On Grain Tax

Lenin systematically discussed the New Economic Policy in the transitional period in this important article. It was written at the end of March 1921, shortly after the closing of the 10th Congress of All-Russian Communist Party (B), the work was completed on April 1921, and was published by the State Publishing House in Moscow as a single booklet at the beginning of May, and then in the June issue of the magazine Krasnaya Nov (Red Virgin Land), and in the same year it was translated into German, French and English and published in the 17th issue of the Communist International magazine. The Chinese translation is included in Vol. 41 of the second and revised edition of Complete Works of Lenin.

After the victory of the October Socialist Revolution, Russia suffered the armed interference of Fourteen imperialist countries and the armed rebellion of domestic white bandits, and at the beginning, the national economic recovery and construction were interrupted, and it was forced to implement the “economic policy of War Communism” which has the main content of to implement the surplus grain collection system, that is, to collect all the surplus grain and part of the rations from the farmers, so as to ensure the army and the workers’ food supply effectively guaranteed the victory of the three-year civil war and consolidated the Soviet regime. However, due to the serious devaluation of paper money at that time, it was actually equal to free collection, which caused a heavy burden on farmers, hindered the development of rural productivity, and damaged the economic foundation of the worker-peasant alliance. After the end of the civil war in the winter of 1920, the task of restoring and developing the national economy and building the socialist economic foundation was put on the agenda again. According to Lenin’s proposal, the Tenth Congress of All-Russian Communist Party (B) held in Moscow in March 1921 adopted the report on replacing the “Surplus Grain Collection System” with material taxes and the resolution on the transition from wartime communist policy to New Economic Policy. However, this policy change caused attacks and distortions of opportunism within the party, and there were many doubts among party members and cadres. In order to fight back the distortion and attack inside and outside the party and explain the essence, significance, necessity and feasibility of the New Economic Policy to the whole Party and the working people.

The main contents of Lenin’s work were as follows: (1) The historical background of Russia’s economic situation and economic policies followed in 1918 and 1921 is explained and compared from the perspective of general principles, and also the work expounds the necessity and practical significance of implementing the new economic policy (NEP) centered on the forced collection of grain tax. In terms of economic structure, the Russian economy in 1921 had the same five economic components as that in 1918, and the small-scale peasant economy was still dominant. Several years of war and imperialist blockade caused great damage to the economy, and in 1920, the severely bad harvest had made the situation even more serious, which damaged the farmers’ enthusiasm for grain production, and the farmers’ life reached the point of extreme poverty, as a result, they were dissatisfied with the policy of War Communism and wavered politically, most of the Kronstadt sailors from the rural areas had even resorted to rebellion.

On the industrial side, due to the serious poverty and economic damage, the major industrial centers lacked those reserves such as food and fuel, and most enterprises were unable to start work, which affected the recovery of industry and transportation. In the face of such a severe economic and political crisis, the most urgent political task of the proletariat as the leading class was to change the grain policy, replacing the surplus grain collection system with grain tax, that is, the farmers paid the issued grain tax, the tax amount being lower than the surplus grain collection system, only a part of the surplus grain, and after the tax payment, the surplus grain was controlled by the farmers themselves and could be exchanged in the market through commodities. In exchange for industrial products, in order to mobilize the enthusiasm of farmers. To a certain extent, the implementation of new economic policies in the industrial field helped to restore the small industry, immediately helped the development of peasant economy and improved its productivity level, thus improving the living conditions of the workers and peasants, and consolidating the worker peasant alliance and the dictatorship of the proletariat. (2) The essence of the New Economic Policy was not the transition from communism to bourgeoisie system, but from War Communism to normal exchange of socialist products; the normal socialist product exchange is also an economic form of transition from socialism with the characteristics of small farmers occupying the majority of the population to communism. These were Lenin’s two transitional theories. Lenin quoted the viewpoint in his “‘Left-Wing’ Childishness and the Petty-Bourgeois Mentality” written in May 1918, and pointed out that the so-called “transition” in economy is the composition, parts and factors of both capitalism and socialism. He admitted that there were many mistakes in estimating the transition period for the recovery and development of the national economy and the transition of socialism, and the due time was longer than estimated before. In response to the attacks of the Mensheviks, Socialist Revolutionaries and Kautsky that “War Communism” was a mistake, Lenin, on the one hand, affirmed the historical role of the “War Communism” policy, and asserted that “War Communism” had proved its truth with the facts of victory, added that otherwise it would not be possible to defeat landlords and capital in a small peasant country whose economy was greatly damaged by the War.

On the other hand, he emphasized that “War Communism” was a special and temporary policy and method which we were forced to carry out due to war and economic damage. Its advantages were limited, and it was not a policy adapted to the economic tasks of the proletariat and could not meet the needs of peaceful socialist construction. The most ideal and “correct” policy was to exchange the industrial products needed by farmers for food. However, the actual economic level and conditions can’t do this, so we have changed the grain policy of the surplus grain collection system and implemented the grain tax system linked with the freedom of trade. The inevitable result of this should be the revival of the petty bourgeoisie commodity economy in the countryside and promoting state capitalism on the basis of free trade. In view of some people’s comments on “capitalism is a curse, socialism is happiness”, Lenin argued that this kind of comments is not correct, and pointed out that compared with socialism, capitalism is a curse, but compared with the medieval system and small-scale production, state capitalism is happiness.

According to Russia’s social and economic structure and the development level of productive forces, the development of the small economy of millions of small producers is the development of the petty bourgeoisie and capitalism, capitalism, as the spontaneous product of small production, is inevitable to some extent, and cannot realize the direct transition from small production to socialism. Therefore, it is necessary to explore the intermediate links and ways of transition from patriarchal system and small-scale production to socialism. (3) Further exploring the role of state capitalism in the transition to socialism and its forms of realization. Lenin put forward the important thought of using capitalism, especially state capitalism as a link between small production and socialism, as the way and method to improve comprehensive productivity and facilitate the transition to socialism and comprehensively explained the necessity and feasibility of using state capitalism strategy. In response to the efforts of some Communist Party members to completely prohibit and block all private non-state-owned commercial exchanges and capitalist development, Lenin severely criticized them for doing stupid things and committing suicide. He believes that both theoretical and practical problems are to find the right way to bring the inevitable development of capitalism to a certain extent and within a certain period of time into the orbit of state capitalism, so as to ensure that state capitalism will be turned into socialism in the near future. Lenin formulated four concrete forms of state capitalism. The first form is the concession system, which is the most important, simple and clear form of state capitalism. The concession system under the Soviet system is a kind of contract or alliance that the Soviet regime entered into with the state capitalism in order to oppose the spontaneous forces of the small private owners (patriarchal and petty bourgeois), that is, to directly enter into meticulous written contracts with the domestic private capital and the most advanced Western European capitalism to rent and operate mines, oil fields and forest areas that the state cannot develop or operate. Although the Soviet countries will pay some sacrifices and costs, they can strengthen the advanced machine production in place of backward manual production, strengthen the large production against the small production, and strengthen the economic relations adjusted by the state to fight against the anarchic economic relations of the petty bourgeoisie. If the concession policy is implemented properly, the production situation can be improved rapidly, the quantity of large industrial products that can be controlled by itself can be increased in the shortest time, the life of workers and peasants can be improved, and the Soviet regime can be consolidated. The second form is cooperative system, which gives small commodity producers the freedom to form production and sales cooperatives. To a certain extent, it was beneficial to the Soviet Union: First, it was conducive to the calculation and supervision of the economic activities of small-scale capitalists, as well as the implementation of the contractual relationship between the state and the capitalists, and in this regard, it is similar to state capitalism and a variant of state capitalism; Second, it is convenient to unite and organize millions of residents, even all of them. In this case, from the point of view of the further transition of state capitalism to socialism, it is another great advantage. Lenin made a comparative analysis of concessions and cooperatives. He pointed out that the basis of concession is large industry, and the foundation of cooperatives is manual, partial or even patriarchal small production; the former requires a definite contract and a definite term, and each contract is only related to a capitalist or a company or a monopoly consortium, while the latter cannot have a definite contract and a definite time limit; breaking the concession contract can immediately and simply cut off the actual relationship between the Soviet regime and the capitalist in terms of economic alliance or “cohabitation”, but not the cancellation of cooperatives; the transition from concession to socialism is the transition from one kind of mass production to another. Once the concession policy is successful, the Soviet Union will obtain a few, but modern advanced capitalist large enterprises which will be completely nationalized after several decades and become the economic foundation of socialism. The transition from small-scale cooperatives to socialism is a transition from small-scale production to large-scale production, which is more complicated and difficult. However, once the cooperative system policy is successful, it can not only completely eradicate all the deep-rooted old social relations, but also make the small economy develop, and transition to large-scale production on the basis of voluntary alliance within a predictable period of time. The third form is buying and selling on behalf of the state, that is, the state pays a certain commission to the capitalists to sell the state’s products and purchase the products of small producers. The fourth form is lease system, that is, leasing state-owned enterprises or oil fields, forest areas, land, etc. to enterprise capitalists. Leasing contracts are similar to concession contracts. The latter two forms of state capitalism have not attracted people’s attention at all. (4) The task of all the staff of the Party and Soviet organs in the process of implementing the grain tax policy was clearly put forward: to vigorously develop, promote and cultivate state capitalism, the most important thing was to apply the principles of the policy of “concession” (i.e., similar to the state capitalism of “concession system”) in order to promote free trade and local commodity circulation and other forms of state capitalism. When the recovery of large industry can only be postponed, we should devote ourselves to the things that are easier to achieve , that is, to recover small industries, to help peasants’ economy by developing small industries, and to revitalize peasants’ economy rapidly; we should give full play to the initiative and creativity of local governments and resolutely develop the circulation between agriculture and industry by all means, that is, free trade and commodity exchange. Lenin taught people not to be afraid of capitalism and deprive the landlords and bourgeoisie economically, and as long as the proletariat firmly controlled the political power and controlled the capitalist activities within a proper range and limit, the negative influence of capitalism can be prevented and overcome, and it is possible to go through private business (let alone state capitalism) that promotes socialism. This is the basic spirit of grain tax, that is, the economic significance of grain tax. (5) This article focused on the improvement of working methods in the implementation of new economic policies. The first is to oppose bureaucracy. The economic roots of bureaucracy in Soviet countries lie in the dispersion and laxity of small-scale production, the existence of poverty, congestion in transportation and illiteracy, and the lack of circulation, connection and cooperation between industry and agriculture. This kind of bureaucracy was suppressed because of the forced implementation of War Communism in the civil war, and after the war, it was fully exposed. Thus, bureaucracy was partially revived within the Soviet system, Lenin argued that the harm of bureaucracy was concentrated in the central government, and he demanded that those who worked in the central government organs should continue to improve their work and eliminate the bureaucracy within their capabilities, while the local governments could help the central government effectively fight against it. Lenin pointed out that: “On the one hand, we should promote the new young forces from below trained in various regions and tested by war and hard life, train a large number of new forces, and help the central organs overcome the habit of following the rules; on the other hand, we should transfer some staff members from the central organs to work in local areas, where they can do a good job in the whole economic work as leaders of counties and townships, especially through instructions and demonstrations so that model township or model county will play a decisive role in history. On the other hand, we should cultivate and mobilize the initiative of all localities in economic construction, especially in the use of surplus grain after paying grain tax and the use of small industry, mainly handicraft industry, to develop the circulation between industry and agriculture. We should give full play to the initiative and innovation spirit of local governments and expand their independence, and study and summarize their practical experience. Thirdly, in promoting the circulation between industry and agriculture, we should learn from the capitalists. Smart Communist Party members are not afraid to learn from capitalists. In order to study, they should not hesitate to spend money, as long as they can learn something. We should do better than the bourgeois experts around us, and be able to revitalize agriculture and industry in various ways and develop the circulation between industry and agriculture. Finally, we should try our best to help the broad masses of workers and keep close contact with the working people of all walks of life, and we should not only improve their living conditions, but also select Non-Party members from among them to undertake Soviet work, first of all economic work. To achieve this will help the implementation of the grain tax policy and dig out the economic roots of small producers. In the past, due to bankruptcy, poverty and hard life, small producers wavered and followed the bourgeoisie, but tomorrow, they will follow the proletariat, and the trained proletariat and its vanguard will surely win.”

The basic content and essence of the New Economic Policy expounded by Lenin in this article marks that important achievements have been made in exploring the socialist construction road suitable for the specific situation of Russia, creatively developed the Marxist theory of transition period, as well as the theory of socialist economic construction, which is to guide the Soviet Republic to realize the “War Communism” with surplus grain collection system as the core “communist policy”, a programmatic document for the comprehensive transformation of the New Economic Policy with grain tax as the core. It not only played an important role in the recovery and development of the national economy and the consolidation of the alliance of workers and peasants at that time, but also played a universal and far-reaching role in guiding the economically backward countries to realize the transition to socialism and develop the socialist economy by using the market, foreign capital and state capitalism after the victory of the proletarian revolution.