RECENT ECONOMIC DEVELOPMENTS IN RUSSIA. BY K. LEITES. Oxford: Oxford University Press, 1922.

THE INDUSTRIAL REVIVAL IN SOVIET RUSSIA. BY A. A. HELLER. New York: Thomas Seltzer, 1922.

THE BALANCE SHEET OF SOVIETISM. BY BORIS LEE BRASOL. New York: Duffield & Company, 1922.

CROSS CURRENTS IN EUROPE TODAY. BY CHARLES A. BEARD. Boston: Marshall Jones Company, 1922.

RUSSLAND UND DEUTSCHLAND DURCH NOT ZUR EINIGUNG (Germany and Russia--Union Through Necessity). BY JOHANN KOLSHORN. Leipzig: 1922.

EVENTS move faster than editions. Almost every book about Russia is out of date before it is off the press. Even using the word "recent" in the title, as Mr. Leites does in his book "Recent Economic Developments in Russia," does not save the situation, for the most "recent" essay in his collection is called "Economic Life in Soviet Russia in 1920." "The Industrial Revival in Soviet Russia," by Heller, comes somewhat nearer actuality, but Mr. Heller is an apologist rather than an economic student. Some of his statements are sufficiently startling to rouse a wholesome skepticism. He has obviously looked for the best that could be said about conditions in Russia and has said them with an emphasis that obliterates perspective. An antidote--not mildly homeopathic, but strenuously allopathic--is Boris Brasol's "The Balance Sheet of Sovietism." It is so very vehement in its rage against the revolution that it is hardly worth reading, unless one wishes to understand the viewpoint of the worst of the old aristocracy and wishes to gain some appreciation of the intensity of the hatred which has overwhelmed them. Of altogether greater value for an understanding of the Russian drama are the chapters on Russia in Charles A. Beard's "Cross Currents in Europe Today." There is no up to the minute news nor personal reminiscence in these lectures of Dr. Beard's, but they are remarkable summaries of the available evidence in regard to present tendencies.

Comparing the French and the Russian revolutions, Dr. Beard writes: "Though in the days of the Terror the Paris proletariat made itself felt in the councils of the state, the final outcome was a triumph for the bourgeoisie, a class with experience in the management of property and the direction of affairs, if not skilled in the arts of government. In Russia, on the other hand, the power of the state passed into the control of a laboring class that had not the slightest familiarity, through practice, with the exigencies of government."

Later on, with some apologies for prophecy "in this rapidly changing world," he writes: "It appears fairly safe to guess that, in the absence of another violent overturn in Russia, two great economic results will flow from the revolution. Russia will become a huge peasant democracy assimilated in type to the democracies of Rumania, Bulgaria, and Jugoslavia. . . . . Petty industries will flourish under private initiative and the large industries, railways, and natural resources will be exploited by concessionnaires under state supervision."

The soundness of Dr. Beard's "guesses" is amply borne out by the current reports from Russia. The two tendencies, which he described in June of last year, are developing steadily. While he is on sure ground in insisting that these phenomena--small holdings in agriculture and individual initiative in industry--are contrary to the pure theory of communism, there is room for doubt as to whether "state capitalism" is an adequate phrase to describe the politico-economic system that "will take the place of communism." The French Revolution never achieved an integral realization of its famous slogan "Liberty, Equality, Fraternity," yet the system which resulted from that great upheaval could not be described as a return to a qualified feudalism. It could not be described by any regrouping of old terms. Out of all that travail something new was born.

Before we can reach any satisfying definition of the new régime in Russia there must be much patient, scientific work in getting at the facts and in coordinating them. It is rather remarkable that we have as yet no book in English, which gives a comprehensive account of the working of "The New Economic Policy" in Russia. There, this phrase has become so common that they have abbreviated it into its initials. They have even coined such new words as "nepman," to describe the type of men who have developed under the NEP--the New Economic Policy.

The seeker after information in regard to the current developments in Russia, if he is not able to read the Russian periodicals in the original, finds the closest and most scholarly observation of Russian economic life in some of the German publications. This is not surprising, as before the war Germany's commercial relations with Russia were much closer than those of France, England or America. Russian was commonly taught in the German commercial schools and there was a very much larger number of Germans "who knew their Russia" than of any other nationality. Since the war there is a new magnet drawing Germany's attention eastward. It is only in countries whose currency is more depreciated than her own that her people can afford to buy food and raw material. Quite aside from the political significance of the Treaty of Rapallo, it is a life and death matter for Germany to understand Russia, and several German periodicals like Der Weg zum Osten and Osteuropäische Wirtschafts Zeitung devote themselves almost exclusively to reporting and analyzing the facts of Russian economic development.

As nearly as can be determined from material now available (which usually comes to light in newspapers and current magazines rather than in books, in foreign languages rather than in English), this New Economic Policy is not "a return to capitalism." It is merely a reluctant admission that the incentive offered to labor must vary with the work required and that the work which a modern industrial state demands of its citizens is not equal.

The men who found themselves in control of the government after the Bolshevik revolution of November, 1917, were strangely unacquainted with the processes of economic life. Mr. Hoover in his recent book, "American Individualism," points out that a large proportion of the present executives of the United States are what we call "self-made men"--men who, starting out in life in the lower economic strata, have worked their way up to the top. There were none of this type in the Council of the People's Commissars. Their knowledge, such as it was, of the processes of industry--the growing or mining of raw materials, the assemblage of such materials in factories where they would find waiting raw materials from the other ends of the earth, the training of labor teams to transmute by their handiwork these varied raw materials, the organization of salesmanship, the delivery to the ultimate consumer, the balancing of the sales-price with the varying production costs and the distribution of the net profit--they had learned only from books.

Learning from books rather than from experience, they thought of the whole process as automatic. Men and women followed the trade to which they had been called under some inherent urge. It seemed to them a matter of economic determinism that a capitalist would go on being a capitalist, that a scientist would continue his research, that an artist would continue the creation of beauty, in spite of revolutions, political or industrial. It was foreordained, in their theory, that the workmen would assemble at the factory door in the morning, that the peasant would rise before the dawn to prepare for a harvest many months hence, without any thought of what would be in the pay envelope or who would "own" the eventual harvest. They seem to have given surprisingly little thought to the problem of why the laborer toils, why the capitalist organizes or why the peasant plants.

When the new rulers of Russia found that habits of industry were not so automatic in life as they had appeared in theory, that the necessary steps in the process were not fatalistic, they were at first surprised, then infuriated. The gradual stoppage of industry, which they could not fail to notice, they attributed to "sabotage," and this word, which before their conquest of power had been used to describe what they considered a legitimate weapon in the war of the classes, they now used as though it described a peculiarly heinous treason. While the French Revolution had made a great deal of the crimes of "Counter-Revolution" and "Speculation," the Bolshevik added "Sabotage" to this trinity of reactionary vices. The full title of the famous Cheka was "The Commission for Combatting Counter-Revolution, Speculation and Sabotage." Anyone who ceased to perform the social function which had been his calling before the revolution was guilty of sabotage. The factory owner who closed down his plant because he could not make a profit under the new régime; the person who refused to deposit money in the nationalized banks because the new edicts forbade him to withdraw more than 500 roubles per week; the employee of commerce who, unable to meet the rising cost of living on his accustomed pay, deserted his post for more profitable labor--all were guilty of sabotage. The workers who struck because of intolerable conditions in a collapsing industry were unforgivable traitors. The peasant who refused to plant more than he needed for his own use, because of uncertainty as to who would control the crop, was quite obviously inspired by bourgeois intrigue.

The vast collections of edicts intended to overcome the menace of sabotage furnish an amazing record of the naivete of Bolsheviks in this matter. The Pravda and Izvestia of the first years of Soviet rule are full of indignant, puzzled discussion of the problem. The effort to substitute food cards for monetary pay resulted in a breakdown of "labor morale," but still through the first few years the communist leaders fought doggedly against recognition of the fact--so contrary to their theory--that the man on the fields, in the mines, or in a counting house will not work without what seems to him adequate incentive, that labor, unlike virtue, is not its own reward.

Apparently the first acceptance by the communists of the necessity of making some exception to their theoretic rule was in the case of Chaliapin. The increase of cultural opportunity for the proletariat was a vital part of their program. It was possible for them to impose many equalitarian rules in regard to the opera. They could, for instance, sell all seats for the same price, but they could not make Chaliapin sing on the basis of an equalitarian payroll. The Soviet papers of the first six months contained much discussion of this unique and rather amusing struggle. Chaliapin was a popular favorite, they needed him. In spite of appeals to his "good nature," in spite of public reprimand and the threats of the Cheka, he held them up shamelessly. As currency depreciated, he increased his price. This was the first official surrender to capitalistic ethics and the Soviet papers raged at the idea that a mere opera singer should receive so much more remuneration than the People's Commissars.

This was, if not the very first opening wedge, at least the first one which was publicly discussed. Krassin, who more than any of his colleagues had real experience in industrial relations, finally succeeded in getting this policy of high pay for technical talent accepted by a general convention of the Communist Party. Already in some vitally important industries, such as munition works, piece-work pay had been substituted for a flat wage. So it is clear that the New Economic Policy is not a sudden switch.

The more dogmatic among the communists have always opposed this tendency and have accused Krassin and his friends of being tainted with bourgeois prejudices. But many things played strongly into the hands of the compromisers. First, was the complete failure of pure communist economics among the peasantry; and second, the dismal failure of Trotzky's "Labor Army." Since the abolition of slavery hardly anyone has believed in the practicability of forced labor. The Soviets with their large control of food, in a time of great food shortage, and with all the elaborate machinery of the "Terror," had much greater prospects of success at this experiment than could ever be the case in normal times and under normal conditions. But in spite of these advantages the attempt to conscript labor failed.

There was another development strengthening the position of the unorthodox among the communists. Not only in the field of production but also in distribution the theory was not working satisfactorily. In the summer of 1920 the Soviet newspapers of Moscow discussed at length the extent of illicit private trading. The amount of food being distributed in the Soviet capital on food cards, according to the communist theory, was approximately one-tenth of the amount required to keep the population alive. So something like nine-tenths of the trade in food in Moscow was illegal. This "speculation" was tolerated in practice, although still a major crime theoretically, because the communists could not organize an adequate distribution.

This fact was perhaps the strongest single argument of those who were, like Lenin, willing to admit errors and who advocated making "legal" the things which had proved themselves inevitable. The ratification by the Communist Party of the New Economic Policy was a victory of those willing to face reality.

The New Economic Policy cannot be adequately described as a "return to capitalism." There is very little similarity between the industrial structure of Britain at the time when Karl Marx wrote his major work, when "Individualism" was as rampant as the unicorn on the coat of arms and democracy had hardly been born, and that of Britain today with its universal suffrage, elaborate factory legislation, unemployment doles and powerful Labor Party. The New Economic Policy represents the triumph in the councils of Russian communism of the realist over the theoretician. The effort to abolish money has been given a complete trial and has failed. It has been demonstrated--a demonstration which has been very reluctantly admitted by some of the communists--that the value of different services to the community varies greatly, that not only is the workman worthy of his hire, but specially valuable work requires greater incentive.

It is idle to speculate on where this New Economic Policy will lead. It seems, for instance, to have had as yet almost no influence on the political structure of the Soviets. The control of the small communist party seems quite as complete as ever.

The Living Age of January 13 contains the translation of an interesting article from the Eko of Kovno, of November 15, which describes vividly the Stock Exchange of Moscow as it operates under the New Economic Policy. Gradually the features of pure communism which experience proves to be unworkable are being dropped off. The announcement of the New Economic Policy is simply a tardy acknowledgment of a conclusion reluctantly arrived at. People were speculating in commodities in Moscow in back alleys before the inauguration of this N. E. P. permitted them once more to use the old Stock Exchange. We may expect from time to time newer economic policies, each in effect the formal proclamation that certain things formerly condemned are now legal. The end results, while undoubtedly quite different from the pure theory of communism, so widely advertised from Moscow in the early days of the Soviet régime, will in all probability be quite different from what we are accustomed to call capitalism.

The old laissez faire individualism of the Manchester School has suffered many a sea change. It inspired miracles of mechanical ingenuity, it increased vastly the volume of production, but its by-products in human misery were too intolerable, the plutocracy it developed was too arrogant and ruthless. Democracy has forced one concession after another from the pure theory of individualism. One modification after another, at first denounced as socialistic and "confiscatory," has been accepted by our American capitalism. One hundred per cent individualists formerly viewed with alarm the agitation for free public schools. They said it would pauperize the poor. The parcel post is a more recent development in which the idea of Public Service, after a long and bitter fight, has triumphed over that of Private Profit.

In the same ways, but in the opposite direction, evolution proceeds in Russia. The necessities of Public Service force modifications of the accepted doctrine. Our American individualist who advocates getting the government out of business does not think that a smooth concrete road, built with federal aid, nor State Universities, nor a Railroad Labor Board, nor the Interstate Commerce Commission, nor the Panama Canal are abject surrenders to socialism. And so in all probability Lenin, Krassin and their friends laugh heartily when they hear their New Economic Policy described as a surrender to capitalism.

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  • ARTHUR BULLARD, Director of the American Government's Public Information Service in Russia during the war, Chief of the Russian Division, Department of State, 1919-1921.
  • More By Arthur Bullard