First Published: Pravda, No. 177, June 29, 1930
Source: Works, J.V. Stalin, Foreign Languages Publishing House, Moscow, 1955, volume 12, pp. 242-385
Transcription/HTML Markup: Hari Kumar for Alliance Marxist-Leninist (North America)/Charles Farrell
Online Version: Stalin Reference Archive (marxists.org) 2000
Comrades, since the Fifteenth Congress two and a half years have passed. Not a very long period one would think. Nevertheless, during this period most important changes have taken place in the life of peoples and states. If one were to characterise the past period in two words, it could be called a turning point period. It marked a turning point not only for us, for the USSR, but also for the capitalist countries all over the world. Between these two turning points, however, there is a fundamental difference. Whereas for the USSR this turning point meant a turn in the direction of a new and bigger economic upswing, for the capitalist countries it meant a turn towards economic decline. Here, in the USSR, there is a growing Upswing of socialist development both in industry and in agriculture. There, among the capitalists, there is growing economic crisis both in industry and in agriculture.
Such is the picture of the present situation in a few words.
Recall the state of affairs in the capitalist countries two and a half years ago. Growth of industrial production and trade in nearly all the capitalist countries. Growth of production of raw materials and food in nearly all the agrarian countries. A halo around the United States as the land of the most full-blooded capitalism. Triumphant hymns of "prosperity." Grovelling to the dollar. Panegyrics in honour of the new technology, in honour of capitalist rationalisation. Proclamation of an era of the "recovery" of capitalism and of the unshakable firmness of capitalist stabilisation. "Universal" noise and clamour about the "inevitable doom" of the Land of Soviets, about the "inevitable collapse" of the USSR That was the state of affairs yesterday.
And what is the picture today?
Today there is an economic crisis in nearly all the industrial countries of capitalism. Today there is an agricultural crisis in all the agrarian countries. Instead of "prosperity" there is mass poverty and a colossal growth of unemployment. Instead of an upswing in agriculture there is the ruin of the vast masses of the peasants. The illusions about the omnipotence of capitalism in general, and about the omnipotence of North American capitalism in particular, are collapsing. The triumphant hymns in honour of the dollar and of capitalist rationalisation are becoming fainter and fainter. Pessimistic wailing about the "mistakes" of capitalism is growing louder and louder. And the "universal" clamour about the "inevitable doom" of the USSR is giving way to "universal" venomous hissing about the necessity of punishing "that country" that dares to develop its economy when crisis is reigning all around.
Such is the picture today.
Things have turned out exactly as the Bolsheviks said they would two or three years ago.
The Bolsheviks said that in view of the restricted limits of the standard of living of the vast masses of the workers and peasants, the further development of technology in the capitalist countries, the growth of productive forces and of capitalist rationalisation, must inevitably lead to a severe economic crisis. The bourgeois press jeered at the "queer prophesies" of the Bolsheviks. The Right deviators dissociated themselves from this Bolshevik forecast and for the Marxist analysis substituted liberal chatter about "organised capitalism." But how did things actually turn out? They turned out exactly as the Bolsheviks said they would.
Such are the facts.
Let us now examine the data on the economic crisis in the capitalist countries.
a) In studying the crisis, the following facts, above all, strike the eye: 1. The present economic crisis is a crisis of over-production. This means that more goods have been produced than the market can absorb. It means that more textiles, fuel, manufactured goods and food have been produced than can be purchased for cash by the bulk of the consumers, i.e., the masses of the people, whose incomes remain on a low level. Since, however, under capitalism, the purchasing power of the masses of the people remains at a minimum level, the capitalists keep their "superfluous" goods, textiles, grain, etc., in their warehouses or even destroy them in order to bolster up prices; they cut down production and discharge their workers, and the masses of the people are compelled to suffer hardship because too many goods have been produced.
2. The present crisis is the first post-war world economic crisis. It is a world crisis not only in the sense that it embraces all, or nearly all, the industrial countries in the world; even France, which is systematically injecting into her organism the billions of marks received as reparations payments from Germany, has been unable to avoid a certain depression, which, as all the data indicate, is bound to develop into a crisis. It is a world crisis also in the sense that the industrial crisis has coincided with an agricultural crisis that affects the production of all forms of raw materials and food in the chief agrarian countries of the world.
3. The present world crisis is developing unevenly, notwithstanding its universal character; it affects different countries at different times and in different degrees. The industrial crisis began first of all in Poland, Rumania and the Balkans. It developed there throughout the whole of last year. Obvious symptoms of an incipient agricultural crisis were already visible at the end of 1928 in Canada, the United States, the Argentine, Brazil and Australia. During the whole of this period United States industry showed an upward trend. By the middle of 1929 industrial production in the United States had reached an almost record level. A break began only in the latter half of 1929, and then a crisis in industrial production swiftly developed, which threw the United States back to the level of 1927. This was followed by an industrial crisis in Canada and Japan. Then came bankruptcies and crisis in China and in the colonial countries, where the crisis was aggravated by the drop in the price of silver, and where the crisis of overproduction was combined with the ruination of the peasant farms, which were reduced to utter exhaustion by feudal exploitation and unbearable taxation. As regards Western Europe, there the crisis began to gain force only at the beginning of this year, but not everywhere to the same degree, and even in that period France still showed an increase in industrial production.
I do not think there is any need to dwell particularly on the statistics that demonstrate the existence of the crisis. Nobody now disputes the existence of the crisis. I shall therefore confine myself to quoting one small but characteristic table recently published by the German Institute of Economic Research. This table depicts the development of the mining industry and the chief branches of large-scale manufacturing industry in the United States, Britain, Germany, France, Poland and the USSR since 1927; the 1928 level of production is taken as 100.
Here is the table:
| Year | USSR | U.S.A. | Britain | Germany | France | Poland |
| 1927 | 82.4 | 95.5 | 105.5 | 100.1 | 86.6 | 88.5 |
| 1928 | 100 | 100 | 100 | 100 | 100 | 100 |
| 1929 | 123.5 | 106.3 | 107.9 | 101.8 | 109.4 | 99.8 |
| 1930 (first quarter) | 171.4 | 95.5 | 107.4 | 93.4 | 113.1 | 84.6 |
What does this table show?
It shows, first of all that the United States, Germany and Poland are experiencing a sharply expressed crisis in large-scale industrial production; in the first quarter of 1930, in the United States, after the boom in the first half of 1929, the level of production dropped 10.8 per cent compared with 1929 and sank to the level of 1927; in Germany, after three years of stagnation, the level of production dropped 8.4 per cent compared with last year and sank to 6.7 per cent below the level of 1927; in Poland, after last year's crisis, the level of production dropped 15.2 per cent compared with last year and sank to 3.9 per cent below the level of 1927.
Secondly, the table shows that Britain has been marking time for three years, round about the 1927 level, and is experiencing severe economic stagnation; in the first quarter of 1930 she even suffered a drop in production of 0.5 per cent compared with the previous year, thus entering the first phase of a crisis.
Thirdly, the table shows that of the big capitalist countries only in France is there a certain growth of large-scale industry; but whereas the increase in 1928 amounted to 13.4 per cent and that in 1929 to 9.4 per cent, the increase in the first quarter of 1930 is only 3.7 per cent above that in 1929, thus presenting from year to year a picture of a descending curve of growth.
Lastly, the table shows that of all the countries in the world, the USSR is the only one in which a powerful upswing of large-scale industry has taken place; the level of production in the first quarter of 1930 was more than twice as high as that in 1927, and the increase rose from 17.6 per cent in 1928 to 23.5 per cent in 1929 and to 32 per cent in the first quarter of 1930, thus presenting from year to year a picture of an ascending curve of growth.
It may be said that although such was the state of affairs up to the end of the first quarter of this year, it is not precluded that a turn for the better may have taken place in the second quarter of this year. The returns for the second quarter, however, emphatically refute such an assumption. They show, on the contrary, that the situation has become still worse in the second quarter. These returns show: a further drop in share prices on the New York Stock Exchange and a new wave of bankruptcies in the United States; a further decline in production, a reduction of wages of the workers, and growth of unemployment in the United States, Germany, Britain, Italy, Japan, South America, Poland, Czechoslovakia, etc.; the entry of a number of branches of industry in France into a state of stagnation, which, in the present international economic situation, is a symptom of incipient crisis. The number of unemployed in the United States is now over 6,000,000, in Germany about 5,000,000, in Britain over 2,000,000, in Italy, South America and Japan a million each, in Poland, Czechoslovakia and Austria half a million each. This is apart from the further intensification of the agricultural crisis, which is ruining millions of farmers and labour-mg peasants. The crisis of overproduction in agriculture has reached such a pitch that in Brazil, in order to keep up prices and the profits of the bourgeoisie, 2,000,000 bags of coffee have been thrown into the sea; in America maize has begun to he used for fuel instead of coal; in Germany, millions of poods of rye are being converted into pig food; and as regards cotton and wheat, every measure is being taken to reduce the crop area by 10-15 per cent.
Such is the general picture of the developing world economic crisis.
b) Now, when the destructive effects of the world economic crisis are spreading, sending to the bottom whole strata of medium and small capitalists, ruining entire groups of the labour aristocracy and farmers, and dooming vast masses of workers to starvation, everybody is asking: what is the cause of the crisis, what is at the bottom of it, how can it be combated, how can it he abolished? The most diverse "theories" about crises are being invented. Whole schemes are being proposed for "mitigating," "preventing," and "eliminating" crises. The bourgeois oppositions are blaming the bourgeois governments because "they failed to take all measures" to prevent the crisis. The "Democrats" blame the "Republicans" and the "Republicans" blame the "Democrats," and all of them together blame the Hoover group with its "Federal Reserve System", (Original Footnote: The Federal Reserve System was instituted in the U.S.A. In 1913. Twelve Federal Reserve Banks in the major centres of the country co-ordinate and control all the activities of the American banks and are an instrument of monopoly capital. The System is headed by a Federal Reserve Board (re-named in 1933 the Board of Governors of the Federal Reserve System), the members of which are appointed by the U.S. President, and which is completely under the thumb of the financial magnates. The American bourgeois economists - apologists of American capitalism - and financial and government circles in the U.S.A. considered that the Federal Reserve System would safeguard the country's economy against crises. The attempts of President Hoover to cope with the crisis that broke out in 1929 with the help of the Federal Reserve System proved a complete failure) which failed to "curb" the crisis. There are even wiseacres who ascribe the world economic crisis to the "machinations of the Bolsheviks". I have in mind the well-known "industrialist" Rechberg who, properly speaking, little resembles an industrialist, hut reminds one more than anything of an "industrialist" among literary men and a "literary man" among industrialists. (Laughter.)
It goes without saying that none of these "theories" and schemes has anything in common with science. It must be admitted that the bourgeois economists have proved to be utter bankrupts in face of the crisis. More than that, they have been found to be devoid even of that little sense of reality which their predecessors could not always be said to lack. These gentlemen forget that crises cannot be regarded as something fortuitous under the capitalist system of economy. These gentlemen forget that economic crises are the inevitable result of capitalism. These gentlemen forget that crises were born with the birth of the rule of capitalism. There have been periodical crises during more than a hundred years, recurring every 12, 10, 8 or less years. During this period bourgeois governments of all ranks and colours, bourgeois leaders of all levels and abilities, all without exception tried their strength at the task of "preventing" and "abolishing" crises. But they all suffered defeat. They suffered defeat because economic crises cannot be prevented or abolished within the framework of capitalism. Is it surprising that the present-day bourgeois leaders are also suffering defeat? Is it surprising that far from mitigating the crisis, far from easing the situation of the vast masses of the working people, the measures taken by the bourgeois governments actually lead to new outbreaks of bankruptcy, to new waves of unemployment, to the swallowing up of the less powerful capitalist combines by the more powerful capitalist combines?
The basis, the cause, of economic crises of over-production lies in the capitalist system of economy itself. The basis of the crisis lies in the contradiction between the social character of production and the capitalist form of appropriation of the results of production. An expression of this fundamental contradiction of capitalism is the contradiction between the colossal growth of capitalism's potentialities of production, calculated to yield the maximum of capitalist profit, and the relative reduction of the effective demand of the vast masses of the working people whose standard of living the capitalists always try to keep at the minimum level. To be successful in competition and to squeeze out the utmost profit, the capitalists are compelled to develop their technical equipment, to introduce rationalisation, to intensify the exploitation of the workers and to increase the production potentialities of their enterprises to the utmost limits. So as not to lag behind one another, all the capitalists are compelled, in one way or another, to take this path of furiously developing production potentialities. The home market and the foreign market, however, the purchasing power of the vast masses of workers' and peasants who, in the last analysis, constitute the bulk of the purchasers, remain on a low level. Hence overproduction crises. Hence the well-known results, recurring more or less periodically, as a consequence of which goods remain unsold, production is reduced, unemployment grows and wages are cut, and all this still further intensifies the contradiction between the level of production and the level of effective demand. Overproduction crises are a manifestation of this contradiction in turbulent and destructive forms.
If capitalism could adapt production not to the obtaining of the utmost profit but to the systematic improvement of the material conditions of the masses of the people, and if it could turn profits not to the satisfaction of the whims of the parasitic classes, not to perfecting the methods of exploitation, not to the export of capital, but to the systematic improvement of the material conditions of the workers and peasants, then there would be no crises. But then capitalism would not be capitalism. To abolish crises it is necessary to abolish capitalism.
Such is the basis of economic crises of overproduction in general.
We cannot, however, confine ourselves to this in characterising the present crisis. The present crisis cannot be regarded as a mere recurrence of the old crises. It is occurring and developing under certain new conditions, which must be brought out if we are to obtain a complete picture of the crisis. It is complicated and deepened by a number of special circumstances which must be understood if we are to obtain a clear idea of the present economic crisis.
What are these special circumstances?
These special circumstances can be reduced to the following characteristic facts:
1. The crisis has most severely affected the principal country of capitalism, its citadel, the United States, in which is concentrated not less than half the total production and consumption of all those countries in the world. Obviously, this circumstance cannot but lead to a colossal expansion of the sphere of influence of the crisis, to the intensification of the crisis and to the accumulation of extra difficulties for world capitalism.
2. In the course of development of the economic crisis, the industrial crisis in the chief capitalist countries did not merely coincide but became interwoven with the agricultural crisis in the agrarian countries, thereby aggravating the difficulties and predetermining the inevitability of a general decline in economic activity. Needless to say, the industrial crisis will intensify the agricultural crisis, and the agricultural crisis will prolong the industrial crisis, which cannot but lead to the intensification of the economic crisis as a whole.
3. Present-day capitalism, unlike the old capitalism, is monopoly capitalism, and this predetermines the inevitability of the capitalist combines fighting to keep up the high monopolist prices of goods, in spite of over-production. Naturally, this circumstance, which makes the crisis particularly painful and ruinous for the masses of the people who constitute the main consumers of goods, cannot but lead to prolonging the crisis, cannot but be an obstacle to resolving it.
4. The present economic crisis is developing on the basis of the general crisis of capitalism, which came into being already in the period of the imperialist war, and is sapping the foundations of capitalism and has facilitated the advent of the economic crisis.
What does that mean?
It means, first of all, that the imperialist war and its aftermath intensified the decay of capitalism and upset its equilibrium, that we are now living in an epoch of wars and revolutions, that capitalism has already ceased to be the sole and all-embracing system of world economy, that side by side with the capitalist system of economy there is the socialist system, which is growing, thriving, stands opposed to the capitalist system and by its very existence demonstrates the decaying state of capitalism, shakes its foundations.
It means, further, that the imperialist war and. the victory of the revolution in the USSR have shaken the foundations of imperialism in the colonial and dependent countries, that the prestige of imperialism has already been undermined in those countries, that it is no longer able to lord it in those countries In the old way.
It means, further, that during the war and after it, a young native capitalism appeared and grew up in the colonial and dependent countries, which is successfully competing in the markets with the old capitalist countries, intensifying and complicating the struggle for markets.
It means, lastly, that the war left the majority of capitalist countries a burdensome heritage in the shape of enterprises chronically working under capacity and of an army of unemployed numbering millions, which has been transformed from a reserve into a permanent army of unemployed; this created for capitalism a mass of difficulties even before the present economic crisis, and must complicate matters still more during the crisis.
Such are the circumstances which intensify and aggravate the world economic crisis.
It must be admitted that the present economic crisis is the gravest and most profound world economic crisis that has ever occurred.
A most important result of the world economic crisis is that it is laying bare and intensifying the contradictions inherent in world capitalism.
a) It is laying bare and intensifying the contradictions between the major imperialist countries, the struggle for markets, the struggle for raw materials, the struggle for the export of capital. None of the capitalist states is now satisfied with the old distribution of spheres of influence and colonies. They see that the relation of forces has changed and that it is necessary in accordance with it to redivide markets, sources of raw materials, spheres of influence, and so forth. The chief contradiction here is that between the United States and Britain. Both in the sphere of the export of manufactured goods and in the sphere of the export of capital, the struggle is raging chiefly between the United States and Britain. It is enough to read any journal dealing with economics, any document concerning exports of goods and capital, to be convinced of this. The principal arena of the struggle is South America, China, the colonies and dominions of the old imperialist states. Superiority of forces in this struggle - and a definite superiority - is on the side of the United States.
After the chief contradiction come contradictions which, while not the chief ones, are, however, fairly important: between America and Japan, between Germany and France, between France and Italy, between Britain and France, and so forth.
There can be no doubt whatever that owing to the developing crisis, the struggle for markets, for raw materials and for the export of capital will grow more intense month by month and day by day.
Means of struggle: tariff policy, cheap goods, cheap credits, regrouping of forces and new military-political alliances, growth of armaments and preparation for new
I have spoken about the crisis embracing all branches of production. There is one branch, however, has not been affected by the crisis. That branch is the armament industry. It is growing continuously, not-withstanding the crisis. The bourgeois states are furiously arming and rearming. What for? Not for friendly chats, of course, but for war. And the imperialists need war, for it is the only means by which to redivide the world, to redivide markets, sources of raw materials and spheres for the investment of capital.
It is quite understandable that in this situation so-called pacifism is living its last days, that the League of Nations is rotting alive, that "disarmament schemes" come to nothing, while conferences for the reduction of naval armaments become transformed into conferences for renewing and enlarging navies.
This means that the danger of war will grow at an accelerated pace.
Let the Social-Democrats chatter about pacifism, peace, the peaceful development of capitalism, and so forth. The experience of Social-Democrats being in power in Germany and Britain shows that for them pacifism is only a screen needed to conceal the preparation for new wars.
b) It is laying bare and will intensify the contradictions between the victor countries and the vanquished countries. Among the latter I have in mind chiefly Germany. Undoubtedly, in view of the crisis and the aggravation of the problem of markets, increased pressure will be brought to bear upon Germany, which is not only a debtor, but also a very big exporting. country. The peculiar relations that have developed between the victor countries and Germany could be depicted in the form of a pyramid at the apex of which America, France, Britain and the others are seated in lordly fashion, holding in their hands the Young Plan (Original Footnote: The Young Plan - named after its author, the American banker Young - was a plan for exacting reparations from Germany. It was adopted on June 7, 1929, by a committee of French, British, Italian, Japanese, Belgian, American and German experts, and was finally endorsed at the Hague Conference on January 20, 1930. The plan fixed total German reparations at 113,900 million marks (in foreign currency), to be paid over a period of 59 years. All reparations receipts and payments were to be handled by the Bank for International Settlements, in which the U.S.A. occupied a dominant position. The establishment of this bank was one of the cardinal points of the Young Plan and was a means by which American monopoly capital could control the trade and currencies of the European countries. The plan relieved German industry of contributions to reparations, the whole burden of which was laid upon the working people. The Young Plan made it possible to speed up the rebuilding of Germany's industrial war potential, which the U.S. imperialists were seeking to achieve with a view to launching aggression against the USSR) with the inscription: "Pay up!"; while underneath lies Germany, flattened out, exhausting herself and compelled to exert all her efforts to obey the order to pay thousands of millions in indemnities. You wish to know what this is? It is "the spirit of Locarno. (Original Footnote: This refers to the treaties and agreements concluded by the imperialist states at a conference in Locarno, Switzerland, held October 5-16, 1925. The Locarno agreements were designed to strengthen the post-war system established in Europe by the Treaty of Versailles, but their effect was to sharpen still more the contradictions between the chief imperialist countries and to stimulate preparation for new wars. [For the Locarno Conference, see J. V. Stalin, Works:, Vol. 7, pp. 277-83.]) To think that such a situation will have no effect upon world capitalism means not to understand anything in life. To think that the German bourgeoisie will be able to pay 20,000 million marks within the next ten years and that the German proletariat, which is living under the double yoke of "its own" and the "foreign" bourgeoisie, will allow the German bourgeoisie to squeeze these 20,000 million marks out of it without serious battles and convulsions, means to go out of one's mind. Let the German and French politicians pretend that they believe in this miracle. We Bolsheviks do not believe in miracles.
c) It is laying bare and intensifying the contradictions between the imperialist states and the colonial and dependent countries. The growing economic crisis cannot but increase the pressure of the imperialists upon the colonies and dependent countries, which are the chief markets for goods and sources of raw materials. Indeed, this pressure is increasing to the utmost degree. It is a fact that the European bourgeoisie is now in a state of war with "its" colonies in India, Indo-China, Indonesia and North Africa. It is a fact that "independent" China is already virtually partitioned into spheres of influence, while the cliques of counter-revolutionary Kuomintang generals, warring among themselves and ruining the Chinese people, are obeying the will of their masters in the imperialist camp.
The mendacious story that officials of the Russian embassies in China are to blame for the disturbance of "peace and order" in China must now be regarded as having been utterly exposed. There have been no Russian embassies for a long time in either South or Central China. On the other hand, there are British, Japanese, German, American and all sorts of other embassies there. There have been no Russian embassies for a long time in either South or Central China. On the other hand, there are German, British and Japanese military advisers with the warring Chinese generals. There have been no Russian embassies there for a long time. On the other hand, there are British, American, German, Czechoslovak and all sorts of other guns, rifles, aircraft, tanks and poison gases. Well? Instead of "peace and order" a most unrestrained and most devastating war of the generals, financed and instructed by the "civilised" states of Europe and America, is now raging in South and Central China. We get a rather piquant picture of the "civilising" activities of the capitalist states. What we do not understand is merely: what have the Russian Bolsheviks to do with it?
It would be ridiculous to think that these out-rages will be without consequences for the imperialists. The Chinese workers and peasants have already retaliated to them by forming Soviets and a Red Army. It is said that a Soviet government has already been set up there. I think that if this is true, there is nothing surprising about it. There can be no doubt that only Soviets can save China from utter collapse and pauperisation.
As regards India, Indo-China, Indonesia, Africa, etc., the growth of the revolutionary movement in those countries, which at times assumes the form of a national war for liberation, leaves no room for doubt. Messieurs the bourgeois count on flooding those countries with blood and on relying on police bayonets, calling people like Gandhi to their assistance. There can be no doubt that police bayonets make a poor prop. Tsarism, in its day, also tried to rely on police bayonets, but everybody knows what kind of a prop they turned out to be. As regards assistants of the Gandhi type, tsarism had a whole herd of them in the shape of liberal compromisers of every kind, but nothing came of this except discomfiture.
d) It is laying bare and intensifying the contradictions between the bourgeoisie and the proletariat in the capitalist countries. The crisis has already increased the pressure exerted by the capitalists on the working class. The crisis has already given rise to another wave of capitalist rationalisation, to a further deterioration of the conditions of the working class, to increased un-employment, to an enlargement of the permanent army of unemployed, to a reduction of wages. It is not surprising that these circumstances are revolutionising the situation, intensifying the class struggle and pushing the workers towards new class battles.
As a result of this, Social-Democratic illusions among the masses of workers are being shattered and dispelled. After the experience of Social-Democrats being in power, when they broke strikes, organised lockouts and shot down workers, the false promises of "industrial democracy, peace in industry," and "peaceful methods" of struggle sound like cruel mockery to the workers. Will many workers be found today capable of believing the false doctrines of the social-fascists? The well-known workers' demonstrations of August 1, 1929 (against the war danger) and of March 6, 1930 (against unemployment) (Original footnote: Anti-war demonstrations and strikes on August 1, 1929 (the fifteenth anniversary of the outbreak of the imperialist first world war) and protest demonstrations on March 8, 1930, against the rapid growth of unemployment (as a result of the world economic crisis of 1929) took place in many cities and industrial centres of France, Germany, Britain, the U.S.A., Poland and other European and American countries. The protest movement took place wholly under the leadership of the Communist Parties and the Communist International) show that the best members of the working class have already turned away from the social-fascists. The economic crisis will strike a fresh blow at Social-Democratic illusions among the workers. Not many workers will be found now, after the bankruptcies and ruination caused by the crisis, who believe that it is possible for "every worker" to become rich by holding shares in "democratised" joint-stock companies. Needless to say, the crisis will strike a crushing blow at all these and similar illusions.
The desertion of the masses of the workers from the Social-Democrats, however, signifies a turn on their part towards communism. That is what is actually taking place. The growth of the trade-union movement that is associated with the Communist Party, the electoral successes of the Communist Parties, the wave of strikes in which the Communists are taking a leading part, the development of economic strikes into political protests organised by the Communists, the mass demonstrations of workers who sympathise with communism, which are meeting a lively response in the working class - all this shows that the masses of the workers regard the Communist Party as the only party capable of fighting capitalism, the only party worthy of the workers' confidence, the only party under whose leadership it is possible to enter, and worth while entering, the struggle for emancipation from capitalism. This means that the masses are turning towards communism. It is the guarantee that our fraternal Communist Par-ties will become big mass parties of the working class. All that is necessary is that the Communists should be capable of appraising the situation and making proper use of it. By developing an uncompromising struggle against Social-Democracy, which is capital's agency in the working class, and by reducing to dust all and sundry deviations from Leninism, which bring grist to the mill of Social-Democracy, the Communist Parties have shown that they are on the right road. They must definitely fortify themselves on this road; for only if they do that can they count on winning over the majority of the working class and successfully prepare the proletariat for the coming class battles. Only if they do that can we count on a further increase in the influence and prestige of the Communist International.
Such is the state of the principal contradictions of world capitalism, which have become intensified to the utmost by the world economic crisis.
What do all these facts show?
That the stabilisation of capitalism is coming to an end.
That the upsurge of the mass revolutionary movement will increase with fresh vigour.
That in a number of countries the world economic crisis will grow into a political crisis.
This means, firstly, that the bourgeoisie will seek a way out of the situation through further fascisation in the sphere of domestic policy, and will utilise all the reactionary forces, including Social-Democracy, for this purpose.
It means, secondly, that in the sphere of foreign policy the bourgeoisie will seek a way out through a new imperialist war.
It means, lastly, that the proletariat, in fighting capitalist exploitation and the war danger, will seek a way out through revolution.
a) I have spoken above about the contradictions of world capitalism. In addition to these, however, there is one other contradiction. I am referring to the contradiction between the capitalist world and the USSR True, this contradiction must not be regarded as being of the same order as the contradiction within capitalism. It is a contradiction between capitalism as a whole and the country that is building socialism. This, however, does not prevent it from corroding and shaking the very foundations of capitalism. More than that, it lays bare all the contradictions of capitalism to the roots and gathers them into a single knot, transforming them into an issue of the life and death of the capitalist order itself. That is why, every time the contradictions of capitalism become acute, the bourgeoisie turns its gaze towards the USSR, wondering whether it would not be possible to solve this or that contradiction of capitalism, or all the contradictions together, at the expense of the USSR, of that Land of Soviets, that citadel of revolution which, by its very existence, is revolutionising the working class and the colonies, which is hindering the organisation of a new war, hindering a new redivision of the world, hindering the capitalists from lording it in its extensive home market which they need so much, especially now, in view of the economic crisis.
Hence the tendency towards adventurist attacks on the USSR and towards intervention, a tendency which will certainly grow owing to the development of the economic crisis.
The most striking expression of this tendency at the present time is present-day bourgeois France, the birthplace of the philanthropic "Pan-Europe"(Original Footnote: '"Pan-Europe "-a projected bloc of European states against the Soviet Union suggested by the French Foreign Minister Briand in May 1930. Europe, united in a Federal Union," was to constitute a single anti-Soviet front, and the executive body of the "Federal Union," the "European Committee," was to be a general staff for preparing an attack on the USSR Briand's plan was also designed to establish French hegemony on the European continent, and therefore encountered the opposition of Britain, Italy and the U.S.A. Nothing came of the "Pan-Europe" scheme owing to the contradictions between the imperialist powers) scheme, the "cradle" of the Kellogg Pact, (Original footnote: This refers to the pact renouncing war signed in Paris on August 27, 1928, by the U.S.A., France, Germany, Great Britain, Poland, Italy, Japan, Czechoslovakia, Belgium and the British Dominions. The USSR was not invited to take part in the negotiations for the conclusion of the Kellogg Pact, in order that the USSR should not be included among the countries to which the proposed pact for renunciation of war as an instrument of national policy should apply. Under cover of demagogic talk about "universal peace," the sponsors of the pact (France, U.S.A., Britain) intended to use it as a means of isolating and combating the USSR The true purposes of the pact were exposed by the Government of the USSR in its statement of August 5, 1925. Under the pressure of public opinion, the American, British and French Governments were compelled to invite the USSR to adhere to the pact. The Soviet Government did so and was one of the first to ratify the Kellogg Pact, inviting neighbouring states to conclude an agreement giving immediate effect to its provisions. Such an agreement was signed by the USSR, Poland, Rumania, Estonia and Latvia in Moscow on February 9, 1929, Turkey and Lithuania adhering to it later) the most aggressive and militarist of all the aggressive and militarist countries in the world.
But intervention is a two-edged sword. The bourgeoisie knows this perfectly well. It will be all right, it thinks, if intervention goes off smoothly and ends in the defeat of the USSR But what if it ends in the defeat of the capitalists? There was intervention once and it ended in failure. If the first intervention, when the Bolsheviks were weak, ended in failure, what guarantee is there that the second will not end in failure too? Everybody sees that the Bolsheviks are far stronger now, both economically and politically, and as regards preparedness for the country's defence. And what about the workers in the capitalist countries, who will not permit intervention in the USSR, who will fight intervention and, if anything happens, may attack the capitalists in the rear? Would it not be better to proceed along the line of increasing trade connections with the USSR, to which the Bolsheviks do not object?
Hence the tendency towards continuing peaceful relations with the USSR.
Thus, we have two sets of factors, and two different tendencies operating in opposite directions:
1) The policy of disrupting economic connections between the USSR and the capitalist countries; provocative attacks upon the USSR; open and secret activities in preparation for intervention against the USSR These are the factors that menace the USSR's international position. It is the operation of these factors that explains such facts as the rupture of relations with the USSR by the British Conservative Cabinet; the seizure of the Chinese-Eastern Railway by the Chinese militarists; the financial blockade of the USSR; the clerical "crusade," headed by the Pope, against the USSR; the organisation by agents of foreign states of wrecking activities on the part of our specialists; the organisation of explosions and incendiarism, such as were carried out by certain employees of "Lena Gold-Fields (Original Footnotes: Lena Gold-Fields - a British company which in 1925-30 held a concession in the USSR for the exploitation of gold, copper, iron and other deposits in Siberia. By the terms of the concession agreement the Lena Gold-Fields company was obliged to construct new mining enterprises and to reconstruct the plants and mines it had received on lease. In view of the fact that the company did not carry out its obligations and caused the plants, mines and other installations it had received to fall into decay, the Soviet Government terminated the concession and committed to trial Lena Gold-Fields employees who had engaged in espionage and wrecking activities in the USSR); attempts on the lives of representatives of the USSR (Poland); finding fault with our exports (United States, Poland), and so forth.
2) Sympathy towards and support of the USSR on the part of the workers in capitalist countries; growth of the economic and political might of the USSR; increase in the USSRís defence capacity; the peace policy undeviatingly pursued by the Soviet government. These are the factors that strengthen the USSR's international position. It is the operation of these factors that explains such facts as the successful settlement of the dispute over the Chinese-Eastern Railway, the restoration of relations with Britain, the growth of economic connections with capitalist countries, and so forth.
It is the conflict between these factors that determines the USSRís external situation.
b) It is said that the stumbling block to the improvement of economic relations between the USSR and the bourgeois states is the question of the debts. I think that this is not an argument in favour of paying the debts, but a pretext advanced by the aggressive elements for interventionist propaganda. Our policy in this field is clear and well-grounded. On condition that we are granted credits, we are willing to pay a small part of the pro-war debts, regarding them as additional interest on the credits. Without this condition we cannot and must not pay. Is more demanded of us? On what grounds? Is it not well-known that those debts were contracted by the tsarist government, which was overthrown by the Revolution, and for whose obligations the Soviet Government can take no responsibility? There is talk about international law, about international obligations. But on the grounds of what international law did Messieurs the "Allies" sever Bessarabia from the USSR and hand it over to enslavement under the Rumanian boyars? On the grounds of what international obligations did the capitalists and governments of France, Britain, America and Japan attack the USSR, invade it, and for three whole years plunder it and ruin its inhabitants? If this is what is called international law and international obligations, then what will you call robbery? (Laughter. Applause.) Is it not obvious that by committing these predatory acts Messieurs the "Allies" have deprived themselves of the right to appeal to international law, to international obligations?
It is said, further, that the establishment of "normal" relations is hindered by the propaganda conducted by the Russian Bolsheviks. With the object of preventing the pernicious effects of propaganda, Messieurs the bourgeois every now and again fence themselves off with "cordons" and "barbed-wire fences" and graciously bestow the honour of guarding these "fences" upon Poland, Rumania, Finland and others. It is said that Germany is burning with envy because she is not being permitted to guard the "cordons" and "barbed-wire fences." Does it need to be proved that the chatter about propaganda is no argument against establishing "normal relations," but a pretext for interventionist propaganda? How can people who do not want to appear ridiculous "fence themselves off" from the ideas of Bolshevism if in their own country there exists favourable soil for these ideas? Tsarism in its time also "fenced itself off" from Bolshevism, but, as is well known, the "fence" proved to be useless. It proved to be useless because Bolshevism everywhere does not penetrate from outside, but grows within the country. There are no countries, one would think, more "fenced-off" from the Russian Bolsheviks than China, India and Indo-China. But what do we find? Bolshevism is growing in these countries, and will continue to grow, in spite of all "cordons," because, evidently, there are conditions there that are favourable for Bolshevism. What has the propaganda of the Russian Bolsheviks to do with it? If Messieurs the capitalists could somehow "fence themselves off" from the economic crisis, from mass poverty, from unemployment, from low wages and from the exploitation of labour, it would be another matter; then there would be no Bolshevik movement in their countries. But the whole point is that every rascal tries to justify his weakness or impotence by pleading Russian Bolshevik propaganda.
It is said, further, that another stumbling block is our Soviet system, collectivisation, the fight against the kulaks, anti-religious propaganda, the fight against wreckers and counter-revolutionaries among "men of science," the banishment of the Besedovskys, Solomons, Dmitrievskys, and other lackeys of capital. But this is becoming quite amusing. It appears that they don't like the Soviet system. But we don't like the capitalist system. (Laughter. Applause.) We don't like the fact that in their countries tens of millions of unemployed are compelled to suffer poverty and starvation, while a small group of capitalists own wealth amounting to billions. Since, however, we have agreed not to intervene in the internal affairs of other countries, is it not obvious that it is not worth while reverting to this question? Collectivisation, the fight against the kulaks, the fight against wreckers, anti-religious propaganda, and so forth, are the inalienable right of the workers and peasants of the USSR, sealed by our Constitution. We must and shall implement the Constitution of the USSR with complete consistency. Naturally, therefore, whoever refuses to reckon with our Constitution can pass on, can go wherever he pleases. As for the Besedovskys, Solomons, Dmitrievskys and so forth, we shall continue to throw out such people like defective goods that are useless and harmful for the Revolution. Let them be made heroes of by those who have a special predilection for offal. (Laughter.) The millstones of our Revolution grind exceedingly well. They take all that is useful and give it to the Soviets and cast aside the offal. It is said that in France, among the Parisian bourgeois, there is a big demand for these defective goods. Well, let them import them to their heart's content. True, this will overburden somewhat the import side of France's balance of trade, against which Messieurs the bourgeois always protest, but that is their business. Let us not intervene in the internal affairs of France. (Laughter. Applause.)
That is how the matter stands with the "obstacles" that hinder the establishment of "normal" relations between the USSR and other countries.
It turns out that these "obstacles" are fictitious "obstacles" raised as a pretext for anti-Soviet propaganda.
Our policy is a policy of peace and of increasing trade connections with all countries. A result of this policy is an improvement in our relations with a number of countries and the conclusion of a number of agreements for trade', technical assistance, and so forth. Another result is the USSRís adherence to the Kellogg Pact, the signing of the well-known protocol along the lines of the Kellogg Pact with Poland, Rumania, Lithuania, and other countries, the signing of the protocol on the prolongation of the treaty of friendship and neutrality with Turkey. And lastly, a result of this policy is the fact that we have succeeded in maintaining peace, in not allowing our enemies to draw us into conflicts, in spite of a number of provocative acts and adventurist attacks on the part of the warmongers. We shall continue to pursue this policy of peace with all our might and with all the means at our disposal. We do not want a single foot of foreign territory; but of our territory we shall not surrender a single inch to anyone. (Applause.)
Such is our foreign policy.
The task is to continue this policy with all the perseverance characteristic of Bolsheviks.
Let us pass to the internal situation in the USSR In contrast to the capitalist countries, where an economic crisis and growing unemployment reign, the internal situation in our country presents a picture of increasing advance of the national economy and of progressive diminution of unemployment. Large-scale industry has grown up, and the rate of its development has increased. Heavy industry has become firmly established. The socialist sector of industry has made great headway. A new force has arisen in agriculture - the state farms and collective farms. Whereas a year or two ago we had a crisis in grain production, and in our grain-procurement operations we depended mainly on individual farming, now the centre of gravity has shifted to the collective farms and state farms, and the grain crisis can be regarded as having been, in the main, solved. The main mass of the peasantry has definitely turned towards the collective farms. The resistance of the kulaks has been broken. The internal situation in the USSR has been still further consolidated. Such is the general picture of the internal situation in the USSR at the present time.
Let us examine the concrete facts.
a) In 1926-27, i.e., at the time of the Fifteenth Congress of the Party, the gross output of agriculture as a whole, including forestry, fishing, etc., amounted in pro-war rubles to 12,370,000,000 rubles, i.e., 106.6 per cent of the pro-war level. In the following year, however, i.e., in 1927-28, it was 107.2 per cent, in 1928-29 it was 109.1 per cent, and this year, 1929-30, judging by the course of development of agriculture, it will be not less than 113-114 per cent of the pre-war level.
Thus we have a steady, although relatively slow, increase in agricultural production as a whole.
In 1926-27, i.e., at the time of the Fifteenth Congress of the Party, the gross output of industry as a whole, both small and large scale, including flour milling, amounted in pro-war rubles to 8,641,000,000 rubles, i.e., 102.5 per cent of the pre-war level. In the following year, however, i.e., in 1927-28, it was 122 per cent, in 1928-29 it was 142.5 per cent, and this year, 1929-30, judging by the course of industrial development, it will be not less than 180 per cent of the pro-war level.
Thus we have an unprecedentedly rapid growth of industry as a whole.
b) In 1926-27, i.e., at the time of the Fifteenth Congress of the Party, freight turnover on our entire railway system amounted to 81,700,000,000 ton-kilometers, i.e., 127 per cent of the prewar level. In the following year, however, i.e., in 1927-28 it was 134.2 per cent, in 1928-29 it was 162.4 per cent, and this year, 1929-30, it, by all accounts, will be not less than 193 per cent of the pre-war level. As regards new railway construction, in the period under review, i.e., counting from 1927-28, the railway system has grown from 76,000 kilometers to 80,000 kilometers, which is 136.7 per cent of the pro-war level.
c) If we take the trade turnover (wholesale and retail) in the country in 1926-27 as 100 (31,000,000,000 'rubles), then the volume of trade in 1927-28 shows an increase to 124.6 per cent, that in 1928-29 to 160.4 per cent, and this year, 1929-30, the volume of trade will, by all accounts, reach 202 per cent, i.e., double that of 1926-27.
d) If we take the combined balances of all our credit institutions on October 1, 1927 as 100 (9,173,000,000 rubles), then on October 1, 1928, there was an increase to 141 per cent, and on October 1, 1929, an increase to 201.1 per cent, i.e., an amount double that of 1927.
e) If the combined state budget for 1926-27 is taken as 100 (6,371,000,000 rubles) that for 1927-28 shows an increase to 125.5 per cent, that for 1928-29 an increase to 146.7 per cent, and that for 1929-30 to 204.4 per cent, i.e., double the budget for 1926-27 (12,605,000,000 rubles).
f) In 1926-27, our foreign trade turnover (exports and imports) was 47.9 per cent of the pre-war level. In 1927-28, however, our foreign trade turnover rose to 56.8 per cent, in 1928-29 to 67.9 per cent, and in 1929-30 it, by all accounts, will be not less than 80 per cent of the pre-war level.
g) As a result, we have the following picture of the growth of the total national income during the period under review (in 1926-27 prices): in 1926-27, the national income, according to the data of the State Planning Commission, amounted to 23,127,000,000 rubles; in 1927-28 it amounted to 25,396,000,000 rubles, an increase of 9.8 per cent; in 1928-29 it amounted to 28,596,000,000 rubles - an increase of 12.6 per cent; in 1929-30 the national income ought, by all accounts, to amount to not less than 34,000,000,000 rubles, thus showing an increase for the year of 20 per cent. The average annual increase during the three years under review is, therefore, over 15 per cent.
Bearing in mind that the average annual increase in the national income in countries like the United States, Britain and Germany amounts to no more than 3-8 per cent, it must be admitted that the rate of increase of the national income of the USSR is truly a record one.
Our national economy is growing not spontaneously, but in a definite direction, namely, in the direction of industrialisation; its keynote is: industrialisation, growth of the relative importance of industry in the general system of the national economy, transformation of our country from an agrarian into an industrial country.
a) The dynamics of the relation between industry as a whole and agriculture as a whole from the point of view of the relative importance of industry in the gross output of the entire national economy during the period under review takes the following form: in pre-war times, industry's share of the gross output of the national economy was 42.1 per cent and that of agriculture 57.9 per cent; in 1927-28 industry's share was 45.2 per cent and that of agriculture 54.8 per cent; in 1928-29, industry's share was 48.7 per cent and that of agriculture 51.3 per cent; in 1929-30 industry's share ought to, by all accounts, be, not less than 53 per cent and that of agriculture not more than 47 per cent.
This means that the relative importance of industry is already beginning to surpass the relative importance of agriculture in the general system of national economy, and that we are on the eve of the transformation of our country from an agrarian into an industrial country. (Applause.)
b) There is a still more marked preponderance in favour of industry when regarded from the viewpoint of its relative importance in the commodity output of the national economy. In 1926-27, industry's share of the total commodity output of the national economy was 68.8 per cent and that of agriculture 31.2 per cent. In 1927-28, however, industry's share was 71.2 per cent and that of agriculture 28.8 per cent; in 1928-29 industry's share was 72.4 per cent and that of agriculture 27.6 per cent, and in 1929-30, industry's share will, by all accounts, be 76 per cent and that of agriculture 24 per cent.
This particularly unfavourable position of agriculture is due, among other things, to its character as small-peasant and small-commodity agriculture. Naturally, this situation should change to a certain extent as large-scale agriculture develops through the state farms and collective farms and produces more for the market.
c) The development of industry in general, however, does not give a complete picture of the rate of industrialisation. To obtain a complete picture we must also ascertain the dynamics of the relation between heavy industry and light industry. Hence, the most striking index of the growth of industrialisation must be considered to be the progressive growth of the relative importance of the output of instruments and means of production (heavy industry) in the total industrial output. In 1927-28, the share of output of instruments and means of production in the total output of all industry amounted to 27.2 per cent while that of the output of consumer goods was 72.8 per cent. In 1928-29, however, the share of the output of instruments and means of production amounted to 28.7 per cent as against 71.3 per cent, and in 1929-30, the share of the output of instruments and means of production, will, by all accounts, already amount to 32.7 per cent as against 67.3 per cent.
If, however, we take not all industry, but only that part which is planned by the Supreme Council of National Economy, and which embraces all the main branches of industry, the relation between the output of instruments and means of production and the output of consumer goods will present a still more favourable picture, namely: in 1927-28, the share of the output of instruments and means of production amounted to 42.7 per cent as against 57.3 per cent; 1928-29 - 44.6 per cent as against 55.4 per cent, and in1929-30, it will, by all accounts, amount to not less than 48 per cent as against 52 per cent for the output of consumer goods.
The keynote of the development of our national economy is industrialisation, the strengthening and development of our own heavy industry.
This means that we have already established and are further developing our heavy industry, the basis of our economic independence.
The keynote of the development of our national economy is industrialisation. But we do not need just any of industrialisation. We need the kind of industrialisation of that will ensure the growing preponderance the socialist forms of industry over the capitalist forms of industry. The characteristic feature of our industrialisation is that it is socialist industrialisation an industrialisation which guarantees the victory of the socialised sector of industry, over the private sector, over the small-commodity and capitalist sector.
Here are some data on the growth of capital investment and of gross output according to sectors: a) Taking the growth of capital investments in industry according to sectors, we get the following picture.
Socialised sector: In 1926-27 — 1,270,000,000 rubles; in 1927-28 —1,614,000,000 rubles; in 1928-29 — 2,046,000,000 rubles; in 1929-30 — 4,275,000,000 rubles.
Private and capitalist sector: in 1926-27 — 63,000,000 rubles; in 1927-28 — 64,000,000 rubles; in 1928-29 — 56,000,000 rubles; in 1929-30 — 51,000,000 rubles.
This means, firstly, that during this period capital investments in the socialised sector of industry have more than trebled (335 per cent).
It means, secondly, that during this period capital investments in the private and capitalist sector have been reduced by one-fifth (81 per cent).
The private and capitalist sector is living on its old capital and is moving towards its doom.
b) Taking the growth of gross output of industry according to sectors we get the following picture.
Socialised sector: in 1926-27 — 11,999,000,000 rubles; in 1927-28 — 15,389,000,000 rubles; in 1928-29 — 18,903,000,000 rubles; in 1929-30 — 24,740,000,000 rubles.
Private and capitalist sector: in 1926-27 — 4,043,000,000 rubles; in 1927-28 — 3,704,000,000 rubles; in 1928-29 — 3,389,000,000 rubles; in 1929-30 — 3,310,000,000 rubles.
This means, firstly, that during the three years, the gross output of the socialised sector of industry more than doubled (206.2 per cent).
It means, secondly, that in the same period the gross industrial output of the private and capitalist sector was reduced by nearly one-fifth (81.9 per cent).
If, however, we take the output not of all industry, but only of large-scale (statistically registered) industry and examine it according to sectors, we get the following picture of the relation between the socialised and private sectors.
Relative importance of the socialised sector in the output of the country's large-scale industry: 1926-27 — 97.7 per cent; 1927-28 — 98.6 per cent; 1928-29 — 99.1 per cent; 1929-30 — 99.3 per cent.
Relative importance of the private sector in the output of the country's large-scale industry: 1926-27 — 2.3 per cent; 1927-28 — 1.4 per cent; 1928-29 — 0.9 per cent; 1929-30 — 0.7 per cent.
As you see, the capitalist elements in large-scale industry have already gone to the bottom.
Clearly, the question "who will beat whom," the question whether socialism will defeat the capitalist elements in industry, or whether the latter will defeat socialism, has already been settled in favour of the socialist forms of industry. Settled finally and irrevocably. (Applause.)
c) Particularly interesting are the data on the rate of development during the period under review of state industry that is planned by the Supreme Council of National Economy. If the 1926-27 gross output of socialist industry planned by the Supreme Council of National Economy is taken as 100, the 1927-28 gross output of that industry shows a rise to 127.4 percent, that of 1928-29 to 158.6 and that of 1929-30 wi1l show a rise to 209.8 per per cent.
This means that socialist industry planned by the-Supreme Council of National Economy, comprising all the main branches of industry and the whole of heavy industry, has more than doubled during the three years.
It cannot but be admitted that no other country in the world can show such a terrific rate of development of its large-scale industry.
This circumstance gives us grounds for speaking of the five-year plan in four years.
d) Some comrades are sceptical about the slogan "the five-year plan in four years." Only very recently one section of comrades regarded our five-year plan, which was endorsed by the Fifth Congress of Soviets, (Original Footnote: The Fifth Congress of Soviets of the USSR, which was held In Moscow, May 2028, 1929, discussed the following questions: The report of the Government of the USSR; the five-year plan of development of the national economy of the USSR; the promotion of agriculture and the development of co-operation in the countryside. The central question at the congress was the discussion and adoption of the First Stalin Five Year Plan. The congress approved the report of the Government of the USSR, endorsed the five-year plan of development of the national economy, outlined ways and means of promoting agriculture and the development of co-operatives in the countryside, and elected a new Central Executive Committee of the USSR) as fantastic; not to mention the bourgeois writers whose eyes pop out of their heads at the very words "five-year plan." But what is the actual situation if we consider the fulfillment of the five-year plan during the first two years? What does checking the fulfilment of the optimal variant of the five-year plan tell us? It tells us not only that we can carry out the five-year plan in four years, it also tells us that in a number of branches of industry we can carry it out in three and even in two-and-a-half years. This may sound incredible to the sceptics in the opportunist camp, but it is a fact, which it would be foolish, and ridiculous to deny.
Judge for yourselves.
According to the five-year plan, the output of the oil industry in 1932-33 was to amount to 977,000,000 rubles. Actually, its output already in 1929-30 amounts to 809,000,000 rubles, i.e., 83 per cent of the amount fixed in the five-year plan for 1932-33. Thus, we are fulfilling the five-year plan for the oil industry in a matter of two-and-a-half years.
The output of the peat industry in 1932-33, according to the five-year plan, was to amount to 122,000,000 rubles. Actually, in 1919-30 already its output amounts to over 115,000,000 rubles, i.e., 96 per cent of the output fixed in the five-year plan for 1932-33. Thus, we are fulfilling the five-year plan for the peat industry in two-and-a-half years, if not sooner.
According to the five-year plan, the output of the general machine-building industry in 1932-33 was to amount to 2,058,000,000 rubles. Actually, in 1929-30 already its output amounts to 1,458,000,000 rubles, i.e., 70 per cent of the output fixed in the five-year plan for 1932-33. Thus, we are fulfilling the five-year plan for the general machine-building industry in two-and-a-half years.
According to the five-year plan, the output of the agricultural machine-building industry in 1932-33 was to amount to 610,000,000 rubles. Actually, in 1929-30, already its output amounts to 400,000 000 rubles, i.e., over 60 per cent of the amount fixed in the five-year plan for 1932-33. Thus, we are fulfilling the agricultural machine-building industry in three years, if not sooner.
According to the five-year plan, the output of the electro-technical industry in 1932-33 was to amount to 896,000,000 rubles. Actually in 1929-30 already it amounts to 503,00,000 rubles, i.e.; over 56 per cent of the amount fixed for 1932-33. Thus, we are fulfilling the five-year plan the five-year plan for the electro-technical industry in three years.
Such are the unprecedented rates of development of our socialist industries.
We are going forward at an accelerated pace, technically and economically overtaking the advanced capitalist countries.
e) This does not mean of course, that we have already overtaken them as regards size of output, that our industry has already reached the level of the development of industry in the advanced capitalist countries. No, this is far from being the case. The rate of industrial development must not be confused with the level of industrial development. Many people in our country confuse the two and believe that since we have achieved an unprecedented rate of industrial development we have thereby reached the level of industrial development of the advanced capitalist countries. But that is radically wrong.
Take, for example, the, production of electricity, in regard to which our rate of development is very high. From 1924 to 1929 we achieved an increase in the output of electricity to nearly 600 per cent of the 1924 figure, whereas in the same period the output of electricity in the United States increased only to 181 per cent, in Canada to 218 per cent, in Germany to 241 per cent and in Italy to 222 per cent. As you see, our rate is truly unprecedented and exceeds that of all other states. But if we take the level of development of electricity production in those countries, in 1929, for example, and compare it with the level of development in the USSR, we shall get a picture that is far from comforting for the USSR Notwithstanding the unprecedented rate of development of electricity production in the USSR, in 1929 output amounted to only 6,465,000,000 kilowatt-hours, whereas that of the United States amounted to 126,000,000,000 kilowatt-hours, Canada 17,628,000,000 kilowatt-hours, Germany 33,000,000,000 kilowatt-hours, and Italy 10,850,000,000 kilowatt-hours. The difference, as you see, is colossal.
It follows, then, that as regards level of development we are behind all these states.
Or take, for example, our output of pig-iron. If our output of pig-iron for 1926-27 is taken as 100 (2,900,000 tons), the output for the three years from 1927-28 to 1929-30 shows an increase to almost double, to 190 per cent (5,500,000 tons). The rate of development, as you see, is fairly high. But if we look at it from the point of view of the level of development of pig-iron production in our country and compare the size of the output in the USSR with that in the advanced capitalist countries, the result is not very comforting. To begin with, we are reaching and shall exceed the pre-war level of pig-iron production only this year 1929-30. This alone drives us to the inexorable conclusion that unless we still further accelerate the development of our metallurgical industry we run the risk of jeopardising our entire industrial production. As regards the level of development of the pig4ron industry in our country and in the West we have the following picture: the output of pig-iron in 1929 in the United States amounted to 42,300,000 tons; Germany ñ 13,400,000 tons; in France ñ 10,450,000 tons; in Great Britain ñ 7,700,000 tons; but in the USSR the output of pig-iron at the end of 1929 30 will amount to only 5,500,000 tons.
No small difference, as you see.
It follows, therefore, that as regards level of development of pig-iron production we are behind all these countries.
What does all this show?
It shows that:
1) The rate of development of industry must not be confused with its level of development;
2) We are damnably behind the advanced capitalist countries as regards level of development of industry;
3) Only the further acceleration of the development of our industry will enable us to overtake and outstrip the advanced capitalist countries technically and economically;
4) People who talk about the necessity of reducing the rate of development of our industry are enemies of socialism, agents of our class enemies. (Applause.)
Above I spoke about the state of agriculture as a whole, including forestry, fishing, etc,, without dividing agriculture into its main branches If we separate agriculture as a whole into its main branches, such as, for example, grain production, livestock farming and the production of industrial crops, the situation, according to the data of the State Planning Commission and the People's Commissariat of Agriculture of the USSR is seen to be as follows:
a) If the grain crop area in 1913 is taken as 100, we get the following picture of the change of the grain crop area from year to year: 1926-27 — 96.9 per cent; 1927-28 — 94.7 per cent; 1928-29 — 98.2 per cent; and this year, 1929-30, the crop area will, by all accounts, be 105.1 per cent of the pre-war level. Noticeable is the drop in the grain crop area in 1927-28. This drop is to be explained not by a retrogression of grain farming such as the ignoramuses in the Right opportunist camp have been chattering about, but by the failure of the winter crop on an area of 7,700,000 hectares (20 per cent of the winter crop area in the USSR).
If, further, the gross output of grain in 1913 is taken as 100, we get the following picture: 1927 — 91.9 per cent; 1928 — 90.8 per cent; 1929 — 94.4 per cent, and in 1930 we shall, by all accounts, reach 110 per cent of the pre-war standard. Noticeable here, too, is the drop in the gross output put of grain in 1928 due to the failure of the winter crop in the Ukraine and the North Caucasus.
As regards the marketable part of the gross output of grain (grain sold outside the rural districts), we have a still mere instructive picture. If the marketable part of the grain output of 1913 is taken as 100, then the marketable output: in 1927 is found to be 31 per cent, in 1928 — 36.8 per cent, in 1929 — 58 per cent, and this year, 1930, it will, by all accounts, amount to not less than 73 per cent of the pre-war level. It follows, that, as regards grain crop area and gross grain output, we are reaching the pre-war level and slighlty exceeding it only this year, 1928.
Thus it follows, further, that, as regards the marketable part of the grain output we are still far from having reached the pre-war standard and shall remain below it this year too by about 25 per cent.
That is the basis of our grain difficulties, which became particularly acute in 1928.
That, too, is the basis grain problem.
b) The picture is approximately the same, but with more alarming figures, in the sphere of livestock farming. If the number of all kinds of head of livestock in 1916 is taken as 100, we get the following picture for the respective years:
In 1927 the number of horses amounted to 88.9 per cent of the pre-war level; Large horned-cattle — 114.3 per cent; Sheep and goats — 119.3 per cent; Pigs — 113.4 per cent.
In 1928: horses — 94.6 percent; large horned cattle — 118.5 per cent; sheep and goats — 126 per cent; pigs — 126.1 per cent.
In 1929: horses — 96.9 per cent; large horned cattle — 115.6 per cent; sheep and goats — 127.8 per cent; pigs — 103 per cent.
In 1930: horses — 88.6 per cent; large horned cattle — 89.1 per cent; sheep and goats — 87.1 per cent; pigs — 60.1 per cent of the 1916 standard.
As you see, if we take the figures for the last year into consideration, we have obvious signs of the beginning of a decline in livestock farming.
The picture is still less comforting from the stand-point of the marketable output of livestock farming, particularly as regards meat and pork fat. If we take the gross output of meat and pork fat for each year as 100, the marketable output of these two items will be: in 1926 — 33.4 per cent; in 1927 — 32.9 per cent; in 1928 — 30.4 per cent; in 1929 — 29.2 per cent.
Thus, we have obvious signs of the instability and economic unreliability of small livestock farming which produces little for the market.
It follows that instead of exceeding the 1916 standard in livestock farming we have in the past year obvious signs of a drop below this standard.
Thus, after the grain problem, which we are already solving in the main successfully, we are faced with the meat problem, the acuteness of which is already making itself felt, and which is still awaiting solution.
c) A different picture is revealed by the development of industrial crops, which provide the raw materials for our light industry. If the industrial crop area in 1913 is taken as 100, we have the following:
Cotton, in 1927 — 107.1 per cent; in 1928 — 131.4 per cent; in 1929 — 151.4 per cent; in 1930 — 217 per cent of the pre-war cent level.
Flax, in 1927 — 86.6 per cent; in 1928 — 95.7 per cent; in 1929 — 112.9 per cent; in 1930 — 125 per cent of the pre-war level.
Sugar-beet, in 1927 — 106.6 per cent; in 1928 — 124.2 per cent; in 1929 — 125.8 per cent; in 1930 — 169 per cent of the pre-war level.
Oil crops, in 1927 — 179.4 per cent; in 1928 — 230.9 per cent; in 1929 — 219.7 per cent; in 1930 — no less than 260 per cent of the pre-war level.
The same, in the main, favourable picture is presented by the gross output of industrial crops. If the gross output in 1913 is taken as 100, we get the following:
cotton, in 1928 — 110.5 per cent; in 1929 — 119 per cent; in 1930 we shall have, by all accounts, 182.8 per cent of the pre-war level.
Flax, in 1928 — 71.6 per cent; in 1929 — 81.5 per cent; in 1930 we shall have, by all accounts, 101.3 per cent of the pre-war level.
Sugar-beet, in 1928 — 93 per cent; in 1929 — 58 per cent; in 1930 we shall have, by all accounts, 139.4 per cent of the pro-war level.
Oil crops, in 1928 — 161.9 per cent; in 1929 — 149.8 per cent; in 1930 we shall have, by all accounts, 220 per cent of the pre-war level.
As regards industrial crops, we thus have a more favourable picture, if we leave out of account the 1929 beet crop, which was damaged by moths.
Incidentally, here too, in the sphere of industrial crops, serious fluctuations and signs of instability are possible and probable in the future in view of the predominance of small farming, similar to the fluctuations and signs of instability that are demonstrated by the figures for flax and oil crops, which come least under the influence of the collective farms and state farms.
We are thus faced with the following problems in agriculture:
1) the problem of strengthening the position of industrial crops by supplying the districts concerned with sufficient quantities of cheap grain produce;
2) the problem of raising the level of livestock farming and of solving the meat question by supplying the districts concerned with sufficient quantities of cheap grain produce and fodder;
3) the problem of finally solving the question of grain farming as the chief question in agriculture at the present moment. It follows that the grain problem is the main link in the system of agriculture and the key to the solution of all the other problems in agriculture.
It follows that the solution of the grain problem is the first in order of a number of problems in agriculture.
But solving the grain problem, and so putting agriculture on the road to really big progress, means completely doing away with the backwardness of agriculture; it means equipping it with tractors and agricultural machines, supplying it with new cadres of scientific workers, raising the productivity of labour, and increasing the output for the market. Unless these conditions are fulfilled, it is impossible even to dream of solving the grain problem.
Is it possible to fulfil all these conditions on the basis of small, individual peasant farming? No, it is impossible. It is impossible because small-peasant farming is unable to accept and master new technical equipment, it is unable to raise productivity of labour to a sufficient degree, it is unable to increase the marketable output of agriculture to a sufficient degree. There is only one way to do this, namely by developing large- scale agriculture by establishing large farms with modern technical equipment.
The Soviet country cannot however, take the line, of organising. large capitalist farms. It can and must take only the of organising large farms of a socialist type, equipped with modern machines. Our state farms and collective farms are precisely farms of this type.
Hence the task of establishing state farms and uniting the small, individual peasant farms into large collective farms, as being the only way to solve the problem of agriculture in general, and the grain problem in particular.
That is the line the Party took in its everyday practical work after the Fifteenth Congress, especially after the serious grain difficulties that arose in the beginning of 1928.
It should he noted that our Party raised this fundamental problem as a practical task already at the Fifteenth Congress, when we were not yet experiencing serious grain difficulties. In the resolution of the Fifteenth Congress on "Work in the Countryside" it is plainly said: "In the present period, the task of uniting and transforming the small, individual peasant farms into large collective farms must be made the Party's principal task in the countryside." (Original Footnote: See Resolutions and Decisions of CPSU Congresses, Conferences and Central Committee Plenums, Part 1,1953, p 355). Perhaps it will not be superfluous also to quote the relevant passage from the Central Committee's report to the Fifteenth Congress in which the problem of doing away with the backwardness of agriculture on the basis of collectivisation was just as sharply and definitely raised. Here is what was stated there: "What is" the way out? The way out is to turn the small and scattered peasant farms into large united farms based on cultivation of the land in common, to go over to collective cultivation of the land on the basis of a new and higher technique.
"The way out is to unite the small and dwarf peasant farms gradually but surely, not by pressure, but by example and persuasion, into large farms based on common, co-operative, collective cultivation of the land with the use of agricultural machines end tractors and scientific methods of Intensive agriculture. "There is no other way out."
(Original Footnote: J V. Stalin, Political Report of the Central Committee to the Fifteenth Congress of the CPSU(B) (see Works, Vol. 10, pp. 312-13).
The turn of the peasantry towards collectivisation did not begin all at once. Moreover, it could not begin all at once. True, the Party proclaimed the slogan of collectivisation already at the Fifteenth Congress; but the proclamation of a slogan is not enough to cause the peasantry to turn en masse towards socialism. At least one more circumstance is needed for this, namely, that the masses of the peasantry themselves should be convinced that the slogan proclaimed is a correct one and that they should accept it as their own. Therefore, this turn was prepared gradually. It was prepared by the whole course of our development, by the whole course of development of our industry, and above all by the development of the industry that supplies machines and tractors for agriculture.
It was prepared by the policy of resolutely fighting the kulaks and by the course of our grain procurements in the new forms that they assumed in 1928 and 1929, which placed kulak farming under the control of the poor and middle-peasant masses. It was prepared by the development of the agricultural co-operatives which trained the individualist peasant in collective methods. It was prepared by the network of collective farms, in which the peasantry verified the advantages of collective farming over individual farming. Lastly it was prepared by the work of state farms, spread over the whole of the USSR and equipped with modern machines, which enabled the peasants to convince themselves of the potency and superiority of modern machines.
It would be a mistake to regard our state farms only as sources of grain supplies. Actually the state farms, with their modern machines, with the assistance they render the peasants in their vicinity, and the unprecedented scope of their farming were the leading force that facilitated the turn of the peasant masses and brought them on to the path of collectivisation.
There you have the basis on which arose that mass collective-farm movement of millions of poor and middle peasants which began in the latter half of 1929, and which ushered in a period of great change in the life of our country.
What measures did the Central Committee take so as to meet this movement and to lead it?
The measures taken by the Central Committee were along three lines: The line of organising and financing of state farms; The line of organising and financing of collective farms; and lastly The line of organising the manufacture of tractors and agricultural machinery and of supplying the countryside with them through machine and tractor stations, through tractor columns, and so forth.
a) As early as 1928, the Political Bureau of the Central Committee adopted a decision to organise new state farms in the course of three or four years, calculating that by the end of this period these state farms could provide not less than 100,000,000 poods of marketable grain. Later, this decision was endorsed by a plenum of the Central Committee. The Grain Trust was organised and entrusted with the task of carrying out this decision. Parallel with this, a decision was adopted to strengthen the old state farms and to enlarge their crop area. The State Farm Centre was organised and entrusted with the task of carrying out this decision.
I cannot help mentioning that these decisions met with a hostile reception from the opportunist section of our Party. There was talk about the money invested in the state farms being money "thrown away." There was also criticism from men of "science", supported by the Opportunist elements in the Party, to the effect that it was impossible and senseless to organise large state farms. The Central Committee, however, continued to pursue its line and pursued it to the end in spite of everything.
In 1927-28, the sum of 65,700,000 rubles (not counting short-term credits for working capital) was assigned for financing the state farms. In 1928-29, the sum of 185,800,000 rubles was assigned. Lastly, this year 856,200,000 rubles have been assigned. During the period under review, 18,000 tractors with a total of 350,000 h.p. were placed at the disposal of the state farms.
What are the results of these measures?
In 1928-29, the crop area of the Grain Trust amounted to: 150,000 hectares, in 1929-30 to 1,060,000 hectares, in 1930-31 it will amount to 4,500,000 hectares, in 1931-32 to 9,000,000 hectares, and in 1932-33, i.e., towards the end of the five-year plan period, to 14,000,000 hectares.
In 1928-29 the crop area of the State Farm Centre amounted to 430,000 hectares, in 1929-30 to 860,000 hectares, in 1930-31 it will amount to 1,800,000 hectares, in 1931-32 to 2,000,000 hectares, and in 1932-33 to 2,500,000 hectares. In 1928-29, the crop area of the Association Ukrainian State Farms amounted to 70,000 hectares, in 1929-30 to 280,000 hectares, in 1930-31 it will amount to 500,000 hectares, and in 1932-33 to 720,000 hectares.
In 1928-29, the crop area of the Sugar Union (grain crop) amounted to 780,000 hectares, in 1929-30 to 820,000 hectares, in 1930-31 it will amount to 860,000 hectares, in 1931-32 to 980,000 hectares, and in 1932-33 to 990,000 hectares.
This means, firstly, that at the end of the five-year plan period the grain crop area of the Grain Trust alone will be as large as that of the whole of the Argentine today. (Applause.)
It means, secondly, that at the end of the five-year plan period, the grain crop area of all the state farms together will be 1,000,000 hectares larger than that of the whole of Canada today. (Applause.)
As regards the gross and marketable grain output of the state farms, we have the following picture of the change year by year: In 1927-28, the gross output of all the state farms amounted to 9,500,000 centners, of which marketable grain amounted to 6,400,000 centners; In 1928-29 — 12,800,000 centners, of which marketable grain amounted to 7,900,000 centners; In 1929-30, we shall have, according to all accounts, 28,200,000 centners, of which marketable grain will amount to 18,000,000 centners (108,000,000 poods); In 1930-31 we shall have 71,700,000 centners, of which marketable grain will amount to 61,000,000 centners (370,000,000 poods); and so on and so forth.
Such are the existing and anticipated results of our Party's state-farm policy. According to the decision of the Political Bureau of the Central Committee of April 1928 on the organisation of new state farms, we ought to receive from the new state farms not less than 100,000,000 poods of marketable grain in 1931-32. Actually, it turns out that in 1931-32 we shall already have from the new state farms alone more than 200,000,000 poods. That means the programme will have been fulfilled twice over.
It follows that the people who ridiculed the decision of the Political Bureau of the Central Committee fiercely ridiculed themselves.
According to the five-year plan endorsed by the Congress of Soviets, by the end of the five-year plan period the state farms controlled by all organisations were to have a total crop area of 5,000,000 hectares. Actually, this year the crop area of the state farms already amounts to 3,800,000 hectares, and next year, i.e., in the third year of the five-year period, their crop area will amount to 8,000,000 hectares.
This means that we shall fulfil and overfulfil the five-year programme of state-farm development in three years.
According to the five-year plan, by the end of the five-year period the gross grain output of the state farms was to amount to 54,300,000 centners. Actually, this year the gross grain output of the state farms already amounts to 28,200,000 centners, and next year it will amount to 71,700,000 centners.
This means that as regards gross grain output we shall fulfil and overfulfil the five-year plan in three years.
The five-year plan in three years!
Let the bourgeois scribes and their opportunist echoes chatter now about it being impossible to fulfil and overfulfil the five-year plan of state-farm development in three years.
b) As regards collective-farm development, we have an even more favourable picture.
As early as July 1928, a plenum of the Central Committee adopted the following decision on collective-farm development:
'Undeviatingly to carry out the task set by the Fifteenth Congress 'to unite and transform the small, individual peasant farms into large collective farms, 'as voluntary associations organised on the basis of modern technology and representing a higher form of grain farming both as regards the socialist transformation of agriculture and as regards ensuring a radical increase in its productivity and marketable output" (see resolution of the July plenum of the Central Committee on "Grain-Procurement Policy in Connection With the General Economic Situation, 1928)."
(Original Footnote: See Resolutions and Decisions of CPSU Congresses, Conferences and Central Committee Plenums, Part II, 1953, p. 393).
Later, this decision was endorsed in the resolutions of the Sixteenth Conference of the Party and in the special resolution of the November plenum of the Central Committee, 1929, on the collective-farm movement. (Original Footnote: The plenum of the Central Committee, CPSU(B) held November 10-17, 1929, discussed the following questions: the control figures for the national economy in 1929-30; results and further tasks of collective-farm development; agriculture in the Ukraine and work in the countryside; the formation of a Union People's Commissariat of Agriculture of the USSR; the fulfilment of the decisions of the July plenum of the C.C. (1928) on the training of technical cadres. The plenum decided that propaganda of the views of Right opportunism and of conciliation towards it was incompatible with membership of the CPSU(B), and resolved to expel Bukharin, as the chief exponent and leader of the Right capitulators, from the Political Bureau of the C.C., CPSU(B). The plenum noted that the Soviet Union had entered a phase of extensive socialist reconstruction of the countryside and development of large-scale socialist agriculture, and outlined a series of concrete measures for strengthening the collective farms and widely developing the collective-farm movement. (For the resolutions of the plenum see Resolutions and Decisions of CPSU Congresses, Conferences and Central Committee Plenums, Part II, 1953, pp. 500-43.) In the latter half of 1929, when the radical turn of the peasants towards the collective farms had become evident and when the mass of the middle peasants were joining the collective farms, the Political Bureau of the Central Committee adopted the special decision of January 5, 1930 on "The Fate of Collectivisation and State Measures to Assist Collective-Farm Development."
In this resolution, the Central Committee:
1) placed on record the existence of a mass turn of the peasantry towards the collective farms and the possibility of overfulfilling the live-year plan of collective-farm development in the spring of 1930;
2) placed on record the existence of the material and other conditions necessary for replacing kulak production by collective-farm production and, in view of this, proclaimed the necessity of passing from the policy of restricting the kulaks to the policy of eliminating the kulaks as a class; 3) laid down the prospect that already in the spring of 1930 the crop area cultivated on a socialised basis would considerably exceed 30,000,000 hectares;
4) divided the USSR into three groups of districts and fixed for each of them approximate dates for the completion, in the main, of collectivisation;
5) revised the land settlement method in favour of the collective farms and the forms of financing agriculture, assigning for the collective farms in 1929-30 credits amounting to not less than 500,000,000 rubles;
6) defined the artel form of the collective-farm movement as the main link in the collective-farm system at the present time;
7) rebuffed the opportunist elements in the Party who were trying to retard the collective-farm movement on the plea of a shortage of machines and tractors;
8) lastly, warned Party workers against possible excesses in the collective-farm movement, and against the danger of decreeing collective-farm development from above, a danger that would involve the threat of playing at collectivisation taking the place of a genuine and mass collective-farm movement.
It must be observed that this decision of the Central Committee met with a more than unfriendly reception from the opportunist elements in our Party. There was talk and whispering about the Central Committee indulging in fantasies, about it "squandering" the people's money on "non-existent" collective farms. The Right-wing elements rubbed their hands in gleeful anticipation of "certain" failure. The Central Committee, however, steadfastly pursued its line and pursued it to the end in spite of everything, in spite of the philistine sniggering of the Rights, and in spite of the excesses and dizziness of the "Lefts."
In 1927-28, the sum of 76,000,000 rubles was assigned for financing the collective farms, in 1928-29-170,000,000 rubles, and, lastly, this year 473,000,000 rubles have been assigned. In addition, 65,000,000 rubles have been assigned for the collectivisation fund. Privileges have been accorded the collective farms, which have increased their financial resources, by 200,000,000 rubles. The collective farms have been supplied with confiscated kulak farm property to the value of over 400,000,000 rubles. There has been supplied for use on collective-farm fields not less than 30,000 tractors of a total of 400,000 b.p., not counting the 7,000 tractors of the Tractor Centre which serve the collective farms and the assistance in the way of tractors rendered the collective farms by the state farms. This year the collective farms have been granted seed loans and seed assistance amounting to 10,000,000 centners of grain (61,000,000 poods). Lastly, direct organisational assistance has been rendered the collective farms in the setting up of machine and horse stations to a number exceeding 7,000, in which the total number of horses available for use is not less than 1,300,000.
What are the results of these measures?
The crop area of the collective farms — in 1927 amounted to 800,000 hectares, in 1928 — 1,400,000 hectares, in 1929 — 4,300,000 hectares, in 1930 — not less than 36,000,000 hectares, counting both spring and winter crops.
This means, firstly, that in three years the crop area of the collective farms has grown more than forty-fold. (Applause.)
It means, secondly, that our collective farms now have a crop area as large as that of France and Italy put together. (Applause.)
As regards gross grain output and the part available for the market, we have the following picture. In 1927 we had from the collective farms 4,900,000 centners, of which marketable grain amounted to 2,000,000 centners; In 1928—8,400,000 centners, of which 3,600,000 centners was marketable grain; In 1929—29,100,000 centners, of which 12,700,000 centners was marketable grain; In 1930 we shall have, according to all accounts, 256,000,000 centners (1,550,000,000 poods), of which marketable grain will amount to not less than 82,000,000 centners (over 500,000,000 poods) of which marketable grain will amount to not less than 82,000,000 centners (over 500,000,000 poods).
It must be admitted that not a single branch of our industry, which, in general, is developing at quite a rapid rate, has shown such an unprecedented rate of progress as our collective-farm development.
What do all these figures show?
They show, first of all, that during three years the gross grain output of the collective farms has increased more than fifty-fold, and its marketable part more than forty-fold.
They show, secondly, that the possibility exists of our receiving from the collective farms this year more than half of the total marketable grain output of the country.
They show, thirdly, that henceforth, the fate of our agriculture and of its main problems will be determined not by the individual peasant farms, but by the collective farms and state farms.
They show, fourthly, that the process of eliminating the kulaks as a class in our country is going full steam ahead.
They show, lastly, that such economic changes have already taken place in the country as give us full grounds for asserting that we have succeeded in turning the countryside to the new path, to the path of collectivisation, thereby ensuring the successful building of socialism not only in the towns, but also in the countryside.
In its decision of January 5, 4930, the Political Bureau of the Central Committee laid down for the spring of 1930 a programme of 30,000,000 hectares of collective farm crop area cultivated on a socialised basis. Actually, we already have 36,000,000 hectares. Thus, the Central Committee's programme has been overfulfilled.
It follows that the people who ridiculed the Central Committee's decision fiercely ridiculed themselves. Nor have the opportunist chatterboxes in our Party derived any benefit either from the petty-bourgeois elemental forces or from the excesses in the collective-farm movement.
According to the five-year plan, by the end of the five-year period we were to have a collective-farm crop area of 20,600,000 hectares. Actually, we have already this year a collective-farm crop area of 36,000,000 hectares.
This means that already in two years we shall have overfulfilled the five-year plan of collective-farm development by over fifty per cent. (Applause.)
According to the five-year plan, by the end of the five-year period we were to have a gross grain output from the collective farms amounting to 190,500,000 centners. Actually, already this year we shall have a gross grain output from the collective farms amounting to 256,000,000 centners.
This means that already in two years we shall have overfulfilled the five-year programme of collective-farm grain output by over 30 per cent.
The five-year plan in two years! (Applause.)
Let the opportunist gossips chatter now about it being impossible to fulfil and overfulfil the five-year plan of collective-farm development in two years.
It follows, therefore, that the progressive growth of the socialist sector in the sphere of industry and in the sphere of agriculture is a fact about which there cannot be the slightest doubt.
What can this signify from the point of view of the material conditions of the working people?
It signifies that, thereby, the foundations have already been laid for a radical improvement in the material and cultural conditions of the workers and peasants.
Why? How?
Because, firstly, the growth of the socialist sector signifies, above all, a diminution of the exploiting elements in town and country, a decline in their relative importance in the national economy. And this means that the workers' and peasants' share of the national income must inevitably increase owing to the reduction of the share of the exploiting classes.
Because, secondly, with the growth of the socialised (socialist) sector, the share of the national income that has hitherto gone to feed the exploiting classes and their hangers-on, is bound henceforth to remain in production, to be used for the expansion of production, for building new factories and mills, for improving the conditions of life of the working people. And this means that the working class is bound to grow in numbers and strength, and unemployment to diminish and disappear.
Because, lastly, the growth of the socialised sector, inasmuch as it leads to an improvement in the material conditions of the working class, signifies a progressive increase in the capacity of the home market, an increase in the demand for manufactured goods on the part of the workers and peasants. And this means that the growth of the home market will outstrip the growth of industry and push it forward towards continuous expansion.
All these and similar circumstances are leading to a steady improvement in the material and cultural conditions of the workers and peasants.
a) Let us begin with the numerical growth of the working class and the diminution of unemployment. In 1926-27, the number of wage-workers (not including unemployed) was 10,990,000. In 1927-28, however, we had 11,456,000, in 1928-29 — 11,997,000 and in 1929-30, we shall, by all accounts, have not less than 13,129,000.
Of these, manual workers (including agricultural labour-era and seasonal workers) numbered: in 1926-27 — 7,069,000, in 1927-28 — 7,404,000, in 1928-29 — 7,758,000, in 1929-30 — 8,533,000.
Of these, workers employed in large-scale industry (not including office employees) numbered: in 1926-27 — 2,439,000, in 1927-28 — 2,632,000, in 1928-29 — 2,858,000, in 1929-30 — 3,029,000.
Thus, we have a picture of the progressive numerical growth of the working class; and whereas the number of wage-workers has increased 19.5 per cent during the three years and the number of manual workers 20.7 per cent, the number of industrial workers has increased 24.2 per cent.
Let us pass to the question of unemployment. It must be said that in this sphere considerable confusion reigns both at the People's Commissariat of Labour and at the All-Union Central Council of Trade Unions.
On the one hand, according to the data of these institutions we have about a million unemployed, of whom, those to any degree skilled constitute only 14.3 per cent, while about 73 per cent are those engaged in so-called intellectual labour and unskilled workers; the vast majority of the latter are women and young persons not connected with industrial production.
On the other hand, according to the same data, we are suffering from a frightful shortage of skilled labour, the labour exchanges are unable to meet about 80 per cent of the demands for labour by our factories and thus we are obliged hurriedly, literally as we go along, to train absolutely unskilled people and make skilled workers out of them in order to satisfy at least the minimum requirements of our factories.
Just try to find your way out of this confusion. It is clear, at all events, that these unemployed do not constitute a reserve and still less a permanent army of un-employed workers of our industry.
Well? Even according to the data of the People's Commissariat of Labour it appears that in the recent period the number of unemployed has diminished compared with last year by over 700,000. This means that by May 1, this year, the number of unemployed had dropped by over 42 per cent.
There you have another result of the growth of the socialist sector of our national economy.
b) We get a still more striking result when we examine the matter from the point of view of the distribution of the national income according to classes.
The question of the distribution of the national income according to classes is a fundamental one from the point of view of the material and cultural conditions of the workers and peasants. It is not for nothing that the bourgeois economists of Germany, Britain and the United States try to confuse this question for the benefit of the bourgeoisie by publishing, every now and again, their "absolutely objective" investigations on this subject. According to data of the German Statistical Board, in 1929 the share of wages in Germany's national income was 70 per cent, and the share of the bourgeoisie was 30 per cent. According to data of the Federal Trade Commission and the National Bureau of Economic Research, the workers' share of the national income of the United States in 1923 amounted to over 54 per cent and the capitalists' share to over 45 per cent. Lastly, according to data of the economists Bowley and Stamp the share of the working class in Britain's national income in 1924 amounted to a little less than 50 per cent and the capitalists' share to a little over 50 per cent.
Naturally, the results of these investigations cannot be taken on trust. This is because, apart from faults of a purely economic order, these investigations have also another kind of fault, the object of which is partly to conceal the incomes of the capitalists and to minimise them, and partly to inflate and exaggerate the incomes of the working class by including in it officials who receive huge salaries. And this is apart from the fact that these investigations often do not take into account the incomes of farmers and of rural capitalists in general.
Comrade Varga has subjected these statistics to a critical analysis. Here is the result that he obtained. It appears that the share of the workers and of the working people generally in town and country, who do not exploit the labour of others, was in Germany 55 per cent of the national income, in the United States-54 per cent, in Britain -45 per cent; whereas the capitalists' share in Germany was 45 per cent, in the United States-46 per cent, and in Britain-55 per cent.
That is how the matter stands in the biggest capitalist countries.
How does it stand in the USSR?
Here are the data of the State planning Commission.
It appears that: a) The share of the workers and working peasants, who do not exploit the labour of others, constituted in our country, in 1927-28, 75.2 per cent of the total national income (including the share of urban and rural wage-workers-33.3 per cent); in 1928-29 it was 76.5 per cent (including the share of urban and rural wage-workers-33.2 per cent); in 1929-30 it was 77.1 per cent (including the share of urban and rural wage-workers-33.5 per cent).
b) The share of the kulaks and urban capitalists was: in 1927-28 — 8.1 per cent; in 1928-29 — 6.5 per cent; in 1929-30 — 1.8 per cent.
c) The share of handicraftsmen, the majority of whom are working people, was: in 1927-28 — 6.5 per cent; in 1928-29 — 5.4 per cent; in 1929-30 — 4.4 per cent.
d) The share of the state sector, the income of which is the income of the working class and of the working people generally, was in 1927-28 — 8.4 per cent; in 1928-29 — 10 per cent; in 1929-30 — 15.2 per cent.
e) Lastly, the share of the so-called miscellaneous (meaning pensions) was in 1927-28 — 1.8 per cent; in 1928-29 — 1.6 per cent; in 1929-30 — 1.5 per cent.
Thus, it follows that, whereas in the advanced capitalist countries the share of the exploiting classes in the national income is about 50 per cent and even more, here, in the USSR, the share a/the exploiting classes in the national income is not more than 2 per cent.
This, properly speaking, explains the striking fact that in the United States in 1922, according to the American bourgeois writer Denny "one per cent of estate holders owned 59 per cent of the total wealth," and in Britain, in 1920-21, according to the same Denny "less than two per cent of the owners held 64 per cent of the total wealth" (see Denny's book America Conquers Britain).
Can such things happen in our country, in the USSR, in the Land of Soviets? Obviously, they cannot. There have long been no "owners" of this kind in the USSR, nor can there be any.
But if in the USSR, in 1929-30, only about two per cent of the national income falls to the share of the exploiting classes, what happens to the rest, the bulk of the national income?
Obviously, it remains in the hands of the workers and working peasants.
There you have the source of the strength and prestige of the Soviet regime among the vast masses of the working class and peasantry.
There you have the basis of the systematic improvement in the material welfare of the workers and peasants of the USSR
f) In the light of these decisive facts, one can quite understand the systematic increase in the real wages of the workers, the increase in the workers' social insurance budget, the increased assistance to poor- and middle-peasant farms, the increased assignments for workers' housing, for the improvement of the workers' living conditions and for mother and child care, and, as a consequence, the progressive growth of the population of the USSR and the decline in mortality, particularly in infant mortality.
It is known, for example, that the real wages of the workers, including social insurance and allocations from, profits to the fund for improvement of the workers living conditions, have risen to 167 per cent of the pre-war level. During the past three years, the workers social insurance budget alone has grown from 980,000,000 rubles in 1927-28 to 1,400,000 000 rubles in 1929-30. The amount spent on mother and child care during the past three years (1929-30) was 494,000,000 rubles. The amount spent on pre-school education (kindergartens, playgrounds, etc.) during the same period was 204,000,000 rubles. The amount spent on workers' housing was 1,880,000,000 rubles.
This does not mean, of course, that everything necessary for an important increase in real wages has already been done, that real wages could not have been raised to a higher level. If this has not been done, it is because of the bureaucracy in our supply organisations in general, and primarily and particularly because of the bureaucracy in the consumers' co-operatives. According to the data of the State Planning Commission, in 1929-30 the socialised sector of internal trade embraced over 99 per cent of wholesale trade and over 89 per cent of retail trade. This means that the co-operatives are systematically ousting the private sector and are becoming the monopolists in the sphere of trade. That, of course, is good. What is bad, however, is that in a number of cases this monopoly operates to the detriment of the consumers. It appears, that in spite of the almost monopolist position they occupy in trade, the co-operatives prefer to supply the workers with more "paying" goods, which yield bigger profits (haberdashery, etc.), and avoid supplying them with less "paying," although more essential, goods for the workers (agricultural produce). As a result, the workers are obliged to satisfy about 25 per cent of their requirements for agricultural produce in the private market, paying higher prices. That is apart from the fact that the co-operative apparatus is concerned most of all with its balance and is therefore reluctant to reduce retail prices in spite of the categorical instructions of the leading centres. It follows, therefore, that in this case the co-operatives function not as a socialist sector, but as a peculiar sector that is infected with a sort of Nepman spirit. The question is, does anyone need co-operatives of this sort, and what benefit do the workers derive from their monopoly if they do not carry out the function of seriously raising the workers' real wages?
If, in spite of this, real wages in our country are steadily rising from year to year, it means that our social system, our system of distribution of the national income, and our entire wages policy, are such that they are able to neutralise and make up for all defects arising from the co-operatives.
If to this circumstance we add a number of other factors, such as the increase in the role of public catering, lower rents for workers, the vast number of stipends paid to workers and workers' children, cultural services, and so forth, we may boldly say that the percentage increase of workers' wages is much greater than is indicated in the statistics of some of our institutions.
All this taken together, plus the introduction of the seven-hour day for over 830,000 industrial workers (33.5 per cent), plus the introduction of the five-day week for over a million and a half industrial workers (63.4 per cent), plus the extensive network of rest homes, sanatoria and health resorts for workers, to which more than 1,700,000 workers have gone during the past three years-all this creates conditions of work and life for the working class that enable us to rear a new generation of workers who are healthy and vigorous, who are capable of raising the might of the Soviet country to the proper level and of protecting it with their lives from attaclcs by its enemies. (Applause.)
As regards assistance to the peasants, both individual and collective-farm peasants, and bearing in mind also assistance to poor peasants, this in the past three years (1927-28 -- 1929-30) has amounted to a sum of not less than 4,000,000,000 rubles, provided in the shape of credits and assignments from the state budget. As is known, assistance in the shape of seeds alone has been granted the peasants during the past three years to the amount of not less than 154,000,000 poods.
It is not surprising that the workers and peasants in our country are living fairly well on the whole, that general mortality has dropped 36 per cent, and infant mortality 42.5 per cent, below the pre-war level, while the annual increase in population in our country is about three million. (Applause.)
As regards the cultural conditions of the workers and peasants, in this sphere too we have some achievements, which, however, cannot under any circumstances satisfy us, as they are still small. Leaving out of account workers' clubs of all kinds, village reading rooms, libraries and abolition of illiteracy classes, which this year are being attended by 10,500,000 persons, the situation as regards cultural and educational matters is as follows. This year elementary schools are being attended by 11,638,000 pupils; secondary schools - 1,945,000; industrial and technical, transport and agricultural schools and classes for training workers of ordinary skill—333,100; secondary technical and equivalent trade schools—238,700; colleges, general and technical - 190,400. All this has enabled us to raise literacy in the USSR to 62.6 per cent of the population, compared with 33 per cent in pre-war times.
The chief thing now is to pass to universal, compulsory elementary education. I say the "chief" thing, because this would be a decisive step in the cultural revolution. And it is high time we took this step, for we now possess all that is needed to organise compulsory, universal elementary education in all areas of the USSR.
Until now we have been obliged to "exercise economy in all things, even in schools" in order to "save, to restore heavy industry" (Lenin). During the recent period, however, we have already restored heavy industry and are developing it further. Hence, the time has arrived when we must set about fully achieving universal, compulsory elementary education.
I think that the congress will do the right thing if it adopts a definite and absolutely categorical decision on this matter. (Applause.)
I have spoken about our achievements in developing our national economy. I have spoken about our achievements in industry, in agriculture, in reconstructing the whole of our national economy on the basis of socialism. Lastly, I have spoken about our achievements in improving the material conditions of the workers and peasants.
It would be a mistake however, to think that we achieved all this "easily and quietly", automatically, so to speak, without exceptional effort and exertion of willpower, without struggle and turmoil. Such achievements do not come about automatically. In fact, we achieved all this in a resolute struggle against difficulties, in a serious and prolonged struggle to surmount difficulties.
Everybody among us talks about difficulties, but not everybody realises the character of these dfficulties. And yet the problem of difficulties is of serious importance for us.
What are the characteristic features of our difficulties, what hostile forces are hidden behind them, and how are we surmounting them?
a) When characterising our difficulties we must bear in mind at least the following circumstances.
First of all, we must take into account the circumstance that our present difficulties are difficulties of the reconstruction period. What does this mean? It means that they differ fundamentally from the difficulties of the restoration period of our economy. Whereas in the restoration period it was a matter of keeping the old factories running and assisting agriculture on its old basis, today it is a matter of fundamentally rebuilding, reconstructing both industry and agriculture, altering their technical basis and providing them with modern technical equipment. It means that we are faced with the task of reconstructing the entire technical basis of our national economy. And this calls for new, more substantial investments in the national economy, for new and more experienced cadres, capable of mastering the new technology and of developing it further.
Secondly, we must bear in mind the circumstance that in our country the reconstruction of the national economy is not limited to rebuilding its technical basis, but that, on the contrary, parallel with this, it calls for the reconstruction of social-economic relationships. Here I have in mind, mainly, agriculture. In industry, which is already united and socialised, technical reconstruction already has, in the main, a ready-made social-economic basis. Here, the task of reconstruction is to accelerate the process of ousting the capitalist elements from industry. The matter is not so simple in agriculture. The reconstruction of the technical basis of agriculture pursues, of course, the same aims. The specific feature of agriculture in our country, however, is that small-peasant farming still predominates in it, that small farming is unable to master the new technology and that, in view of this, the reconstruction of the technical basis of agriculture is impossible without simultaneously re-constructing the old social-economic order, without unit-ing the small individual farms into large, collective farms, without tearing out the roots of capitalism in agriculture.
Naturally, these circumstances cannot but complicate our difficulties, cannot but complicate our work in surmounting these difficulties.
Thirdly, we must hear in mind the circumstance that our work for the socialist reconstruction of the national economy, since it breaks up the economic connections of capitalism and turns all the forces of the old world upside down, cannot but rouse the desperate resistance of these forces. Such is the case, as you know. The malicious wrecking activities of the top stratum of the bourgeois intelligentsia in all branches of our industry, the brutal struggle of the kulaks against collective forms of farming in the countryside, the sabotage of the Soviet government's measures by bureaucratic elements in the state apparatus, who are agents of our class enemy—such, so far, are the chief forms of the resistance of the moribund classes in our country. Obviously, these circumstances cannot facilitate our work of reconstructing the national economy.
Fourthly, we must hear in mind the circumstance that the resistance of the moribund classes in our country is not taking place in isolation from the outside world, hut is receiving the support of the capitalist encirclement. Capitalist encirclement must not be regarded simply as a geographical concept. Capitalist encirclement means that the USSR is surrounded by hostile class forces, which are ready to support our class enemies within the USSR morally, materially, by means of a financial blockade and, if the opportunity offers, by military intervention. It has been proved that the wrecking activities of our specialists, the anti-Soviet activities of the kulaks, and the incendiarism and explosions at our factories and installations are subsidised and inspired from abroad. The imperialist world is not interested in the USSR standing up firmly and becoming able to overtake and outstrip the advanced capitalist countries. Hence, the assistance it renders the forces of the old world in the USSR Naturally, this circumstance, too, cannot serve to facilitate our work of reconstruction.
The characterisation of our difficulties will not be complete, however, if we fail to bear in mind one other circumstance. I am referring to the special character of our difficulties. I am referring to the fact that our difficulties are not difficulties of decline, or of stagnation, but difficulties of growth, difficulties of ascent, difficulties of progress. This means that our difficulties differ fundamentally from those encountered by the capitalist countries. When people in the United States talk about difficulties they have in mind difficulties due to decline, for America is now going through a crisis, i.e., economic decline. When people in Britain talk about difficulties they have in mind difficulties due to stagnation, for Britain, for a number of years already, has been experiencing stagnation, i.e., cessation of progress. When we speak about our difficulties, however, we have in mind not decline and not stagnation in development, but the growth of our forces, the upswing of our forces, the progress of our economy. How many points shall we move further forward by a given date? What per cent more goods shall we produce? How many million more hectares shall we sow? How many months earlier shall we erect a factory, a mill, a railway? Such are the questions that we have in mind when we speak of difficulties. Consequently, our difficulties, unlike those encountered by, say, America or Britain, are difficulties of growth, difficulties of progress.
What does this signify? It signifies that our difficulties are such as contain within themselves the possibility of surmounting them. It signifies that the distinguishing feature of our difficulties is that they themselves give us the basis for surmounting them.
What follows from all this?
It follows from this, first of all that our difficulties are not difficulties due to minor and accidental "derangements," but difficulties arising from the class struggle.
It follows from this secondly, that behind our difficulties are hidden our class enemies, that these difficulties are complicated by the desperate resistance of the moribund classes in our country, by the support that these classes receive from abroad, by the existence of bureaucratic elements in our own institutions, by the existence of unsureness and conservatism among certain sections of our Party.
It follows from this thirdly, that to surmount the difficulties it is necessary first of all, to repulse the attacks of the capitalist elements, to crush their resistance and thereby clear the way for rapid progress.
It follows from this, lastly, that the very character of our difficulties, being difficulties of growth, creates the possibilities that we need for crushing our class enemies.
There is only one means, however, of taking advantage of these possibilities and of con