Was Lenin a State-capitalist? (The NEP explained)

Every now and then one hears the claim that “Lenin was a state-capitalist, Lenin didn’t support socialism, but state-capitalism.” What is this based on? Let’s get to the bottom of this.

This confusion stems from an incorrect understanding of Lenin’s writings, the early soviet policies of “war-communism” and the so-called NEP or “New Economic Policy”.

Lenin of course, was a communist. He wanted Socialism and communism.

In the early 1920s Lenin argued strongly in favor of building socialism and said it was no longer a matter of the distant future, but something viable that could be built during the immediately following years:

Socialism is no longer a matter of the distant futureno matter how many difficulties it may entail, we shall all―not in one day, but in the course of several years―all of us together fulfil it whatever happens so that NEP Russia will become socialist Russia
~Lenin, “Speech At A Plenary Session Of The Moscow Soviet Nov. 20, 1922”

But what about the NEP? What was it? Lenin even mentions the NEP in the quote above.

The NEP, or “New Economy Policy” was a transition policy from capitalism to socialism. During the NEP the proletariat had conquered state power, and large industry was mostly nationalized into the hands of the state. However, it wasn’t socialism yet particularly because the agricultural sector was still mostly in private hands, hence why Lenin calls it “state-capitalism”. It would have been inaccurate to call it socialism, it was the preparation for socialism.

This is what Lenin said in 1923:

Infinitely stereotyped, for instance, is the argument they learned by rote during the development of West-European Social-Democracy, namely, that we are not yet ripe for socialism, but as certain “learned” gentleman among them put it, the objective economic premises for socialism do not exist in our country… “The development of the productive forces of Russia has not yet attained the level that makes socialism possible.” All the heroes of the Second International, including, of course, Sukhanov, beat the drums about this proposition. They keep harping on this incontrovertible proposition in a thousand different keys, and think that it is decisive criterion of our revolution… You say that civilization is necessary for the building of socialism. Very good. But why could we not first create such prerequisites of civilization in our country by the expulsion of the landowners and the Russian capitalists, and then start moving toward socialism? Where, in what books, have you read that such variations of the customary historical sequence of events are impermissible or impossible?”
~Lenin, “Our Revolution” (1923)

Once again Lenin reiterates that it is feasable and necessary to implement measures of proletarian state-control, which is not socialism, but a step towards it:

“Under no circumstances can the party of the proletariat set itself the aim of “introducing” socialism in a country of small peasants so long as the overwhelming majority of the population has not come to realise the need for a socialist revolution.

But only bourgeois sophists, hiding behind “near-Marxist” catchwords, can deduce from this truth a justification of the policy of post poning immediate revolutionary measures, the time for which is fully ripe; measures which have been frequently resorted to during the war by a number of bourgeois states… the nationalisation of the land, of all the banks and capitalist syndicates, or, at least, the immediate establishment of the control of the Soviets of Workers’ Deputies, etc., over them… which are only steps towards socialism, and which are perfectly feasible economically.”
~Lenin, The Tasks of the Proletariat in Our Revolution (1917)

Lenin also realized that in order to transition to socialism it was necessary to create a collective agriculture sector. He said in 1923, talking about agricultural co-operatives:

As a matter of fact, the political power of the Soviet over all large-scale means of production, the power in the state in the hands of the proletariat, the alliance of this proletariat with the many millions of small and very small peasants, the assured leadership of the peasantry by the proletariat, etc, …is not this all that is necessary in order from the co-operatives – from the co-operatives alone, which we formerly treated as huckstering, and which, from a certain aspect, we have the right to treat as such now, under the new economic policy – is not this all that is necessary in order to build a complete socialist society? This is not yet the building of socialist society but it is all that is necessary and sufficient for this building.”
~Lenin, “On Cooperation” (1923)

Lenin’s opponents claimed that Lenin was going backwards and betraying socialism by advocating development on state-capitalist lines. Lenin reminded them of what he said already in 1917:

“[S]ocialism is merely the next step forward from state-capitalist monopoly… no revolt can bring about socialism unless the economic conditions for socialism are ripe… state-monopoly capitalism is a complete material preparation for socialism, the threshold of socialism, a rung on the ladder of history between which and the rung called socialism there are no intermediate rungs.”
~Lenin, “The Impending Catastrophe and How to Combat it” (1917)

Now it should be clear that he says state-capitalism is a material preparation for socialism i.e. the means of production have been highly centralized so it is relatively easy for a dictatorship of the proletariat to take them over. Of course Lenin is also talking about the context of his own time. Russia was a semi-feudal country, meaning that they had some industry in the cities, while most of the country was under developed countryside, dominated by small scale peasant production. This is why Lenin said, that it would be preferable and useful, if the country wasn’t semi-feudal, but state-capitalist. That would allow for faster development, building up of industry, electricity etc.

He points to the example of Germany which transitioned from feudalism to state-capitalism. He argued, this would be useful for Russia, if it was under the dictatorship of the proletariat.

“In the first place economically state capitalism is immeasurably superior to our present economic system.

In the second place there is nothing terrible in it for the Soviet power, for the Soviet state is a state in which the power of the workers and the poor is assured. . . .

To make things even clearer, let us first of all take the most concrete example of state capitalism. Everybody knows what this example is. It is Germany. Here we have “the last word” in modern large-scale capitalist engineering and planned organisation, subordinated to Junker-bourgeois imperialism. Cross out the words in italics, and in place of the militarist, Junker, bourgeois, imperialist state put also a state, but of a different social type, of a different class content—a Soviet state, that is, a proletarian state, and you will have the sum total of the conditions necessary for socialism.

Socialism is inconceivable without large-scale capitalist engineering based on the latest discoveries of modern science. It is inconceivable without planned state organisation which keeps tens of millions of people to the strictest observance of a unified standard in production and distribution. We Marxists have always spoken of this, and it is not worth while wasting two seconds talking to people who do not understand even this (anarchists and a good half of the Left Socialist-Revolutionaries).”
~Lenin, The Tax in Kind (The Significance Of The New Policy And Its Conditions)

Marx and Engels supported the idea that a socialist revolution should be carried out as soon as possible without waiting for capitalism to develop “on its own” and destroy the peasantry. Lenin’s policy of worker-peasant alliance, developing of agricultural co-operatives and using state-capitalism as a transition from semi-feudalism and undeveloped capitalism to socialism is in accordance with Marx and Engels.

“We, of course, are decidedly on the side of the small peasant; we shall do everything at all permissible to make his lot more bearable, to facilitate his transition to the co-operative should he decide to do so, and even to make it possible for him to remain on his small holding for a protracted length of time to think the matter over, should he still be unable to bring himself to this decision. We do this not only because we consider the small peasant living by his own labor as virtually belonging to us, but also in the direct interest of the Party. The greater the number of peasants whom we can save from being actually hurled down into the proletariat, whom we can win to our side while they are still peasants, the more quickly and easily the social transformation will be accomplished. It will serve us nought to wait with this transformation until capitalist production has developed everywhere to its utmost consequences, until the last small handicraftsman and the last small peasant have fallen victim to capitalist large-scale production.” ~Engels, The Peasant Question in France and Germany

Marx and Engels said that all means of productions should be nationalized. But the soviets quickly realized, that it is impossible to nationalize all the small means of productions, especially the thousands and thousands of small peasant farms. In our modern day, this is not necessarily a problem, but for countries in those days it was a serious problem. So Lenin proposed setting up of agricultural co-operatives, which would help transition the small peasant farms to socialism.

So Lenin did not support state-capitalism ruled by the bourgeois. He didn’t support bourgeois rule at all, but he realized that it would be inaccurate to call the NEP socialism, so he called it state-capitalism, ruled by the proletariat.

But why did Lenin’s opponents accuse him of retreating backwards (they never had socialism before)? That is because the left-opposition wanted to continue their previous war time policy of “war-communism”. It has communism in the name, but that doesn’t mean it was actually socialist or communist. War-communism was a system of direct grain confiscation, meaning that all the surplus food produced by the peasantry, would be taken at a fixed price, and given to the cities and the army. This was a necessary war time policy, but it wasn’t socialism and it was unpopular among the peasants. Therefore, when the civil war ended, war-communism was also ended.

Unlike war-communism, the NEP allowed a limited grain market, with price controls. Lenin admitted, that in some ways this was a retreat, but a necessary one.

So lets recap. The NEP meant:

  • ending of war communism
  • rebuilding after the war
  • large trade in the hands of the state, but allowing a limited grain market to stimulate grain production
  • developing industry in the hands of the proletarian state
  • developing a collective agricultural sector

=setting up the necessary economic foundations for building socialism


Lenin, The Tax in Kind (The Significance Of The New Policy And Its Conditions) (1921)
Lenin, The Impending Catastrophe and How to Combat it (1917)
Lenin, “On Cooperation” (1923)
Lenin, The Tasks of the Proletariat in Our Revolution (1917)
Lenin, “Our Revolution” (1923)
Lenin, “Speech At A Plenary Session Of The Moscow Soviet Nov. 20, 1922”
Engels, “The Peasant Question in France and Germany“