Nikolai Ivanovitch Bukharin was born in Moscow on September 27, 1888 (October 9 in the Gregorian Calendar), the second son of Ivan Gavrilovich and Liubov Ivavnovna Bukharin. His parents were very cultured and devoted lots of time to the boys education, and as a result Bukharin became the most intellectual and broadly educated of the Bolshevik political leaders. He had a particular interest in world literature and art, and by the time he joined the party at seventeen he already had a knowledge of foreign languages.
It was during his years as a schoolboy at the gymnasium that Bukharin encountered political radicalism and became interested in revolutionary politics. Russia at the time was in a state of social unrest and open protest. Russians backwardness and the injustices of czarist society were very evident, particularly in the aftermath of Russias disastrous war with Japan in 1904-5.
By 1905, at the age of sixteen, Bukharin had already become a leading member of the illegal student movement associated with the social democrats. As a political radical Bukharin was frequently imprisoned and was exiled in 1911, during which timed he lived and worked in Austria, Switzerland, Sweden, Norway, Denmark, and the United States.
It was during his time in exile that Bukharin established himself as a political thinker and theoretician. He completed his education and familiarized himself with western languages and theoretical literature. By 1917 he was able to speak and read German, French, and English. He published several important articles and completed The Economic Theory of the Leisure Class and Imperialism and World Economy.
After the March 1917 Revolution Bukharin returned to Moscow and established a reputation as a Bolshevik theorist that was so strong that it was second only to Lenin. He became a prominent organizer of the October Revolution, served for twenty years on the Central Committee of the Bolshevik Party, and was a member of the politburo for ten years. He was also in charge of Pravda between 1917 and 1929.
Although Bukharin and Lenin were often in disagreement over how Marxs socialist system was to be put into practice, among many other things, the two began a strong relationship and had respect for each other. Lenin spoke of Bukharin as being "the greatest and most valuable theoretician in the party," and "deservedly the favourite of the party." Bukharins work influenced Lenin, in particular his book on imperialism, Imperialism and World Economy, which Lenin borrowed from in his own writings on the subject. After Lenins death Bukharin became the leading theorist of the party and was chief of staff of the Bolshevik Party.
Many see Bukharin as a strong supporter of NEP and therefore as someone who would have been in favor of market socialism. He has been seen by many as someone who wanted to maintain a fixed economy for the Soviet Union with a continuing role for market relations in the allocation of national resources, and as someone who was more tolerant of the peasantry than Stalin was.
During the early stages of NEP, many Bolsheviks, including Bukharin, viewed it as a retreat from a higher stage of socialism. In time though he viewed it as a necessary retreat and a new way of bringing down capitalism. He referred to it as "growing into socialism"
At first Bukharin appeared to be quite anti-statist, and believed that the socialist movement was to be built by the people. In time though he began to realize the need for the state to play a bigger role in the distribution of resources between agriculture and industry, and for overall planning. He was no longer defending the market and the interests of the peasantry as he had done earlier.
It is therefore wrong to think of Bukharin as an advocate for market socialism since his views changed during the evolution of the NEP and he shifted towards believing in a greater role for planning. Also, he believed that the market would decline and disappear as Communism approached.
One thing to keep in mind is that Bukharin was not able to see how the Communist experiment failed. He was a very inventive thinker, and he if could have seen the path that Communism was going to take he might of thought of a different way in which to apply Marxs ideas to society, or he may have acted the way reformers are today. Although it cannot be argued that Bukharin economic reforms were precursors of Perestroika, it can be argued that his political reforms were. He had a strong sense of social justice and morals and was unwilling to sacrifice them for a higher cause, similar to the way social justice has been dealt with by some of the Soviet reformers during the collapse of Communism.
In 1937 Bukharin was arrested by Stalin on charges of Trotskyist activities and convicted during one of the Stalin purge trials. In February 1988, fifty years after Bukharins execution as a traitor, the verdict was reversed and his name cleared by the Soviet Supreme Court.
For Bukharin "modern capitalism is world capitalism" and "social economy finds its concrete expression in world economy." In this sense the world economy is more than just the sum of its parts. Bukharin says that the world economy is a unit which imposes its own dynamic on its parts so that "we may define world economy as a system of production relations." The roots of this world economy lie in the expansive nature of capital itself. The competitive drive of capitals to maintain their rates of profit does not stop at national boundaries - it makes nonsense of them.
If the world economy acts upon its parts then so do the parts act to affect the character of the whole. The interests of individual units of capital are determined by their competitive relations with one another. However, because capitalism is subject to recurring crises of production it also gives rise to intensified competition and problems with in the reproduction of capital. As a result, individual capitals will run for cover and group around the national form of protection, that is the state. There is therefore a tendency for capitals to centralize and integrate with the state leading toward what Bukharin termed state capitalism.
The organizational forms of the world economy are therefore the product of the two contradictory forces stemming from the nature of capital. On the one hand, there is a constant tendency towards internationalization, towards the breaking-down of barriers and, on the other, there is a constant towards nationalization and the erection of barriers towards the competitive expansion of other capitals. Both tendencies are a product of the drive of capitals to accumulate and maintain their rates of profit against one another.
Writing in the midst of the first world war, Bukharin put his greatest stress on the extent to which the nationalization of economic life had triumphed. In the 1920's, he was forced to qualify his analysis and to place a greater weight on the way in which the forces of internationalization of capital could subvert national barriers. But he regarded any suggestion that the internationalization could triumph over tendencies towards nationalization as utopian. Forms of international organizations or political forms did exist, but they were incomparably weaker than national forms. They faced greater organizational problems and were therefore much less stable. Since the degree of attraction is directly related to the rate of expansion of capital, it follows that when this falls so will the strain on international bodies increase. The weaker the capital and the sharper the crisis, the more it will need the support of its state.
In this way, Bukharin argued that the world economy is "just as blindly irrational as the earlier system of national economy." The crisis mechanism of the world economy is international and its ramifications are necessarily felt throughout the system. And, as the crisis develops, this anarchy results in war which "is only one of the methods of capitalist competition when the latter extends to the sphere of world economy."
Haynes, Michael. Nikolai Bukharin & the Transition from Capitalism to Socialism. Holmes & Meier Publishers, Inc.: New York, 1985.
Before explaining the economic theories of Nikolay Bukharin, it is imperative to briefly trace his life, in order to show at what point his economic views altered.
Nikolay Ivanovich Bukharin was born on October 8, 1888. At Moscow State University, he studied economics and became a revolutionary. By 1906, he joined the Russian Social-Democratic Workers' Party, and, in 1908, he became a member of the Moscow Committee's Bolshevik wing. In 1911, he was arrested and deported to Onega, near the White Sea. Escaping to Western Europe, he met up with I. Lenin in 1912 in Krakow, where they worked together on the Bolshevik paper, Pravda. In October, 1916, Bukharin edited the Leninist paper, Mir ("Bukharin, Nikolay Ivanovich" Britannica Online)
When the revolution occurred in February 1917, Bukharin returned to Russia. During the Leninist era, he held various positions in the party's central committee and in the Comintern's Executive Committee, besides editing Pravda. In 1921, he wrote The ABC of Communism with fellow Left Communist E.A. Preobrazhensky and The Theory of Historical Materialism ("Bukharin, Nikolay Ivanovich" Britannica Online).
There were two turning points in Bukharins's life by 1924: his shift from Left Communism to full advocacy of NEP and Lenin's death. Even though by 1920, he started to promote NEP policies, he became an even more avid supporter; indeed, his beliefs and support helped Stalin undermine rivals to become Lenin's successor ("Bukharin, Nikolay Ivanovich" Britannica Online). According to the 1974 book, Political Undercurrents in Soviet Economic Debates: From Bukharin to Modern Reformers, by Moshe Lewin, E.H. Carr called him "Stalin's willing henchman" during this period (Lewin 10). Possibly as a reward, Bukharin became the Comintern executive chairman in 1926. Also, in 1924, he was a full member of the Politburo("Bukharin, Nikolay Ivanovich" Britannica Online). Despite this alliance, Bukharin and Stalin still had different philosophies (Carr 12).
By 1928, this rift furthered when Stalin reversed himself, switching from the balanced and gradual growth camp to the rapid collectivization camp. He denounced Bukharin, who lost the Comintern post in April 1929 and was expelled from the Poliburo in November 1929. Bukharin then recanted his views and was partially reinstated into the party. He edited the government paper, Zvesta, and helped write the 1936 Constitution, but, in 1937, he was arrested and expelled for being a "Trotskyite." In March 1938, he was a defendant in a purge trial where he was falsely accused of counterrevolutionary activities and espionage. He was found guilty and executed during that same year ("Bukharin, Nikolay Ivanovich" Britannica Online).
As mentioned, Bukharin was a Left Communist leader during the early years of U.S.S.R. As a Left Communist, he proposed transforming WWI into a general Communist revolution throughout Europe ("Bukharin, Nikolay Ivanovich" Britannica Online). During War Communism, Bukharin and Lenin held the utopian beliefs that militarization of the economy and society at war produced features of the communist system (Lewin 8). Indeed, he felt it was impossible for the Soviets to build socialism and do away with economic underdevelopment until other revolutions occurred in Western Europe. On industrial issues, Bukharin the Left Communist believed that the proletariat class should run the economy; the workers' control of industrial enterprises in 1917 was an important step to this goal ("Left Communist" Britannica Online). Bukharin's beliefs were embodied in his book, Imperialism and the World Economy, the inspiration for Lenin's famous work on imperialism (Lewin 5).
What did Bukharin the Left Communist think about World War I capitalism? He saw that the capitalist state had a new intervening role in the economy because it was involved in organization and planning; this occurrence during the World War I era did not meet the laissez faire tradition previously embodied by capitalism. Was he implying the commencement to socialist revolution, the next obvious stage after capitalism (as the Marxist paradigm states)? Not necessarily. He intimated through his writings that this is just "organized capitalism," which is unlike Marxist production. In his "Towards a Theory of the Imperialist State." he revised Marxism, affirming that revolution destroys the state apparatus and creates a new proletarian state (6-7). Concluding that capitalism can overcome its problems, Bukharin believed that the socialist state needs to move quickly to the "commune-state." Then, the "state" would dwindle and the "commune" elements would grow (7) Yet, his writings in 1920 began to hint at a switch in his economic beliefs.
Although there are implications in his writings as early as 1920, Bukharin was a staunch supporter of the New Economic Policy (NEP) by 1925. In other words, he advocated a temporary retreat from extreme centralization and the socialism doctrinaire. By 1921, War Communism brought the economy to a virtual breakdown. NEP measures included a return of most agriculture production, retail trade, and small-scale light industry to the private sector, but retaining state ownership and control of heavy industry, transport, banking and foreign trade. NEP supporters, like Bukharin, felt that this temporary retreat could return the U.S.S.R. to economic stability while it recovered from years of civil war and government mismanagement (Economic Growth and Planning: Economic Growth and Planning in Communist Sectors" Britannica Online).
Bukharin's new economic beliefs encompassed other ideas on agriculture, the industrial sector, political alliances, and internationalism. For example, Bukharin opposed rapid industrialization and collectivization in agriculture. Instead, he felt a small portion of agriculture should be still extracted for public ownership through a proportional tax on net output. Also, he believed the political alliance, Smychka, should be maintained between the government and the peasant class. Another belief was that rapprochement with the world should be pursued. Bukharin wanted an opening of society.
What did he see as the problems of superindustrialization and collective agriculture? He felt that there would be unequal exchanges between the city and country through big push industrialization. The state industry would grow faster than the rest of the country so its share in the economy would increase. Seeing the superiority of the state through its increased share in the economy, the peasants would join producer and consumer corporations. The foundations of economic development would be shaken.
Bukharin argued that there should be a linking of the industry and agriculture for balanced growth. There is already a potential interdependence between the two: industry requires agricultural supplies and agriculture exports could finance the purchase of capital for industry. By pursuing methods to link these two sectors without rapid development of one (rather than the other), balanced growth could be achieved in the city and country. He also called for methods to utilize capital efficiently and effectively (improving industrial products) by shifts, complete construction, and appropriate factor productions. Moreover, by expanding and opening these sectors (thus, exposing them to possible competition), prices are lowered and savings are created. This is part of Bukharin's slogan: "Get rich!" Clearly, Bukharin wanted slowdown to socialism, but he admitted that his NEP policies for balanced growth may result in an actual slowdown of growth (Lewin Chap. 1-3).
Nicolai Bukharin proved to be a highly influential Soviet economist and theoretician for the Communist Party during the 1920's and 30's. Although originally aligned with Stalin's economic policy, Bukharin eventually became the leader of an intense opposition against Stalin. It was this opposition that would ultimately bring forth the end of Bukharin's career and life. On March 15, 1938, Bukharin was executed in a Stalinist show trial. Nevertheless, Nicolai Bukharin has been acknowledged as "a splendidly educated Marxist economist" whose errors stemmed largely from his attempt to "think through the specific difficulties of the transition - that agonizing and arduous transition - from capitalism to socialism." (Medvedev, 7)
As an important economist in the Soviet Union, it was Bukharin who had insisted that after Lenin's death, the economic policies which had been worked out by Lenin would be continued and developed. Of these economic policies, the New Economic Policy (NEP) was first and foremost. Implemented in 1921, NEP abolished war communism. It represented a change in the nature of the Soviet economic system. It was different than the pure command economy, for it was based on a partial privatization of the economy. Key industries remained nationalized, but trade was legalized, a new currency emerged, and private owners were encouraged to make profits. Through this plan the economy recovered quickly and reached the level which it had been in 1913, before the outbreak of World War I. According to Lenin, NEP was "the very means by which the Party was to build a socialist society in the backward, peasants' country that was Russia." (Medvedev, 15)
Bukharin was a strong supporter of NEP, and he based his economic theory around it. Initially Stalin had agreed with Bukharin's methods, for Stalin was opposed to the left because Trotsky was a political enemy. However, it was Bukharin's support of NEP and Stalin's move away from it that would cause the eventual political break-up between the two men. Between 1926 and 1929, Stalin slowly began to eliminate NEP, thereby bringing the country on a course that Bukharin was not in favor of. Bukharin and Stalin began to hold critically different views about how the economy should function. Bukharin's fundamental economic theories were based upon moderated, steady industrialization, and were against enforced collectivization. Both of these ideas were opposed to Stalin's.
Bukharin became identified with the interests of the peasants, closely following Lenin's advice for the party to "move cautiously and slowly in pace with the peasants' understanding and acceptance of the state's policies." (Lewin, 13) Bukharin built his economic platform around the concept of socialism as a system of "civilized cooperators". (Medvedev, 14) He opposed a rapid collectivization throughout the country because he foresaw the resentment that the peasants would foster. He opted for a slow, cooperative process of introducing communal land, but this idea quickly deteriorated as Stalin began to force collectivization in the countryside.
It was industrialization, however, that was the main point of contention between Bukharin and Stalin. Bukharin's dictum was "that the country will move at a snail's pace, but will move nevertheless." (Medvedev, 13) He advocated gradualist policies towards industrialization, as set out in NEP. For Stalin, though, this theory was not feasible for the country as it approached the end of the 1920's. he Soviet Union was seriously lagging behind other countries in terms of technology and industrialization. In order to foster a strong military and political presence in the world arena, Stalin chose to side with Preobrazhensky and leftist policies. Bukharin's plan for a cautious, moderate approach towards industrialization was not accepted by Stalin.
The policies set out by Preobrazhensky, located at the opposite end of the spectrum from Bukharin's beliefs, called for a rapid industrialization which started in 1929. The government taxed the peasants and then made massive investments into industry. Collectivization began and forced cooperatives emerged. Between 1929 and 1934, Stalin had enforced the policies of the leftists and had condemned Bukharin for the criticism of his policies. In the political show trials of the 1930's, the right opposition was expelled. With the majority of Stalin's political enemies gone, he was free to put the country on whatever path he chose. This path, however, was not the one which Bukharin had wanted the country to travel.
In terms of the question of collectivization, agricultural production went down once communal land was established. Peasants were not willing to give their property over to the collective farms. They chose to slaughter their cattle and cut down their trees; they did not want the state to benefit from their sacrifice. Much of their produce was hidden from the government. Incentives were low: peasants had little reason to work hard and efficiently. Because of this, there was little surplus to extract from agriculture. This situation was at its worst during 1932-33, but the conditions never improved enough for the peasants to work more productively.
Bukharin's plan for good relations with the peasants and gradual implementation of collective farms might have prevented these circumstances from occurring. Had the peasants been better informed and more involved in state decisions, the feeling of resentment on their part would have been reduced. However, this scenario seems rather unrealistic. It was naive of Bukharin to think that Stalin would accept any form of peasant involvement in economic decisions. The socialist system dictates that decisions will be made at the top and then handed down to the people regardless of popular dissent or approval. Stalin was not a leader who was willing to accommodate to the wishes of those lower than him. The peasants, unfortunately, suffered from this. Bukharin's policy, therefore, proves logical, but highly unrealistic.
In regards to industrialization, the consequences of the rapid build-up of heavy industry seems apparent. Bukharin's moderate policy may have proven more successful in the long term. Under Stalin's economic policy, the belief was that allocations would preferentially go towards investment goods and consumption would be reduced in the short run. This would speed up the economy and industrialize it rapidly. However, the assumptions undermining this method were not realistic. The economy did not grow enough and the people were constantly sacrificing for a future which never came. Even with a reduction of preferential allocations towards heavy industry under Khruschev, consumption did not grow as expected. The huge spending toward industry and armament eventually bankrupt the Soviet economy in the 1980's. The USSR simply could not keep up with the United States and Western Europe.
Bukharin's goal for a steady rather than rapid industrialization would have been more efficient. Had allocations been more evenly divided among Sector I and II goods, the feeling of a constant sacrifice by the people probably would have been greatly reduced. Under perfect conditions, Bukharin's policies may have proven beneficial to the economy of the USSR. It must be kept in mind, however, that despite which policy (left or right) was chosen, the command system in general is an inefficient one. No matter how dynamic or rational the policy may be, it will undoubtedly fail if it is not implemented in an efficient, organized manner. It is hard to say whether Bukharin's methods would have succeeded under the hierarchical system of the Soviet Union. It is not so much the policy, but the implementation of that policy, which defines results in a centrally planned economy.
Lewin, Moshe. Political Undercurrents in Soviet Economic Debates. Princeton University Press, 1974.
Medvedev, Roy A. Nicolai Bukharin. W.W Norton and Co., 1980.