Stalin- NEP AND MARKET RELATIONS

 Bukharin's fourth mistake is on the question of NEP (the New Economic Policy). Bukharin's mistake is that he fails to see the two-fold character of NEP, he sees only one aspect of NEP. When we introduced NEP in 1921, we directed its spearhead against War Communism, against a regime and system which excluded any and every form of freedom for private trade. We considered, and still consider, that NEP implies a certain freedom for private trade. Bukharin remembers this aspect of the matter. That is very good. 

But Bukharin is mistaken in supposing that this is the only aspect of NEP. Bukharin forgets that NEP has also another aspect. The point is that NEP by no means implies complete freedom for private trade, the free play of prices in the market. NEP is freedom for private trade within certain limits, within certain boundaries, with the proviso that the role of the state as the regulator of the market is guaranteed.

That, precisely, is the second aspect of NEP. Moreover, this aspect of NEP is more important for us than the first. In our country there is no free play of prices in the market, such as is usually the case in capitalist countries. We, in the main, determine the price of grain. We determine the prices of manufactured goods. We try to carry out a policy of reducing production costs and reducing prices of manufactured goods, while striving to stabilize the prices of agricultural produce. Is it not obvious that such special and specific market conditions do not exist in capitalist countries?

From this it follows that as long as NEP exists, both its aspects must be retained: the first aspect, which is directed against the regime of War Communism and aims at ensuring a certain freedom for private trade, and the second aspect, which is directed against complete freedom for private trade, and aims at ensuring the role of the state as the regulator of the market. Destroy one of these aspects, and the New Economic Policy disappears.

Bukharin thinks that danger can threaten NEP only "from the Left," from people who want to abolish all freedom of trade. That is not true. It is a gross error. Moreover, such a danger is the least real at the present moment, since there is nobody, or hardly anybody, in our local and central organizations now who does not understand the necessity and expediency of preserving a certain measure of freedom of trade.

The danger from the Right, from those who want to abolish the role of the state as the regulator of the market, who want to "emancipate" the market and thereby open up an era of complete freedom for private trade, is much more real. There cannot be the slightest doubt that the danger of disrupting NEP from the Right is much more real at the present time.

It should not be forgotten that the petty-bourgeois elemental forces are working precisely in this direction, in the direction of disrupting NEP from the Right. It should also be borne in mind that the outcries of the kulaks and the well-to-do elements, the outcries of the speculators and profiteers, to which many of our comrades often yield, bombard NEP from precisely this quarter. The fact that Bukharin does not see this second, and very real, danger of NEP being disrupted undoubtedly shows that he has yielded to the pressure of the petty-bourgeois elemental forces.

Bukharin proposes to "normalize" the market and to "manoeuvre" with grain-procurement prices according to areas, i.e., to raise the price of grain. What does this mean? It means that he is not satisfied with Soviet market conditions, he wants to put a brake on the role of the state as the regulator of the market and proposes that concessions be made to the petty-bourgeois elemental forces, which are disrupting NEP from the Right.

Let us assume for a moment that we followed Bukharin's advice. What would be the result? We raise the price of grain in the autumn, let us say, at the beginning of the grain-purchasing period. But since there are always people on the market, all sorts of speculators and profiteers, who can pay three times as much for grain, and since we cannot keep up with the speculators, for they buy some 10 million poods in all while we have to buy hundreds of millions of poods, those who hold grain will all the same continue to hold it in expectation of a further rise in price. Consequently, towards the spring, when the state's real need for grain mainly begins, we should again have to raise the price of grain. But what would raising the price of grain in the spring mean? It would mean ruining the poor and economically weaker strata of the rural population, who are themselves obliged to buy grain in the spring, partly for seed and partly for food -- the very grain which they sold in the autumn at a lower price. Can we by such operations obtain any really useful results in the way of securing a sufficient quantity of grain? Most probably not, for there will always be speculators and profiteers able to pay twice and three times as much for the same grain. Consequently, we would have to be prepared to raise the price of grain once again in a vain effort to catch up with the speculators and profiteers.

From this, however, it follows that once having started on the path of raising grain prices we should have to continue down the slippery slope without any guarantee of securing a sufficient quantity of grain.

But the matter does not end there.

Firstly, having raised grain-procurement prices, we should then also have to raise the prices of raw materials supplied by agriculture, in order to maintain a certain proportion in the prices of agricultural produce.

Secondly, having raised grain-procurement prices, we should not be able to maintain low retail prices of bread in the towns -- consequently, we should have to raise the selling price of bread. And since we cannot and must not injure the workers, we should have to increase wages at an accelerated pace. But this is bound to lead to a rise in the prices of manufactured goods, for, otherwise, there could be a diversion of resources from the towns into the countryside to the detriment of industrialization.

As a result, we should have to adjust the prices of manufactured goods and of agricultural produce not on the basis of falling or, at any rate, stabilized prices, but on the basis of rising prices, both of grain and of manufactured goods.

In other words, we should have to pursue a policy of raising the prices of manufactured goods and agricultural produce.

It is not difficult to understand that such "manoeuvring" with prices can only lead to the complete nullification of the Soviet price policy, to the nullification of the role of the state as the regulator of the market, and to giving a free rein to the petty-bourgeois elemental forces.

Who would profit by this?

Only the well-to-do strata of the urban and rural population, for expensive manufactured goods and agricultural produce would necessarily become out of the reach both of the working class and of the poor and economically weaker strata of the rural population. It would profit the kulaks and the well-to-do, the Nepmen and other prosperous classes.

That, too, would be a bond, but a peculiar one, a bond with the wealthy strata of the rural and urban population. The workers and the economically weaker strata of the rural population would have every right to ask us: Whose government are you, a workers' and peasants' government or a kulak and Nepmen's government?

A rupture with the working class and the economically weaker strata of the rural population, and a bond with the wealthy strata of the urban and rural population -- that is what Bukharin's "normalization" of the market and "manoeuvring" with grain prices according to areas must lead to.

Obviously, the Party cannot take this fatal path.

The extent to which all conceptions of NEP in Bukharin's mind have become muddled and the extent to which he is firmly held captive by the petty-bourgeois elemental forces is shown, among other things, by the more than negative attitude he displays to the question of the new forms of trade turnover between town and country, between the state and the peasantry. He is indignant and cries out against the fact that the state has become the supplier of goods for the peasantry and that the peasantry is becoming the supplier of grain for the state. He regards this as a violation of all the rules of NEP, as almost the disruption of NEP. Why? On what grounds?

What can there be objectionable in the fact that the state, state industry, is the supplier, without middlemen, of goods for the peasantry, and that the peasantry is the supplier of grain for industry, for the state, also without middlemen?

What can there be objectionable, from the point of view of Marxism and a Marxist policy, in the fact that the peasantry has already become the supplier of cotton, beet and flax for the needs of state industry, and that state industry has become the supplier of urban goods, seed and instruments of production for these branches of agriculture?

The contract system is here the principal method of establishing these new forms of trade turnover between town and country. But is the contract system contrary to the principles of NEP?

What can there be objectionable in the fact that, thanks to this contract system, the peasantry is becoming the state's supplier not only of cotton, beet and flax, but also of grain?

If trade in small consignments, petty trade, can be termed trade turnover, why cannot trade in large consignments, conducted by means of agreements concluded in advance (contracts) as to price and quality of goods be regarded as trade turnover?

Is it difficult to understand that it is on the basis of NEP that these new, mass forms of trade turnover between town and country based on the contract system have arisen, that they mark a very big step forward on the part of our organizations as regards strengthening the planned, socialist direction of our national economy?

Bukharin has lost the capacity to understand these simple and obvious things.