the most welcome moment, say, after a large strike, like the one now on in Britain, or the one which was recently defeated in Germany.[97] But a successful strike and a successful revolution will come in the wake of an unsuccessful one, and we shall then find ourselves with socialist, instead of capitalist, relations.
Stoppages in oil extraction may prove to be disastrous. The capitalists have failed to reach Baku's 1905 rate. It turns out that the danger of flooding is also reckoned with abroad, for instance, in California and Rumania. Insufficient pump-off of water results in ever greater flooding.
There are detailed regulations on this score in Russian and foreign legislation. When dealing with this matter in Baku, we sought the opinion of our experts on Rumanian and Californian legislation. If we are to safeguard our oil resources, we must see that the scientific and technical regulations are observed. If we are to lease, say, a tract of forest we must see that the lumbering is done in a proper manner. If it should be an oil lease, we must stipulate measures to prevent flooding. In each case, there must be
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observance of scientific and technical regulations and rational exploitation. Where are the regulations to come from? They are to be taken from Russian and foreign legislation, and this will allay any suspicions that they are our own invention, in which case no capitalist will bother to negotiate with us. We intend to take what there is in Russian and foreign legislation. If we take the best of what there is in Russian and any foreign legislation, we shall have a basis to guarantee the standards attained by the leading capitalists. These are well-known business standards borrowed from capitalist practice, and not a Communist flight of fancy which the capitalists fear most of all. We guarantee that none of the terms, aspects or clauses of our concession agreement will go beyond the framework of capitalist legislation. We must never lose sight of this key proposition. We must take capitalist relationships as a basis to show that the capitalists will find these terms acceptable and profitable, but we, for our part, must turn them to good advantage. Otherwise, it is a waste of time to talk about concessions. But to return to what is recognised in capitalist legislation. Advanced capitalism is known to be superior to our own industry in technical organisation and improvements. For that reason, we are not confining ourselves to Russian legislation, and in the case of oil we have started to borrow from Russian, Rumanian and Californian legislation. We are entitled to take any law, which will dispel any suspicions of arbitrariness or whim. That will be easily understood by the modern advanced capitalist and financial magnate, in fact, finance capital as a whole, for our terms and standards will conform to those prevalent abroad, and we are proposing them with an eye to the business practices of capitalism. In this case, we are not indulging in any flights of fancy, but are setting ourselves the practical goal of improving our industry and raising it to the levels of modern advanced capitalism. Anyone who has an idea of the state of our industry will see that this will be a tremendous improvement. If we were to do this even in respect of a certain section of our industry, say, one-tenth of it, we should still be taking a great step forward, which would be feasible for them, and highly desirable for us. Point Seven:
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"7. A rule similar to that set forth in Point Four shall also apply to the equipment imported by the concessionaire from abroad."
Point Four says that the concessionaire shall be bound, in the event the clause is written into the agreement, to import a certain quantity of goods for sale, against a special payment, over and above what he imports for his own operations. If the capitalist should import improved types of bores and tools for himself, we shall be entitled to demand that he import, say, an extra 25 per cent for us, over and above the bores he imports for himself, the payment arrangements to be the same as those specified in Point Four, that is, cost plus a definite percentage for overhead expenses.
The future is very bright, but we should never confuse our activity in these two planes: on the one hand, there is the agitation which brings nearer this future, and on the other, the ability now to adapt ourselves to and exist in the capitalist encirclement. If we fail to do that we might find ourselves in the position of one who has had his chance but was not alert enough to act in time. We must manage, by taking advantage of the peculiarities of the capitalist world and the capitalist avidity for raw materials, to derive all the benefits that would help us to consolidate our economic positions among the capitalists, strange as that may sound. The task seems to be an odd one: How can a socialist republic improve its positions with capitalist support? We had an instance of this during the war. We did not win the war because we were stronger, but because, while being weaker, we played off the enmity between the capitalist states. Either we now succeed in playing off the rivalry between the trusts, or we shall find ourselves unadapted to capitalist conditions and unable to exist in the capitalist encirclement. Point Eight:
"8. A special clause in each agreement shall regulate the question of payment to the workers employed at the concession enterprises of wages in foreign currency special coupons, Soviet currency, etc."
You see that in this case we are prepared to accept payment in any currency, whether foreign or Soviet, or in coupons, and show goodwill by being prepared to consider
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any of the businessmen's proposals. Of the concrete proposals there is the one Vanderlip made to our representatives. He said: "I should like to pay the workers an average wage of, say, a dollar and a half a day. On my concession territory I would set up stores carrying all the goods the workers may need, and these will be available to those who receive special coupons; these coupons will be issued only to workers who are employed at my concession enterprises." Whether things work out as he says, remains to be seen, but we find this acceptable in principle. A great many difficulties naturally arise. It is, of course, no easy task to harmonise a concession geared to capitalist production with the Soviet standpoint, and every effort of that kind is, as I have said, a continuation of the struggle between capitalism and socialism. This struggle has assumed new forms, but it remains a struggle nonetheless. Every concessionaire remains a capitalist, and he will try to trip up the Soviet power, while we, for our part, must try to make use of his rapacity. We say: "We shall not grudge him even 150 per cent in profits, provided the condition of our workers is improved." That is the pivot of the struggle. In this sphere, of course, you need to be even more skilled than in struggling for the conclusion of a peace treaty. The capitalist powers behind the scenes take part in the struggle for the conclusion of any peace treaty. There was a foreign power pulling the strings behind each of the countries with whom we have signed a peace treaty -- Latvia, Finland and Poland. We had to conclude these treaties in such a way that, on the one hand, they allowed the bourgeois republics to exist, and on the other, they secured advantages for the Soviet power from the standpoint of world diplomacy. Every peace treaty with a capitalist power is a record of certain war clauses. In much the same way, each clause of a concession agreement records some aspect of a war, and we should organise things in such a way as to safeguard our own interests in that war. This can be done because the capitalist will be receiving big profits from the concession enterprise, while we shall be obtaining some improvement in the condition of our workers, and some increase in the quantity of goods from our share in the output. If the wages should be paid in foreign currency, this will give rise to a number
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of complex problems: how is this currency to be exchanged for Soviet currency? how are we to fight speculation? etc. We have accepted the idea that we have an answer to all these problems, and need not fear any of them. This point tells the capitalists that they are free to invent anything they like. It makes no difference to us whether you bring in the goods and sell them for special coupons, on special terms, or only upon presentation of special certificates issued personally to workers employed at the concession. We shall manage to adapt ourselves to any terms in such a way as to fight the capitalists on these terms and secure a certain improvement in the condition of our workers. This is the task we have set ourselves. We can't tell how it will be resolved in a concession agreement, for we can't very well offer the same terms of payment in some place like Kamchatka as over here or in Baku. If the concession should be located in the Donets Basin, the forms of payment cannot conceivably be the same as for one in the far North. We are not holding down the capitalists to some specific form of payment. Every clause of the agreement will contain an element of struggle between capitalists and socialists. We are not afraid of this struggle, and are sure that we shall manage to derive every possible benefit from the concessions. Point Nine:
"9. The concessionaire shall be free to make his own terms of employment, living conditions and remuneration with foreign skilled workers and employees.
"The trade unions shall not have the right to demand application of Russian pay rates or of Russian rules of employment to that category of workers."
We believed Point Nine to be absolutely indispensable because it would be quite absurd to expect the capitalists to trust the Communists. This is clearly stated both from the standpoint of principle and especially from the businessman's standpoint. For if we insisted on trade union endorsement of these terms of employment, if we told the capitalists that we accepted any foreign technician or specialist but only within the framework of the Labour Code of the R.S.F.S.R., it would be too much to expect any of the latter to accept, and the demand would be a mere formality. It could be said that the government says one thing and the trade unions another,
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because they are two distinct bodies, thereby leaving a legal loophole. But this was not written for lawyers but for Communists, and it was done on the basis of the decisions of the Tenth Party Congress on how to conduct the concessions policy. All of our writings, to which people in Europe have access, say that the concessions policy is being directed by the Communist Party, which is the ruling party. This has been rendered into all foreign languages, and there is no catch in it. We would not be in a position to consider any concessions policy at all, if we, being the political leadership, failed to say that in this case we were unable and unwilling to make use of our influence with the trade unions. There is no sense in teaching communism to the capitalists. We are fine Communists, but we are not going to usher in the communist order through concessions. After all, a concession is an agreement with a capitalist power. We would surely have committed to a lunatic asylum any Communist who decided to go and conclude a treaty with a capitalist power on the basis of communist principles. We would tell him that he was a fine Communist in his way but a complete flop as a diplomatist in a capitalist country. The Communist who tried to demonstrate his communism in respect of the concessions policy in an agreement would be just as near to being committed to a lunatic asylum. What you need to have is a good idea of capitalist trade, and if you haven't got it, you're no good. Either don't go in for concessions at all, or make an effort to understand that we must try to use these capitalist conditions in our own interest, by allowing the foreign technicians and workers complete freedom. That we shall not insist on any restrictions in this sphere goes without saying.
Section Three of Point Nine, which follows, does contain a restriction:
"The proportion of foreign workers and employees to Russians, both in total and within the several categories, shall be agreed upon by the parties in concluding each concession agreement separately."
We cannot, of course, object to the importation of foreign workers into areas which we are unable to supply with Russian workers, as, for instance, in the Kamchatka timber
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industry. In the case of, say, the mining industry, where there is a lack of drinking water or foodstuffs, and where the capitalists would wish to build, we shall also allow them to bring in the greater part. On the other hand, where Russian workers are available, we stipulate a proportion to give our workers a chance, a) to learn, and b) to improve their condition. After all, we do want our workers to benefit from an improvement of our enterprises according to the last word in capitalist technology. The capitalists have not raised any objections in principle to any of these provisions. And here is Point Ten, the last one:
"10. The concessionaire may, by agreement with the government organs of the R.S.F.S.R., be granted the right to invite highly skilled specialists from among Russian citizens, the terms of employment being agreed with central government bodies in each case."
Plainly, we cannot guarantee full scope in this respect, as we can in respect of foreign technicians and workers. In the latter case, we refrain from interfering, and they are left entirely within the framework of capitalist relations. We promise no such scope for our specialists and technicians, for we cannot have our best men working at the concession enterprises. We have no desire to shut off all access for them to that area, but there must be supervision over the performance of the agreement from above and from below the workers, members of the Communist Party, who will be employed at these enterprises, must supervise the performance of the terms of the agreement, both in respect of their technical training and observance of our laws. There were no objections in principle on this point in the exploratory talks with some of the magnates of modern capitalism.
All these points have been confirmed by the Council of People's Commissars, and I hope they give you a clear picture of the concessions policy we intend to conduct.
Each concession will undoubtedly be a new kind of war -- an economic war -- the fight carried into another plane. This calls for adaptation, but one that is in line with the Party Congress. If we are to attain our goal, we must have a respite and must be prepared to make sacrifices and endure hardships. Our goal is: in the capitalist encirclement
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to make use of the greed of the capitalists for profit and the rivalry between the trusts, so as to create conditions for the existence of the socialist republic, which cannot exist without having ties with the rest of the world, and must, in the present circumstances, adjust its existence to capitalist relations. There is the question of actual terms. For oil agreements, they are as follows: from one-quarter to one-third of the whole of Grozny and of the whole of Baku. We have worked out our share of the output: we shall be retaining from 30 to 40 per cent of the oil extracted. We have inserted a commitment to increase output within a certain period to, say, 100 million, and another commitment to extend the oil pipeline from Grozny and Petrovsk to Moscow. Whether we shall have to make any extra payments is to be stipulated in each agreement. But we should be quite clear on the type of agreement concluded in these conditions. The important thing, from the trade union standpoint, is for the Party leadership to see the specific features of this policy and set themselves the task of securing such concessions at any cost, in pursuance of the decisions of the Party Congress, in the context of tasks facing the socialist system in the capitalist encirclement. Every concession will be a gain and an immediate improvement in the condition of a section of the workers and peasants. The latter will stand to gain because each concession will mean the production of additional goods, which we are unable to produce ourselves, and which we shall be exchanging for their products, instead of taking them through a tax.
This is a very difficult operation, especially for the organs of the Soviet power. With this point as pivotal we must set about to secure concessions, overriding the prejudices, inertia, ingrained customs, and the inconvenience of some workers having a bigger pay packet than the others. We could invent any number of excuses, in the way of objections and inconveniences, to frustrate any practical improvement, and that is what the foreign capitalists are really banking on. I know of no other point that has drawn so many objections from the most intelligent writers in the Russian whiteguard press, the men the Kronstadt events proved to be head and shoulders above Martov and Chernov. They are very well aware that if we fail to improve the
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condition of our workers and peasants because of our prejudices, we shall multiply our difficulties and altogether undermine the prestige of the Soviet power. You know that we must have that improvement at all costs. We shall not grudge the foreign capitalist even a 2,000 per cent profit, provided we improve the condition of the workers and peasants. It is imperative that we do it.