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p For nearly a quarter of a century after the victory of the October Revolution our country was in the position of a besieged fortress, constantly subject to a political, economic and military blockade. The imperialists more than once raised their hand against the land of socialism. It was attacked not only from without, but by the class enemies from within. The difficulty was that the class enemies, both internal and external, were inspired by the splitting activities of the Trotskyists, the Right opportunists and the various brands of bourgeois nationalists. Our people and the Party, true to Leninism, succeeded in repelling these furious attacks of the enemy.

p The Soviet Republic’s international position from the very beginning of its inception was an extremely difficult one. The capitalist states could not reconcile themselves to the existence of this one and only socialist country and did their utmost to strangle it at birth. Seeing the country in the throes of appalling economic chaos, they entertained great hopes that the Soviet Republic would be unable to recover its feet and would die a natural death beneath the weight of those tremendous internal difficulties it had had to cope with after two disastrous wars. These hopes were expressed outspokenly by that “famous” ideologue of the Russian bourgeoisie Ustryalov, who said that "the great Russian revolution will take its place in the national pantheon which history has prepared for it”.

p The Party never for a moment forgot Lenin’s warning as to the deadly danger of capitalist encirclement and the need for speeding up economic development. Fate willed that it use the respite to its utmost limits in order to raise the country’s economic potential. Now that Russia had built for itself the world’s most advanced political system, the problem of its economic resurgence bulked large. Already on the eve of the October Revolution Lenin had 224 written: ". . .either perish or overtake and outstrip the advanced countries economically as well. . . . Perish or forge full steam ahead. That is the alternative put by history.”  [224•*  One can just imagine stupendous efforts the Party had to make to surmount the obstacles and difficulties in the path of its socialist economic policy.

p For one thing, the extreme backwardness inherited from the old bourgeois-landowner regime had to be overcome without delay. The Communists remembered Lenin’s precept only too well. They knew that unless we rapidly overcame our economic and technical backwardness we would be crushed by the imperialist forces. The intense desire to break free of this backwardness dictated the need for making sacrifices and enduring hardships in order to ensure a high rate of construction of socialism—that most advanced of social systems. Consequently, the first difficulty was to overcome Russia’s age-old backwardness in a brief space of time. Upon this depended the fate of our revolution.

p Secondly, another thing to be overcome was the deadly menace of a hostile capitalist encirclement if the country was not to fall into economic and political dependence on the capitalist world and lose its national and state independence. Consequently, the second difficulty consisted in effecting an economic resurgence through the country’s own efforts and resources, and building up the necessary types of armament to defend the Soviet state. For this it was necessary to consolidate the alliance between the working class and the peasantry, strengthen the unity of the Party and concentrate all efforts on raising the industrial might of the Soviet Union and using the peaceful breathing-space for building socialism.

p Thirdly, a correct line had to be determined for the building-up of a new socialist economy. History knew of no such precedent. We were the first to have to blaze the path to socialism, to move towards this goal by unexplored and unbeaten tracks. Consequently, the third difficulty consisted in the working-out of new forms and methods of socialist management, the accelerated training of engineering personnel from among the workers and peasants, the proper use of the sources of internal socialist 225 accumulation for the construction of heavy industry, the organisation of large-scale socialist farming and the carrying-out of wide-scale cultural reforms.

p Our contemporaries could well peer into this not- sodistant past in order to realise the full measure of the heroic deeds that fell to the lot of our admirable predecessors headed by Lenin. In undertaking the socialist revolution the Communist Party foresaw that the capitalists and landowners would not give up the power peacefully and that a long grim struggle was inevitable. In fact the struggle was a long and extremely bitter one. Before the working classes could taste the fruits of their victory a civil war broke out, which turned the young Soviet Republic into a beleaguered fortress. This war was forced upon it by the internal counter-revolution and its inspirers—the reactionary forces of the imperialist states.

p The civil war disastrously affected all aspects of the people’s life. To hold out and win in the war against the internal and external counter-revolution demanded a tremendous exertion of all forces and a whole system of emergency measures of an economic and political nature. The Party believed that the only possible way out under the existing circumstances was to introduce the policy of War Communism. Lenin said that the Soviet Republic was blockaded and besieged on all sides, and therefore "we could not afford to hesitate in introducing War Communism, or daring to go to the most desperate extremes: to save the workers’ and peasants’ rule we had to suffer an existence of semi-starvation and worse than semi- starvation, but to hold on at all costs, in spite of unprecedented ruin and the absence of economic intercourse”.  [225•*  War Communism, as a policy, was forced upon us by the war and ruin. "It was not, and could not be, a policy that corresponded to the economic tasks of the proletariat. It was a makeshift.”  [225•** 

p At the beginning of the revolution Lenin had occasion to refute the allegations of the bourgeoisie concerning the destructiveness of the socialist revolution and its creative incapacity. Lenin said: "In every socialist revolution, however—and consequently in the socialist revolution in 226 Russia which we began on October 25, 1917—the principal task of the proletariat, and of the poor peasants which it leads, is the positive or constructive work of setting up an extremely intricate and delicate system of new organisational relationships extending to the planned production and distribution of the goods required for the existence of tens of millions of people.”  [226•* 

p The first results of the profound socio-economic reforms carried out by the socialist revolution were summed up by Lenin in his historic work The Immediate Tasks of the Soviet Government written between March and April 1918. Already at that time he had made out a case for the basic principles of the New Economic Policy (N.E.P.) in keeping with the transition from capitalism to socialism. The entire system of measures devised by him signified the gradual socialisation of production with the use of state capitalism under the control of the organs of Soviet authority.

p This programme, however, did not even get off the ground. The breathing-space was so short that instead of state capitalism the Party was compelled to introduce War Communism and carry out the political and economic measures it called for. The whole of industry, large and small, was put under the centralised control of the Soviet government and geared to the needs of the country’s defence; the Party introduced a monopoly on the trade in breadstuffs and banned private trade; it registered all food resources in agriculture; it introduced the surplus-appropriation system and labour conscription; it centralised the management of all links of the national economy. Only the adoption of extreme revolutionary measures saved the young Soviet Republic from destruction.

p Our Party possesses the admirable skill of Leninist revolutionary leadership of the masses, a knowledge of the laws of social development and a knack of scientific prevision. These inestimable qualities always enabled it to find the right bearings, to accurately determine the alignment of class forces, to ensure mobilisation of the masses and make sharp turns at historical stages of the revolutionary struggle. To go forward one must know the goal of the movement, but to achieve this goal in practice requires inflexible assurance and dedicated struggle. An example of 227 outstanding revolutionary performance is the Party’s transition from the policy of War Communism to the New Economic Policy, which was proclaimed by the Tenth Congress of the Party in 1921. This Congress marked a turning point in all spheres of life of the young Soviet state.

p The classics of Marxism-Leninism theoretically demonstrated the inevitability of a transition period from capitalism to socialism for the countries which had made a socialist revolution, a period during which the proletariat, under the leadership of the Communist Party, would have to effect the necessary socio-economic reforms and build the socialist society. The Leninist principles of the N.E.P. were fully in keeping with the spirit and character of this transition period.

p In the present instance these principles accorded with the vital facts which confronted the young socialist republic. Life demanded of the Party that it drastically change its economic policy in order to remove without delay the obstacles that hindered the development of the country’s productive forces and the consolidation of the political and economic alliance between the working class and the mass of the peasantry. This alliance had to be given a purpose that fulfilled the conditions of peaceful construction. Consequently, the cardinal question of economic construction consisted in the establishment of such relationships between town and country as would enable the working class to properly discharge its historical mission—that of building socialism. Naturally, the peasantry could follow the lead of the proletariat only given a correct economic policy that fully met their economic demands. Under the prevailing conditions of appalling economic ruin, however, it was difficult to supply the peasant with all the products of industry he needed.

p What was the alternative? The alternative, as the Party saw it, was, first, to restore freedom of trade, freedom for the small producer to carry on his business; secondly, to restore small-scale industry as a means of quickly rendering assistance to the peasant farmer and making his labour more productive. Particular emphasis was laid on the view that it was not the petty bourgeoisie or petty capital that had to be feared, but the danger of this state of need and dearth of products lasting too long, and this was likely to 228 drain the strength of the proletariat, make it impossible for it to withstand the pressure of petty-bourgeois vacillations.

p An extremely contradictory situation was created, which Lenin likened to a vicious circle. To make safe the alliance between the working class and the peasantry and build up large-scale state-owned industry, which alone would help the country on its way to socialism, it was necessary first of all to improve the condition of peasant farming and small-scale industry. But this involved opening the doors to some extent to capitalism. What way out was there? Reviving capitalism, Lenin pointed out, had to be directed into the channel of state capitalism.

p The only possible and reasonable policy, he said, was not to attempt to ban or cork up the growth of capitalism, but to try to direct it into the channel of state capitalism. "The whole problem—in theoretical and practical terms— is to find the correct methods of directing the development of capitalism (which is to some extent and for some time inevitable) into the channels of state capitalism, and to determine how we are to hedge it about with conditions to ensure its transformation into socialism in the near future.”  [228•* 

p The adoption of the New Economic Policy was first of all an economic concession to the petty peasant producer for whom it was to provide an incentive. Only by means of such a policy was it possible "to build solid gangways to socialism by way of state capitalism”.  [228•**  Thus, the basic aims of the Communist Party’s New Economic Policy were to build a new, socialist economy together with the peasantry, to strengthen the ties of trade and industry between town and country and develop a system of commodity circulation.

p In allowing freedom of trade and market relations and encouraging private business initiative the Communist Party knew very well that these measures were bound to lead to a revival of capitalist elements and the rise of the Nepman—the new “Soviet” bourgeoisie. The N.E.P. was meant to serve and actually did serve as a basis for unprecedented competition between two forces and tendencies—the capitalistic and the socialistic. The question "who will win?" became a life-and-death issue that faced the Party in all its magnitude.

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p On the one hand, the capitalist elements, taking advantage of all the privileges arising from the New Economic Policy, plunged into trade, made a scramble for the market in order to penetrate through it into industry, seize commanding heights in the national economy and overpower the socialist structure. On the other hand, the socialist state, holding the commanding heights in the national economy, confronted the capitalist elements with all the power of its revolutionary forces and barred the way to the restoration of their economic domination.

p Controlling the major economic levers of state regulation and the economic and co-operative organisations, the socialist state was to weaken the capitalist elements by taking possession of the entire system of commodity circulation and directing it into a channel that would enable it to strengthen the trade and industrial ties between town and country and revive big industry, thereby creating a powerful economic base for socialism. Nevertheless, although the calculations as to the inevitable victory of the socialist elements over the capitalist were scientifically well-founded, the danger of the capitalist elements expanding and taking root was a real one.

p Essentially it was a question as to who would be quickest to take advantage of this new situation, whose lead the peasantry would follow—that of the proletariat, who was out to build a socialist society, or that of the capitalist. The question at issue, Lenin said, was "who will take the lead. We must face this issue squarely—who will come out on top? Either the capitalists succeed in organising first—in which case they will drive out the Communists and that will be the end of it”.  [229•*  What forces was the Soviet government to lean on in this economic struggle? Lenin’s answer to this question was: on the one hand, on the working class, who, with the development of industry, would steadily grow in numbers and strength, and, on the other, on the economic advance of the peasantry, on a sharp improvement of its material condition. These forces, given the existence of Soviet rule, were fully capable of curbing the power of capital.

p Panicking in the face of difficulties, the Trotskyists, in chorus with the “Left” Communists, raised an hysterical cry 230 about the erroneousness of the Party’s New Economic Policy. They considered it a full class retreat and offered as an alternative solution the policy of War Communism, which had clearly outlived itself. These politicians, under a screen of “Left” phrases, advocated with one voice and lauded methods of state coercion, emphatically rejected the idea of an economic bond between town and country and denied the possibility of any alliance between the working class and the peasantry. This attitude of the Trotskyists and the “Left” Communists fully reflected their anti-Leninist views on the question of building socialism in one country. They did not believe in the inner forces of the Soviet state and denied the leading role of the working class and its capability of carrying the vast masses of the peasantry with it. The Communist Party rejected this anti-Marxist concept of the oppositionists and wholly adopted Lenin’s policy of economic construction.

p At the new difficult stage of economic construction the Party’s chief task was to use the revolutionary power of the dictatorship of the proletariat and the socialist key positions in the national economy to gain control of the entire mechanism of economic, trade, banking and co-operative activities within a short space of time. To contrapose these powerful levers of state regulation to private capital, to learn business management and trade, and learn it better and more efficiently than the capitalist tradesman—such was the Party’s main demand.

p The strength of the Party leadership was to show itself in a knowledge of economics and business management. How prophetic Lenin’s words sound to this day when he said that the necessary retreat in the sphere of economic policy which the Party then made pursued the clear aim of retreating in order to "link up with the peasant masses, with the rank-and-file working peasants, and begin to move forward immeasurably, infinitely more slowly than we expected, but in such a way that the entire mass will actually move forward with us. If we do that we shall in time progress much more quickly than we even dream of today”.  [230•* 

p The retreat, as we know, continued for a year and yielded palpable results. While pointing out that the object had been achieved, Lenin warned the Party against making too 231 many concessions to capitalism, since excessive concessions to capitalist elements was a grave danger to the cause of socialist construction. On the basis of an economic and class analysis Lenin, at the llth Congress of the Party in 1922, proclaimed the watchword "stop the retreat". "For a year we have been retreating. On behalf of the Party we must now call a halt. The purpose pursued by the retreat has been achieved. This period is drawing, or has drawn, to a close. We now have a different objective, that of regrouping our forces.”  [231•* 

p At the time Lenin formulated two extremely important tasks: first, to effect such a regrouping of class forces as would lead to the complete victory of the socialist structure over all other economic forms; second, to correctly time the moment for launching a decisive offensive of socialism against the capitalist elements, first and foremost against the last and most numerous of the exploiter classes—the kulaks. During the redeployment of class forces the Communist Party was to create the conditions and accumulate the necessary material and technical resources and organisational and political experience for mounting an offensive all along the line against the capitalist elements of town and country and crowning this offensive with the complete victory of the socialist structure throughout the national economy. The Party and the Soviet government, as we know, spent over seven years on redeployment of the class forces. Already during the second half of 1929 the victorious offensive of socialism against the capitalist elements was pressed home along the whole front.

p In his last articles, which were a political testament for the Party, Lenin once again subjected the economic and class changes within the country to a profound analysis. But this time, two years after the introduction of N.E.P., these questions were examined by him from a different angle: not in the context of state capitalism, but in the context of the expansion and consolidation of socialist relations in the system of national economy. Lenin made out a case for the socialist method of industrialisation, showed the sources of accumulation, which differed essentially from those of capitalist states, revealed new objective tendencies in Soviet industrialisation and authenticated his 232 famous co-operative plan—the plan for the socialist transformation of agriculture and for drawing the peasantry into the work of socialist construction.

p As a result of the tremendous efforts and stupendous creative work done by the Party and the people the Soviet Union made rapid strides along the road of economic and cultural revival. Step by step the Communist Party led the country towards the completion of the rehabilitative stage and created the conditions for developing socialist reconstruction in all branches of the national economy. The year 1925 was the decisive year of the restoration period, which saw a tremendous growth of the economy and its approach to the prewar level. As the Party’s 14th Congress pointed out: "We thus have an economic offensive of the proletariat and the advance of the Soviet Union’s economy towards socialism.”  [232•* 

p The 14th Congress of the Communist Party, which embarked on a policy of industrialisation, unanimously approved the plan of the Politbureau for developing fullscale construction of enterprises of the heavy industry. With the adoption of a policy of industrialisation our country completed the first phase of the New Economic Policy and started on the second. At the first stage the Party concentrated its attention on rehabilitating agriculture. Without this there could be no progress in the economy as a whole. At the second stage the Party was to give chief attention to building up big socialist industry, upon whose development now depended the construction of the socialist foundation for the national economy and the further development of all its branches, particularly the socialist reconstruction of agriculture.

p The economic law of development of the socialist economy requires a balanced, integrated growth on planned lines for both industry and agriculture on a country-wide scale, otherwise it is impossible to establish a correct balance between the different branches of the economy, distribute and use the national income with greatest effect and ensure the burgeoning of the whole socialist economy. The need for creating an integrated economic base for 233 large-scale socialist production both in industry and agriculture arose objectively from the socio-economic conditions themselves.

p Thus, the process of regrouping of the class forces, which started after the Party’s llth Congress, ended in the complete victory of the alliance of the working class and the peasantry. Backed by the might of this alliance and by the increased weight of the socialist elements in the system of the national economy, the Communist Party was able to organise the powerful forces of socialism and launch its offensive all along the line. This policy was proclaimed by the 16th Congress of the Party in 1930.

p This most difficult period of struggle for the country’s industrialisation, for the socialist reconstruction of peasant farming and the cultural revolution could truly be said to be one of the most vivid pages in the history of our Party and the Soviet state. This period was replete with the rich experience of the Party’s theoretical and practical activities, with its unremitting efforts to preserve the ideological purity of its ranks and educate all Communists in the spirit of consecrated devotion to Marxism-Leninism. In stressing the special place which this period occupies in the history of the Soviet state, it is safe to say that our Party, guided by the precepts of Lenin, has acquitted itself of its tasks with honour. It has skilfully guided the Soviet people through all obstacles, difficulties and hardships and ensured the epoch-making victory of socialism. At the cost of unheardof privations the Party, step by step, solved the most difficult problem—that of internal accumulation for the construction of heavy industry, for building up large-scale socialist agriculture and carrying through a cultural revolution.

p It was a hard time, a very hard time indeed for our country, the only socialist country in the world, surrounded as it was on all sides and constantly bombarded by the class enemies. This heroic deed of the Soviet people will be inscribed in letters of gold in the annals of the human race. No single socialist state has had to endure such trials, no single nation has had to perform such an exploit, verging on self-sacrifice, as our people. Yet the Soviet people unflinchingly made these sacrifices, knowing that unless it withstood this ordeal the great cause of the revolution might come to naught.

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How good it is to realise that the great honour of performing the "Bolshevik miracle" fell to the lot of our Party and the whole Soviet people. In terms of living reality this means that as a result of their dedicated struggle and work our Party and the Soviet people have created a first-class heavy industry and large-scale socialist agriculture and accomplished a cultural revolution of unprecedented scope and depth. The country’s age-old economic, industrial and cultural backwardness was liquidated and the economic foundation of socialism was laid, followed by the edifice of socialism itself. With the victory of socialism in the U.S.S.R. the New Economic Policy was played out. It can truly be said that the Bolsheviks are the Prometheans of our epoch, who have lighted the torch of socialism in Russia and illumined the path into the future for all the nations of the Earth.