Concessions

Concessions were an important content of the new economic policy and a form of state capitalism. Under the supervision of the Soviet regime, certain industrial and mining enterprises, forests, oil fields and land, which the state was unable to operate at that time, were leased to foreign capitalists under certain conditions and time limits, to be operated by the leased capitalists, and the lessee gives a part of the product to the Soviet state and also earns profits according to the contract. After the contract expires, the state will take back the enterprise.

Lenin argued that the nature of the concession system was state capitalism, which was a contract between the Soviet state and the entrepreneurs from the capitalist countries. The socialist state gives the use rights of its means of production, such as factories, raw materials and mines, to capitalists, who are financially and technically qualified to operate them as contract partner or as a leaseholder, The socialist capital is used to make part of the profits from socialist production. There are two main forms of the concession system.

One was that foreign capitalists control a certain amount of means of production and form a joint venture company with the state-owned Soviet company, for a joint investment ed by Soviet Russia and capitalists in a certain proportion; the other is “sole proprietorship”, that is, the investment is completely made by the foreign entrepreneur.

The Soviet government only provided certain factory land and labor force, and most of the commodities produced were owned by the investors, and a small part of them belonged to Soviet state.

Lenin made a definition of state capitalism: “It is one of the principal aspects of the New Economic Policy, and it is under the Soviet power, a form of capitalism that is deliberately permitted and restricted by the working class”. At that time, the concession system aimed to absorb foreign capital as well as advanced foreign technology and equipment, acquire management experience and master new technologies, so that Russia could rapidly restore and develop productive forces, which would benefit Soviet state politically and economically. The implementation of the concession policy also meant “giving certain amount of ‘tribute’ to the world capitalists, and cajole them so as to persuade them to make the proper investments”. For Lenin, in fact the concession policy was “a form of struggle” and by no way meant substituting class struggle by class peace with foreign capitalists. Limited by the historical conditions of that time, the leasing system proposed by Lenin was not implemented so much.