributed to the delegates of the 15th Party Congress, was drawn up immediately before the Congress, and has therefore not yet been examined.

What are the chief defects of the Five Years’ Plan, common to all its variations? The first defect is the too statistical character of the plan. The figures given are not worked out economically to a sufficient extent, nor do they accord adequate consideration to the problems of the technics of production. And yet we are living in a period of fundamental changes in the organisation of industry, and are pressing forward towards a tar-reaching technical and economic reorganisation of agriculture. The Plan must give expression to the processes going on in the technics of production.

The second defect of the Five Years’ Plans is their failure to deal clearly with the problem of dividing the Soviet Union into different economic areas. This makes more difficult not only the examination of this problem, but its solution.

The basic idea of the Five Years’ Plan is: The industrialisation of the country as the main path to the organisation of socialist economy. We must face the fact that the execution of this Plan involves the overcoming of many difficulties and obstacles. The Plan must be so constructed that these difficulties and fluctuations in economic prosperity are reduced to a minimum. Here lies the importance of the directions submitted to the Party Congress for the drawing up of a Five Years’ Plan. These deal with the main possible difficulties lying in the way of the development of national economy, and point out the means of overcoming them.

The problem of accumulation. A considerable portion of our difficulties is caused by the enormous expenditure demanded by the reconstruction of national economy on the basis of the development of industry and agriculture. The question of how much financial means we can obtain from our national income, and of the channels into which these means are best diverted, determines the general rate of our advance towards Socialism and the possibility of the transition without crises from one stage of economic development to another. Can we overcome these difficulties by increasing the means taken from private accumulation? It need scarcely be said that we cannot guarantee being able to extract from private capitalist accumulation the whole of the means required for the needs of the country. Doubtless our system of private capitalist taxation has still many faults; in some cases the taxation may be adequate, but in others it is insufficient, and in others again it is too high. But it would be a grave error to suppose that the private capitalist section of our national economy is an inexhaustible and ever growing source of taxation revenues. The policy which we have hitherto pursued has decreased the role played by private capital in national economy. In the course of the next five years we expect to reduce the share of private capital in our economy still further. There will be two opposing lines in economy, on the one hand the line of growing investments in industry, and on the other the comparative regression of the private capitalist section of our whole national economy. This process of rapid supplanting of private capital excludes the possibility of locking to the increase of taxation on private capitalist accumulation as any decided solution of the whole problem of capital investment.

Another assertion which is incorrect is that the industrialisation of the country will only be possible for years to come by means of an uninterrupted and increasing transference of means from agriculture and other sections of national economy into industry. Such a transference of means (of course within certain limits) is inevitable and permissible only in the present stage of development, until industry has been placed on a firm footing. After industry has secured its position, and the industrial development of the country has attained a higher level than at present, it is quite possible that the reverse process will take place: the transference of means from industry to agriculture, to the end that this latter may develop more intensively in a socialist direction.

One extremely absurd criticism of the Five Years’ Plan in all its variations is that which takes as a starting point the assumption that it is necessary for a maximum speed of development to be maintained in all branches of national economy at the same time. We all know the proposals of the Opposition: a maximum increase in wages, maximum improvement in the economic position of the peasantry, maximum increase of capital investment. in transport service, in house building, in industry, in agriculture, etc. etc. The means at the disposal of the State are always limited to a certain extent. The solution of the problem of rapid socialisation is not to satisfy everybody at once (which nobody could accomplish), but in a rational distribution of the means at our disposal, yielding the best results for the building up of the new society.

Accumulation and agriculture. The distance between the level of our agriculture and the agriculture of the advanced capitalist countries is much greater than, let us say, the distance between the level of development of our textile industry and the textile industry of Germany, England, or the United States.

In our industries we possess all the advantages of the large scale undertaking, and of comparatively advanced technics. Thanks to the October Revolution, we can add to the advantages of the large undertaking the advantages of the socialist character of our industry, and the full possibility of conducting this systematically. in agriculture we have a large number of small and dwarf undertakings, which do not enjoy the advantages of large-scale undertakings. The kulak farms have the advantage over these with respect to the technics of production. The kulak farm, even when other conditions are equal, is more profitable and better able to organise its work on rational lines. Not only the smallest farms but even the middle farms suffer from the fact that technical improvements cost them proportionately much more than they cost the larger farms, as they cannot be utilised on the same scale. Comrade Molotov has told me that on many small farms it is not even worth while to keep a horse.

In what direction should a fundamental change be effected in agriculture? The right way to go to work is to organise large scale agricultural undertakings, with the aid of the co- operative organisation of collectivisation. We shall employ the full powers of the State and the Party to restrict the exploiting tendencies of the kulak, and to support the poor and middle peasantry. If we are to attain these ends it is imperatively necessary to lay before the whole peasantry, the village poor and the middle peasants, clearly and tangibly, the question of the development of agriculture by means of large-scale agricultural production. This is one of our main tasks in the agricultural question. In agriculture, as opposed to the State section of our economy, the accumulation is carried on in millions of scattered and insufficiently organised peasant farms. We must create an incentive stimulating a use of this private accumulation for the purpose of uniting the peasantry in the organisation of agriculture on the basis of larger units of pro- duction.

Light and heavy industry. The question of accumulation in national economy is followed closely by the question of the most suitable distribution of the available means among the separate branches of national economy, and especially of the share to be allotted to light and heavy industry. Various branches of heavy industry have not yet regained the pre-war level. And even before the war their degree of development was by no means high. A more rapid development of heavy industry is absolutely indispensable for the next few years. The development of light industry and agriculture depend on the development of heavy industry, especially of machine building. In the sphere of heavy industry we are greatly dependent upon foreign countries. We can and will solve our own heavy industrial problem with our own means, although this will prevent us for the time being from solving altogether the question of the so-called deficit goods (for which there prevails an unsatisfied demand). Up to now no country has been capable of reconstructing and developing its heavy industry without extensive help from abroad. If we want to build up our heavy industry with our own means–and we must do this then we shall have to impose restrictions on ourselves for a time. There is no other way.

Our policy of steadily increasing the economic prosperity of the masses of workers and peasants brings about a correspondingly steady increase in the demand for mass articles of consumption. But the possible shortage of some mass articles of consumption, and the occasional increased demand for this or that article which cannot be produced with sufficient rapidity, are not in themselves dangerous. What is dangerous is a crisis affecting the whole circulation of goods, leading possibly to a currency crisis, and to a crisis affecting the whole national economy of the country. We must never permit conditions in our markets to reach this acute point. On the other hand we must not abandon our positions in heavy industry merely because we encounter occasional difficulties. We can only develop our heavy industry by maintaining at first an extremely strict regime in the circulation, of goods, not excluding the occasional shortage of this or that mass, article of consumption. This does not mean, of course, that light industry is to fall behind. It must be promoted in every possible way, in order that there may be no interruption in the circulation of goods between town and country, and in order to prevent a crisis affecting the entire economy.

The transport problem. According to some of the variations of the Five Years’ Plan, the transport service is to receive as much, or more, support than industry. In my opinion increased investments in the transport service are absolutely indispensable, not only because the further development of national economy supposes a more rapid development of transport service than hitherto, but because the transport service, in the hands of the working class, is a powerful means for the reorganisation of the whole national economy and a potent instrument enabling national economy to be influenced by our socialised undertakings. Up to the present we have dealt with transport questions as if we were speaking solely of cab drivers. Until quite recently we have even neglected the problem of the utilisation of the transport service as a weapon of our economic policy, as an instrument enabling the socialist economic elements to exercise influence over the non-socialist.

The problem of equilibrium in the market. One of the most important and cardinal demands which we must make upon the Five Years’ Plan is that it secures for us as far as possible the development of our whole national economy from year to year, without crises. Do the different variations of the Five Years’ Plan as yet submitted meet this demand? The problem is too complicated to allow of categorical reply to this question. have here some calculations made by collaborators of the People’s Commissariat for trade, dealing with the question of the extent to which the rate of development of the separate elements of our economy, as assumed by the State Planning Commission for the Five Years’ period, secures the equilibrium of the market at the close of this period. The result of these calculations is as follows: If we take the 26 per cent. rise in wages provided by the Five Years’ Plan (the increase of real wages. taking into account the reduction of prices, is estimated by the State Planning Commission at something over 40 per cent.), assume the reduction of retail prices for industrial goods at 24.5 per cent., the reduction of retail prices for agricultural products at 5.5 per cent., and the in- crease of agricultural products placed on the market at 68.8 per cent. as a basis, we find that the maintenance of equilibrium in the market requires a much greater quantity of mass articles of consumption than are provided by the State Planning Commission. The functionaries of the Trade Commissariat point out that, should the Five Years’ Plan be realised, the end of the period will see us with a goods shortage considerably more acute than that of 1926/27. That is, we risk a general crisis in the circulation of goods. In order to avoid this, it is apparently necessary to increase the production of industrial mass articles not merely by 70 per cent., but by 89 per cent. This equilibrium of the market can of course be attained by other means, for instance by a slighter reduction in the prices of industrial goods, by the reduction of prices for agricultural products, by a somewhat smaller rise in wages, etc. Still other measures can be used for maintaining the balance of the market.

It is the task of the Five Years’ Plan to secure this relative equilibrium of the goods circulation by a system of measures best guaranteeing the interests of the working class and the building up of the socialist state of society.

Foreign trade. The weakest point in our whole economic development is our foreign trade. The Five Years’ Plan must take as a starting point the fact that during the next few years the process of industrialisation will depend greatly on foreign trade. In view of the enormous importance of foreign trade, the Party and Soviet organs must devote much greater attention to questions of export; we must force the export of other goods than grain, for instance wood, livestock produce etc.

Reserves. Our economic conditions will probably be extremely strained during the next five years, and we shall have great difficulties to overcome. The rate of general economic development and of industrialisation assumed by the plans pre- supposes a severe strain. It will therefore be necessary to accumulate reserves which will enable us to manoeuvre in the case of economic difficulties of any nature. But here again we must not forget the difficulties connected with the formation of reserves. I need only give one example in order to convey an idea of these difficulties. The sum of no less than 500 million roubles is for instance required to purchase a reserve of industrial mass articles sufficient for one month. If such a sum is required for this one reserve stock, it may well be imagined what sums are required if reserves are to be accumulated of all necessary articles (grain, raw materials, securities, etc.).

The problem of unemployment. How do the capitalist States solve the problem of agrarian over-population? In the first place with the aid of mass emigration. We place no obstacles in the way of emigration to other countries, and yet there is no special emigration movement among us. On the contrary, there is an opposite tendency towards immigration.

For us the way of solution of the problem of agrarian over-population by means of emigration is almost entirely barred. In the Soviet Union itself there are vast tracts of country excellently adapted, for forming settlements for the surplus population, but the organisation of such settlements demands an outlay which we shall scarcely be able to afford during the next few years, and we cannot hope to lessen unemployment and to furnish room for the expansion of our population to any great extent by these means for some time to come. This means that at present our chief remedies against unemployment and surplus- population must be the intensification of agriculture and the development of industry. The transition to the seven-hour day taking place next year will considerably increase the number of workers employed in industry, but even this will scarcely suffice to provide a complete solution of the problem of unemployment and surplus agrarian population.

When dealing with the question of unemployment, there is one inaccuracy which creeps into practically all our calculations: We count the unemployed of all categories and in all districts together, and then apply the same prescription as a remedy against unemployment everywhere. That is incorrect. There are different kinds of unemployment. It will, for instance, scarcely be found possible to combat unemployment in White Russia and the Ukrainian border districts with the same means and measures as those suitable for the struggle against unemployment among the industrial workers of Leningrad and Moscow. There appears to be no general unemployment among the skilled workers in the Soviet Union. Individual cases of unemployment in these categories are due to the faulty organisation of the distribution and employment of the skilled labour of the Soviet Union. In many districts the irrigation and drainage of the soil can increase the arable land to an extent enabling the surplus population of these and the adjacent districts to find sufficient employment on the newly won land.

A considerable part of the unemployed of Moscow, Leningrad, and other large cities consist of brain workers, whilst in the provinces and in the village there is a tremendous dearth of brain workers.

It is scarcely possible to combat unemployment among brain workers with the same means employed against unemployment among industrial workers. The first measure to be taken for combating unemployment among mental workers is not to designate as unemployed those who prefer work in the village to unemployment in the city. (A voice: “Hear, hear!” Applause.) Further, more attention must be devoted to satisfying the cultural needs of the people, especially in the provinces; in many cases the position of the cultural workers must be improved: In connection with unemployment among mental workers, I cannot but refer to the various interpretations of the economisation regime and the wrong methods adopted in carrying out the directions requiring a 20 per cent. reduction of administrative costs. I have observed a number of cases in which qualified laboratory specialists and technicians have been discharged, although these were employed in improving the methods of production, only for the sake of the reduction of the total number of employees. And this in face of the enormous shortage of qualified workers in every factory and every undertaking! I this way we create artificial unemployment among the engineers, technicians, etc., who are absolutely indispensable to us if we are to make any progress from the extreme technical backwardness of our industry. For some reason the idea seems to prevail among us that the specialists must sit in our offices, business managements, and People’s Commissariats, occupied with filling up sheets of foolscap. In these places nobody is discharged, whilst in the factories, works, and in the whole process of production itself, cutting down of staffs is undertaken for one reason or another. We must change this state of affairs fundamentally, especially in the present period of the rationalisation and reconstruction of our industry. We shall never rationalise our industry unless we have sufficient technical forces at our disposal, unless we train fresh cadres of engineers and technicians working in the factories themselves, actually taking part in the process of production, and unless we increase the specific weight of these skilled workers in our industry.

Closely bound up with this are the cultural questions, which I shall only touch upon in passing. In the first place it is, in my opinion, an undoubted fact that our cultural progress falls far behind the development of our national economy and the improvement of the standard of living of our workers and peasants. (A voice: “Hear, hear!”) In the second place I am of the opinion that the realisation of industrialisation and the advancement of economy cannot be achieved further without a corresponding raising of the cultural level of the whole country.

In the third place I believe that the reason why expenditure for cultural purposes forms so small a part of the budget of the worker and peasant is not to be found in a lack of desire for culture, but in the fact that we have not yet learnt to satisfy the actually existing desire.”

In the fourth place, and finally, I am of the opinion that when our budget and revenues increase during the coming year, we must begin at once to expend even more on our cultural advancement than we have expended on the restoration of economy. We must not divide the economic revolution from the cultural. A discrepancy here will have to be paid for dearly. (A voice: “Hear, hear!”) It must be clear to all that in the given stage our development culture is just as important and necessary for successful economic construction as a supply of ammunition in war. Without a rapid cultural advancement we shall not be able to reconstruct our economy effectually.

The Defects of our Building Activities.

The most pressing practical question of today is the inefficiency of our building activities. At the present time, building is the most expensive of all our economic activities. The index figure for building expenses for the current economic year is 265, whilst the general industrial index figure is 199. If we can succeed in reducing this figure, if only to the level of the industrial index figure, we shall save many hundred millions of roubles. The financial problem of our building work has ramifications involving a much more comprehensive problem. One of the variations of the Five Years’ Plan suggests an outlay of over 20 milliard rouble for the erection of works and factories. Were our building costs to be reduced by 10 per cent, two milliard roubles would be saved in five years; a 15 per cent. reduction would save 3 milliard roubles in this time. We hold innumerable meetings to decide the question of where we are to find money for the expansion of industry, but we have not yet succeeded in solving this most important problem of cutting down building expenses, of rationalising our building activities, and applying the means at our disposal in the manner best adapted to our ends. Radical changes must be made here. Mistakes made in the erection of works and factories throw great obstacles in the way of further progress. I have before me data referring to various building undertakings. One of these was estimated to cost 7 million roubles and cost in reality 20 million. Another preliminary estimate was for 8 million roubles, the actual cost 10 million. A third project is especially characteristic. This is for the erection of the cotton factory at Fergana. This work has been already commenced, and under the following conditions: 4 to 5 kilometres from the railway, 17 versts from the nearest source of drinking water, and 14 versts from the spot where suitable water for factory purposes is to be found. There are no dwelling houses for workers or employees near the spot where the factory is being erected. It looks exactly as if the very worst and most unsuitable place in the whole Soviet Union had been selected. The unsuitable position of this building site is in itself sufficient to increase the costs of digging and laving the foundations from 4.50 roubles per cubic metre to 14 roubles. (A voice: “Has anyone been punished for that?” Disturbance.)

I have just got to know of this case, and of course those guilty will be punished.

It need not be said that such cases become rarer every year. We have made great strides forward in industry of late. But we must remember that we are not yet finished with the work of rationalising the expenditure for industrial development. Neither have we yet learnt to utilise to a requisite degree the possibilities of what is already completed.

I do not consider that the economists alone are to blame for this. We have all contributed to this evil. It is a state of affairs naturally resulting from the fact that we and our leading economic organs have devoted our attention exclusively to the question of calculating and raising the means required, and have paid but little attention to questions of reconstruction, rationalisation, and the suitable outlay of the means available. The realisaion of the Five Years’ Plan must place in the foreground the organisatory and technical problems arising in connection with the investment of 20 to 25 milliard roubles of fresh capital. This second aspect of the problem of our building activities must be placed on our agenda and accorded maximum attention.

III. THE FRESH EXPENDITURE AND THE ORGANISATION OF THE MASSES.

I have already taken the opportunity of pointing out that the system of economic organisation which has developed during the period of reconstruction and the working methods of our social economic-organisations taken over from this period must be regarded as entirely inadequate for the accomplishment of our fresh tasks–the reconstruction of the economy of the whole country on the basis of a tremendous advance in the activity of the working class and of the working masses generally. The realisation of our tasks, which are growing in number and complication, entails the fullest utilisation of the materials and labour obtainable both in town and country, which can and must be mobilised and organised by the Party. (A voice: “Hear, hear!”).

Among the most important and essential constituents of our Party work we must reckon the improvement of the forms and methods of organising the growing active cadres of the working masses. The present methods of social organisation appear to me to be insufficient for the solution of the gigantic problems which we have already tackled: The problems of building up Socialism in our country. That these methods are no longer sufficient is due to the growing complication of our tasks and the necessity of greater expenditure for their fulfilment. We have a system of comprehensive and gigantic organisations, often occupying a monopolist position in their special spheres of economic and social life. These organisations are extremely jealous of any competitors. Up to the present no organisations of importance have been formed on the principle of the personal interest of any Party members, workers. peasants, or Soviet intellectuals for the accomplishment of this or that definite task. It need not be said that all, or almost all, the workers are members of the trade unions, and that they all, or almost all, take part in the elections to the Soviets. If anyone takes an interest in some special question, however, whether in the sphere of industrialisation, factory life, or cultural work, then why should we not support special organisations formed voluntarily on the principle of personal inclination? Why should we not promote the formation of such organisations, why should we not avail ourselves the help of such organisations in the solution of the various problems of socialist construction? It seems to me that this can and must be done. I do not think that we can fulfil our tasks without building up a system of mass organisations, and without utilising voluntarily societies to aid us in the work of solving individual problems of socialist construction. Every initiative towards economic or cultural progress should receive the utmost encouragement. Such initiative is perfectly indispensable for the realisation of the socialist state of society.

It will scarcely be necessary for me to touch upon the necessity of altering the system and working methods of our organisations. We have gigantic centralised organisations, with ramifications extending all over our great country. The head organs of these organisations are so far distant from the works, factories, and villages, that there exists a grave danger of estrangement. In the course of years a process of routine and ossification is inevitable in these organisations, even when gigantic upheavals and changes are going on at their actual basis, and every day something new appears and grows. We run the danger that the organs thus alienated from their basis become powers in themselves, occupying an important position in the life of the Soviet State, and hampering and retarding by their routine and immobility all the new, living, progressive, and revolutionary that is growing up under the Soviet Power and on the basis of the Soviet economy.

On the eve of the XV. Party Congress the Opposition suffered a complete and unexampled defeat, although it employed in its struggle against the Party and in its appeals to the third power every description of promise and demagogic assurance. No one has followed it. Why? Because the millions of workers and peasants in our Soviet Union are taking immediate part in the gigantic and comprehensive work of socialist construction. The millions of our workers and peasants not only recognise the building up of Socialism to be their own affair, they take part in it actively, immediately, and daily. This process of participation on the part of the masses in the building up of the new society has just begun; the further we advance, the greater will be their participation.

The Five Years’ Plan of Party work must secure the participation of these masses in living, active, mobile, and powerful organisations. The Five Years’ Plan of Party work must secure the full utilisation of the possibilities of these gigantic masses of active participants in the work of socialist construction, ensuring the complete victory of the working class in the realisation of the new society. (Enthusiastic and prolonged applause.)

International Press Correspondence, widely known as”Inprecor” was published by the Executive Committee of the Communist International (ECCI) regularly in German and English, occasionally in many other languages, beginning in 1921 and lasting in English until 1938. Inprecor’s role was to supply translated articles to the English-speaking press of the International from the Comintern’s different sections, as well as news and statements from the ECCI. Many ‘Daily Worker’ and ‘Communist’ articles originated in Inprecor, and it also published articles by American comrades for use in other countries. It was published at least weekly, and often thrice weekly.

PDF of full issue: https://www.marxists.org/history/international/comintern/inprecor/1928/v08n02-jan-12-1928-Inprecor-op.pdf