V. I. Lenin
Original publication: marxists.org

Concessions and the Development of Capitalism (1921)

3 minutes | English | State Capitalism The Soviet Union

A transcription of one of various speeches given by Lenin in 1921. For a more elaborate explanation of the Soviet Union’s New Economic Policy, see Leon Trotsky’s “The Forces and Resources of the Two Camps” (1922). [1]

Deng Xiaoping, defending his solution to China’s problems in 1985, would argue in this way: “Perhaps Lenin had a good idea when he adopted the New Economic Policy.” [2]

The Soviet government is inviting foreign capitalists to obtain concessions in Russia.

What is a concession? It is a contract between the government and a capitalist who undertakes to organize or improve production (for example, felling and floating timber, extracting coal, oil, ore, etc.) and to pay the government a share of the product obtained, keeping the rest as his profit.

Is it right for the Soviet government to invite foreign capitalists after expelling the Russian landowners and capitalists? Yes, it is, because, seeing that the workers’ revolution in other countries is delayed, we have to make some sacrifices in order to achieve a rapid and even immediate improvement in the condition of the workers and peasants. The sacrifice is that over a number of years we shall be giving away to the capitalists millions of kilograms of valuable products. The improvement in the condition of the workers and peasants is that we shall immediately obtain additional quantities of petroleum, paraffin oil, salt, coal, farming implements, and so forth. We have no right to forego the opportunity of immediately improving the condition of the workers and peasants, for our impoverishment makes it essential, and our sacrifices will not be fatal.

But is it not dangerous to invite the capitalists? Does it not imply a development of capitalism? Yes, it does imply a development of capitalism, but this is not dangerous, because power will still be in the hands of the workers and peasants, and the land owners and capitalists will not be getting back their property. A concession is something in the nature of a contract of lease.

The capitalist becomes, for a specified period, the lessee of a certain part of state property under a contract, but he does not become the owner. The state remains the owner.

The Soviet government will see to it that the capitalist lessee abides by the terms of the contract, that the contract is to our advantage, and that, as a result, the condition of the workers and peasants is improved. On these terms the development of capitalism is not dangerous, and the workers and peasants stand to gain by obtaining a larger quantity of products.

[1] Leon Trotsky, “The Forces and Resources of the Two Camps” (1922). [web] 

[2] Deng Xiaoping, “Reform is the only way for China to develop its productive forces” (1985). [web]