Workers' Control and Nationalization - Part Two

In Part Two Rob Lyon looks at the experience of workers' control and management in the Russian revolution. The experiences of the Russian proletariat offer invaluable lessons to the workers in Venezuela.

The Soviet Experience

Control and planning of the economy can only take place within certain limits – limits determined by the level of technique when the new social order takes over.

In Russia 1917, given the crushing backwardness of the country, the low cultural level and illiteracy of the working class and peasantry, the level of technique was very low. In fact, even after the October Revolution, management of industry was to be left in the hands of the capitalists until the workers had acquired the necessary expertise to take the helm into their own hands.

Again, in late 1917, Trotsky was asked whether it was the intention of the Soviet government to dispossess the owners of industrial plants in Russia. His reply was lengthy, and I apologize for reproducing most of it, but it is important because it highlights the general plan for the economy of the Soviet government.

"No, we are not yet ready to take over all industry. That will come in time, but no one can say how soon. For the present, we expect out of the earnings of a factory to pay the owner 5% or 6% yearly on his actual investment. What we aim at now is control, rather than ownership

"[By control] I mean that we will see to it that the factory is run not from the point of view of profit, but from the point of view of the social welfare democratically conceived. For example, we will not allow the capitalist to shut up his factory in order to starve his workmen into submissiveness or because it is not yielding him a profit. If it is turning out economically a needed product, it must be kept running. If the capitalist abandons it, he will lose it altogether, for a board of directors chosen by the workers will be put in charge…

"Again, 'control' implies that the books and correspondence of the concern will be open to the public, so that henceforth there will be no industrial secrets. If this concern hits upon a better process or device, it will be communicated to all the other concerns in the same branch of industry, so that the public will promptly realise the utmost possible benefit from the find. At present, it is hidden away from other concerns at the dictate of the profit motive, and for years the article may be kept needlessly scarce and dear to the consuming public…

"‘Control’ also means that primary requisites limited in quantity, such as coal, oil, iron, steel etc., will be allotted to the different plants calling for them with an eye to their social utility…

"[This will be done not] according to the bidding of capitalists against one another, but on the basis of full and carefully gathered statistics." (In Defence of the Russian Revolution, Workers’ Control and Nationalisation by Leon Trotsky).

The character of workers’ control during the Russian Revolution was very explosive. The slogan of control over industry was first issued on a wide scale by the Bolshevik Party in 1917, however, it was not invented by the Party. Similar to the Soviets, the factory councils and workers’ control were the result of a spontaneous movement of the working class, as a method of struggle born out of the class struggle itself.

Of course, workers’ control really began as a defensive struggle against the sabotage of the bosses. Many factories had been shut down and locked out, or left idle. The workers in many cases, defending their jobs and the revolution, occupied their factories. During this period workers’ control was largely passive.

Of course, after the victory of the October Revolution, the Soviet government passed a decree on workers’ control based on Lenin’s draft. The actual decree recognized the factory committees as the organ of control in each individual enterprise, and attempted to reorganize them on a regional level, and in an All-Russian Council of Workers’ Control.

The Bolsheviks, aware of the impossibility of backward Russia immediately passing to socialism, and aware of the inexperience of the workers in administration, wanted to set up a regime of workers’ control until assistance could come from the revolution in the West, namely from Germany, with its strong, highly educated working class.

Even so, the Bolsheviks did nationalize the banks – one of the most important measures taken by the young Soviet state. This robbed the owners of big business, both foreign and Russian, of one of their most effective tools to organize sabotage, and gave the Soviet state a powerful economic tool, as well as a vital and effective statistical and accounting centre for the whole economy.

One of the pressing issues facing the Bolsheviks was the need to re-organize Russian industry and to raise the productivity of labour. If this could not be done, then the young Soviet state was doomed.

After the decree on workers’ control was passed, workers’ control attained a convulsive, chaotic character. As Paul Avrich writes: “The effect of the decree was to give powerful impetus to a brand of syndicalism in which the workers on the spot rather than the over-all trade union apparatus controlled the instruments of production – a brand of syndicalism bordering on total chaos." (Paul Avrich, The Russian Anarchists, pg 162). More and more bosses were leaving Russia, and the workers were more and more forced to take the reigns of management. The Russian economy was smashed after four years of war and revolution. Russia was itself on the verge of collapse.

The bosses naturally resisted workers’ control. Workers’ control was met with further lockouts and sabotage. This was in turn answered with punitive nationalizations. As Trotsky had explained, if the bosses attempted sabotage or abandoned the factory, they lost it.

The Bolsheviks also faced the disintegration of central authority. In fact, between November 1917 and June 1918, many factories and mills were run under “workers’ self-management”, that is the syndicalist idea of self-management. This particularism and parochialism reflected the backwardness of Russia, her low level of development, and a largely rural petty-bourgeois economy.

Many Bolsheviks and other labour leaders recognized that the local pride of individual factory committees might damage the national economy beyond repair, and that many were selfishly absorbed in the needs of their own enterprises, and as one labour leader said “this could result in the same sort of atomisation as under the capitalist system”(Avrich, The Russian Anarchists, pg 164).

Another labour leader wrote, “workers’ control had turned into an anarchistic attempt to achieve socialism in one enterprise, but actually leads to clashes among the workers themselves, and to the refusal of fuel, metal, etc., to one another” (Avrich, The Russian Anarchists, pg 164).

Trotsky had explained some of the dangers inherent in this set-up in late 1917. When asked whether the workers’ committees or elected managers of a factory should be free to run the factory as they saw fit, he replied, “No, they will be subject to policies laid down by the local council of workmen’s deputies… [and] their range of discretion will be limited in turn by regulations made for each class of industry by the boards or bureaux of the central government.” (In Defence of the Russian Revolution, Workers’ Control and Nationalisation by Leon Trotsky)

He was then asked about the idea of Kroptkin and some of the Anarchists, which was that each centre be autonomous with respect to the industries carried within it.

"Kroptkin’s communalism would work in a simple society based on agriculture and household industries, but it isn’t at all suited to the state of things in modern industrial society. The coal from the Donets basin goes all over Russia and is indispensable in all sorts of industries. Now, don’t you see if the organised people of that district could do as they pleased with the coal mines, they could hold up all the rest of Russia if they chose? Entire independence of each locality respecting its industries would result in endless friction and difficulties in a society that has reached the stage of local specialisation of industry. It might even bring on civil war. Kropotkin has in mind the Russia of 60 years ago, the Russia of his youth." (In Defence of the Russian Revolution, Workers’ Control and Nationalisation by Leon Trotsky)

Both Paul Avrich (in The Russian Anarchists) and E.H. Carr (in The Bolshevik Revolution vol 2) report that some factory committees sought alliances with owners. Sometimes owners were begged to return to help profiteer. In some cases, the factory committee simply appropriated the funds of the factory or sold its stocks or plant for their own advantage, dividing the spoils between themselves.

A British trade union report explained that the workers had been transformed overnight into “a new body of shareholders”. Paul Avrich wrote that,

"Individual factories sent ‘pushers’ into the provinces to purchase fuel and raw materials, sometimes at outrageous prices. Often they refused to share available supplies with other factories in direct need. Local committees raised wages and prices indiscriminately, and on occasion cooperated with the owners in return for special bonuses." (Paul Avrich, The Russian Anarchists, pg 163).

Many of the committees were concerned with their own enterprise, not the general economic interest of the country. A.M. Pankratova wrote,

"We were building, not a Soviet Republic, but a republic of working class communities based on the capitalist factories and mills. Instead of a strict ordering of production and social distribution, instead of measures towards the Socialist organization of society, the existing state of affairs reminded one of the autonomous communes of producers the anarchists had dreamed of." (as quoted by Victor Serge in Year One of the Russian Revolution from The Factory Committees of Russia in the struggle for the Socialist Factory by A.M. Pankratova).

There were, of course, some success stories (such as the Moscow textile mills), but the overall trend of the economy was downward and increasingly chaotic. In fact, the Russian economy was heading towards total collapse. Obviously the situation was not conducive to the re-organization of production, to the elimination of competition, or to the planning of the economy.

The young Soviet Republic also faced other problems, such as the sabotage of the specialists and technicians. These specialists and technicians were hoping for, and certainly expected, that the Soviet government would fall within a matter of weeks. As a result they either left Russia or refused to work. The specialists in Russia 1917 were not like the specialists and technicians today. We will come to this more in a minute when we discuss Venezuela, but the technicians and specialists, lower-level managers and white-collar workers today have become more and more proletarianized. They face the same attacks, cuts and wage reductions as the workers do. It will be possible to bring them onboard, to convince them of our ideas and to win them over, as is happening in some cases in Venezuela today.

However, in Russia 1917, the specialists and technicians were very privileged. They were the sons and daughters of aristocrats and the bourgeois. They were well educated, which in itself was a massive privilege. They were well-paid, and had powerful positions. They were insulted by the very idea of a workers’ state and workers’ control. They refused to work en masse, crippling Soviet industry.

Hence the Soviet state was forced to make a series of compromises, beginning by paying the technicians more than the average worker. Of course, a political commissar was put at their side to ensure their loyalty as they were sent to the factories to help in their operation, itself a brilliant measure of workers’ control, but nonetheless it was still a compromise. The Soviet state was faced with no other option – without the specialists industry would not run.

As the country rapidly descended into civil war in the summer of 1918, the sabotage of the former ruling class picked up. Russia faced famine as the rich peasants horded grain. When the Soviet government was desperate for fuel in preparation for the coming war, the oil bosses threatened a lockout, confident that the workers could not run the industry. All the forces of reaction on a world scale were eagerly anticipating the collapse of the young Soviet state.

As a consequence, the Soviet government nationalized the commanding heights of the economy in June 1918. All industries engaged in mining, engineering, textiles, electrical goods, wood and lumber, tobacco, glass, ceramics, leather, cement, rubber, transport and fuel were nationalized. These were vital industries, and it was necessary to protect them from the sabotage of the bourgeois and to reorganize them for the war effort.

The Congress of Economic Councils, which had been formed in December 1917, decided to establish management boards of all nationalized industries composed of the following: 1/3 of the board came from the regional Economic Councils or the Supreme Economic Soviet, 1/3 came from the trade unions, and the other 1/3 from the workers of the enterprise itself. The factory committees were in turn transformed into the base cells of the trade unions, and began to manage and administer industry. These measures were taken to ensure the democratic planning of the economy and the socialized nature of the economy. It ensured the democratic control over the economy of the working class as a whole and not just of the workers in individual factories. This form of syndicalism and “local self-management”, which had dominated from before October until the summer 1918, had been causing friction and competition as well as hording and profiteering, and was ultimately crippling the economy. These new measures of the Soviet state reversed the chaotic trend in the economy and were a major part of why the Soviets were able to win the Civil War.

Now I don’t want to get into the whole question of Stalinism and the degeneration of the Soviet Union, as that is not the point or the topic of today’s discussion, but suffice it to say this: that workers’ democracy, that is workers’ control and workers’ management of industry did not develop under ideal conditions in Russia. But even so, even in a country faced with crushing backwardness, facing the general sabotage not only of the Russian bourgeoisie but also of the technical personnel and the imperialists, the young and inexperienced Russian proletariat, surrounded by enemies on all sides, was able to organize the management of industry. This is a testament to the creativity of the working class and its ability to transform society.

However, the Soviet Union emerged from the Civil War absolutely shattered. In 1921, industrial and agricultural production were only 13% of their pre-war levels. Seven full years of war, revolution, and civil war had taken their toll on the economy and the country as a whole. Everything that was left had been submitted to winning the Civil War. The working class emerged from the Civil War, as Lenin said, “de-classed”. Most of the advanced workers had given their lives on the front. Peasants, hostile to the cities and the factories, and angry from their experiences of the war, were brought into the cities to fill the factories. In many ways, it was the bureaucracy and not the working class that emerged victorious from the Civil War.

With the introduction of the NEP and the growth of bureaucracy, workers’ democracy was replaced by the will of the growing, and increasingly self-aware, bureaucracy. Workers’ management of industry was replaced by the bureaucratic mis-management of industry.

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