THE New Zealand Herald AND DAILY SOUTHERN CROSS. THURSDAY, JANUARY 21, 1926. NEW SOVIET SLOGAN.

New Zealand Herald, Volume LXIII, Issue 19231, 21 January 1926, Page 8

THE New Zealand Herald AND DAILY SOUTHERN CROSS. THURSDAY, JANUARY 21, 1926. NEW SOVIET SLOGAN.

A message from Russia says that the country has adopted a new slogan, "State capitalism," and that with it there has been a renewal of industrial activity. An exact estimate of what this portends is difficult, because there is so little indication of the system underlying it. A desire to make definitely State enterprises such as the railways return a profit is apparent, while devices to stimulate production are easily discernible. Yet any announcement of a new turn to economic policy must be 1 taken cautiously, for there have been many shifts and changes since it became apparent that pure communism must be wrecked against the rock of unchanging human nature. Most of all there must be caution in deciding that, because changes in the economic structure of the country show a tendency for evolution toward the conventional systems of the remainder of Europe, therefore the Russian Government too will quietly change its form and become indistinguishable from that of other self-governing countries. In the opinion of recent observers, such a happening is highly improbable. At the outset the Government and the Communist Party were virtually identical. In the course of time the two have tended to differentiate. Many of the leading officials are still members of the party, but the two organisations have become distinct. At the same time it is expected that the present form of Government organisation will endure for many years to come. Though its policy may consist really of a series of retreats i'from Communist practice, probably enlivened by rearguard skirmishes with the die-hards of the party, communism is likely to remain the official political creed while the Soviet system endures. It may be modified again and again, as in the past, to meet the needs of everyday life, and especially in face of the strong individualism of the peasants. Yet as much of it as possible will be retained for as long as possible.

How far the State capitalism just proclaimed 'differs from the New Economic Policy of 1921, it is impossible to say. The shifts which have occurred since 1917 are numerous and intricate. In 1918 Lenin was an enthusiastic advocate of State capitalism, aiming apparently at a method of co-operation between the State and the existent capitalist organisations for the carrying on of essential industry. There immediately sprang up a lively controversy between him and the extreme wing of the Communist Party, which was demanding the wholesale expropriation of capital and the entire nationalisation of industry. Lenin lost in the struggle. State capitalism became anathema to the orthodox Communist. After a tussle with the syndicalists who desired to have industry administered by the , unions for the unions, the Soviet Government instituted a system of bureaucratic control, under which the State was to manage all industry, receive the whole proceeds of it, and reward workers according to their needs. This system was tried for from two to three years. It failed because the peasants broke it by passive resistance. One of the prime needs was for the Government to receive the whole of what the land-workers produced. The attempt to enforce this plan, euphemistically known as the requisition of grain, failed. One of the flaws was that there was nothing that could be given the peasant in return for his grain. By the beginning of 1921 the country was on the verge of ruin and complete collapse. A mutiny by the sailors of the Kronstadt garrison brought the crisis to a head. It,was based on a demand for abolition of the requisition, and, in effect, for a return to free trading in the products of the land. The mutiny was suppressed, but the alarm it occasioned led to the. abandonment of wholesale nationalisation of industry and production of all kinds. The result was the birth of Lenin's New Economic Policy of 1921. When, in 1918, Lenin advocated State capitalism, it meant the admission of the State into the existing industrial organisation. That was not possible in 1921, because the whole organisation had been swept awav. The problem was met by readmitting private capital into the nationalised industries. The first step had been abolition of the requisition. The peasant, after paying a tax in kind to the State, was allowed to dispose of his proi duce. State rationing of factory I workers necessarily ceased when the monopoly in food ended. Soon industry was reorganised by a sysI tem of State trusts, so-called, which differed in no discernible degree from joint stock companies, save that the State had a voice in their management. Money came back ! into use, and the trader reappeared. ! The workers received wages and the industries bought raw material in the open market. It was the State i capitalism advocated by Lenin, but I in a different guise and without the | name. In 1918 Lenin contemplated State control of industry then in I private hands. In 1921 private conI trol was established in industry ! owned by the State, obtained by j confiscation. This system endured i «nti! the end of 1923, when a violent reaction in the Communist Party led to an offensive against private trading. Lant year the pendulum swung hack again, vt that, promises of renewed freedom for private industrial and commercial activities were made. The enthusiasm for "State capitalism" just proclaimed is possibly the re establishment of the New Economic Policy of 1021 under the name then rejected. It is probable that the Soviet Government, which had to give way before the passive strength of the peasants in 1921, has had to bow to the same authority in 1926, admitting the existence of private property, and softening the blow by proclaiming "State capitalism."