The Monopoly Of Foreign Trade - Lenin to Stalin

To Comrade Stalin For The Plenary Meeting Of The Central Committee

December 13, 1922

I think it is most important to discuss Comrade Bukharin’s letter. His first point says that “neither Lenin nor Krasin says a word about the incalculable losses that are borne by the economy of the country as a consequence of the inefficiency of the People’s Commissariat of Foreign Trade, due to the ’principles’ on which it is organised; they do not say a word about the losses incurred because we ourselves are unable (and will not be able for a long time for quite understandable reasons) to mobilise the peasants’ stocks of goods and use them for international trade”.

This statement is positively untrue, for in his § 2 Krasin clearly discusses the formation of mixed companies as a means, firstly, of mobilising the peasants’ stocks of goods, and secondly, of obtaining for our Exchequer no less than half the profits accruing from this mobilisation. Thus it is Bukharin who is trying to evade the issue, for he refuses to see that the profits accruing from the “mobilisation of the peasants’ stocks of goods” will go wholly and entirely into the pockets of the Nepmen. The question is: will our People’s Commissariat of Foreign Trade operate for the benefit of the Nepmen or of our proletarian state? This is a fundamental question over which a fight can and should be put up at a Party Congress.

Compared with this primary, fundamental question of principle, the question of the inefficiency of the People’s Commissariat of Foreign Trade is only a minor one, for this inefficiency is only part and parcel of the inefficiency of all our People’s Commissariats, and is due to their general social structure; to remedy this we shall require many years of persistent effort to improve education and to raise the general standard.

The second point in Bukharin’s theses says that “points like § 5 of Krasin’s theses, for example, are fully applicable to concessions in general”. This, too, is glaringly untrue, for Krasin’s 5th thesis states that “the most pernicious exploiter, the merchant, profiteer, the agent of foreign capital, operating with dollars, pounds and Swedish crowns, will be artificially introduced into the rural districts”. Nothing of the kind will happen in the case of concessions, which not only stipulate territory, but also envisage special permission to trade—in specified articles; and what is most important, we control the trade in the articles specified in the concession. Without saying a single word in opposition to Krasin’s argument that we shall be unable to keep free trade within the limits laid down by the decision of the Plenary Meeting of October 6, that trade will be torn out of our hands by pressure brought to bear not only by smugglers, but also by the entire peasantry—without saying a word in answer to this fundamental economic and class argument, Bukharin hurls accusations against Krasin that are amazingly groundless.

In the third point of his letter Bukharin writes “§ 3 of Krasin’s theses”. (By mistake he mentions § 3 instead of § 4.) “We are maintaining our frontiers”, and he asks: “What does this mean? In reality, this means that we are doing nothing. It is exactly like a shop with a splendid window, but with nothing on its shelves (the ’shut the shops system’).” Krasin very definitely says that we are maintaining our frontiers not so much by tariffs, or frontier guards, as by means of our monopoly of foreign trade. Bukharin does not say a word to refute this obvious, positive and indisputable fact, nor can he do so. His sneering reference to the “shut the shops system” belongs to the category of expressions to which Marx, in his day, retorted with the expression “free-trader vulgaris ”, for it is nothing more than a vulgar free-trader catch-phrase.

Further, in his fourth point, Bukharin accuses Krasin of failing to realise that we must improve our tariff system, and at the same time he says that I am wrong in talking about having inspectors all over the country, because export and import bases are the only point under discussion. Here, too, Bukharin’s objections are amazingly thoughtless and quite beside the point; for Krasin not only realises that we must improve our tariff system and not only fully admits it, but says so with a definiteness that leaves no room for the slightest doubt. This improvement consists, firstly, in our adopting the monopoly of foreign trade, and secondly, in the formation of mixed companies.

Bukharin does not see—this is his most amazing mistake, and a purely theoretical one at that—that no tariff system can be effective in the epoch of imperialism when there are monstrous contrasts between pauper countries and immensely rich countries. Several times Bukharin mentions tariff barriers, failing to realise that under the circumstances indicated any of the wealthy industrial countries can completely break down such tariff barriers. To do this it will be sufficient for it to introduce an export bounty to encourage the export to Russia of goods upon which we have imposed high import duties. All of the industrial countries have more than enough money for this purpose, and by means of such a measure any of them could easily ruin our home industry.

Consequently, all Bukharin’s arguments about the tariff system would in practice only leave Russian industry entirely unprotected and lead to the adoption of free trading under a very flimsy veil. We must oppose this with all our might and carry our opposition right to a Party Congress, for in the present epoch of imperialism the only system of protection worthy of consideration is the monopoly of foreign trade.

Bukharin’s accusation (in his fifth point) that Krasin fails to appreciate the importance of increasing circulation is utterly refuted by what Krasin says about mixed companies, for these mixed companies have no other purpose than to increase circulation and to provide real protection for our Russian industry and not the fictitious protection of tariff barriers.

Further, in point six, in answer to me, Bukharin writes that he attaches no importance to the fact that the peasants will enter into profitable transactions, and that the struggle will proceed between the Soviet government and the exporters and not between the peasants and the Soviet government. Here, too, he is absolutely wrong, for with the difference in prices that I have indicated (for example, in Russia the price of flax is 4 rubles 50 kopeks, while in Britain it is 14 rubles), the exporter will be able to mobilise all the peasants around himself in the swiftest and most certain manner. In practice, Bukharin is acting as an advocate of the profiteer, of the petty bourgeois and of the upper stratum of the peasantry in opposition to the industrial proletariat, which will be totally unable to build up its own industry and make Russia an industrial country unless it has the protection, not of tariffs, but of the monopoly of foreign trade. In view of the conditions at present prevailing in Russia, any other form of protection would be absolutely fictitious; it would be merely paper protection, from which the proletariat would derive no benefit whatever. Hence, from the viewpoint of the proletariat and of its industry, the present fight rages around fundamental principles. The mixed company system is the only system that can be really effective in improving the defective machinery of the People’s Commissariat of Foreign Trade; for under this system foreign and Russian merchants will be operating side by side. If we fail to learn the business thoroughly even under such circumstances, it will prove that ours is a nation of hopeless fools.

By talking about “tariff barriers” we shall only be concealing from ourselves the dangers which Krasin points out quite clearly, and which Bukharin has failed to refute in the slightest degree.

I will add that the partial opening of the frontiers would be fraught with grave currency dangers, for in practice we should be reduced to the position of Germany; there would be the grave danger that the petty-bourgeoisie and all sorts of agents of émigré Russia would penetrate into Russia, without our having the slightest possibility of exercising control over them.

The utilisation of mixed companies as a means of obtaining serious and long tuition is the only road to the restoration of our industry.

Lenin