Creating the material basis of socialism- Industry Recovery

The development of the Soviet economy

Task of the NEP

 One of the most important tasks of the NEP was to create the material basis of socialism—a powerful advanced machine industry. To do this, the working class had first of all to overcome the deepest disruption in all branches of the national economy. The restoration of large-scale industry under these conditions presented great difficulties. 

It was impossible to seriously undertake the restoration of large-scale industry without having the necessary food funds. Lenin referred to the experience of 1920, when the Ivanovo textile industry began to gain momentum, but then grain and fuel resources dried up, and there was again a hitch in its progress. For a serious rise in industry, Lenin put forward the task of creating a food fund of 400 million poods of grain. And for this it was necessary to start with the restoration of the peasant economy. 

The development of the entire national economy, including industry, rested on agriculture. The rise of agriculture was a prerequisite and a necessary condition for the industrial revival of the country. But, in addition to food and agricultural raw materials, fuel and raw materials of mineral origin (ore of all kinds, oil for processing, etc.) were no less necessary for the restoration of industry. Fuel and raw materials form the material basis of the working capital of industry. During the civil war, the discrepancy between the fixed and circulating assets of industry reached extreme limits. Without resolving the fuel and raw materials problem, it was impossible to even think about restoring large-scale industry.

 “During the recovery period, the task was to revive, first of all, agriculture, to obtain raw materials, food from agriculture and set in motion, to restore industry, to restore existing plants and factories” [“History of the CPSU (b)”. Short course, p. 267.]. 

At the end of the civil war, industry was extremely poorly loaded. A large number of enterprises, including a number of powerful factories, did not work and were mothballed. Operating enterprises, with rare exceptions, worked part-time. The available labor force was far from being fully utilized. 

The industry had significant fixed assets, which were inactive and were waiting for their revival. The production fixed assets of large-scale industry in 1920 were estimated at 8,090 million rubles. (in 1926/27 prices), in 1921 - 7930 million, in 1922 - 7935 million, in 1923 - 7969 million, in 1924 - 8016 million and in 1925 - 8105 million rubles. [“The Socialist Construction of the USSR”, TsUNKhU, 1936, p. 3. By the range of industries taken into account in 1913]. These data show that during the first year of the NEP the fixed assets of large-scale industry decreased, but already in the following year the further decrease in fixed assets stopped and their growth began. During this period, capital investments in a significant part were directed to major repairs: in 1923/24 - 40%, in 1924/25 - 28% and in 1925/26 - 25%. However, the proportion of capital investment sent to new construction, grew rapidly. Thus, the main production assets were restored relatively quickly. 

The natural form of fixed assets (factory buildings, equipment, etc.) predetermines their use only for their intended purpose and only productively. They cannot become circulating assets or enter the sphere of individual consumption. 

The situation is different with working capital. They in their material form - as fuel, lubricants, raw materials, etc. - are entirely consumed in the production process and acquire a different natural form. Having entered production, the elements of circulating assets do not retain their independent form in relation to the manufactured product; exposed to the life-giving influence of labor, they acquire a different material appearance in the finished product. The constituent parts of circulating assets, wholly consumed in the process of production, must be constantly renewed in their former natural form. Their peculiarity is also that they can be used for other production and non-production purposes. Coal intended for metallurgy and other industries, can be successfully used both in transport and for home heating. The same can happen with metal, with different types of raw materials included in the material elements of working capital. The material form of working capital allows their use for a variety of purposes. 

During the period of the civil war, the circulating funds of industry were extremely depleted and were not renewed in the required form and in the proper quantity. The depletion of working capital was caused by a sharp drop in the level of production in the mining industry (coal, oil, ore, etc.), metallurgy, and a catastrophic reduction in the collection of industrial crops in agriculture during the civil war. Meanwhile, without the restoration of working capital, there could be no question of restoring industry in general. For the rise of industrial production at that time, even the question of labor power did not have the acuteness that circulating assets had acquired. Bread for workers, fuel and raw materials for industry then constituted the main condition for the industrial revival of the country. Of course, the problem of fuel and raw materials is broader in its meaning, than the question of the circulating funds of large-scale industry, since fuel is used not only for the needs of industry, but raw materials are also necessary for small-scale handicraft industry. However, this does not change the situation that without solving the fuel and raw material problem it was impossible to solve the problem of circulating assets of large-scale industry. Fuel occupied an exceptional place in the restoration of industry. By the end of the civil war, the production of those industries that demanded more than others fuel and raw materials, mainly of mineral origin, fell especially sharply. 

In the early years of the NEP, the consumption of wood fuel increased significantly. In comparison with pre-war times, coal consumption has fallen sharply in all branches of the national economy, even in railway transport, where any transition to less valuable types of fuel is fraught with great difficulties. In 1913, coal accounted for 62% of all fuel consumed by railroads; in 1921/22, the share of coal in the fuel consumed by railways more than halved to 27.2%, in 1922/23 it rose to 36.2%, and in 1923/24 — up to 51.1%. The consumption of coal in industry has fallen even more. In 1913, industry consumed 67.1% of coal and 32.9% of other fuels, mainly firewood, and in 1923/24, coal consumption in industry was only 42% of the total amount of fuel consumed. 

During this period, firewood was brought to the railway exclusively on peasant horses. Thus, the resolution of the fuel question was closely dependent on the state of agriculture. Coal mining, in turn, rested on the food issue. The supply of coal basins with grain largely determined the success in coal mining. 

In connection with the beginning of the rise of agriculture, state procurement of grain products increased from year to year. Suffice it to point out that in 1925/26 they increased by 133.7% in comparison with 1921/22. The solution of the food question served as the starting point, in particular, for the solution of the fuel problem. In 1921/22, 11324 thousand tons of anthracite and coal were mined, in 1922/23 - 12700 thousand, in 1923/24 - 16328 thousand, in 1924/25 - 16520 thousand and in 1925/26 - 25770 thousand tons. 

Stocks of raw materials, primarily agricultural raw materials, grew. The collection of industrial crops systematically increased. In 1925-26, the country as a whole almost reached the pre-war level of production in terms of industrial crops. Raw cotton in 1925/26 was collected in comparison with the pre-war level of 89.4%, flax fiber - 83.8%, hemp fiber - 112.4%, oilseeds - 137.1%, yellow tobacco - 164 .7%, shag - 173.9%, etc. From the above figures it is clear that in many industrial crops the gross agricultural output in 1925/26 exceeded pre-war levels. The raw material base of the food industry was in the most favorable condition. 

The situation was worse with raw materials of mineral origin. The extraction of oil without gas in 1925 amounted to 7483 thousand tons or 81% in relation to the extraction of 1913, iron ore - 2190 thousand tons or 23.8% of the extraction in 1913. From these data it follows that the level of extraction of fuel and raw materials of mineral origin lagged far behind the size of the production of agricultural raw materials. 

The raw material base of the light and food industries was restored in a shorter period than the raw material base of the heavy industry. This, to a certain extent, explains the backwardness of heavy industry in the early years of NEP. The interests of the rise of heavy industry demanded an accelerated rise in its raw material base. The metal industry, which is the basis of heavy industry, by the end of the recovery period, began to intensively pull up the iron ore industry. In 1925 alone, ore mining more than doubled. 

The financial policy of the proletarian state was also subordinated to the task of strengthening the circulating assets of large-scale industry, the all-round development of industries that produce fuel and raw materials for industry and transport. Particular attention was paid to the financing of the extractive industry. The gross output of the mining industry for 1921/22 was estimated at 194.5 million pre-war rubles, and that of the manufacturing industry at 1,298.7 million pre-war rubles. Production of the extractive industry in the same year accounted for 13% of the gross output of large-scale industry. In the following year, 1922/23, the gross output of the extractive industry was estimated at 219.2 million, and that of the manufacturing industry at 1,730.1 million pre-war rubles. The share of extractive industry products decreased to 11.3%. From the end of 1921 to May 1922, about 30 million rubles were allocated to industry. gold, with 45% of this amount going to the fuel industry and about 25% to the metal industry. In 1922/23, the extractive industry received from the state 61,035,300 red rubles, or 43.6% of all budget appropriations for industry. Thus, the extractive industry, whose share in all industrial output is small, received the lion's share of state appropriations. 

Increased funding for this branch of industrial production was dictated by the need to expand the raw material base of large-scale industry as soon as possible. 

The credit granted to industry in 1922/23 was used mainly to replenish working capital. 

In the same year, a large loan - 21.5 million red rubles - was received through the State Bank by the textile industry for the purchase of foreign cotton. In 1921/22, 15,000 poods of cotton, 258,000 poods of tannins, 85,000 poods of rubber, etc. were imported from abroad; in 1922/23, 1,828,000 poods of cotton, 1,275,000 poods of tannins, and 165,000 poods of rubber were imported. 

All these figures show what importance the Soviet government attached at that time to restoring the working capital of large-scale industry and what measures it took to solve this problem. 

In 1921, the output of large-scale enterprises was about five times lower than before the war, while the number of workers employed in it was only two times less than in 1913. The output per worker in 1921 was 2 1 / 2 times less than the output of one worker in 1913. 

In the early years of NEP, large-scale industrial enterprises undoubtedly had major shortcomings in the organization and discipline of labor. However, this alone cannot explain such a large drop in labor productivity, the main reason for which was an acute shortage of food, as well as fuel and raw materials for industry. The low level of labor productivity, in turn, affected the cost of production. 

The reduction in the cost of production of large-scale industry was in direct proportion to the resolution of food, fuel, and raw material issues. Without this, the full load of enterprises and a serious rise in labor productivity were unthinkable. 

The beginning rise in agriculture and the growth of the country's food, fuel and raw material resources ensured a rapid increase in the working capital of large-scale industry and an increase in the workload of enterprises. The necessary prerequisites and conditions were created for the restoration of large-scale industry. Plants and factories received the necessary fuel and raw materials, workers - bread and other foodstuffs. But the realization of these conditions required the heroic efforts of the working class, its labor enthusiasm. 

During this period, the working class quickly consolidated its ranks. Workers began to return to factories and plants. For five years (from 1921 to 1925), the number of workers in the factory industry increased by 64% - from 1185 thousand to 2107 thousand people, which amounted to 81.1% of the number of workers in 1913. It is characteristic that the products of large-scale industry during this time increased from 2004 million rubles. [For comparison with 1913, the data in the text are given without the products of the fishing industry, logging, and railway repair shops. The diagram shows the gross output of large-scale industry for a full range of industries.] up to 7739 million rubles. (in 1926/27 prices), that is, almost four times. In comparison with 1921, output per worker in 1925 more than doubled: from 5.7 rubles. for one man-day worked, it increased to 11.9 rubles. 

Thanks to the great work done by the party of Lenin-Stalin in organizing and educating the working masses, Lenin's slogan of raising labor productivity began to be successfully implemented. Strengthened labor discipline. The number of working days increased from 221.5 in 1921 to 261.9 in 1925, that is, by 18.2%. Absenteeism for unexcused reasons decreased from 20.6 to 7.4 days per year on average per worker. Increased organization in the work of enterprises. 

The political and industrial activity of the working class grew. His labor enthusiasm was a powerful engine of the industrial rise of the country. The advanced workers were the pioneers in the movement for austerity and the rationalization of production. Production meetings of workers at enterprises played a special role at that time. Production meetings consisted mainly of workers from the machine tool; they were attended by members of the factory committee and representatives of the administration. The meetings educated the productive assets of enterprises and drew the broad masses of workers into active participation in socialist construction. The enormous fundamental significance of the work of production conferences consisted in the fact that here the working masses, solving specific problems of production, learned the state approach to the economy, they brought up a communist attitude to work and national property. Many excellent business executives and administrators subsequently grew out of the asset of production meetings. 

Guided by the Leninist plan for the restoration of industry, starting with agriculture, solving the food problem on this basis, and then the raw material problem, the working class of our country from the very beginning of the NEP ensured a high rate of industrial progress in the country. Large-scale industry began to recover rapidly, its gross output increased significantly every year. In 1925, it reached 7,739 million rubles. (in prices of 1926/27) against 10251 million rubles. in 1913 (in a comparable circle), and in 1926 it already exceeded the level of pre-war industrial production by 8.1% [For comparison with 1913, the data in the text are given without the products of the fishing industry, logging, and railway repair shops. The diagram shows the gross output of large-scale industry for a full range of industries.] (see diagram No. 1). 

Gross output of large-scale industry (in billion rubles; in 1926/27 prices) – 1920 1.7, 1921 2.4, 1925 8.4 

During the five years of the recovery period, industrial production increased 5 1/2 times . The rise of large-scale socialist industry was much faster than the growth of small-scale handicraft industry. In 1920, the industrial output of large-scale socialist industry exceeded the gross output of handicraft industry by only 24%, and in 1924/25 by 315%. 

Lenin's plan for the electrification of the country was successfully carried out. The operation of power plants has improved significantly, their number and average size of enterprises have increased. In 1925, in comparison with 1921, the output of power stations increased almost sixfold, surpassing pre-war levels. All power plants in the country in 1925 generated 2925 million kWh against 1945 million kWh in 1913.

Significant investments were made for that time in the state industry. In 1923/24, capital investments in industry amounted to 245.3 million rubles, in 1924/25 - 395.3 million, and in 1925/26 - 858.3 million rubles. [1923/24 without housing construction, and the rest of the years with the industrial housing fund, at the prices of the corresponding years.]. During these three years about 1.5 billion rubles were invested in socialist industry. 

Let us present some summary data on the dynamics of growth in the output of large-scale (qualified) industry. 

Production of large-scale industry in the USSR ["Socialist Construction of the USSR", TsUNKhU, 1936, p. 2. By sectors recorded in 1913 (excluding the fishing industry, logging, timber rafting and railway repair shops).]

  

	1913	1920	1921	1922	1923	1924	1925
Gross output in 1926/27 prices (in million rubles)
All industry Production of means of production Production of consumer goods	10251  4177 6074	1410  665 745	2004  876 1128	2619  1173 1446	4005  1925 2080	4660  2109 2551	7739  3356 4383
Product growth rate (in % to the previous year)
All industry  Production of means of production Production of consumer goods	—  — —	—  — —	142.1  131.7 151.4	130.7  133.9 128.2	152.9  164.1 143.8	116.4  109.6 122.6	166.1  159.1 171.8
Production volume index (1913 = 100)
All industry  Production of means of production Production of consumer goods	100  100 100	13.8  15.9 12.3	19.5  21.0 18.6	25.5  28.1 23.8	39.1  46.1 34.2	45.5  50.5 42.0	75.5  80.3 72.2
Share of large-scale industry products (percentage)
Production of means of production Production of consumer goods	40.7 59.3	47.2 52.8	43.7 56.3	44.8 55.2	48.1 51.9	45.3 54.7	43.4 56.6

 The table shows that the growth rates of industrial output in the USSR during the recovery period were very significant. The average annual increase in finished industrial products over these five years reached 41%. 

None of the capitalist countries in the post-war period restored their industry with such speed. The industrial production of France as a result of the imperialist war fell in 1920 to 62% against the level of 1913. It took six years (from 1919 to 1924) to restore industrial production to pre-war levels in France. In doing so, she used the huge reparations she received under the Treaty of Versailles. It took Germany nine years to restore its industrial production to pre-war levels - and this was subject to a large influx of foreign, especially American, capital. Thus, already in the recovery period, the Soviet economic system showed its enormous advantages over the capitalist economic system. 

The recovery of industrial production in our country has been uneven in individual years. The highest rates of annual growth in industrial output were in 1923 (52.9%) and in 1925 (66.1%); the lowest rates were in 1922 (30.7%) and in 1924 (16.4%). A study of this issue shows that the slowdown in the recovery of industrial production in some years was in close connection with the state of agriculture and the conditions for the sale of agricultural and industrial products. The crop failure of 1921 could not but affect the pace of the rise in industrial production. Difficulties in the supply of food and agricultural raw materials greatly affected the state of industry. The good harvest of 1922 contributed greatly to the rise of industry. In 1923, the increase in industrial output reached 52.9%. In 1924 the rate of growth of industrial production has declined. This was due, to a certain extent, to sales difficulties that arose in the autumn of 1923 in connection with a significant divergence in prices for industrial and agricultural products, which led to the formation of large stocks of industrial goods and affected the growth rate of industrial output. 

Characteristic of the first years of the NEP was the lagging behind of heavy industry. This issue was at that time the most acute for the industrial production of the Soviet country. The proportion of the production of means of production in the industrial output of the country not only did not increase, but even somewhat decreased. In 1921 it was 43.7% (in large-scale industry), in 1923 it increased to 48.1%, in 1924 it decreased to 45.3% and in 1925 to 43.4%. In 1925, the share of production of means of production in the industrial output of the country was lower than in 1921. 

There is nothing unexpected in this, because first of all, the raw material base of the light and food industries was restored, since the restoration of the national economy began with agriculture. The policy of the Soviet government at that time was aimed at the fastest possible restoration of industry, which produced products suitable for exchange for bread, which the peasants then most needed. This did not in the least contradict the interests of boosting heavy industry, for only on this basis could the proletarian state move heavy industry forward by force. 

Light industry since the beginning of the new economic policy has become more confident on the path of recovery. The textile, leather, fur, sugar, and other branches of light industry have made a sharp upward leap since the first year of NEP. Production of the cotton industry by 40.2%, rubber by 146.6%, and so on. (in prices of 1926/27) against 6074 million rubles in 1913. 

The heavy industry of our country was also restored. But the pace of its recovery somewhat lagged behind the pace of the rise of light industry. The production of heavy industry increased from 876 million rubles. (in prices of 1926/27) in 1921 to 3356 million rubles. in 1925, that is, by 283%. The output of the light and food industries increased during the same period from 1,128 million to 4,383 million rubles, i.e., by 289%. The renewal of equipment, the expansion and construction of new light industry factories required the creation of a developed machine building industry, a large building materials industry, etc. 

Lenin repeatedly spoke about the backwardness of heavy industry in the first years of NEP. He noted this fact in his report at the Fourth Congress of the Comintern. Lenin pointed out that heavy industry in any capitalist country usually required large subsidies. “The economic history of the capitalist countries proves that in backward countries only long-term loans of a hundred million dollars or gold rubles could be a means for raising heavy industry” [Lenin, Soch., vol. XXVII, p. 348.]. Speaking about the tasks of restoring heavy industry in our country, Lenin emphasized: “Heavy industry needs state subsidies. If we don't find them, then we, as a civilized state—I don't even say as a socialist state—are lost” [Ibid., p. 349.]. 

In this regard, Lenin pointed out that the proletarian state must cut hard on everything - both on the state apparatus by reducing it and on all other public expenditures. “We save on everything, even on schools” [Ibid.]. 

From these statements of Lenin we see that the question of heavy industry has always occupied an exceptionally large place in the policy of the Soviet government. But it acquired a special urgency towards the end of the recovery period. 

During the civil war, the production of metal fell especially sharply. Although this industry was rapidly recovering, in terms of its level, it continued to lag significantly behind the pre-war volume of production. In 1925, 1,535,000 tons of pig iron were smelted against 4,216,000 tons in 1913, i.e., 36% of pre-war levels. Only 2,135,000 tons of steel were smelted against 4,251,000 tons in 1913. Ferrous metallurgy at that time was only just beginning to really gain momentum. In 1924, only 755 thousand tons of pig iron were smelted, in 1925 production was doubled. 

It follows from these data that the decisive branches of heavy industry have not yet reached their pre-war levels. The question of the metal industry was specially brought up for discussion at the Fourteenth Party Conference. 

In a report to the activists of the Moscow organization of the RCP (b) on May 9, 1925, Comrade Stalin pointed out the exceptional importance of the metal industry: “The growth of the metal industry is the basis for the growth of the entire industry in general and the national economy in general” [Lenin and Stalin, Collection of Works for the Study of the History of the All-Union Communist Party of Bolsheviks ), vol. III, p. 26.]. The party set the task of turning our country into a metal one. Under the leadership of the Bolshevik Party, the entire working class undertook to carry out this task. 

During the recovery period, not only was the restoration of industry within the former, pre-war framework and on the same technical basis, but during this period there was also a partial reconstruction of industry, the technical base of large-scale industry was gradually changing. Electricity quickly penetrated the industry. The capacity of power plants, especially regional ones, was systematically increased, and the coefficient of their use increased. Summing up the results of the electrification of the country, Comrade Stalin at the Fourteenth Congress assured the Party that, proceeding from the rates of electrification taken, the Goelro plan would be carried out within the scheduled time. As you know, it was completed ahead of schedule. 

Modernization of state industry equipment began on the basis of advanced technology. Some branches of industry have taken a significant step in the matter of technical re-equipment. The most revealing in this respect was the oil industry. In 1913 the Russian oil industry was dominated by the most backward method of extraction - bagging, which covered 90% of all production. Oil extraction by compressors was almost non-existent. In 1925/26, only 22.9% was extracted by bailing, 29.5% by pumps, and 16.5% by compressors. From these data one can see how advanced the technology of the oil industry has advanced. 

The reconstruction of the coal industry also began. Small artisanal mines were closed, coal mining in which became clearly inexpedient. Funds allocated to boost the coal industry were directed primarily to the restoration and improvement of the work of large mines. Such a measure was fully justified at that time, it ensured the most productive use of capital investments and the earliest possible development of the coal industry. Before the war, coal mining was not carried out by cutters. In 1925/26, there were already a fair amount of these machines in the Donbass. 

The above data testify to the great work done in the field of rationalization of production. 

Reorganizing itself on the basis of modern technology, industry began to fulfill its tasks of reorganizing agriculture. During this period, the beginning of the production of tractors within the country was laid. In 1922/23, the first two experimental tractors were produced; the following year, 10 of them were produced, in 1924/25 - 481 and in 1925/26 - 813. The former Putilov plant acted as a pioneer in the technical re-equipment of the country's agriculture. 

It should be noted that during the years of the recovery period, agricultural engineering in our country grew much faster than other branches of heavy industry. During the five years of the recovery period, the production of coal and oil doubled, and plows - seven times, seeders - seven times [1922-1925], reapers and mowers - 26 times and threshing machines - 38 times. 

Socialist industry rapidly expanded and strengthened its production ties with agriculture, re-equipping it, creating a new technical basis for agriculture in our country. The machine supply of agriculture in 1925/26 was expressed in the amount of 123.5 million rubles. This year alone, the machinery park of agriculture has been updated by 15%. 

The data presented testify to the technical and economic shifts that have taken place in certain industries. However, this was only the beginning of the reconstruction of the national economy. The main task of the reconstruction was still ahead. 

Despite the rise of industry and the involvement of workers in production, there was still unemployment in the country. At the end of 1923 there were about a million unemployed in the cities. The unemployment that existed in the USSR was a temporary phenomenon. The main source of its formation was the countryside, which threw into the city a relatively excessive labor force in agriculture. Unemployment, which existed in the USSR before the victory of the collective-farm system in the countryside, can by no means be identified with unemployment in the capitalist countries, where it is an inevitable companion of capitalist production and where the unemployed constitute its reserve industrial army. The cyclical development of capitalist production is impossible without a reserve army of labor. Production in the USSR does not know cyclicity, it knows only one way: systematic and continuous movement forward. 

During this period, capitalist rationalization of industrial production was intensively pursued in the most important capitalist countries. This rationalization led to a reduction in workers, increasing the army of unemployed. Unemployment in these countries became chronic during the period of the general crisis of capitalism. 

The situation was completely different in the USSR, where socialist rationalization, while ensuring an increase in production and labor productivity, was accompanied by a significant systematic increase in the number of employed workers. 

At that time, even the large-scale industry of the USSR was not socially homogeneous. In industry, there was a struggle between the elements of socialism and capitalism. It presented several forms of economy: socialism, capitalism, and small-scale production; along with private capitalism, state capitalism existed, and concession enterprises operated. The share of concession enterprises was small. In 1924/25 there were 14 concession enterprises in the licensed industry, employing 4,531 workers and employees. These enterprises gave a gross output of 11.5 million rubles. In 1925/26, the number of concession enterprises increased to 52, and the number of employees in them - up to 15,714 people. In the same year they gave 0.4% of the total gross output of large-scale industry, or 35.4 million rubles. in absolute terms. 

By the end of the recovery period, the first results of the activity of foreign capital in the USSR had already been determined. The international bourgeoisie was defeated in the war against the Soviet Union. The struggle was transferred to the economic area. “Concessions,” Lenin pointed out, “is nothing but a new form of war” [Lenin, Soch., vol. XXV, p. 511.]. A concession is a kind of war, a struggle, a competition between two forms of economy. Two worlds collided here - socialist and capitalist. In connection with the admission of concessions in the Soviet country, Lenin pointed out that as long as capitalism and socialism exist, there can be no talk of peace between them, "either one or the other." For a certain period of time, the war with weapons and tanks was replaced by an economic war. 

The share of concessions in the gross industrial output was negligible. Nevertheless, their role in the class struggle was significant. 

The concessions did not produce the desired results. Many of the concession enterprises did not fulfill the agreements concluded with the Soviet government and used primitive means of production. Under such conditions, the main goal pursued by the Soviet government - to adopt the technical culture of the West and America - was not achieved. But that's not all. Many concessions were used by foreign states as residences for their spy agencies. For example, as it turned out later, the agents of the Metro-Vickers concession carried out active wrecking work to destroy our power plants. During the trial of the Trotskyist spies in January 1937, it was revealed that the Trotskyists had connections with foreign firms. These firms used the possibility of legal penetration of their agents into our country for espionage and sabotage activities. Through the concession of Lena Goldfields, the traitor Trotsky in 1926 contacted the British intelligence service Intelligence Service, becoming its agent - a spy. The counter-revolutionary connection of the Trotskyists with these firms indicates that some of the foreign concessions were used as a link between the sabotage and espionage activities of the Trotskyists and foreign intelligence agents who penetrated into our country. These facts confirm the full depth of Lenin's instructions that concessions are the same as war, only in different forms. 

On July 5, 1921, by a decree of the Soviet government, the provincial economic councils were granted the right to lease small industrial enterprises to cooperative organizations and private individuals. 7449 enterprises were intended for leasing, by the end of 1923, 76.5% of this number were leased. In terms of the number of leased enterprises, the first place was occupied by food and leather enterprises. These enterprises did not require large investments, they worked on local raw materials and for the local market. Among the tenants at that time, private individuals prevailed - 52% of the total. 30% of tenants were former owners. 37% of these enterprises were handed over to cooperatives, including labor artels. On average, there were 17 workers per enterprise leased out in 1923. In all enterprises rented by private entrepreneurs, 80-90 thousand people worked in the same year. workers [See "Russian Industry in 1923", Yearbook of the Supreme Economic Council, pp. 43, 44, 45.].

Gross output of private capitalist enterprises of the factory industry in the first years of NEP grew in absolute terms: in 1923/24 it amounted to 198.6 million rubles, in 1924/25 - 253.7 million and in 1925/26 - 362.9 million rubles. At the same time, its share in the output of the factory industry was declining: in 1923/24 it was 4.37%, in 1924/25 - 3.7%, and in 1925/26 - 3, 62%. As can be seen from the data presented, private capital increased its output in the factory industry by 82.8% in just two years. 

The number of workers in capitalist enterprises also grew to a certain extent. Part of the workers, who did not find application for their labor in state enterprises, was forced to go to work for a private entrepreneur. Private capital used this circumstance to intensify the capitalist exploitation of the workers, trying to circumvent the laws of the Soviet government on the protection and protection of labor, exploiting minors (under sixteen years of age), violating the eight-hour working day, not observing the rules of labor protection, etc. 

Private capital, looking for an easy and quick profit, revealed in all its nakedness a predatory speculative character. The capitalists approached the matter in this way: to pluck as much as possible and do it in the shortest possible time. In this way they destroyed the equipment. 

Among the handicraft artels in 1926 there were a significant number of "wild" cooperatives, i.e., not included in the system of industrial cooperatives and thereby avoiding state control. Of the 1065 "wild" cooperatives surveyed in Moscow, 10% turned out to be pseudo-cooperatives that exploited hired labor. In general, in the industrial cooperation at that time there were 47% of the total number of employees working in it. 

All measures taken by the Soviet authorities aimed at limiting the capitalist, predatory tendencies of private capital met with desperate resistance from the latter. The class struggle in industry developed and intensified not only between socialist and capitalist enterprises. Within every capitalist enterprise there was a struggle between workers and capitalists. 

The Trotskyists and Zinovievites denied the socialist character of the enterprises of state industry, considering them to be state capitalist. This vile slander against state industry was completely exposed by Comrade Stalin. 

Comrade Stalin has shown that state-owned enterprises are, in their type, consistently socialist enterprises. They represent not two opposing classes, as is the case in capitalist enterprises, but one class—the working class that owns the means of production and is not exploited by anyone, the working class that works for itself, for its proletarian state. Along with enterprises of the consistently socialist type, owned by the state, there were at that time socialist enterprises based on cooperative ownership of the means of production. In cooperative enterprises, of course, excluding pseudo-cooperatives, there could also be no capitalist exploitation of the labor of others, by their nature they could not serve as a source of enrichment for individuals. Another thing is private capitalist enterprises. In them, as well as in state capitalist ones, two classes are represented: the exploiter - the capitalists, and the exploited - the proletariat. Here there can be no question of the common interests of these two classes; the social abyss between them is impassable. 

The class struggle in private capitalist and state capitalist enterprises in the conditions of the socialist offensive against the capitalist elements was constantly aggravated. Private entrepreneurial capitalists sought to shift their failures and defeats in the struggle against socialist enterprises onto the shoulders of the workers, intensifying their exploitation. Using all sorts of tricks, they lengthened the working day, forced workers to work in unsanitary conditions, avoided hiring union members, etc. 

Relying on Soviet legislation and the power of the dictatorship of the proletariat, the trade unions organized working masses within private capitalist and state capitalist enterprises, who gave a due rebuff to the capitalists, fighting for their vital interests. 

The successes of the recovery period were the most severe blow to the capitalist elements in the national economy of the USSR. Relying on the restored large-scale socialist industry, the working class of the USSR intensified its offensive against capitalism. 

The class enemy and his agents - the Trotskyites and Bukharinites - tried by all means to prevent the restoration of the national economy of the Soviet Union. Despite the high rates of growth of socialist industry, the enemies of Bolshevism—the Trotskyists—proposed by the end of the restoration period to take super-industrialist fantastic rates. These proposals had a clearly provocative, counter-revolutionary character. They proceeded from the Trotskyist counter-revolutionary position on the so-called "initial socialist accumulation", which, by analogy with the initial capitalist accumulation, should occur at the expense of the ruin of the peasant economy. With their super-industrialist delusions, the Trotskyists tried to provoke a conflict between the working class and the peasantry, thereby disrupting the alliance between them and leading the revolution to death. 

The Communist Party, carrying out the behests of Lenin, under the leadership of its leader, Comrade Stalin, exposed the Trotskyists and led the working people of our country, after the end of the restoration period, along the path of socialist industrialization. During the first five years of NEP, the Soviet country came close to solving an even more ambitious task - socialist industrialization as the basis for the reconstruction of the entire national economy. 

Summing up the country's economic situation by the end of the period of restoration of the national economy, Comrade Stalin said: “Now we have about 4 million industrial proletariat. This, of course, is not enough, but it is still something to build socialism and build the defense of our country at the fear of the enemies of the proletariat. But we cannot and must not stop there. We need 15 to 20 million industrial proletarians, electrification of the main regions of our country, co-operative agriculture, and a highly developed metal industry. And then we are not afraid of any danger. And then we will win on an international scale” [Lenin and Stalin, Collection of Works for the Study of the History of the All-Union Communist Party of Bolsheviks, Vol. III, p. 27.]. 

Already at that time, the foundations of Stalin's policy of socialist industrialization of the country were laid. The party was preparing for a new stage in the struggle for socialism. The main task of the new economic policy in that period was to build the foundation of a socialist economy in conditions of an expanded trade turnover. In the first period of the New Economic Policy, from 1921 to 1925, the party and the Soviet government approached this task primarily from the point of view of raising agriculture. It was impossible to build the foundation of a socialist economy without creating a powerful, advanced industry. But we could not begin with the creation of a large machine industry in the first period of NEP, because the appropriate prerequisites had not been created for this. The Soviet government began the restoration of the national economy in conditions of an extreme shortage of bread, fuel, and raw materials. On the basis of the restoration of agriculture, the food problem was resolved, which ensured the influx of workers to factories and factories and created conditions for a serious rise in labor productivity. The resolution of the food problem played a decisive role in creating the necessary fuel resources. The rise of agriculture restored the agricultural raw material base of industry—the production of cotton, flax, leather, beets, etc. It also served as the basis for the growth of ore, oil, logging, etc. Having resolved all these issues, the working class fully activated, brought the movement of the existing production apparatus of large-scale industry, which he inherited from the old system. Further, forward, he could go only by reconstructing and expanding his industry. The center of gravity has shifted towards the industry. Now the advance of the entire national economy was already resting on industry, and above all on the production of means of production. Agriculture itself also could not move forward without new agricultural machines, tractors, and other industrial products. 

The recovery period had, as noted in the "Short Course on the History of the All-Union Communist Party of Bolsheviks", three significant shortcomings. 

First, he dealt with old plants and factories, whose technically backward equipment was worn out and needed to be updated on the basis of advanced technology. 

Secondly, the industry of this period relied on a narrow base, for the machine-building industry occupied an extremely insignificant place in the national economy. 

Thirdly, the recovery period brought light industry, first of all, to the road. The further development of the latter also rested on the weakness of heavy industry. 

All this led to new tasks, which primarily consisted in re-equipping existing enterprises and creating new means of production, thereby placing emphasis on the development of heavy industry. 

The country has entered a new period of NEP, a period of struggle for the direct implementation of socialist industrialization. The XIV Congress of the All-Union Communist Party of Bolsheviks (December 1925), having summed up the results of the restoration period, set a course for the industrialization of the country, for the development of the production of means of production, thus opening a new page in the heroic struggle for socialism.