NOTES ON THE VSNKh THESIS “ON ECONOMIC POLICY”
DRAFT OUTLINE: THESIS ON ECONOMIC POLICY
1) The initial results of practical implementation under the new economic policy enable us to clearly delineate a number of fundamental issues confronting the Russian national economy—issues that demand 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 question determining the success or failure of state industry. As the full owner of enterprises and of all produced goods, the state must rely on enterprises and associations that are empowered to carry out production within the bounds of approved programs and possess substantial authority—indeed, there already exists a resolution (cf., Vol. 1921!) concerning the enhancement of enterprise autonomy, depending on the scale of state supply. A rigid, formalistic approach to budgetary planning in a period of rapidly shifting organizational forms would prove to be a significant impediment to the development of our national economy and would ultimately give rise to nothing but utterly undesirable arbitrariness on the part of state officials over industrial affairs. The solution lies in fostering and developing initiative and self‑reliance among the leaders of state industry.

Moreover, Section 2, while encouraging and promoting initiative and independence, tends to be overly general—and thus vague. Similarly, Section 3 is too broad in its scope. The primary tasks facing state industry are to increase output and to reduce production costs. These objectives can be achieved only if enterprises are managed with strict economic accountability, if every element of production is accurately accounted for, and if management is thoroughly rationalized—through, for example, the judicious reduction of bloated administrative apparatuses, the improvement of remuneration for remaining personnel, the abandonment of bureaucratic work practices, and so forth—while taking into account practical experience.

In what specific relation should this be coordinated with Centrosouz?
INDUSTRIAL SUPPLY
4) Experience has shown that only when enterprises maintain adequate food reserves can they transition to new forms of economic management. Accordingly, it is imperative not only to build up two‑month food reserves but also to ensure that the key sectors of our national economy are fully supplied until the next harvest. The same principle applies to the financing of industry: enterprises must know precisely how much capital they have at their disposal each month, so that they may take timely measures to prevent disruptions and interruptions in operations.
5) The inadequacy of state supply and the existence of a market compel enterprises to adopt a system of combined supply—drawing on both state resources and commodities procured through the marketplace. The balance between these two modes of supply is determined by the importance of a given industrial sector within the broader framework of the national economy, as well as by the availability of state resources. It is essential 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 Sovnarkoms must establish their own wholesale trading networks, bearing in mind the precise intent of the tax-in-kind law (the gradual reduction of the tax-in-kind rate).

NOTES ON THE VSNKh THESIS “ON ECONOMIC POLICY”
CENTER AND LOCALITIES
6) With the resurgence of industry and its shift toward economic accounting, the problem of relations between the center and the localities—and between enterprises and economic bodies—is undergoing a profound transformation. Only the new economic policy has laid a solid foundation for overcoming chiefism—the petty, paternalistic oversight of the state and its excessive verticalization. The center retains responsibility for planning, production programming, state supply and financing, regulation, and oversight; all other functions of management are transferred to the localities. Similar relationships are established between provincial Sovnarkoms and enterprises located within the province’s jurisdiction. Enterprises directly subordinate to the center or to the industrial bureaus conduct their operations in close coordination with the relevant provincial economic councils.

PROFESSIONAL UNIONS
7) Alongside their traditional tasks—participating in industrial management jointly with economic bodies, discussing production programs, staffing economic institutions, addressing tariff issues, and the like—life is presenting unions with a host of new challenges. In an era marked by intensified commodity circulation, the exchange of goods assumes immense significance. To the extent that the state succeeds in mastering trade—or is forced to cede this domain to private capital—the well‑being of the working masses will depend, to a great degree, on this very dynamic. For this reason, the unions must strengthen their ties with cooperatives: workers must learn to engage in trade—not only for their own benefit, but also for the benefit of the state.

Another major, emerging task that life is placing before the unions is the organized participation of the working class in financial matters. The introduction of taxes and the establishment of state monopolies cannot—and must not—proceed without the active involvement of trade unions.

8) The looming threat posed by petty-bourgeois tendencies urgently demands that unions and economic bodies join forces in a united front to combat and halt further retreat. To this end, it is essential to intensify outreach efforts among the masses, focusing on concrete, universally comprehensible issues that resonate with every worker.

These “old” tasks must be refined and made more specific: forms of participation, consultative voice, candidate lists, enhanced scrutiny of candidates, training in managerial skills, and so forth. Workers’ cooperatives must likewise be developed and strengthened.

Forms of participation: Consultative voice. Scrutiny. Candidate lists. J

§b.
What’s the matter??
Hardly is this correct || ?? ||
COOPERATION
9) In order to combat the rising tide of private trade and the growing tendency toward monopolization of retail operations in the hands of consumer cooperatives across the country, it is imperative to eliminate all factors that, either economically or psychologically, hinder the full realization of cooperative initiative and the mobilization of the working capital necessary for commercial activities—whether through share subscriptions or targeted contributions—and that prevent cooperatives from reaping trade profits at the expense of the bourgeoisie by selling luxury goods to cooperative members at the first stage of distribution (as per the Central Union Board’s resolution prohibiting first-stage cooperatives from selling goods to non-members). To this end:

a) It is essential to abolish compulsory cooperation, which has lost its rationale in light of the state’s decision to abandon the practice of supplying the entire population through rationing—a practice that artificially inflated the representation of de facto non-cooperative peasants within cooperative bodies; that stood as an obstacle to the development of a consciously cooperative populace and to the cultivation of skilled cooperative personnel; and that served as the primary source of distrust toward the administrative apparatus of consumer cooperatives and of reluctance to pay share contributions. Instead, we should adhere to the principle that, within any given territorial jurisdiction, only a single consumer cooperative may exist—as a measure designed to prevent the formation of speculative consumer cooperatives and to facilitate effective management, oversight, and control.

b) All resolutions issued by state and cooperative authorities—regardless of their degree of restriction on the rights of cooperatives (at all levels) in the realm of commercial transactions relative to those of private individuals—must be rescinded.

FOREIGN TRADE
10) The People’s Commissariat for Foreign Trade must be transformed exclusively into an agency responsible for regulating the RSFSR’s foreign trade abroad, overseeing import and export activities, and ensuring—

NOTES ON THE VSNKh THESIS “ON ECONOMIC POLICY”
The People’s Commissariat for Foreign Trade is firmly opposed. There is a new
resolution from the Central Union, dated November 27th or 28th, 1921. This resolution must be taken into account.
and implementing the republic’s customs policies. State main departments and centers, the Central Union, and provincial unions—by mutual agreement with the Central Union—should be granted free access to the international market. For joint ventures by main departments and trusts in the global marketplace, associations comprising the aforementioned organizations may be established along shareholder-based lines, operating on commercial principles.
FINANCE
11) The restoration of our monetary circulation is emerging as the central issue in economic affairs. With a currency plummeting into catastrophic decline, it is impossible to speak of rational economic management, of sound profitability, or of a properly balanced budget. The interests of industry urgently demand swift and decisive action in this domain. Only devaluation can alleviate the strains on our monetary system; therefore, preparations for this measure must begin without delay.
12) In order to foster and streamline credit operations, it is necessary to establish both cooperative and private banks. The role of the state bank would then be reduced to that of a “bank of banks”—a function that fully aligns with contemporary realities. Delay in implementing these measures leads to monstrous forms of speculative lending, which are utterly ruinous for the national economy.
Should we not add
??) a section on agriculture?
More support for peasant entrepreneurial initiatives; ??) greater emphasis on assisting the poor in organizing themselves—not only through various forms of “affiliations with trade unions,” but also through specialized cooperative models and the like.
Written on November 29, 1921.
First published in 1933 in the Lenin Collection, Volume XXIII.

Printed from manuscript.