Socialists for controlled, selected foreign investments

By Dr. Vickramabahu Karunaratne-2017-11-16

Popular socialists do not totally denounce foreign investments but welcome investments in selected areas, according to one such socialist leader. Even if they come to power, such a policy may be implemented. These radical statements have come out recently, at a seminar organized by a Sri Lankan friendship circle. "We do not denounce foreign investors but welcome them to invest in selected areas. There are valuable natural resources in our country but presently, however, the country only produces five kinds of chemicals using these resources. The problem is Sri Lanka does not have sufficient technology to enhance marketable products using the natural resources found there. Therefore, we are compelled to seek help through foreign investments. Clearly such cooperation is needed in sectors such as these. So, we are for controlled, selected foreign investments," the socialist leader explained.

This proposal is very similar to New Economic Policy (NEP), the economic policy of the government of the Soviet Union from 1921 to 1928, representing a temporary retreat from its previous policy of extreme centralization and military socialism. The policy of War Communism, in effect since 1918, had by 1921 brought the national economy to the point of total breakdown. The Kronshtadt Rebellion of March 1921 convinced the Communist Party and its leader, Vladimir Lenin, of the need to retreat from pure socialist policies in order to maintain the party's hold on power. Accordingly, the 10th Party Congress in March 1921 introduced the measures of the New Economic Policy. These measures included the return of most agriculture, retail trade, and small-scale light industry to private ownership and management while the State retained control of heavy industry, transport, banking, and foreign trade. Money was re-introduced into the economy in 1922 (it had been abolished under War Communism).

The peasantry was allowed to own and cultivate their own land, while paying taxes to the State. The New Economic Policy reintroduced a measure of stability to the economy and allowed the Soviet people to recover from years of war, civil war, and governmental mismanagement. The small businessmen and managers who flourished in this period became known as NEP men.

However, local socialists did not refer to this similarity or tried to compare the local situation with what happened in Russia.

Speaking further, he said the socialists in a period like this where liberals are in power do not press for an economy without a private sector; however, that the private sector should work according to the national development plan. "Our belief is that the private sector should not be allowed to work independently without coordinating with the national development strategy, but work with participation in the national development plan," he said. Clearly all socialists today can see the disastrous path selected by Stalin and his followers. At that time the NEP was viewed by the Soviet Government as merely a temporary expedient to allow the economy to recover while the Communists solidified their hold on power. By 1925 Nicolai Bukharin had become the foremost supporter of the NEP, while Leon Trotsky explained the necessity of the extension of the revolution to the industrial West. Without the change in the industrial West, Russia cannot build socialism in Russia alone. There cannot be socialism in one country:

Particularly, in an under developed country, without the support of the international proletariat.
The NEP was dogged by the government's chronic inability to procure enough grain supplies from the peasantry to feed its urban work force. In 1928–29 these grain shortages prompted Joseph Stalin, by then the country's paramount leader, to forcibly eliminate the private ownership of farmland and to collectivize agriculture under the State's control, thus ensuring the procurement of adequate food supplies for the cities in the future. This abrupt policy change, which was accompanied by the destruction of several million of the country's most prosperous private farmers, marked the end of the NEP. It was followed by the re-imposition of State control over all industry and commerce in the country by 1931. Premature socialist revolutions could bring disaster unless there is a proper perspective to win the support of the proletariat of the industrialized Western world.