A Glance at Soviet Russia
Carter, John
July 2, 1930 THE COMMONWEAL 261 A GLANCE AT SOVIET RUSSIA By JOHN CARTER THE great enigma of the modern economic world is Soviet Russia—a varied, energetic population of 140,000,000...
...War Communism yielded to the nationalization of industry, pure Communism yielded to Lenin's new economic policy, Stalin resumed the drive for collectivization, slacked it, swung back towards a milder policy...
...Its foreign trade amounts to the quite respectable figure of $1,000,000,000 a year...
...Russia was a happy hunting-ground for European concessionaires and entrepreneurs, and England and Germany, between them, dominated Russian trade...
...If her Five-year Plan succeeds—and it is the part of intelligent statesmanship to assume that it will succeed, in order to envisage the shift in policy which it may necessitate—Russia will emerge from the communist night as the most powerful single business enterprise in the world...
...Industrialists began to write new tariffs...
...The world's reaction to collectivist superiority can only be a test of the merits of greater economic freedom...
...Over forty American business concerns are engaged in technical assistance contracts with Soviet industry...
...However, the Five-year Plan is a good idea...
...Then Russia was Europe's economic hinterland, a source of raw materials, including grain, for the continent and a market for continental manufactures...
...Economists began to study tables of figures and percentages and indices...
...The picture has changed...
...Our attitude toward it will be vastly similar to our attitude toward slaveeconomics...
...Private enterprise and initiative is eliminated, wasteful competition and profit holds no place in the scheme...
...There may be inefficiency and graft, but that was also true of czarist Russia and is not altogether false of the United States...
...The industrialization of Russia is the essential factor in this program...
...Enormous trusts began to take charge of every major phase of Russian economy...
...Confirmed economic gravitationists claim that the other foot will not budge, but as they study the Five-Year Plan which is now in operation, they are not so sure...
...Since then it has been growing rapidly...
...Germany and England, France and Italy, established diplomatic and trade relations with the red colossus...
...Colonel Hugh L. Cooper, the army engineer who constructed the Muscle Shoals hydro-electric plant, is building an even larger plant on the Dnieper...
...China and porcelain, glassware, rubber overshoes, cotton goods, linen and hemp goods, metal articles, rags and matches, all showed a gain in quantity and value in 1928-29...
...A five-year plan of electrification was launched by Lenin...
...Scott Nearing, the answer is obvious: The world will imitate Russia, because it cannot otherwise compete...
...The President's Business Committee, the British Economic Council with its corollary financial dictatorship for rationalizing British industry, the French system of allocating German reparations in kind, the Australian tariff which aims to establish rigid national control of the foreign exchange situation, all these bear strange similarities to the scheme elaborated by the impractical doctrinaires of Moscow who have succeeded in working the unworkable during a ten-year period of economic heresy...
...Russia has been cut off from foreign capital for sixteen years, has got along without it and is now engaged in a ghastly effort to manufacture her own capital out of the labors and privations of her people...
...July 2, 1930 THE COMMONWEAL 261 A GLANCE AT SOVIET RUSSIA By JOHN CARTER THE great enigma of the modern economic world is Soviet Russia—a varied, energetic population of 140,000,000 inhabiting the greatest single land area in the world, bridging Europe and Asia in an administrative union which stretches from the Pacific to the Baltic, from the White to the Black Seas...
...This mass was cut away from world economy in 1914...
...Russian collectivism, if attained, will be at the cost of the elemental human liberties...
...It has never returned...
...The strain is terrific and so far they have succeeded in getting only one foot off the ground...
...the bulk of her people were peasants...
...The plan contemplates an apportionment of exports in 1932-33, excluding grain, of 63.1 percent industrial exports...
...Neither politically nor economically will the western nations act as a unit against Russian economy...
...To begin with, it may be stated that the first year was a success, that the first quarter of the second year was a disappointment and that the second quarter of the second year was a fairly definite success...
...The only war fought to free the slaves was our Civil War, a rear-guard action to a movement which lasted the better part of a century...
...Russian wood-pulp and anthracite have been competing in the American market...
...On the other hand, what would be accounted a success in Russia would be regarded as definite misery in the United States...
...Nobody knows the answer to this question...
...Every type of enterprise from rubber reclaiming to nitrogen fixation, from irrigation work to textile plants, is represented in this private work of "Americanization" in Russia...
...It will be impossible to trace costs of Russian production, to prevent dumping or to compete with such a concern, under present conditions...
...The real answer to slavery was the demonstration that freedom was economically superior...
...It is certain, however, that the present world, with its tariff wars, its protectionist groups, its economic nationalism, and its parochial beneficiaries, is not qualified to cope with the shadowy engine of economic production which is arising out of the red mists of Moscow...
...Statesmen began to count noses...
...At that moment, the reins of Russian government were seized by the Communists, whose repudiation of foreign debts and confiscation of private property, burned the bridges which linked the Russia of the Czars with the rest of the world...
...While we may grant its pragmatic success, our answer will be a move in the direction of greater liberty in capitalistic society, of freer trade, of more unrestricted production, of greater liberty in the competition and combination of economic groups...
...For a decade the rest of the world sat back and waited for the inevitable collapse...
...On the contrary, strange and gigantic economic forms began to materialize in the land of the red revolution...
...About five hundred American experts are assisting Russian industry on the spot...
...Russia's traditional exports of lumber, oil, flax, grain, dairy products, fur, platinum and such are again on the world market...
...Was Communism going to succeed...
...The five years embodied in this plan are those from 1928-29 to 1932-33...
...It remains to be seen whether Commissioner Whalen's charges that the Amtorg is engaged in communist propaganda will have the effect of killing this trade and throwing it into the hands of England, much as the London police raid on Arcos, Limited—the Soviet trading agency in London—threw Russian trade with Great Britain into American pockets...
...Quantities of production have been attained, but quality still leaves much to seek...
...The element of planning, of foresight, of coordination and unification and simplification is too valuable to be wasted on Russia...
...The world's answer to the gigantic menace of Russian masseconomics, may be a move toward lower tariffs, elimination of narrow economic nationalism, repeal of restrictive economic measures and the establishment of a world area of freer trade to offset the establishment of a Russian area of arbitrary economics...
...The world said, "It's contrary to economic law...
...In 1928-29, it amounted to about $90,000,000...
...In 1927-28 alone, the Amtorg placed orders for $90,000,000 in the United States, of which over $50,000,000 was for cotton and over $8,000,000 for tractors...
...If it succeeds, what will be the answer of our industrial democracies to this monstrous economic organization...
...What is Russia, anyhow, and what are the Russians doing ? Russia is a big country and it contains more people than the United States...
...Among them are such names as Dupont de Nemours and Company, Ford Motor Company, International General Electric Company, Newport News Shipbuilding and Drydock Com262 THE COMMONWEAL July 2, 1930 pany, Radio Corporation of America, and J. G. White Construction Company...
...Russia is still dependent on the outside word for technical assistance, but is procuring it in the United States to an unappreciated degree...
...While our trade with the rest of the world has been declining, in consequence of the economic depression, Russia has become our sixth best market...
...Henry Ford, next to Lenin, became the hero of the new Russia...
...Schemes of construction, schemes of coordination, schemes of production were devised, applied, modified, revised, applied again, and the world began to catch a glimpse of a country which organized its economic life on a national basis and which conducted its foreign trade as would any other big business, unified purchasing, official sales agencies: everything, from mine and forest and farm to warehouse, factory, train and ship, under unified direction...
...For the Russians are beginning to lift themselves by their economic boot-straps...
...Then came a five-year plan of industrial reconstruction, now under way, still successfully...
...And still there was no collapse...
...Famine, party dissensions, proscriptions, revolts came and went, and still the collapse failed to materialize...
...If it fails, what effect will that failure have on our way of living...
...Nobody can say whether the new Russian economy is a success or a failure, not even the staunchest of conservatives or the most fiery of radicals...
...It is a growing country...
...Such Russian industry as existed was either dependent upon or hopelessly inferior to European industry...
...Despite the absence of diplomatic relations and the occasional economic and social qualms we feel at Russian social and moral inadequacies, this trade has been satisfactory and profitable to both parties...
...A fifteen-year plan is around the corner...
...Defeat in war, foreign invasion and intervention, blockade, revolution and counterrevolution, huge losses in territory, left Soviet Russia economically prostrated in 1918...
...The world said, "It runs counter to human nature...
...To such Marxian theologians as Dr...
...The completion of the Turksib railway links Siberia to Russian Turkestan, promises to increase Russian cotton production and opens up new markets in Chinese Turkestan...
...It produces large quantities of petroleum, gold, and platinum...
...This means competition...
...The world said, "It can't possibly work...
...In the economic world nothing succeeds like success and a good idea leaps boundaries overnight...
...Others are not so sure...
...It was so with slavery—a system of economic production which offended the conscience of free nations...
...What answer we shall make to a Russia which has made a success of collective economics is as yet unknown...
...For it is obvious that the "encirclement" of Russia has failed...
...In the first two months of 1930, our sales to Russia were exceeded only by our sales to Great Britain, France, Germany, Canada and Japan...
...In our future dealings with the Marxian State, which shall it be—imitation or a return to economic first principles...
...This is a change from its prewar position...
...Russia's exports are increasingly industrial in character...
...All that is known is that it hasn't failed yet...
...Can materialism, coupled with administrative abnegation, organized on American lines of production and on the Stinnes type of "trustification," succeed in evolving an economic system based on Communism...
...Russian matches have been competing with the Swedish product in eastern Europe...
...If it does, it will have demonstrated the Soviet ability to play off one industrial democracy against another and to take advantage of occidental competition to promote and to protect Russian Soviet interests...
...Russia has more than tripled her prewar export of petroleum...
...For industrial competition, under these terms, Russia will find herself admirably equipped...
...The year 1929 showed substantial increases in the production of freight-cars, boilers, Diesel engines, steam-turbines, mining equipment, chemical machinery, automobiles, tractors, bicycles and sewing-machines...
...Her cotton cloth is competing in Turkey, Persia and the Middle East...
...Where less than $200,000,000 worth of industrial goods were exported in 1927-28, by 1932-33 Russia plans to export $500,000,000 worth...
...Still there was no collapse...
...an equal number of Russian engineers and technicians are studying American industrial methods in this country...
...It succeeded...
...It sets for Russian industry a series of definite, concrete yearby-year objectives, so many yards of cotton cloth, so many tons of pig iron, so many miles of railway, so many bushels of wheat, bales of cotton, pounds of sugar, kilowatt hours, tractors and industrial machinery...
...And Russia can make her trade relations the servant of her foreign policy, to a degree which is denied to the nations of the West...
...Something very big and quite important was happening in Russia...
...Its coal reserves are half as great as those of Europe, its iron ore reserves twice as great as those of Asia, its petroleum reserves as great as those of the United States, and greater than those of Europe and the Far East combined...
...Russia was dependent on Europe for capital, for technical assistance and for a market...
...The year 1928-29 showed huge gains in Russian exports of lumber and oil products, asbestos and other basic minerals...
...It grows, among other things, over half of the world's rye, a fifth of the world's oats, a quarter of the world's potatoes, a sixth of the world's beet sugar, and nearly three-fifths of the world's flax and hemp...
...It is the only completely coordinated and integrated scheme of national economy in the world today...
...Russian trading agencies are being established in northern China...
...Russia had a comparatively small trained working-class...
...The Russian riddle, therefore, is going to be the preoccupation of future economists...
...This at a time when the rest of the world was going through a profound economic depression...
...In the meantime, Russian-American trade is a steady factor in our economic life...
Vol. 12 • July 1930 • No. 9
