On the Internal and External Policies of the Republic
Report to the VTsIK and Sovnarkom, December 23 (Stormy applause. Shouts of “Hurrah!” “Long live our leader, Comrade Lenin!” “Long live the leader of the international proletariat, Comrade Lenin!”—long, sustained rounds of applause.) Comrades! I am about to present a report on the internal and external situation of the Republic. For the first time, I find myself delivering such a report in a context where an entire year has passed—and not a single, at least not a major, invasion of our Soviet power by Russian or foreign capitalists has occurred. In this first year, though we were able to avail ourselves only to a very limited extent of a relative respite from these onslaughts, we were nevertheless able to devote at least some portion of our energies to what remains our primary and fundamental task: the restoration of the economy, ravaged by war; the healing of the wounds inflicted upon Russia by the commanding exploitative classes; and the laying of the foundations for socialist construction.
First and foremost, when addressing the question of our republic’s international position, I must reiterate what I have said before: namely, that a certain equilibrium—in spite of its highly precarious nature—has nonetheless emerged in international relations. And we are now witnessing this equilibrium. It is profoundly strange, for those of us who experienced the revolution from its very beginning, who knew firsthand and directly observed the unprecedented difficulties we faced in breaking through the imperialist frontlines, to see how things have turned out. No one, perhaps, could have anticipated—or even imagined—that the situation would unfold as it has.
We had envisioned (and it may be no superfluous reminder now, since it will prove useful for us and for our practical conclusions on key economic issues) that future developments would take place in a simpler, more direct form than they ultimately did. We told ourselves—and we told the working class, we told all working people, both in Russia and in other countries—that there was no other way out of the accursed, criminal imperialist slaughter than a revolutionary path. By breaking the imperialist war through revolution, we opened up the only possible way out of this most heinous slaughter for all peoples. At that time, it seemed to us—and it could hardly have seemed otherwise—that this road was clear, direct, and the easiest of all. Yet it turned out that this very same straight path—which alone truly led us out of imperialist bonds, out of imperialist crimes, and out of the imperialist war that continued to threaten the entire world—was, at least not as quickly as we had hoped, a path that other nations were unable to follow. And if, despite all this, we now see what has come to pass—a single socialist Soviet republic existing in the midst of a host of imperialist powers fiercely hostile to it—then we must ask ourselves: how could this have happened?
Without exaggeration, we can say: it happened because, in the main, our understanding of events was correct; because, in the main, our assessment of the imperialist slaughter and of the intricate web of rivalries that had arisen among the imperialist powers was accurate. It was only for this reason that such a strange, precarious, seemingly incomprehensible yet, to a certain degree, undeniable equilibrium came into being—this equilibrium we now observe, characterized by the fact that, although surrounded on all sides by powers immeasurably more powerful than we are,

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in economic and military terms, powers that were openly, often with frenzied hostility toward us—we nevertheless see that they failed to accomplish the very thing for which they had poured so many resources and exerted so much effort over three long years: the immediate, outright strangulation of Soviet Russia. When we ask ourselves how this could have happened, how it was possible that one of the most undoubtedly backward and extremely weak states—openly hostile to the most powerful nations in the world—should have withstood the relentless pressure directed against it, when we examine this question closely, we clearly see what was at stake: we were right in the most fundamental sense. We were right in our predictions and in our calculations. It turned out that although we did not receive the swift, direct, immediate support from the working masses around the globe that we had counted on—and that we had made the cornerstone of our entire policy—we did, however, receive a different kind of support: not direct support, not rapid support—but support nonetheless, support that was not fleeting, not transient. Indeed, we received just enough of this support, just enough of the sympathy shown to us by the working masses—by both workers and peasant, agricultural masses—throughout the world, even in the very nations most hostile to us. It was precisely this support, precisely this sympathy from the working masses—sympathy that reached across national boundaries, that united workers and peasants in every corner of the globe—that became the final, decisive source, the crucial cause, of the fact that all the invasions launched against us ended in failure; that the alliance of workers from all countries, which we had proclaimed, enshrined, and within the borders of our own republic put into practice, did indeed exert its influence on every nation. However fragile this support may be—as long as capitalism persists in other countries (a fact we must, of course, recognize clearly and acknowledge forthrightly)—however unstable this entire foundation may be, it is nonetheless true that we can already lean on it. This sympathy and support manifested themselves in the fact that the invasions we had endured over three long years—invasions that had brought us untold ruin and suffering—while I would not go so far as to say that these invasions were entirely impossible—on this point we must remain exceedingly cautious and circumspect—still, they were made far more difficult for our enemies in to a tremendous degree. And this, in the final analysis, explains the rather strange, at first glance incomprehensible situation we are now witnessing.
If we calmly and dispassionately weigh our sympathies for Bolshevism and the socialist revolution—if we examine the international situation purely from the standpoint of a cold, hard calculation of forces, regardless of whether those forces stand on the side of right or wrong, of the exploiting class or of the working masses—though we will not concern ourselves with such matters, but instead seek to assess how these forces are arrayed on the global stage—then we will see that these forces have coalesced in ways that largely confirm our predictions and our calculations: that capitalism is in a state of decay. And after the war, which began with the Treaty of Brest-Litovsk and was followed by the Treaty of Versailles—though I am not sure which was worse—the more time passes, the deeper grows the hatred and revulsion toward it, even in those countries that emerged victorious. The further we move away from the war, the clearer it becomes—not only for the working classes, but to an ever‑growing extent even for the bourgeoisie of the victorious nations—that capitalism is crumbling; that the global economic crisis has created conditions so intolerable that there is no way out, despite all the victories that have been won. This is why we, though immeasurably weaker than all other powers—in economic, political, and military terms—are nonetheless stronger than they in one crucial respect: we understand and correctly assess everything that has emerged—and everything that is bound to emerge—from this imperialist muddle, from this bloody tangle of contradictions (take, for example, the currency conflict; I need not speak of the others), into which they have become increasingly entangled, unable to see any way forward.
And so we watch as the tone of even the most moderate representatives of the bourgeoisie—those who are resolutely and unreservedly far removed from any thought of socialism whatsoever—changes, let alone from “that dreaded Bolshevism.” Even figures like the renowned writer Keynes, whose works have been translated into

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all languages, and who himself took part in the Versailles negotiations, who poured his heart and soul into helping his own governments—yet even he was ultimately forced to abandon that path, to turn away from it, while continuing to denounce socialism. Again, he does not speak of Bolshevism, nor does he even wish to entertain the idea—but he addresses the capitalist world, saying: “What you are doing is leading you to a dead end,” and even goes so far as to suggest something along the lines of canceling all debts.
Very well, gentlemen! You ought to have followed our example long ago.
Just the other day, we read in the newspapers a brief report stating that one of the most experienced, highly skilled, and adept leaders of the capitalist government—Lloyd George—seemed to be beginning to propose precisely the same measure, to which America, it appeared, was ready to respond: “Excuse us, but we want to receive our full due.” At that point, we said to ourselves: How poorly things are going for those advanced, most powerful nations that have spent years after the war debating such a simple measure. We could have accomplished this task with ease—after all, what difficulties did we ever face! (Applause.) When we see increasing confusion surrounding such a question, we must remember, without forgetting the dangers that surround us, that however weak we may be economically and militarily compared to any of those states—which, taken together, often openly express their hatred toward us—we do not fear this kind of propaganda. Yet when we express views somewhat different from theirs regarding the justice of the existence of landowners and capitalists, they take offense, and these views are branded as criminal propaganda. I simply cannot understand this: for in every nation that does not share our economic outlooks and convictions, such propaganda is conducted openly and legally. But the propaganda claiming that Bolshevism is a monstrous, criminal, usurping force—there is no word in the language capable of fully capturing the enormity of this beast—this very same propaganda is carried out openly in all those countries. Not long ago, I had the opportunity to meet Christensen, who ran as a candidate for the presidency of the United States on behalf of the local Workers’ and Peasants’ Party. Do not be misled, comrades, about this name. It bears little resemblance to what we in Russia call the Workers’ and Peasants’ Party. In fact, it is a thoroughly bourgeois party, openly and unequivocally hostile to all forms of socialism, yet recognized as perfectly respectable by all bourgeois parties. And this man—Danish by birth, now an American—who received nearly a million votes (a considerable number, after all, in the United States) in the presidential election—told me how, when he tried to explain to audiences in Denmark, among people “dressed as I am”—as he put it, though he himself was impeccably dressed, in true bourgeois style—he attempted to argue that the Bolsheviks were not criminals, only to be met with near-outrage: “They almost killed me,” he said. They told him that the Bolsheviks were monsters, usurpers—how could anyone possibly dare to speak of such people in polite society? Such is the atmosphere of propaganda that surrounds us.
And yet we see that a certain equilibrium has come into being. This is an objective political situation, independent of our victories, one that demonstrates that we have grasped the depth of the contradictions inherent in the imperialist war—and that we are calculating more accurately than ever before, more accurately than the other great powers, whose victories, despite all their strength, have still failed to yield, and continue to fail to yield, a viable way out. This is the very essence of the international situation that explains what we are observing today. Before us lies a highly unstable, yet nonetheless undeniable, incontrovertible equilibrium. Whether it will endure for long, I do not know—and I believe that no one can truly know. For this reason, we must exercise the utmost caution. The first commandment of our policy, the first lesson to be drawn from our year of governmental activity—a lesson that all workers and peasants must internalize—is to remain vigilant, to remember that we are surrounded by individuals, classes, and governments that openly express the deepest hatred toward us. We must never forget that we are always on the brink of disaster, ever poised on the edge of peril.

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We will do everything in our power to avert this calamity. We have endured the weight of imperialist war to an extent few other nations have ever borne. Following that, we suffered the ravages of civil war—war imposed upon us by the representatives of the ruling classes, who sought to defend emigrant Russia: Russia of the landowners, Russia of the capitalists. We know—indeed, we know only too well—what unspeakable disasters war brings to workers and peasants alike. For this reason, we must approach this question with the utmost care and circumspection. We are prepared to make the greatest concessions and sacrifices, so long as we can preserve the peace that has been won at such a high price. We are willing to make the most significant concessions and sacrifices—but not just any sacrifices, not endless ones. Let those few, fortunately, who represent the militaristic parties and the expansionist cliques of Finland, Poland, and Romania—and who play games with these issues—let them take careful note of that. (Applause.)
Anyone who thinks rationally and calculates with political acumen will recognize that there has never been—and could never be—in Russia a government other than the Soviet government that would make such concessions and sacrifices toward nationalities both within our state and toward those that had once belonged to the Russian Empire. There is no other government—nor could there ever be—one that, as clearly as we do, recognized and openly declared before all that the old Russia, Tsarist Russia, the Russia of the militarists, its attitude toward the nationalities inhabiting Russia was criminal; that these relations were intolerable; that they provoked the most righteous protests of indignation and outrage among the oppressed nationalities. There is no other government that would so openly acknowledge this reality, that would carry out this propaganda—the propaganda of anti‑chauvinism, the propaganda of recognizing the criminal nature of old Russia, of Tsarist Russia, and of Kerensky’s Russia—a government that would wage propaganda against the forcible incorporation of other nationalities into Russia. These are not mere words—they are a simple political fact, plain for all to see, utterly beyond dispute. As long as no nation harbors plots against us, schemes that would enslave them under imperialist domination, as long as they do not seek to build bridges to strangle us, we shall not dwell on formalities. We shall not forget that we are revolutionaries. (Applause.) But there are facts that irrefutably and indisputably prove that even the smallest, least armed nation—no matter how weak it may be—within Russia, having defeated the Mensheviks and Socialist Revolutionaries, can and must feel secure in the knowledge that we harbor no intentions toward it other than peaceful ones; that our campaign to expose the criminal character of the old policies of past governments shows no sign of abating; and that our determination, come what may, at the cost of immense sacrifices and great concessions, to uphold peace with all the nationalities formerly part of the Russian Empire that chose not to remain with us remains steadfast. We have proven this. And no matter how fierce the curses hurled at us from every quarter, we will prove it again. We believe we have demonstrated this quite clearly, and before this assembly of workers’ and peasants’ representatives from across Russia, before the entire working and peasant masses of multi‑million‑strong Russia, we declare that we will do everything in our power to safeguard further peace—we will stop at nothing, making great concessions and sacrifices, in order to defend that peace.
But there is a limit beyond which we cannot go. We will not tolerate mockery of peace treaties; we will not allow attempts to undermine our peaceful efforts. Under no circumstances will we permit this—and we will stand as one, united in defense of our very existence. (Applause.)
Comrades, what I have just said is perfectly clear and self‑evident to you, and you could not expect anything else from anyone reporting to you on our political course. You knew that our policy was—and always has been—

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exactly as I have described. But, unfortunately, there are now two worlds in the world: the old world of capitalism, mired in its own contradictions and never willing to retreat; and the rising new world, still very fragile, yet destined to grow, for it is invincible. This old world clings to its old diplomacy, unable to believe that one can speak plainly and openly. The old diplomacy insists: “There must be some cunning trick up your sleeve—right here!” (Applause and laughter.) When a representative of this economically and militarily all‑powerful old world sent one of the American government’s emissaries—Bullitt—to us, long ago, with a proposal that we conclude peace with Kolchak and Denikin—a peace that would be most disadvantageous to us—and when we replied that we valued the blood of workers and peasants, which had been shed in Russia for so long, that although the peace was extremely unfavorable to us, we were nonetheless ready to accept it, confident that Kolchak and Denikin would eventually crumble from within; when we stated this frankly, without much recourse to polished diplomatic phrasing—then they concluded that we must surely be deceivers. And as soon as Bullitt, who had spoken with us in good faith around the same table, returned home, he was met with scorn, forced to resign—and I wonder how he was not thrown into hard labor, according to the imperialist custom of punishing secret sympathy for the Bolsheviks. (Laughter. Applause.) Yet in the end, we, who had proposed a peace that was worst for us, secured a peace on terms more favorable to us. This is but a small lesson. I know we cannot learn the ways of old diplomacy, just as we cannot remake ourselves—but the lessons we have learned in the realm of diplomacy over this time, lessons that have been absorbed by other powers, could not possibly pass without leaving their mark; they have surely lingered in the memory of some. (Laughter.) And so our straightforward declaration—that the workers and peasants of Russia value the blessings of peace above all else, but that they will endure only so much deviation in this regard—was received in such a way that they did not, for a single moment, We have never for a single moment forgotten the immense burdens we bore during the imperialist and civil wars. This is our reminder—and I am confident that, as a whole Congress, as the broad masses of workers and peasants, as all of Russia, we will reaffirm and express this reminder. I am equally certain that, however one may regard it, however much diplomatic cunning—or, in accordance with old diplomatic habits, whatever suspicions one might harbor—this reminder will by no means pass unnoticed; it will, in any case, play at least some role.
Now, comrades, this is what I consider essential to say regarding our international position. We have achieved, to a certain extent, an unstable equilibrium. In material terms—economically and militarily—we are immeasurably weak; yet morally, while of course not understanding this in the abstract moral sense, but rather grasping it as the balance of real forces among all classes in every state—we are stronger than all others. This has been tested in practice; it is proven not by words, but by deeds; it has already been demonstrated once—and perhaps, should history unfold in a particular way, it will be proven again and again. That is why we tell ourselves: as we embark upon our peaceful construction, we will devote every effort to carrying it forward without interruption. At the same time, comrades, remain ever vigilant; guard the defensive capacity of our country and of our Red Army as the apple of your eye, and remember that we must not permit, not for a single second, any weakening of our workers and peasants or of their hard-won gains. (Applause.)
Comrades, having briefly outlined what is most essential about our international situation, I will now turn to how economic relations are beginning to take shape both within our own country and in Western Europe, in the capitalist states. The greatest difficulty here lay in the fact that, without certain forms of mutual engagement between us and the capitalist states, sound economic relations were impossible for us. Events have shown, quite clearly, that such relations are likewise impossible for them. But we are no longer so altruistically inclined; instead, we are increasingly concerned with how, in the face of hostility from other powers,

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we might continue to exist.
But is it even conceivable that a socialist republic could exist surrounded by capitalist nations? Such a prospect had seemed unthinkable—both politically and militarily. That it is possible, politically and militarily, has already been proven; it is a fact. What about trade? What about economic exchange? And what of the ties, the mutual assistance, the exchange of services between backward, impoverished agricultural Russia and the advanced, industrially wealthy group of capitalist powers—could such a connection possibly exist? Did they not threaten us with the prospect of being encircled by barbed wire, with the claim that no economic relations whatsoever would ever come into being? “They weren’t afraid of war—so we’ll simply lay siege to them.”
Comrades, over these four years we have seen countless threats—and some of those threats were truly terrifying. Yet we need not fear a single one of them. As for the blockade, experience has shown that it is unclear whether it is more burdensome for those who are blockaded or for those who impose the blockade. Experience has undeniably demonstrated that, in this very first year—during which I can report to you as a period of relatively basic respite from outright, brutal violence—we were not recognized, we were rejected, and relations with us were declared nonexistent (well, let them be declared nonexistent in bourgeois courts—but they still exist). This, I believe, is something I am fully justified in reporting to you—not in the slightest exaggeration—as one of the principal outcomes of the 1921 reporting year.
I do not know whether you have received today—or will receive—the report of the People’s Commissariat for Foreign Affairs to the IX Congress of Soviets. In my view, this report suffers from one major shortcoming: it is far too thick, and it is difficult to read through to the end. But perhaps this is merely my personal weakness—and I have no doubt that, though not immediately, the vast majority of you, as well as anyone interested in politics, will eventually read this report. Even if one does not read it in its entirety, but merely glances at it briefly and flips through its pages, it becomes clear that Russia has, so to speak, developed a whole network of fairly sound, regular trade relations, representative offices, treaties, and the like. To be sure, we do not yet enjoy formal legal recognition—but that fact remains significant, for the danger of disrupting the fragile equilibrium, the danger of new attempts at invasion, which I have spoken of before, has only grown. Still, the fact remains a fact.
In 1921—the first year of our foreign trade—our progress was extraordinary. This was due, in part, to the question of transportation—the cornerstone, perhaps the very foundation, of our entire economy. It was tied to both imports and exports. Let me offer just the briefest figures on this matter. All our difficulties—those most unimaginable, the very weight of our burdens in fuel and food, the crushing pressure on the peasant economy, the famine and calamities that descended upon us—we know full well that all of this is linked to the issue of transportation. We must speak of this, and we must ensure that all comrades in the localities understand—and that we remind all comrades in the field again and again—that we must summon every ounce of our energy to overcome the food and fuel crises. Our transport system—this material instrument of connection with the outside world—continues to suffer from these very causes.
The organizational improvements made in our transport sector over the past year are undeniable. In 1921, we transported far more goods by river than in 1920. The average voyage length in 1921 reached 1,000 pood‑versts, compared to 800 pood‑versts in 1920. There is no doubt that organizational progress has been made. It is worth noting that we are beginning, for the first time, to receive aid from abroad: thousands of locomotives have been ordered, and we have already received the first 13 Swedish engines and 37 German ones. This is but a small beginning—but it is a beginning nonetheless. We have ordered hundreds of tank cars, and by 1921, nearly 500 of them had already arrived. We pay exorbitant, outrageously high prices for all of this—but still, this signifies that the major industries of the advanced nations are extending a helping hand to us; it signifies that the great industrial powers of the capitalist world are assisting us in the task of rebuilding our economy.

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Despite the fact that all of these governments are led by capitalists who utterly despise us, they are united under regimes that endlessly churn out articles in their respective press, endlessly debating whether Soviet Russia should be recognized de jure—and whether the Bolshevik government is legitimate or illegitimate. After protracted deliberations, it is ultimately deemed legitimate, yet still incapable of being officially recognized. I have no right to conceal this sad truth—that we are not yet recognized—but I must tell you that trade relations with foreign countries are nonetheless beginning to develop.
All of these capitalist nations find themselves in a position where they extract from us far more than we can afford to pay, yet despite this, they continue to lend a helping hand to our economy. How did this come to pass? Why do they act against their own will—contrary to what the press incessantly proclaims? And yet, that very press—unlike ours—is vastly superior in terms of circulation, and in the sheer intensity and virulence with which it hurls its venomous attacks against us. They brand us as criminals, and yet they still aid us. It turns out that economically, they are bound to us. As I have already told you, when we take a broad, long-term view, our calculations prove to be more accurate than theirs. And it’s not because they lack capable analysts—on the contrary, they have far more such experts than we do—but because one cannot make sound judgments when standing on the brink of ruin. That is why, in addition to what I have already shared, I wish to present a few figures illustrating the growth of our foreign trade. I will offer only the most concise statistics, easy to remember: if we trace the data over the three years—1918, 1919, and 1920—we find that our imports from abroad totaled just over 17 million poods; by 1921, however, this figure had soared to 50 million poods—three times greater than the combined total for the previous three years. Our exports over the first three years amounted to two and a half million poods; in 1921 alone, we exported 11.5 million poods. This figure is paltry, minuscule—ridiculously small—and to anyone with even a modicum of understanding, it speaks volumes: poverty. These figures bear witness to that reality. Yet even so, this is but the beginning.

We, who have endured direct attempts to strangle us, who have listened for years to threats that, as long as we remain what we are, all forms of engagement with us would be barred by every possible means—still, we see that some have proven stronger than those threats. We see that their economic assessments were fundamentally flawed, while ours were spot-on. The groundwork has been laid. All our attention, all our efforts, all our concern must now be directed toward ensuring that this development does not falter—and that it continues to advance.
Let me share one more brief illustration to show how we made progress throughout 1921. In the first quarter of 1921, imports stood at around 3 million poods; in the second quarter, they rose to 8 million poods; by the third quarter, they had surged to 24 million poods. We are indeed moving forward. These figures may seem infinitesimally small, but they are steadily increasing. And we see that they grew even amidst the year 1921—a year marked by unprecedented hardship. You know full well the toll exacted by famine, the unimaginable suffering it continued to inflict upon agriculture, industry, and every aspect of our lives. Yet despite being a nation ravaged by war, a country burdened by colossal disasters—disasters borne both from the wars themselves and from the reckless exploitation carried out by tsars and capitalists—we now stand on a path that opens up the possibility of improving our situation, even in the face of relentless hostility directed at us. This is the fundamental factor. That is why, when we recently read about the Washington Conference of 1921, when we heard the news that the powers hostile to us would soon be compelled to convene a second conference—this time inviting both Germany and Russia—to discuss the terms of a genuine peace, we said: our demands are clear and unambiguous; we have set them forth, and they have been made public. How much hostility will we encounter? There is no room for misapprehension on that score. But we know that the economic conditions of those who sought to blockade us have proven vulnerable. There exists a force greater than the desires, wills, and resolutions of any single hostile government or class—this
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Power—these are the overarching, global economic relations that compel them to embark upon this path of engagement with us. The further they venture down this road, the more clearly—and rapidly—the contours of what I can only present to you today in such meager figures in my 1921 report will emerge.
I must now turn to our domestic economic situation. Here, the central question we must address first and foremost is that of our economic policy. The transition to this new economic policy, the taking of those initial steps along this path, the learning process required to master these steps, the adaptation of our legislation and our administrative apparatus to this new reality—such was the principal task we undertook during the reporting year of 1921. You are familiar from the press with a wealth of facts and reports that illustrate how our work in this regard has unfolded. Of course, you would not expect me to offer additional facts or to enumerate specific figures here. What is needed is simply to establish the fundamental principle that unites us all most deeply—a principle that is of paramount importance when viewed from the perspective of the most essential and most profound question underlying our entire revolution, and indeed all future socialist revolutions (taken on a global scale).
The most fundamental, the most essential question is this: the relationship between the working class and the peasantry; the alliance between the working class and the peasantry; the ability of advanced workers—those who have undergone the long, arduous, yet profoundly rewarding school of the large factory—to organize matters in such a way as to win over the masses of peasants, crushed by capitalism, oppressed by landowners, weighed down by their own ancient, impoverished, wretched modes of subsistence—and to demonstrate to them that only through alliance with the workers, no matter how many difficulties may arise along the way—and there are many such difficulties, which we cannot afford to ignore—only in this alliance lies the liberation of the peasantry from the age‑old yoke of landlords and capitalists. Only in the consolidation of the alliance between workers and peasants does humanity find its common deliverance from such horrors as the recent imperialist slaughter, from those savage contradictions we witness in the capitalist world today—where a tiny handful of the wealthiest nations choke on their own opulence, while the vast majority of the earth’s population languishes in poverty, deprived of access to the very culture and abundant resources that lie at their disposal, blocked from realization by a lack of proper circulation.
Unemployment is the greatest scourge afflicting the advanced nations. There is no other way out of this predicament than a firm alliance between the peasantry and the working class—those who have passed through the hard but, in the end, the only truly solid and serious school: the factory, factory-based exploitation, factory-based organization. No other path exists. We experienced this political and military alliance in the most trying years of our republic. For the first time in 1921, we are now confronting this alliance on an economic level. We have, unfortunately, still far to go in this regard. We must state this openly. We must recognize this shortcoming—not gloss over it—but instead direct all our efforts toward rectifying it, understanding that within this lies the foundation of our new economic policy. To establish the proper relationship between the working class and the peasantry, one can envision only two paths. If large-scale industry is flourishing—if it can immediately supply small farmers with sufficient quantities of goods, or even greater quantities than before, thereby establishing a sound balance between the agricultural products flowing in from the peasants and the industrial goods produced—then the peasantry will be fully satisfied; then, in the great mass of the peasantry—peasants who remain largely non‑partisan—will come to recognize, by the force of circumstances, that this new order is superior to the capitalist system. When we speak of a thriving large-scale industry capable of meeting the peasantry’s needs with every necessary commodity at once, such conditions are already in place; if we consider the question on a global scale, a large-scale industry that is truly flourishing…

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There is no shortage of the productive forces capable of supplying the entire world with all necessary goods; the only problem is that these forces are not being put to use—except, of course, for the purpose of building cannons, manufacturing shells, and other instruments of war, which were employed with such devastating success during the years 1914–1918. At that time, industry was entirely devoted to warfare, and it supplied humanity with its products so abundantly that the toll amounted to no fewer than ten million dead and at least twenty million maimed. We have seen this with our own eyes—and yet, even in the twentieth century, war remains nothing like the wars of the past.
From among those who were most hostile to and utterly alienated from all forms of socialism, who regarded even the slightest socialist idea as a mortal enemy, it was precisely in the aftermath of this war—indeed, even in those countries that emerged victorious—that the loudest voices were heard, unequivocally declaring that, had there been no ill‑intentioned Bolsheviks in the world, it would have been highly unlikely that another such war could ever have been permitted. These were the voices of representatives from the wealthiest nations. This is what that wealthy, advanced, large-scale industry had been working toward: it had served as a factory for producing crippled men—and it had left itself little time to supply the peasantry with their own means of subsistence. Still, we are justified in asserting that, on a global scale, such an industry does exist. There are countries across the globe endowed with advanced, large-scale industries capable of immediately providing for hundreds of millions of backward peasant communities. We take this fact as the foundation of our calculations. You know better than anyone else—having observed it in everyday life—that little remains of our once mighty industrial sector, which was already weak to begin with. For example, in the Donbas—the very heartland of large-scale industry—civil war wrought such devastation, and Ukraine has endured countless imperialist governments (how many, indeed, has Ukraine seen!), each of which left behind nothing but meager remnants of what had once been our great industrial might. Add to this the calamity of the 1921 famine, and it becomes clear that our attempt to supply the peasantry with the products of large-scale industry now under state control ultimately came to naught.

Since this attempt failed, there can be no other economic link between the peasantry and the working class—no other connection between agriculture and industry—than exchange, than trade. This, in essence, is the crux of the matter. The replacement of prodrazvyorstka with tax in kind—this is the core of our economic policy, and it is the simplest of principles. If we lack a thriving large-scale industry capable of organizing itself in such a way as to promptly meet the needs of the peasantry, then there is no alternative path to the gradual development of a powerful alliance between workers and peasants—no path other than the route of trade, and the steady elevation of both agriculture and industry above their present condition, under the leadership and oversight of a workers’ state. Such a path is absolutely indispensable. And it is in this alone that lies the foundation and true essence of our New Economic Policy.
In an era when primary attention and greatest energies were diverted toward political and military tasks, we had no choice but to act with the utmost speed, charging forward at the vanguard, knowing full well that this vanguard would be supported by the broader masses. In the realm of great political transformations—and in the course of that monumental undertaking we accomplished over three years, when we threw ourselves into war against the commanding powers of the world—we secured the alliance of peasants and workers through a simple political and military impulse, for every peasant knew, felt, and experienced that he was facing a centuries‑old adversary: the landed proprietor, who was aided in one way or another by representatives of other parties. And it was precisely because of this that the alliance proved so strong and invincible.
But in the economic sphere, the alliance must be built upon different principles. Here, a fundamental transformation of both the nature and the form of the alliance is required. If any member of the Communist Party, any trade unionist, or simply any person sympathetic to Soviet power has overlooked this essential shift in the nature and form of the alliance, then that is their own loss. Such oversights are unacceptable in times of revolution. The need to alter the form of the alliance arises from the fact that the political alliance and the military alliance could not be sustained in the same straightforward manner within the economic domain.

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When we still lack a substantial industrial base—when that industry has been devastated by war, a war unparalleled in the history of any nation—yet even in states infinitely richer than our own, and which emerged from war as victors rather than losers, industrial recovery has not yet fully taken hold. The transformation of the form and substance of the alliance between workers and peasants proved to be indispensable. We had advanced into the political and military realms far beyond what the immediate economic alliance between workers and peasants could have permitted. We were compelled to do so in order to defeat the enemy—and we had every right to do so. We succeeded in this endeavor because we vanquished our foes on the very terrain that mattered most at the time: the political and military front—but in the economic sphere, we suffered a series of defeats. There is no need to shy away from acknowledging this; on the contrary: it is only when we cease to fear the admission of our failures and shortcomings, when we dare to face the truth—even the bleakest of truths—head-on, that we truly learn how to prevail. We may rightly take pride in our achievements in the first domain—the political and military realm—they have entered history as a global conquest that will yet reveal its full potential across all fields. Yet in the economic sphere, over the year for which I am now reporting to you, we have only just begun to embark upon the path of the New Economic Policy, and while we are making progress in this regard, we are still but barely beginning to learn. Looking back, we have made far more mistakes in this area—mistakes born of an overreliance on past experience, which was indeed magnificent, lofty, majestic, and of world-historical significance, yet utterly incapable of addressing the economic challenges now thrust upon us in a country whose large-scale industrial sector lies in ruins, in circumstances that demand above all else that we master the economic interconnections that have become both inevitable and essential. That crucial link is trade. For communists, this is a deeply uncomfortable realization. It may well be that this discovery is profoundly unpleasant—or perhaps it is, without a doubt, deeply unwelcome—but if we allow ourselves to be guided by considerations of pleasure or displeasure, we shall sink to the level of those “almost” socialists whom we have seen enough of during the era of Kerensky’s Provisional Government. Such “socialists” hardly command any lasting authority in our republic today. Our strength has always lain in our capacity to reckon with real conditions—and to confront them without fear, no matter how unpalatable they may seem.
Since large-scale industry exists on a global scale, it is undoubtedly possible to make a direct transition to socialism—and no one can refute this fact, just as no one can deny that this very same large-scale industry either suffocates under its own weight, generating unemployment even in the most prosperous and affluent victorious nations, or else spends its days churning out shells designed to slaughter human beings. And if, under the conditions of backwardness we faced when we entered the revolution, we still lack the industrial development we so desperately need, then are we simply to give up? Are we to lose heart? No. We must turn to hard labor, for the path we are treading remains true. Without question, the path of the alliance of the popular masses is the only way in which the labor of the peasant and the labor of the worker can become labor for themselves—not labor for the exploiters. And to bring this about in our own context, we require that economic link—a link that is, quite simply, the only feasible one: the link through the household economy.
This is the reason for our retreat; this is why we were compelled to retreat toward state capitalism, to retreat toward concessions, to retreat toward trade. Without such a course of action, given the devastation we have endured, we cannot restore the necessary bonds with the peasantry. Without this, we risk the danger that the vanguard of the revolution will surge ahead too far, becoming severed from the broad mass of rural workers. The vital connections between that vanguard and the peasant masses will be lost—and that would spell ruin for the revolution. We must view this reality with particular clarity, for it is from this very point that the core of what we call our New Economic Policy first emerges, and from it flows the greatest of all our concerns. This is why we unanimously declared that

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We are pursuing this policy seriously and for the long term—but, of course, as has rightly been pointed out, not forever. It is driven by our state of poverty and ruin, and by the profound weakening of our heavy industry.
I will now venture to present the most modest figures in order to demonstrate that, however difficult our situation may have been, and however many mistakes we made—though we made them in staggering numbers—we are nonetheless making progress. Comrades, I do not have comprehensive data on the development of domestic trade; I intend only to cite the turnover figures for Centrosyuz, covering a span of three months. In September, Centrosyuz’s turnover amounted to 1 million rubles in gold; in October, it reached 3 million; and in November, it surged to 6 million. Again, if we consider these figures in absolute terms, they are paltry, meager—and we must acknowledge this frankly, for it would be more harmful to harbor illusions about them. These are pitifully small numbers; yet, given the conditions of devastation we find ourselves in, these figures unmistakably attest that progress is being made, that we can indeed anchor ourselves to this economic foundation. No matter how numerous the mistakes we commit—whether in the trade unions, the Communist Party, or the administrative apparatus—we are nevertheless convinced that we can overcome these errors, and we are gradually doing so. We are following the path that will, come what may, restore the balance between agriculture and industry. We must—and we can—raise productive forces, at least to the level of small peasant farming, and for the time being, build upon the foundations of small-scale industry, since the restoration of large-scale industry proves so exceedingly difficult. We must achieve success, and we are beginning to attain it—but we must bear in mind that here, the pace is different, the working conditions are distinct; victory is harder to secure. We cannot reach our goals as swiftly as we once did in the political and military spheres. Here, we cannot advance in leaps and bounds, and the timescales are different—measured in decades. It is within such a timeframe that we must strive for success in the economic war, amid an environment not of assistance but of hostility from our neighbors.

And our path is the right one, for it is a path to which, sooner or later, all other nations will inevitably converge. We have begun to walk this righteous road. We need only carefully weigh every single step, account for even the smallest of our errors—and then, on this path, we shall achieve our goal.
Comrades, I ought now to speak at some length about our primary concern—the agricultural sector—but I believe you will hear a far more detailed and comprehensive report on this subject than I could possibly deliver, just as you will hear a thorough discussion of the famine from Comrade Kalinin.
You are well aware, comrades, of the unprecedented severity with which the famine struck us in 1921. The calamities of old Russia were bound to befall us as well, for the only way out of this predicament lay in the restoration of productive forces—not on the old, impoverished, small-scale foundations, but on new foundations, built upon large-scale industry and electrification. Only in this way could we escape our state of destitution and the relentless cycles of starvation—and it is immediately clear that the timeframes we had used to measure our political and military victories are ill-suited to this task. Still, though we were surrounded by hostile states, we broke through that blockade: despite the meagerness of the aid we received, we managed to procure something. In total, the aid amounted to 2.5 million poods. This was the entirety of the assistance we obtained from abroad—aid that foreign governments had graciously offered to a starving Russia. Through donations, we were able to collect roughly 600,000 gold rubles. Yet this figure is utterly insignificant, and from it we can see just how self‑interested European bourgeoisie was toward our plight. You have all no doubt read how, at the outset, when news of the famine first broke, influential statesmen solemnly and grandly declared that to exploit the famine in order to press old debt claims would be a diabolical act. I do not know whether the devil is more terrifying than modern-day imperialism—but I do know that in reality, things turned out exactly as they did: from us,

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despite the famine, attempts were made to collect old debts under particularly harsh conditions. We do not refuse to pay, and we solemnly declare that we are ready to discuss this matter in a businesslike manner. But to allow ourselves to be enslaved by such demands—without any consideration, without calculating mutual claims, without engaging in any serious, pragmatic discussion of the issue—you all understand, and there can be no doubt about this—that we will never, under no circumstances, permit such a thing.
I must inform you that the past few days have brought us quite significant progress in our fight against famine. You have probably read in the newspapers that America has allocated 20 million dollars to aid the starving in Russia—likely on the same terms under which the American Relief Association (ARA) provides assistance to famine victims. Just recently, we received a telegram from Krassin stating that the American government has formally offered to guarantee, over the course of three months, our access to food and seeds financed by those 20 million dollars—if we, in turn, could agree to spend 10 million dollars (20 million gold rubles) on the same purpose. We gave our immediate consent, and this has already been transmitted via telegraph. It appears we can expect, within the first three months, to secure food and seeds for the starving totaling 30 million dollars—equivalent to 60 million gold rubles. Of course, this is still far from sufficient; it will by no means alleviate the terrible disaster that has befallen us. You all understand this perfectly. But in any case, this is still aid that will undoubtedly play its part in easing the desperate need and dire hunger. And if we were already able to achieve notable success in the autumn by supplying seeds to famine-stricken regions and expanding sowing efforts overall, then we can hope to achieve even greater success in the spring.
In the autumn, roughly 75% of winter crops were sown in famine‑stricken provinces; in provinces that had partially suffered crop failure, the figure reached 102%; and in provinces that were net producers, it stood at 123%. In the provinces dialectics – 126%. In any case, this demonstrates that, however devilishly harsh our conditions may have been, we nevertheless managed to provide some measure of assistance to the peasantry in expanding sown areas and combating famine. Given the circumstances that had arisen, we are now fully justified—without exaggeration and without fear of error—in expecting that, when it comes to sowing the spring crop, we will be able to extend substantial aid to the peasantry. I repeat: under no circumstances will this assistance be complete. We simply do not possess sufficient resources to meet all needs. This must be stated plainly—and all the more reason to redouble our efforts to expand this support.
In this regard, I must present the final figures pertaining to our food supply operations. Overall, the tax in kind has brought relief to the peasantry as a whole, across the entire rural population. This is self-evident. The issue is not merely the quantity of grain extracted from the peasant; rather, it is that the peasant felt more secure under the tax in kind, and his interest in agricultural production was thereby rekindled. For the diligent farmer, as productive forces increased, the tax in kind opened up broader avenues for progress. The overall outcome of tax-in-kind collection for the reporting year is such that we must say: we must exert every possible effort to avoid failure.
These are the general, most concise results that I can share with you based on the latest data received from the People’s Commissariat for Food Supplies. We require no less than 230 million poods. Of this total, 12 million poods are earmarked for the starving, 37 million for seed, and 15 million for the reserve fund—but we can expect to collect 109 million through the tax in kind, 15 million from milling levies, 12.5 million from the repayment of seed loans, 13.5 million from barter transactions, 27 million from Ukraine, and 38 million poods from abroad (38 million, assuming we secure 30 million, taking into account the operation I just mentioned, and in addition purchasing 8 million poods). The grand total comes to 215 million poods. Even so, there remains a shortfall, with not a single pood in reserve. Whether we will be able to procure additional supplies abroad remains uncertain. Our food supply plan has now been calculated on the tightest possible margin in order to—

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to lighten the burden placed upon the peasantry, which has suffered so grievously from famine. For a long time, we have directed all our efforts within the central Soviet institutions to ensure that the food supply plan was implemented to the fullest extent possible. While in 1920 we estimated that 38 million people were dependent on state support, we have since reduced that figure to 8 million. Such has been the magnitude of the reduction we have achieved in this regard. Yet the only conclusion to draw is this: the tax in kind must be collected at 100%, that is, in full—come what may. We are keenly aware that for the peasantry, which has endured so much hardship, this represents an enormous burden. I know full well that comrades working at the local level—who have personally experienced the full weight of food supply operations—are better informed than I am about what it truly means to fulfill the task of collecting 100% of the tax in kind, come what may. But on behalf of the government, and as a summary of our work in 1921, I must tell you: comrades, this task must be accomplished; we must embrace this difficulty and overcome this burden. Otherwise, we cannot secure the most fundamental, the most basic elements of our transportation system and our industrial sector; we cannot maintain even the bare minimum budget—absolutely essential for survival in the circumstances we face, surrounded by enemies and living in a highly unstable international balance.
Without immense effort, given the position we find ourselves in—tormented by imperialist war and civil war, poisoned by the ruling classes of every nation—there is no way out, nor can there be. Therefore, we must speak with utter clarity, unafraid of the bitter truth, and, on behalf of the Congress, reaffirm to all workers at the local level: “Comrades, the very existence of the Soviet Republic, our most modest plans for restoring transport and industry, all hinge on our ability to carry out the general food supply program. Accordingly, the tax in kind, collected at 100%, is an absolute necessity.”

Speaking of the plan, I will now turn to the practical situation we have reached with regard to the state economic plan. I will begin with fuel—what serves as the bread of industry, the very foundation upon which all our industrial endeavors rest. You have likely already received, or will receive in the coming days, materials detailing the work of our Gosplan—the State Planning Commission. You will also receive a report from the Congress of Electrical Engineers, which has yielded profoundly insightful and richly detailed findings: a thorough examination, conducted by Russia’s foremost technical and scientific experts, of the plan that stands as the only scientifically validated, most concise, and most immediate blueprint for the restoration of our heavy industry—a plan that will require no fewer than 10 to 15 years to implement. I have said it before, and I will not tire of repeating: the time horizons we must reckon with in our practical work are no longer those we once knew in the realms of political and military affairs. Many of the leading cadres of the Communist Party and the trade unions have come to grasp this truth—and yet it is imperative that everyone fully internalize it. Incidentally, in the pamphlet prepared by Comrade Krzhizhanovsky, which will be distributed to you tomorrow—a report on the activities of Gosplan—you will see how, from the standpoint of the collective wisdom of engineers and agronomists, the question of our state economic plan is approached in its entirety. You will observe how these professionals—far from adopting the familiar, oft‑repeated perspectives of general politics or macroeconomics—instead bring to bear their collective experience, calculating, among other things, just how far we may afford to deviate from established targets. Within this pamphlet, you will find answers to these questions from the vantage point of engineers and agronomists; even more valuable, however, is what you will discover there as the result of a year’s work by our overarching state planning institution: a detailed analysis of how transport and industry are being addressed within the plan. Naturally, I cannot here lay out the full contents of this work.
I would like only to briefly touch upon the state of our fuel plan, for it was in this very domain that we suffered the most devastating setback at the outset of the reporting year, 1921. It was precisely here, relying on

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the improvements achieved toward the end of 1920, that we made the gravest miscalculation—and in the spring of 1921, we drove transport into a colossal crisis, a crisis no longer caused solely by a shortage of material resources, but by our misjudgment of the pace of development itself. Even then, the error became apparent: we had carried over the lessons we had learned from the political and military spheres into the realm of economic tasks—a fundamental, root-level mistake that, comrades, we continue to repeat at every turn. Today, we are riddled with errors, and it must be said that unless we recognize these errors—and unless we resolutely strive to correct them—we can never achieve lasting improvement in our economic affairs. Having learned our lesson, we approached the fuel plan for the second half of 1921 with great caution, deeming even the slightest overestimation here utterly unacceptable and combating it with every possible means. The figures communicated to me by Comrade Smilga—our chief administrator responsible for all fuel‑collection agencies—though still incomplete as of late December, indicate that we are indeed facing a deficit; yet this deficit is already quite small, and moreover, it reflects an improvement in the internal structure of our fuel budget—precisely what technicians refer to as “mineralization,” meaning that we have made significant progress in securing Russia with mineral fuels. For it is only through mineral fuels that we can establish a solid foundation for heavy industry—one capable of serving as the bedrock of a socialist society. This is how our fuel plan was calculated at the outset of the second half of 1921. If we convert the 2,700,000 cubic sazhens of firewood into equivalent fuel yielding 7,000 calories—as we always do, and as is done on page 40 of Krzhizhanovsky’s pamphlet, which will be distributed to you—then we anticipate producing 297 million poods. Yet the figures now show that we have actually produced around 234 million poods. Here lies a tremendous shortfall, one to which I must draw your attention. Throughout the reporting year, we treated the wood‑fuel operations of our fuel agencies with the utmost care—but it was precisely this…

Work is most closely tied to the state of the peasant economy. It is here that the full burden falls upon the peasant and his horse—fuel shortages, fodder scarcity, and the like all weigh heavily on agricultural output. This is precisely why we are facing deficits. That is why, now that we stand at the threshold of the winter fuel campaign, I must once again urge you: comrades, bring to every locality the rallying cry of maximum exertion in this critical area. In formulating our fuel budget, we have allocated only the bare minimum necessary to sustain and revive industrial production—but within these minimal limits, we must see that our targets are met at all costs, no matter how harsh the conditions may be.
Moving forward: We had projected coal production at 143 million poods, but we actually delivered 184 million poods—a clear sign of success, of progress in the mineralization of our fuel supply, and of the remarkable advances made by the Donbas region and other key industrial centers where numerous comrades worked with extraordinary self‑sacrifice and achieved tangible results in modernizing large-scale industry. Let me share a few figures regarding the Donbas, for it is the cornerstone, the major hub of our entire industrial complex. We had planned to extract 80 million barrels of oil, which would translate into 120 million tons of equivalent fuel; we had forecast 40 million tons of peat (equivalent to 19 million tons of fuel), yet we ended up producing 50 million tons. Altogether, we had aimed to secure 579 million poods, but it seems we will barely manage to reach 562 million. In sum, we are indeed experiencing a shortfall in fuel supplies. Admittedly, this deficit is not particularly severe—perhaps just 3–4%—but it remains a deficit nonetheless. At the very least, we must acknowledge that this shortfall poses a direct threat to large-scale industry, since even the minimal targets we set may not be fully met. Through this example, I believe I have shown you, first and foremost, that our planning institutions have not labored in vain—and that the moment when our plans begin to take concrete shape is fast approaching. At the same time, this example also reveals that we are only just beginning to recover; that the burdens and difficulties inherent in our economic situation remain exceedingly great—and that, therefore, the primary slogan, the central battle cry, with which our Congress must carry out its work and conclude its deliberations, with which it must disperse back to the localities, must be this: we need to redouble our efforts, however arduous they may be—both in industrial work and in agricultural labor. There is no other path to salvation for the republic, no other way to preserve, safeguard, and consolidate the power of the workers and peasants than through intensified labor in these spheres. The significant achievements we have made were especially evident in the Donbas, where comrades such as Comrade Pyatakov devoted themselves with extraordinary dedication and attained remarkable success in large-scale industry, while Comrade Rukhimovich excelled in small-scale industry, managing for the first time to reorganize this sector so that it began to yield meaningful results. In large-scale industry, the output per miner has reached pre‑war levels—a feat we had never accomplished before. In 1920, the total output of the Donbas was calculated at 272 million poods; by 1921, that figure had risen to 350 million poods. While this number is still far below the peak level achieved in the pre‑war era—1.7 billion poods—it is nonetheless a substantial improvement. It demonstrates that we are making serious strides forward. It marks a genuine step forward in the restoration of large-scale industry—and we simply cannot afford to begrudge the sacrifices required to rebuild this vital sector.
Let us say a few more words about metallurgy. Here, our situation is particularly dire: we produce perhaps only 6% of what we once produced in pre‑war times. Such is the extent of ruin, such is the depth of poverty to which imperialist war and civil war have reduced Russia! Yet, of course, we are on the mend. We are establishing new industrial centers—such as Yugostal No. 135, where Comrade Mezhlauk works with unparalleled devotion. Despite the severity of our circumstances, we are witnessing tremendous progress here. In the first half of 1921, we were smelting 70,000 poods of pig iron per month; by October, that figure had risen to 130,000, and by November it had surged to 270,000—nearly quadrupling our output. Clearly, we have no reason to give in to panic.

We make no secret of the fact that the figures I have cited reveal a level of meager, downright penurious output—but even so, these figures nonetheless demonstrate that, however severe 1921 may have been, and whatever extraordinary burdens may have weighed upon the working class and the peasantry, we are nonetheless on the path of recovery, firmly on the right track. By summoning all our strength, we can still hope that the upward trajectory will grow ever steeper.
I would like to share some additional data regarding the progress of electrification. Unfortunately, we have not yet achieved any major breakthroughs. I had hoped to be able to congratulate the Ninth Congress on the inauguration of the second large-scale electric power station built under Soviet rule: the first was Shaturka, and the second—our new hub—the Kashira Station, which we had originally planned to open in December 1921. This station was expected—and still could—deliver an initial output of 6,000 kilowatts; combined with the 18,000 kilowatts already in operation in Moscow, such a contribution would have represented a substantial boost. However, a series of unforeseen obstacles prevented us from opening the Kashira Station in December 1921. The station will finally come online at the earliest possible date—no more than a few weeks away. In general, you have likely noticed the report recently published in “Economic Life,” signed by Engineer Levi, one of the leading figures of the Eighth All-Russian Electrotechnical Congress and, indeed, one of our foremost experts in the field. From that report, I will share only the following brief statistics: if we add together the years 1918 and 1919, we find that during this period 51 power stations were commissioned, with a total capacity of 3,500 kilowatts. When we look at 1920 and 1921, we see that 221 stations were brought online, boasting a combined capacity of 12,000 kilowatts. Compared with Western Europe, these figures will undoubtedly appear exceedingly modest, almost pitifully small. Yet they demonstrate how progress can still advance—even amid difficulties unparalleled in any other country. Of particular importance has been the proliferation of small power stations in rural areas. To be frank, the process of decentralization often led to fragmentation and dispersion. But even in this scattered development, there is a certain degree of benefit. Through these small stations, we have created—

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centers of modern, large-scale industry in the countryside. Though these stations remain modest in scale, they nevertheless convey to the peasantry that Russia will not remain mired in manual labor, nor will it cling to its primitive wooden plow; instead, Russia will forge ahead into a new era. Gradually, the idea is taking root among the peasant masses that we must—and we are capable of—replacing the old foundations of Russian society with entirely new ones. As I have said before, the timescales involved here are measured in decades; but the work has already begun, and consciousness among the rural population is expanding—partly because our small power stations are growing faster than their larger counterparts. While we may have delayed the commissioning of a single large electric power station in 1921, by early 1922 we will have two: the Kashira Station in the Moscow suburbs and Utkina Zavod’ near St. Petersburg. In this regard, at least, we are firmly on a path that ensures continued forward progress—as long as we approach the fulfillment of our tasks with the same unwavering dedication we have shown thus far.
Let me say a few more words about another success—our achievements in peat mining. In 1920, peat production reached 93 million poods; by 1921, it had surged to 139 million poods—a feat that, perhaps uniquely among all nations, saw us far surpass our prewar output levels. Russia’s peat deposits are vast beyond compare, richer than those of any other country in the world. Yet the challenges posed by this industry have been—and in many respects still are—enormous. Indeed, peat mining is inherently a labor-intensive endeavor, and in Russia, it was especially arduous. The invention of the hydraulic method for peat extraction—developed under the leadership of Comrades Radchenko, Menshikov, and Morozov at Glavtorf—has greatly eased the burden of this work. In this respect, we have achieved a truly monumental breakthrough. In 1921, only two peat pumps—hydraulic peat-extraction machines designed to relieve workers of the grueling toil that had long been associated with peat mining—were in operation. Now, we have placed orders in Germany and secured delivery of 20 such machines by 1922. Our collaboration with one of Europe’s most advanced nations has begun. Before us now lies a remarkable opportunity to develop this sector—a path we simply cannot afford to ignore. Russia’s abundance of swamps and its vast peat reserves are unmatched anywhere else in the world; and we must transform this labor—from the backbreaking toil that once consumed so much energy and—

Only a small number of workers need to go forward—now, it seems, this is more feasible than ever. Practical cooperation with the world’s most advanced state—Germany—has been achieved, as factories there are already producing instruments that greatly ease this labor; these instruments are certain to be put into operation in 1922. We must pay close attention to this development. In this field, we can accomplish far, far more—if we all come to understand and spread the idea that, by intensifying our efforts and mechanizing labor, we have a far greater chance of emerging from Russia’s economic crisis than any other nation.
Now, in the realm of our economic policy, I would like to emphasize yet another aspect of the matter. When assessing our New Economic Policy, it is not enough to focus solely on what may seem especially important. Of course, the essence of the New Economic Policy lies in the alliance between the proletariat and the peasantry—the core of the policy resides in forging a bond between the vanguard of the proletariat and the broad peasant masses. The drive to raise productive forces—no matter what it takes, no matter how urgent, right now—has begun, thanks to the New Economic Policy. There is yet another dimension to the New Economic Policy: the opportunity to learn. The New Economic Policy represents the very form through which we will begin to truly master the art of economic management—and in this regard, up to now, we have performed woefully poorly. Naturally, it is difficult for a communist leader or a trade union official representing the working masses to imagine that commerce has now become the cornerstone of our economic life, the sole possible link between the vanguard of the proletariat and the peasantry, the only viable means of launching an economic upswing under a united front. If we take any merchant who trades under the supervision of the state—and our courts are proletarian, and our courts are capable of keeping a close watch on every private entrepreneur, ensuring that laws are crafted for them in ways quite different from how they are written in bourgeois states—recently, in Moscow, we saw just such an example: 138, and all

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As you well know, we will multiply the number of such examples, rigorously punishing any attempts by private entrepreneurs to violate our laws—but if we look closely, we will see that even this merchant, this private entrepreneur, can achieve remarkable results with a profit margin of over one hundred percent—say, by procuring raw materials for industry—in ways that, time and again, no communist or trade unionist could hope to match. And here lies the true significance of the New Economic Policy: learn. This is a profoundly serious undertaking, one that we must all undertake. It is an exceedingly harsh lesson—not the sort of thing one learns through lectures in school or by passing exams. Rather, it is the challenge of a hard, unyielding economic struggle, waged amid conditions of poverty, unprecedented burdens, staggering difficulties, famine, hunger, and cold—but it is precisely this genuine learning process that we must undergo. To shrug off this task, to turn a blind eye and pretend that we are somehow “over here,” set apart from it—such an attitude would be the most criminal and most dangerous form of arrogance, both communist and professional. We comrades, all those who govern Soviet Russia, have suffered greatly from this failing, and we must recognize it with complete candor if we are to overcome this deficiency.
We are approaching the task of economic construction based on our experience of yesterday—and therein lies our fundamental error. Let me offer you a French proverb that says: people’s shortcomings are often intimately connected with their virtues. A person’s strengths, when carried too far, fail to emerge at the right time or in the right place—and thus become weaknesses. Almost all of you have likely observed this in your personal lives, and we are now seeing it play out across the entire trajectory of our revolution, our Party, our trade unions—which serve as the Party’s chief bulwark—and throughout the entire apparatus that governs Soviet Russia. We are witnessing this very same flaw, which has emerged as a kind of extension… dialectics. Our greatest achievement lay in the fact that, in the political and military spheres, we took a world‑historical step—one that entered global history as the transition between two epochs. No matter what further trials we may yet endure, no one can ever take this away from us. It was only through the proletarian revolution, only by virtue of the Soviet system’s replacement of the old order, that we emerged from the imperialist war and from our own dire hardships. This cannot be undone; it is an indisputable, immutable, and inalienable achievement—no effort or onslaught on the part of our enemies can ever strip it away. Yet precisely when we attempt to carry it forward in areas where it is not needed, it becomes our most dangerous shortcoming.
The political and military tasks could be resolved by kindling a surge of enthusiasm among workers and peasants at the level of consciousness they had attained. They understood fully that the imperialist war was suffocating them; there was no need to ascend to a new stage of consciousness, to reach a new level of organizational development, in order to grasp this truth. The fervor, the drive, the heroism—those qualities that have remained and will forever serve as a lasting monument to what revolution accomplishes and what it was capable of accomplishing—enabled us to meet these challenges. This is how we achieved our political and military successes; yet this very accomplishment has now become our most perilous shortcoming. We look back and assume that we can apply the same approach to economic tasks. But therein lies the error: when conditions change and we are called upon to tackle entirely different kinds of problems, we must not turn backward and try to solve today’s tasks with yesterday’s methods. If you do not try, you will not succeed! We must recognize this fundamental mistake. Communist workers and trade unionists—those who, time and again, have devoted themselves to arduous, years‑long economic work that demands endurance, severe trials, sustained effort, meticulous care, and unwavering perseverance—whether as Soviet workers or as former combatants—have grown weary of such labor, shrugging it off and excusing themselves with memories of the great things we accomplished yesterday. To me, you resemble the fable of the geese who boasted that they “saved Rome,” yet for all their pride,

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the peasant replied with a switch: “Leave your ancestors alone—what have you actually done?” No one can deny that, in 1917–1918–1919–1920, we resolved our political and military tasks with the same heroism and the same remarkable success that ushered in a new epoch in world history. This achievement belongs to us—and neither within the Party nor among the trade unions has anyone ever attempted to take it away from us—but today, Soviet workers and trade unionists face a different set of challenges.
You are now surrounded by capitalist powers that will not aid you, but rather stand in your way. You labor under conditions of poverty, ruin, famine, and widespread suffering. Either you learn to work at a different pace—counting your efforts in decades rather than months—and to engage with the masses that have grown exhausted and are no longer capable of sustaining the revolutionary, heroic tempo in their daily work—or you learn to do so; otherwise, you will rightly be called geese. When any trade unionist or political worker offers the general assertion that “we, the trade unions, we, the Communist Party, are in charge”—that is all well and good. In the political and military spheres, we have performed admirably; but in the economic realm, we are faring poorly. We must recognize this reality and strive to improve. To any trade union that broadly raises the question of whether trade unions should participate in production, I would say: enough with the empty talk (applause)—instead, answer my question practically: if you hold a position of responsibility, if you are a respected figure—a member of the Communist Party or a trade union leader—tell me: where have you successfully established production? How many years have you been working toward that goal? How many people do you oversee—thousands or tens of thousands? Give me a list of those whom you have entrusted with economic tasks that you have brought to completion—not of those who take on twenty projects only to abandon each one before it is finished due to lack of time. In our Soviet ethos, it is often the case that we fail to see economic endeavors through to the end; instead, we boast of success after just a few years, afraid to learn from that merchant who achieves 100%… dialectics
It will seize profits and keep even more for itself—and then, what happens? They’ll draft a splendid resolution on raw materials and declare, “We are, after all, representatives of the Communist Party, the trade unions, the proletariat.” Excuse me, but let’s be clear: what, exactly, is meant by “proletariat”? It is the class engaged in large-scale industrial labor. But where is this large-scale industry located? What kind of proletariat is that? Where is your industry? Why has it come to a standstill? Because there is no raw material? And have you managed to gather any? No. If you write a resolution calling for its procurement, you’ll only end up looking foolish—and people will say, “That’s nonsense,” and in the end, you’ll be like the goose whose ancestors saved Rome.
History has now placed upon us a task: to complete the greatest political revolution through slow, arduous, and painstaking economic work—work whose timescales are set to be exceedingly long. Throughout history, great political revolutions have always required a lengthy period to fully digest and assimilate. All great political revolutions were brought about by the fervor of vanguard groups, followed in a spontaneous, semi-conscious manner by the masses. Otherwise, development could not possibly proceed in a society that had been crushed under the heel of tsars, landowners, and capitalists. And we have accomplished that part of the work—the political revolution—in such a way that the world-historical significance of this undertaking is beyond dispute. Yet, following the great political revolution, another task arises—one that must be understood: we must digest this revolution, bring it to life, and refrain from excusing ourselves with the claim that the Soviet system is flawed and needs to be rebuilt. We have an astonishing number of well-meaning individuals eager to “rebuild” in every conceivable way—and the consequences of these so‑called “reconstructions” have been so disastrous that I have never known such calamity in my entire life. I am acutely aware of the shortcomings in our apparatus for organizing the masses; for every ten shortcomings that any one of you might point out to me, I can immediately name a hundred more. But the issue is not simply to improve the apparatus through rapid reorganization—it is that we must digest this political transformation in order to attain a new cultural and economic level. That is the crux of the matter. Not to re—

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Instead of rebuilding, we must, on the contrary, help correct the numerous shortcomings that exist within the Soviet system and throughout the entire administrative apparatus—so that we may assist tens of thousands, even millions, of people. The entire peasant mass must help us digest the greatest political victory we have achieved. Here, we must remain sober and recognize that while this victory has been won, it has yet to be fully integrated into the very fabric of everyday economic life and into the conditions of existence for the masses. This is a task that will take decades—and it demands immense effort. We cannot pursue it at the same pace, with the same speed, or under the same conditions that we employed during the war.
Before concluding, I would like to extend this lesson—that shortcomings are sometimes merely the continuation of our virtues—to one of our institutions: the Cheka. Comrades! You are, of course, all familiar with the fierce hatred that this institution inspires among Russian émigrés and among the countless representatives of the ruling classes in imperialist countries who live in close association with those Russian émigrés. And why shouldn’t they hate it? After all, this was the very institution that served as our most formidable weapon against countless conspiracies and countless attempts on Soviet power—conspiracies hatched by men who were infinitely more powerful than we were. The capitalists and landowners still held in their hands all international connections, all international backing; they enjoyed the support of states far more mighty than our own. You know from the history of these conspiracies how those men operated. You know that there was no other way to respond to them except through repression—harsh, swift, immediate repression, grounded in the solidarity of workers and peasants. This is the virtue of our Cheka. We will always emphasize this when we hear, directly or indirectly—as we often do from abroad—the cries of certain Russian exiles who, in every language, know how to wield the word “Cheka” and regard it as a symbol, a type of Russian barbarism.
Gentlemen capitalists—Russian and foreign! We know full well that you will never grow to love this institution. Indeed… dialectics! It has mastered the art of thwarting your intrigues and your machinations like no other—especially in an environment where you sought to strangle us, where you besieged us with wave after wave of invasions, where you hatched internal conspiracies and stopped at nothing short of outright crime in order to sabotage our peaceful endeavors. We have no other response but to establish an institution that knows every move of the conspirators—and that is not content merely to plead or persuade, but rather to strike swiftly and decisively. Without such an institution, the power of the working class cannot endure so long as exploiters still roam the earth, refusing to bestow upon workers and peasants, on a silver platter, the rights of landlords, the rights of capitalists. We know this all too well—but we also recognize that a person’s strengths can become their weaknesses, and we understand that the circumstances we now face urgently demand that we confine this institution to the realm of pure politics, focusing its efforts on those tasks for which the prevailing conditions and context are most conducive to its success. If counterrevolutionary attempts continue as they have up to now—and we have no evidence to suggest that the psychology of our adversaries has changed; indeed, we have no reason to believe otherwise—then we will be able to respond in a way that makes our reply unmistakably serious. The Soviet state has, under the guise of providing aid, admitted foreign representatives into its midst; yet these very representatives have aided and abetted the overthrow of Soviet power—examples of this have already occurred. We will not find ourselves in such a predicament, thanks to our appreciation for—and our judicious use of—an institution like the Cheka. This we can guarantee to everyone, without reservation. Yet at the same time, we must state clearly that the Cheka must undergo reform: its functions and jurisdiction must be defined, and its activities must be circumscribed to strictly political tasks. Today, we face the task of developing civil circulation—a task mandated by the New Economic Policy—and this, in turn, calls for greater revolutionary legality. Of course, in an era of military offensives, when the Soviet government was being choked at every turn, if we had placed this goal at the forefront of our priorities back then, we would have been mere pedants, playing at revolution—but

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we would not have made real revolution. The more we enter into conditions that embody the foundations of firm and steadfast power, the further civil circulation develops, the more imperative it becomes to champion the resolute slogan of advancing greater revolutionary legality—and the narrower the sphere of action becomes for an institution that responds to every blow struck by conspirators with a decisive counterstroke. Such is the result of experience, observation, and reflection that the government has drawn from the past year.
In closing, I must say, comrades, that the task we are tackling this year—and one we have so far addressed so poorly—the task of forging a solid economic alliance between workers and peasants, even amidst the depths of poverty and devastation—is now properly set before us. We have adopted the correct line, and there can be no doubt about that. Moreover, this task is not merely Russian; it is a global challenge. (Stormy, prolonged applause.)
The task we are currently pursuing—though for the time being we are undertaking it alone—may seem at first glance to be a distinctly Russian endeavor; yet in truth, it is a task that will confront socialists everywhere. Capitalism is doomed; in its final collapse, it may inflict unimaginable suffering upon tens and hundreds of millions of people—but no force can prevent its fall. The new society, founded upon the union of workers and peasants, is inevitable. Sooner or later—whether twenty years earlier or twenty years later—it will come to pass, and it is for this very society that we are helping to shape the forms of worker-peasant alliance as we labor to implement our New Economic Policy. We will succeed in solving this task, and we will forge the union of workers and peasants so firmly that no earthly power will ever be able to dissolve it. (Stormy, long-lasting applause.)
Printed on December 23, 1921, in the bulletin “IX All-Russian
Congress of Soviets. Stenographic
Report,” No. 1

Reprinted from the text of the book “The Ninth All-Russian Congress of Soviets of Workers, Peasants, Red Army Soldiers, and Cossack Deputies. Stenographic Report.” Moscow, published by the VTsIK, 1922, verified against the stenographic record.