Economic Sectors in the Transitional Period

Lenin’s exposition on the economic composition of the backward nations in the period of transition from capitalism to socialism.

After the October Revolution in Russia, Lenin pointed out that there would be both capitalist and socialist elements in the transitional period. In Russia, the transitional economy consists of patriarchal (to a large extent natural) peasant economy, small commodity production (including most farmers who sell grain), private capitalism, state capitalism and socialist sector of the economy. The patriarchal peasant economy is a primitive natural economy based on private ownership of means of production and individual family labor. Small commodity production is an economy based on private ownership of means of production and individual family labor, and it has more relations with the market.

The representatives of private capitalism are the upper-class members of the rural bourgeoisie (rich peasants), owners of non-nationalized enterprises, mainly small and medium-sized capitalist industrial enterprises, and businessmen. Under the dictatorship of the proletariat, state capitalism is manifested as enterprises leased and leased to capitalists, joint ventures jointly owned by the state and capitalists, and shops entrusted by the state to operate consignment business. On many occasions, state capitalism has become a transitional form of socialist nationalization. The socialist economy sector includes factories, transportation, banks, state farms, commercial enterprises and other enterprises in the hand of socialist state, as well as consumer cooperatives, supply and marketing cooperatives, credit cooperatives, production cooperatives, etc., the main foundation of the socialist sector of the economy is the large-scale machinized industry.

During the transitional period, various economic elements coexist and compete with each other, among which the main struggle is between private capitalism and state-owned economy and state capitalism, between small commodity economy and semi natural economy and cooperative economy, which runs through the whole transition period from capitalism to socialism.