Russia: Land of High Profits. (1930)

Book Review from the September 1930 issue of the Socialist Standard

“The Soviet Union Year-Book, 1930.” Publishers: George Allen & Unwin, Ltd. 7s. 6d.

The Soviet Union Year-Book, compiled and edited by A. A. Santalov and Louis Segal, Ph.D., M.A., is published “to provide business and public men with a reliable information on the economic and political life of the U.S.S.R.” It contains in its 670 pages accurate and detailed information from official sources on all the chief aspects of Russian economic and political life. For business men seeking trade connections, and for those who wish to combat the double campaign of misrepresentation which is carried on by the ignorant and prejudiced in the ranks of capitalist parties on the one hand and the ranks of the communist party on the other it is an indispensable work of reference.

It is not possible here to describe fully the range which is covered. It must suffice to indicate some of the facts and figures which will be useful to the Socialist student of Soviet affairs.

Production and foreign trade.

Much space is devoted to the growth of trade and production. Agricultural production in 1928-29 was 4 per cent. above that in 1913, and in 1932-33 it is planned to reach 59 per cent. above the 1913 level (page 92). Industrial production in 1928-29 was 73 per cent. above 1913 level, and in 1931-32 will reach 166 per cent. above that level (page 94).

Exports in 1928-29 were valued at 877 million roubles, as compared with 1,520 million in 1913. Imports in 1928-29 were valued at 836 million roubles, as compared with 1,374 million in 1913 (page 289). It is planned to increase exports to over 2,000 million roubles in 1932-33, and imports to over 1,705 million. In 1909-13 agricultural exports represented 70 per cent. of the total exports, and industrial exports 30 per cent. In 1932-33 the proportions will be equal, if the plan matures (page 291).

High Rates of interest and profit.

The Concession Companies make staggering profits out of the exploitation of the Russian workers. In 1926-27 the average profit was 81 per cent. on the capital invested by them.

In 1927-28 it was 96 per cent. (see page 208). What a harsh reality after the dreams of the visionaries for whom Russia was to serve as a model to the Western world. One of the Bolshevik slogans of 1917 was “Down with the foreign bondholders.” They were duly “downed” and the National Debts repudiated. The Soviet Government has just repeated its willingness to resume part of the old National Debt obligations, but in the meantime the foreign bondholders have given place to “home” bondholders – a distinction without a difference from the stand point of the Russian workers.

A rapidly increasing percentage of the total revenue of the Government is raised by means of additions to the new National Debt. In 1927-28 the percentage was 0.5; in 1928-29 it was 8.6 per cent., and in 1929-30 it will be 11.5 per cent. (page 397).

On October 1st, 1925, the new National Debt stood at 367 million roubles (£36 million). On October 1st, 1929, it was 2,595 million roubles (£259 million) (see page 398). It is at the present moment nearly 3,000 million (£300 million), and it is planned to increase it to £500 or £600 million in the next year or two.

The amount raised by means of loans during the one year 1929-30 reached the total of 1,335 million roubles (page 391). In the same year the Government spent 450 million roubles on payments to the new investing class who have invested their money in Russian industry through the Russian Central Government. Interest rates are very high; up to 12 per cent.

Other avenues of investment for Russia’s propertied class are the co-operatives. Hundreds of millions of roubles are invested in that way (see pages 226 and 621).

All these forms of investment, in the National Debt, in the co-operatives, and in the trading concerns, etc., are forms of exploitation of the Russian workers They, like the workers everywhere, carry on their backs a class of property owners, receiving incomes from property ownership.

The very high rate of interest which rules in Russia owing to slowness with which foreign investors enter the Russian money markets, may serve to explain why the Russian Government, or certain influential groups behind it, continues without any tangible result to finance Communist parties abroad. Investors inside Russia would naturally not want the interest rates to fall from 10 per cent. or 12 per cent. to 4 per cent. or 5 per cent., and an obvious method of preventing this would be to play upon the fears of foreign Governments and investors, and thus save themselves from unwelcome competitors.

Excess profits tax.

As in this country, the income tax in Russia is a graduated one, there being five categories. In each of them provision is made for different rates of tax on ranges of income from under 1,000 roubles a year up to 24,000 roubles and over (page 402).

The fifth grade applies to those whose incomes are derived from “ownership of industrial and trading enterprises, from money investments, dividends on shares, etc.” (page 402), also incomes from “rent” (page 401).

Then, in addition to the income tax, there is an excess profits tax for those companies whose yearly profits exceed a standard which is described as the “normal profits” (page 405).

It is this economic organisation, possessing all the usual features of exploitation (rent, interest, and profit, a working class, and a property owning class, a stock exchange, etc.), which the Communist parties describe as “Socialism”!

Wages and unemployment. 

The average money wages in 1928-29 was 892 roubles (£89, or about 34s. 6d. a week(page 453).

The worker’s output is increasing at a greater rate than his wages. Under the five-year plan the “productivity of labour in the end of the five-year period will be doubled and real wages are to show an increase of 70 per cent.” (p. 97)

(Information about the inequalities of wages and salaries was given on The Socialist Standard for December, 1929)

The number of unemployed in 1924-25 was 848,000; in 1926-27, 1,353,000; and on January 1st 1930, 1,310,000 (page 454).

The amount paid out in unemployment insurance in 1928-29 was 111,500,000 roubles. This works at about 80 to 90 roubles a year for each unemployed person (on the basis of 1,300,000 unemployed). This, in English coinage, is about £8 10s. a year, or 3s. 3d. a week. The trade unions also pay unemployment benefit to their members from 3 to 18 roubles a month, say from 1s. 6d. to 9s. a week. Although the unemployed are exempt from the obligation to pay rent, or charges for lighting, water and transport, it would seem that they do not have a very pleasant time. Is this what our communists have in mind when they ask the Government here to give the unemployed “full maintenance”?

Inheritance.

As in other capitalist countries inheritance of property is recognised in Russia. “Soviet law recognises the right of inheritance, irrespective of the amount involved” (page 498).

As in this country, it is subject to an inheritance tax (page 405). The tax rises from 5 per cent. on the first 2,000 roubles (£200) up to 90 per cent. on that part between 200,000 and 500,000 roubles (£20,000 to £50,000).

The Communist Party. 

The membership of the Communist Party on July 1st, 1922, was 1,554,012 which represented 184 in every 10,000 of the adult population, or 1 in 54 (page 565).

The number of new members enrolled in 5½ years from 1924 to June, 1929, was 1,408,742. The number expelled in the same period were 128,460.

On July 1st, 1929, the party was composed as follows: – workers, 724,115; peasants, 200,452; employees, etc., 629,327. Women form 13.5 per cent. of the whole membership (page 566).

Education.

In December, 1926 (the last available figures) illiterates had been reduced considerably, but still represented 433 per 1,000 of the whole population (page 462)

The expenditure on education by the Central Government is under 3 per cent. of its total expenditure (page 462).

It is less than the amount spent on army and navy (page 389).

Hopes and facts.

In the first section of the “Constitution of the U.S.S.R.,” passed in 1923, Russia is depicted in the following rosy terms: –

“Here – in the camp of Socialism –are mutual confidence and peace, national freedom and equality, and dwelling together in peace and brotherly collaboration of peoples” (see page 1).

The facts given in this Year-Book sufficiently illustrates how illusory the communist dreams have been. Like many pious hopes embodied in the official documents and constitutions of the rest of the capitalist world these phrases have no relation whatever to the actual facts. Russian capitalism, although administered by the Communist Party dictatorship, reproduces almost down to the last detail the paraphernalia of the capitalist world as we know it here.

The lesson of it is the one we have tried to drive home for so many years, that it is not possible for a minority to impose socialism upon a majority who are hostile or indifferent; nor is it possible to remedy backward economic development by means of fine-sounding but ineffective decrees, issued by dictators.

Edgar Hardcastle