Date: 1921-11-29
Source: ru:LS/v23

l*-:
P O P R A V K I K T E Z I S A M V S N X «O K H O Z Y A Y S T V E N N O Y
P O L I T I K E » K
[November 29, 1921]
Draft Outline.
THESES ON ECONOMIC POLICY.
1) The initial results of practical implementation under the new economic policy enable us to clearly delineate a number of fundamental questions confronting the Russian national economy—questions that demand the most urgent resolution.
State Industry.
2) Establishing sound relationships between industrial enterprises, associations, and economic bodies on the one hand, and budgetary and supply agencies on the other, is a pivotal issue determining the success or failure of state industry. As the sovereign master of enterprises and of all produced goods, the state must rely on enterprises and associations that are fully empowered in matters of production within the bounds of approved programs—and that enjoy substantial authority in the commercialization of their own output, commensurate with the scale of state-supplied inputs. A rigid, formalistic budgetary and accounting regime, especially during periods of rapid change in economic forms, would serve as a significant brake on the development of our national economy, leading only to the highly undesirable arbitrariness with which Soviet officials could exercise control over industry. The way forward lies in fostering and developing the initiative and self‑activity of leaders in state industry.
Is there already a resolution—seems it was No. 1921?—to increase the autonomy of individual enterprises? That’s more precise. This must be concretized, taking into account practical experience.
The present text of § 2 is far too general—and empty.
3)
The primary tasks facing state industry are to increase output and to reduce its cost of production. These objectives can be achieved only through strictly economic management of enterprises, meticulous accounting for all elements of production, and rationalization of administrative processes (ruthless streamlining of bloated bureaucracies, improved remuneration for the remaining staff, abandonment of bureaucratic work practices, and so forth).
And § 3 is also far too general—and empty.

FIRST RESULTS OF THE NEW ECONOMIC POLICY
Supply to Industry.
4)
Experience has shown that only when enterprises maintain adequate food reserves can they transition to new forms of economic management. Therefore, it is essential not only to build up two‑month food reserves but also to ensure that the key sectors of our national economy are adequately supplied until the next harvest. The same principle applies to the financing of industry.
An enterprise must know precisely how much money it has at its disposal each month, so that it can promptly take measures to guard against disruptions and interruptions in operations.
Add:
In particular, the question of leasing state-owned property by tenants—especially in §§ 5 and 6.
5)
The inadequacy of state supply combined with the existence of a vibrant market compels enterprises to adopt a mixed system of supply: drawing on state resources while simultaneously procuring goods from the open market. The relative weight assigned to these two modes of supply depends on the importance of a given industrial sector within the broader national economic system, as well as on the availability of state resources. It is necessary to reserve full state supply for those industries whose products are of particular interest to the state—such as mineral fuels, military industry, and the like. At the same time, enterprises and local people’s economic councils should establish their own wholesale trading apparatuses, bearing in mind the precise intent of the grain tax law—and the gradual reduction of that tax.
in a well‑defined relationship with
the Central Union?
The Center of Property.
6) With the revival of industry and its transition toward the principles of economic accounting, the problem of relations between the central authorities and local units, as well as between enterprises and economic bodies, undergoes a profound transformation. Only the new economic policy has laid a solid foundation for overcoming the remnants of centralism—the petty, paternalistic oversight of the state and the excessive vertical integration of power. The central authorities retain responsibility for planning, production programming, state supply and financing, regulation, and oversight. Management—with all its functions—shifts to the local level. Dialogic relationships are established between provincial people’s economic councils and enterprises located within the province. Enterprises directly subordinate to the central authorities or to industrial bureaus carry out their work in close coordination with the corresponding provincial economic councils.
Trade Unions.
7) Alongside their traditional tasks of participating in industrial management together with economic bodies, discussing production plans, and negotiating tariffs, life itself is presenting unions with a host of new challenges. As the process of commodity circulation becomes increasingly dynamic, the role of trade unions takes on immense significance. Depending on whether the state succeeds in mastering the realm of commerce—or is forced to cede this domain to private capital—the material well‑being of the working masses will depend to a great extent on the outcome.
Therefore, the ties between trade unions and cooperatives must be strengthened. Workers must learn to engage in trade—not only for their own benefit, but also for the good of the state. Another major, emerging task that life is placing before trade unions is the organized participation of the working class in financial affairs. The introduction of taxes and the establishment of state monopolies cannot—and must not—proceed without the active involvement of trade unions.
These “old” tasks require further elaboration: the forms of participation; the consultative vote; candidate lists; better screening of candidates; learning how to manage effectively, and so forth. Worker cooperatives must… and so on.
Forms of participation:
the consultative vote.
Screening.
Candidates.
8)
The danger posed by petty-bourgeois tendencies urgently demands that trade unions and economic bodies unite in a common front to combat and halt further retreat. To this end, it is imperative to intensify work among the masses, grounding our efforts in concrete issues that are clear and comprehensible to every worker.
Cooperation.
9) In order to counter the rising tide of private trade and the growing tendency toward monopoly in the hands of consumer cooperatives—particularly in the realm of retail trade—the state must eliminate all factors that hinder the full realization of cooperative potential, both economically and psychologically. These include the use of share and earmarked contributions to generate the working capital needed for commercial operations, as well as restrictions that prevent cooperatives from reaping the profits of trade with the bourgeoisie by selling luxury goods to consumers through first‑tier cooperatives (as stipulated in the Central Union’s resolution prohibiting first‑tier cooperatives from selling goods to non‑members). To this end:
a) It is necessary to abolish compulsory cooperation—as a practice that has lost its rationale in light of the state’s decision to abandon the policy of supplying the entire population through distribution channels, as a mechanism that artificially inflates the representation of peasants who are, in fact, uncooperative, as a factor that impedes the formation of a conscious cooperative membership and a cadre of dedicated workers, and as the primary cause of distrust toward the consumer cooperative apparatus and the reluctance to make share contributions—while retaining the principle that, within any given territory, only one consumer society may exist, as a measure that guarantees against the proliferation of speculative consumer cooperatives and facilitates effective leadership, supervision, and control.

FIRST RESULTS OF THE NEW ECONOMIC POLICY

6)
It is necessary to rescind all resolutions issued by state and cooperative bodies that, to varying degrees, restrict the rights of cooperatives—of all tiers—in the sphere of commercial transactions compared with those of private individuals.
Foreign Trade.
1C) The People’s Commissariat for Foreign Trade must be transformed exclusively into an agency responsible for regulating foreign trade of the RSFSR abroad, overseeing imports and exports, and formulating and implementing the republic’s customs policies. State main departments and centers, the Central Union, and provincial people’s economic councils—acting in accordance with the Central Union—should be granted free access to overseas markets.
To facilitate the joint appearance of main departments and trusts in the international marketplace, the aforementioned organizations may establish joint-stock companies operating on commercial principles.
The People’s Commissariat for Foreign Trade is firmly opposed to this.
There is, however, Resolution No. 6 of the Central Union dated either the 27th or 28th of November 1921. We must take this into account.
Finance.
11) The restoration of our monetary circulation is becoming a central issue in economic affairs. With a currency plummeting into crisis, it is impossible to speak of rational economic management, of profitability, or of a sound budget. The interests of industry urgently demand swift and decisive action in this area. Only devaluation can ease our monetary circulation—and therefore, preparations for this measure must begin without delay.
12) In order to develop and streamline credit operations, it is necessary to open cooperative and private banks. The role of the state bank will then be reduced to that of a “bank of banks,” a function that perfectly aligns with the current historical moment. Delay in implementing these measures leads to monstrous forms of speculative lending—lending that proves ruinous for the national economy.
Should we not add a)?
about [local] economic activity.
More support for peasant initiatives.
RR)
Greater attention should be paid to assisting impoverished communities—whether in the form of technical assistance or other forms of support—both in the context of federations and other organizations affiliated with trade unions, and in the context of special urban cooperatives and the like.
November 29, 1921 – T. Smilga!
I am sending my comments.
To Kamenev, for return to me—I skimmed through them. Please forward them to L. B.
Lenin.

The theses were drafted by the Deputy Chairman of the All‑Union Council of National Economy, T. Smilga, and were intended for discussion among workers of the All‑Union Council of National Economy, the State Planning Commission, the All‑Union Central Council of Trade Unions, and the Central Union—about which Smilga informed Lenin in his accompanying letter.
2 The Decree of the Council of People’s Commissars dated May 17, 1921, concerned small-scale and artisanal industry, as well as artisanal agricultural cooperatives. In order to stimulate their development, the Council of People’s Commissars urged local authorities to avoid excessive regulation and unnecessary formalism that might stifle the entrepreneurial spirit of individuals and groups within the population (see “Izvestia,” No. 109, May 21, 1921).
Measures pertaining to large-scale industry were introduced at a later date. Among these were the Decree of the State Economic Council dated August 12, 1921, “On Measures to Restore Large‑Scale Industry, to Raise and Develop Production,” and, in furtherance of this decree, the Decree of the Council of People’s Commissars dated August 16 of the same year, “On Expanding the Rights of State Enterprises in the Areas of Financing and Disposal of Material Resources.”
Both in the first and in the second case, associations (enterprises) were granted the right to independently procure, both domestically and abroad, fuel, raw materials, supplies, and provisions—at the expense of a portion of their own output. In the realm of financing, the decree authorized enterprises, within the limits of the approved budget, to move appropriations from one section to another with complete autonomy during the budgetary period. (For more details, see “Izvestia,” Nos. 193 and 199, November 1 and 8, 1921.)
3 Lenin refers to the resolution adopted by the Presidium of the Central Union’s Board on October 27, 1921 (not November 27, as erroneously stated), concerning the Department of Foreign Trade. This resolution envisioned the Central Union’s independent entry into the foreign market and, for that purpose, the establishment of its own trading organs beyond the borders of the RSFSR: offices, agencies, and representative offices.
The agreement between the People’s Commissariat for Foreign Trade and the Central Union regarding the latter’s right to independently procure goods abroad was formally ratified under Soviet law by the Decree of the State Economic Council dated December 2, 1921. Prior to this decree, all trade operations involving foreign markets were conducted exclusively through the People’s Commissariat for Foreign Trade, in accordance with the regulations governing the state monopoly on foreign trade.
The result of these decisions was a revival of consumer cooperative trade in the final months of 1921—a development culminating in the dispatch of Central Union representatives abroad to forge new trade connections and restore old ones, both with cooperative organizations and with private enterprises (see “Report on the Activities of the Central Union in 1921,” pp. 68–71).