Lenin’s plan, articulated in 1918, was dubbed ‘state capitalism’. It was essentially a mixed economy – major companies and industries would remain in private hands but under state control. Bourgeois managers and experts would retain their roles in industries, factories and manufacturing. These sectors would be managed by Vesenkha, a government department created by the Sovnarkom in late 1917.
Lenin argued that capitalist development was necessary to restore production and build a solid economic foundation for the construction of a socialist economy. It was, in effect, a return to Karl Marx‘s argument that socialism can only take root in a capitalist economy.
In “a truly revolutionary-democratic state,” Lenin argued, “state monopoly capitalism inevitably and unavoidably implies a step, and more than one step, towards socialism”. He stressed that socialism would be “the next step forward from state-capitalist monopoly.”
Lenin viewed Germany as the ideal state capitalist economy. It was fully industrialised and highly advanced but planned and controlled for the purposes of imperialism. Lenin saw it as the ideal economy on which to construct a socialist system.
If Germany’s “modern large-scale capitalist engineering and planned organisation” were subordinated to a Soviet-style state, Lenin argued, “you will have the sum total of the conditions necessary for socialism”.
This is one of the reasons that Lenin and his fellow internationalists hoped for a socialist revolution in Germany. German industries and production under socialist control would be of enormous benefit to Russia