He believed that the Red Guard attacks on capital had drawn to a close and the period of “utilising bourgeois specialists by the proletarian state power” had begun.4 He even strayed from every theoretical premise and declared unequivocally that these specialists must be engaged in the service of the new regime with “high remuneration”. Lenin described this “winning over the ‘stars’ of the intelligentsia” as a “step back” and a “partial retreat” when compared with socialist equality.5 In the same breath – and with great prescience – he spoke of a certain and inevitable corruption of this system, the weakening of its moral fiber as a sort of natural concomitant of “market economy”. “The corrupting influence of high salaries – both upon the Soviet authorities (especially since the revolution occurred so rapidly that it was impossible to prevent a certain number of adventurers and rogues from getting into positions of authority…) and upon the mass of the workers – is indisputable.” Yet he never found a convincing solution to this contradiction, always thinking in terms of “socialist” and “proletarian” consciousness, because they had not been able to establish “comprehensive control and accounting,” and had “fallen behind with the socialist reforms.” “We have introduced workers’ control as a law, but this law … is only just beginning to penetrate the minds of broad sections of the proletariat.”6 Essentially, the expansion of state regulation to capitalist production and turnover of goods (to the cooperatives as well) may become a fundamental question regarding financial and market conditions in the “transition leading to socialism”.7

A virtually unnoticed shift took place within this political framework toward war-communist restrictions of the market economy. Originally instrumental in defending against foreign capital and establishing independence internally, the state monopoly on grain (introduced by the Provisional Government’s law of 25 March 1917) was followed by plans for both a state monopoly on foreign trade and a property tax, as a way of “supplementing” the budget.8 At the same time, in The Impending Catastrophe, he drew a clear line between state control of the bourgeoisie and the expropriation of private property that applied to the bourgeoisie, even arguing against expropriation in this specific case:

If nationalisation of the banks is so often confused with the confiscation of private property, it is the bourgeois press which has an interest in deceiving the public… Whoever owned fifteen rubles on a savings account would continue to be the owner of fifteen rubles after the nationalisation of the banks; and whoever had fifteen million rubles would continue after the nationalisation of the banks to have fifteen million rubles in the form of shares, bonds, bills, commercial certifi cates and so on.9

The purpose of nationalization was to oversee the financial and economic processes, the actual collection of personal income taxes, etc. Lenin contrasted reactionary-bourgeois regulation to revolutionary democratic regulation, with bottom-up control, with whose limitations he soon came face-to-face. He had already stipulated that the construction of the most modern heavy industry would require state-of-the-art technical-technological progress, to apply “much of what is scientific and progressive in the Taylor system; we must make wages correspond to the total amount of goods turned out, or to the amount of work done by the railways, the water transport system, etc., etc.” Lenin thought that the feasibility of socialism depended on the successes that could be achieved in the field of “combining Soviet power and the Soviet organisation of administration with the up-to-date achievements of capitalism.”10 Apart from the cooperation and competition of economic sectors and modes of production, Lenin also spoke about the “competition of communes,” and etched out its moral driving forces more clearly than its material and economic bases. In contrast to the “allowances” made to market and financial conditions and the “bourgeois cooperatives,” the “socialist state can arise only as a network of producers’ and consumers’ communes, which conscientiously keep account of their production and consumption, economise on labour, and steadily raise the productivity of labour, thus making it possible to reduce the working day to seven, six and even fewer hours.”

Lenin had taken note of this, and by the spring of 1918, famine ravaged the cities On his initiative, the Council of People’s Commissars introduced the “dictatorship of state subsistence,” the formation of the poor peasant committees. Many writers tend to wax theoretical about these spontaneous measures, as if Lenin had ventured upon these in line with a concept he had invented earlier; on some theoretical basis; or even with the assumption that some sort of special socialism or theoretical model could be erected on the basis of these actions. In fact, a political turn was outlined in May 1918, leading from a state-supervised mixed market economy to a dictatorship of state subsistence that swept spontaneously toward war communism. The latter, in the beginning, was determined and validated by the internal armed counterrevolution and interventionist military attacks.

On the other hand the conditions of war communism brought the notions of “transitional period” and “socialism” too close to each other in theoretical terms. Bukharin and Preobrazhensky’s The ABC of Communism gave a theoretical basis to the conflation of war communism (as a relatively integrated sequence of economic policy measures) and the realization of socialism as such. The work was a curious mixture of the mutually exclusive ideas of Soviet labor self-government and state socialism. These two famous Bolshevik writers attempted to “translate” the Marxist conception of socialism into the reality of war communism. It was as if the first stage of communism, the realization of socialism, was coming into a state of full development, and was able to transcend commodity and finance relations thanks to both unprecedented inflation and the forced measures of war communism:

But it is perfectly plain that we cannot believe State capitalism to be possible unless we also believe in the possibility of the socialist organization of economic life. The only difference between the two systems lies in this, that in one case industry is organized by the bourgeois State, and that in the other case it is organized by the proletarian State.11

Left unexplained was that the matter does not simply rest on state power, for in war communism the state as a military force of authority, as a “deterrent to class enemies through dictatorial” power, acted as the mainspring of the economy. This had no roots in any form of Marxist theoretical tradition from Marx’s own time, and even contradicted his period’s idea of socialism. Lenin was not so naive as to identify war communism with “complete socialism,” for he continued to believe that “as long as workers and peasants remain, socialism has not been achieved”.12 Moreover, he never deduced the concept of equality theoretically from the reality of war communism, using it only to refer to eliminating social class in economic terms, a final and indispensable requirement of the liberation from capital and achieving freedom. Lenin’s real theoretical mistake in 1919–1920 was that he overestimated the possibilities of socialization, of social supervision within the framework of nationalization, and underestimated the inveteracy of the market and money in a regulating role, a fact he later recognized. The “atmosphere” of the epoch, the romantic attitude of the civil war, was also expressed in war communism’s compulsory egalitarianism. The roots of this “primitive” egalitarianism ran deep in Red Army units and partisan brigades engaged in life-and-death combat with the Whites – a phenomenon picked up by innumerable literary works and films. War communism also influenced theory, which interpreted the “system” as socialism, despite that being suggestive of an anachronism – especially in light of the famous thesis of the “semi-state” in State and Revolution (which can be traced back to Marx). There, Lenin was already engaged in a polemical attack on what was a conceptual muddle. He used Engels’ critique of the draft program of Erfurt, which he had handed over to Kautsky in 1891, who published it a decade later in Neue Zeit. This is interesting because the “opportunist wing” of the social democrats had already suggested that the state, in itself, might be able to consolidate socialism. This line of thought incorporated the increased role of the state in modern capitalism. Lenin mentions the concept of “state socialism,” opposed to the revolution and revolutionary socialism, inasmuch as the role of socialism is defined in opposition to the state.