V. Obolenskii-Osinskii, Origin of the Supreme Council of the National Economy. November 1918

Original Source: Narodnoe khoziaistvo, No. 11 (November 1918), pp. 11-14.

Upon my arrival at Petrograd early in November 1917, I was asked ... to start the organization of the Supreme Economic Conference. This was the name of the institution which later developed ... into the Supreme Council of National Economy. We chose a more modest name at the beginning, as we were not sure what form the policy of economic regulation was bound to assume. Some of us ... thought that the economic dictatorship of the proletariat would be limited to Workers' Control ... On the other hand, two central organizations of the working class-the Council of Trade Unions and the Center of Factory-Shop Committees ... claimed the right to assume exclusive control of the economic life of the country. There was also the vague question as to the relation in which the Supreme Economic institution would stand to those commissariats which had charge of economic problems (Commissariats of Trade and Industry, Finance, Food Supply, Agriculture, Ways of Communication, etc.). For those reasons it seemed more cautious to speak of a Supreme Economic Conference and let future experience determine what permanent institution should regulate national economy.

Our work ... proceeded in three directions:

First, we decided to formulate a statute ... For that purpose we revised the statutes of the Chief Economic Committee and the Supreme Economic Council which existed during the Kerenskii period ... and gave them a purely proletarian character adapting them to the aims of socialist construction.

Secondly, we decided to secure a staff to do the office work.

Quite naturally we "requisitioned" Kerenskii's Chief Economic Committee. M. A. Savel'ev received an "order" to "occupy" the offices of that committee ...

Our third task was to give to our economic conference the character of a proletarian organ by attracting to its work the "live forces" of the proletariat ... At that time the trade unions could not be relied upon. They were in the hands of men whose attitude toward the social revolution was either "neutral," skeptical, or hostile. Through Comrade Skrypnik we established connections with the Center of Factory-Shop Committees which was at that time the organ of the more revolutionary trade-union movement ...

After some three or five days of such work Comrade Smirnov and I were transferred to the State Bank. The bank sabotaged Soviet power by refusing under different pretexts to give money and finally the very day I was appointed Chief Commissar of the bank the employees went on strike. For three weeks we were completely submerged in bank affairs ... and early in December the new Bolshevik bank was going at top speed. Upon the completion of the "strategic plan" for the capture of private banks ..., I petitioned to be relieved from work in problems of finance in which I had no special knowledge and to be permitted to return to economic work of a more general character.

During my absence ... Comrade Bukharin was added to the organization committee. He and Comrades Savel'ev, Larin, and Miliutin ... drafted in its final form the decree on the Supreme Council of National Economy. The Left SRs delayed for some time the adoption of the decree by the Central Executive Committee. They demanded that half the membership in the Supreme Economic organ be reserved for the representatives of the peasant section of the Central Executive Committee ...

At the first plenary session of the Council of National Economy a bureau was elected ... At the second session ... a statute for local councils of national economy was approved.

In the interim between plenary sessions the bureau carried out the work. It first selected a presidium (Antipov, Schmidt, Larin, Smirnov, and myself); then it divided the Council into sections, assigning members of the bureau to the different sections ...

Meanwhile ... life was pressing its claims. According to the decree which established the Supreme Council of National Economy the latter was given very wide prerogatives. Every economic question fell under its jurisdiction. The bank crisis and the closing of private banks brought about a great demand for state subsidies for the conduct of industries. Very often these subsidies amounted to millions of rubles. The disorganization of industry which we inherited front Kerenskii and which was intensified by sabotage and civil war called for urgent measures. We were expected to supply the industries with fuel and raw material ...

At the same time, we were confronted with the task of socialist reconstruction, and especially with that of the revolutionary disruption of capitalism. The nationalization of industry was going on in an uncontrollable fashion and we were unable to establish even regular connections with socialized factories ... The situation was difficult indeed ... The sphere of our activities was enormous and absolutely undefined. Moreover, entirely new economic tasks had arisen and we lacked the technical staff to attend to those tasks ... That is why the Supreme Council of National Economy was so slow in developing, so deficient in technique, and so apt to lay itself open to frequent criticisms.

There were other causes within the Supreme Council of National Economy itself, which greatly contributed to the state of general disorganization, In addition to the unavoidable confusion of the first days there were in the bureau of the Supreme Council a number of comrades (I speak mainly of the intellectuals) who lacked the habit of systematic work and business routine. They possessed instead great verve and initiative, and the Supreme Council of National Economy was in danger of becoming an anarchistic "Commune" in which everyone could, on his own initiative and risk, make decisions of immense importance involving at times millions of rubles ... System had to be introduced into the work of the Supreme Council of National Economy in order to make it an organ of government. That is why the Central Executive Committee resolved to appoint a chairman of the Supreme Council of National Economy with the rights of People's Commissar On December 25, 1917, ... the writer was appointed chairman. With this appointment the first period of confusion came to an end ...

Comrade Shliapnikov and his successor, V. Smirnov, were of the opinion ... that to have the Commissariat of Trade and Industry as well as the Supreme Council of National Economy was utterly illogical. They therefore undertook to transfer to the Supreme Council of National Economy those sections of the Commissariat of Trade and Industry which had charge of the different branches of production ... From the very first the rule was established that every section of production which was transferred to the Council was obliged to establish connections with the corresponding trade union and to ask for officials to do the responsible work of the section ...

Simultaneously with the inclusion of the sections of the Commissariat of Trade and Industry into the Council other "conferences" and committees, such as fuel, metal, defense, etc., were incorporated ...

I can recall the negotiations which the labor representatives of the tanning industry conducted with Lenin. The workers in the tanning industry wished to form a working agreement with the capitalists: the works were not be expropriated but were to come under a joint control of a bourgeois-proletarian syndicate subsidized by the state The plan was not realized and proved nothing but a bait by which the industrialists hoped to secure a subsidy ... Comrade Lenin ... thought at the time that it might be interesting to try an experiment of this kind.

I also recall the first session of the bureau under my chairmanship ... when Lenin made one of his most interesting reports defending the draft of a decree which he had introduced to the VSNKh. This decree ... advocated the nationalization of all banks and of large-scale industry, the annulment of state loans, the introduction of labor duty, consumers' communes, and budget-labor books. The members of the bureau were extremely embarrassed when they first heard the project. With the exception of Lozovskii and Riazanov, however, no objections were made to the principles involved in the project, but there were doubts as to whether it could be realized all at once. When Lenin was asked whether it was a statement of policy or a law intended to be introduced at one time lie replied that he had the latter purpose in mind. A proposal was then made to develop in detail the different parts of the decree ...

As is well known, almost every part of the decree is now realized. I think that Lenin was then quite serious. Legislation by declaration is of great importance during critical revolutionary periods. Both the 'Mensheviks and a great number of Bolsheviks failed to appreciate this fact. Legislation by declaration gives a spiritual impetus to the masses, frees their hands ... During the mass-assault on capital it is important to proclaim the end toward which the masses should strive and it is of little importance that the legal phrase is at variance with the revolutionary deed ...