Comrades! What is the meaning of the policy of abolishing the rationing system? First and foremost, it means that we want to strengthen the monetary economy. We want to strengthen the monetary economy under Soviet conditions and fully develop commodity circulation, replacing the present system or present policy of mechanical distribution of products — which takes account not of the needs of the district or of living people, but of an abstract person — with a system or policy of commodity circulation. At present, the consumer is not taken into account. Such-and-such an amount of goods and bread is distributed — take it; if you don't take it, it's wasted anyway. This principle must be changed. We have already taken a position on the basis of commodity circulation, but we must plant both feet firmly on the basis of accounting for the needs of living people, of bringing things closer to the consumer. At present, no one takes the consumer into account. You were given your ration — live as best you can, poorly or well. This principle, which had its justification as long as we did not have enough bread, must now be replaced.

We need to fully develop commodity circulation in all economic activity, throughout its entire sphere, through the monetary economy. Commodity circulation is not simply the exchange of goods. We need to strengthen the monetary economy.

The monetary economy is one of the few bourgeois economic apparatuses which we, as socialists, must use to the fullest. It has not yet been fully used, this apparatus. It is very flexible; we need it, and we shall turn it in our own way so that it pours water onto our mill and not onto the mill of capitalism. Developing commodity circulation, developing Soviet trade, strengthening the monetary economy — this is the basic meaning of the reform we are undertaking.

We have a rather well organized industry; we can produce goods and products. We also have a rather well organized agriculture; we can have agricultural products. But all this is not enough. It is necessary to establish the meeting of these products — exchange between city and countryside. And establishing exchange between city and countryside under our conditions without commodity circulation, without buying and selling, is unthinkable. There are in our Party individual "leftist" elements who think one can jump straight to product exchange at once. This is nonsense. Several times individual comrades have tried to do this, and each time they have banged their heads against a wall.

We are now at the stage when the bond between industry and agriculture, the exchange between city and countryside of goods, articles, and products can be carried out only through commodity circulation. We are at this stage, and we have not yet begun to exhaust it. Only after we exhaust this stage to the fullest will it be possible to raise the question of product exchange. We have not even used a third of the possibilities that commodity circulation through the monetary economy provides to ensure that what is produced by industry and agriculture does not go to waste, but reaches the consumer. Commodity circulation is the necessary connecting link between the products of industry and the products of agriculture. This is the stage we are at, at which we must develop commodity circulation if we truly want to move our economy forward — I mean the entire national economy.

The abolition of the rationing system in grain products and groats — evidently we shall do the same for potatoes, sugar, and manufactured goods — means that with respect to the bond, the commodity bond, between city and countryside, an end is being put to mechanical, blind, bureaucratic, ration-based distribution of products. The tastes, needs, and wishes of individual districts and individual consumers must be taken into account by our trading organizations, both in terms of receiving a certain quantity of goods and, especially, in terms of the quality of these goods. This means that trading organizations are dealing not with an abstract consumer, but with a concrete one, depending on the district, the oblast, the branch of industry, the branch of trade. Only after our trading organizations learn to take into account each and every specific feature of each district and each oblast, and establish the richest network of commodity distribution — only then will it be possible to attempt to raise the question of a transition from commodity circulation to product exchange without money. Until we have done this, until we have not used even a third of this commodity circulation, to speak of the abolition of the monetary economy, of replacing commodity circulation with product exchange — means to speak nonsense, things that are absolutely anti-Leninist, anti-Marxist, having nothing in common with Marxism.

So, it is precisely for the expansion of commodity circulation, for the strengthening of the monetary economy under our Soviet conditions, in trade without capitalists and without speculators, precisely for this, first and foremost and principally, that the abolition of the rationing system is being carried out. The rationing system undermines the foundations of commodity circulation, replaces trade with simple distribution, takes no account of market prices whatsoever. It turns upside down all possibilities of commodity circulation and thereby prevents us from establishing normal, living, organic ties between city and countryside, between industry and agriculture, between urban manufactures and agricultural products.

It may seem strange that socialists who have come to power, who have already organized socialist industry, socialist agriculture, and who possess such productive capabilities, should reach for an old instrument of the bourgeoisie — commodity circulation. But there is nothing strange in this. We have used not one or two instruments of the bourgeoisie, of bourgeois economics. And this instrument, the most tenacious in the monetary economy, we shall use to the fullest, if we can get rid of all kinds of rationing systems. This is now the crux of the matter.

So, to repeat: in order to further develop commodity circulation, which provides the link between city and countryside — a commercial link — and in order to strengthen the monetary economy under our conditions, since commodity circulation without money is unthinkable, we are first and foremost abolishing the rationing system for bread, this basic commodity, because bread pulls everything else along with it. It is precisely with this link that we must begin.

This is the first and basic significance of this reform.

Secondly, the significance of the reform we are carrying out lies in putting the policy of lowering prices for all goods and all products on a real basis, a genuine real basis. [The speech continues with detailed discussion of pricing, the relationship between ration prices and market prices, the economic and political consequences of the reform, its impact on livestock production, and its effect on reducing speculation.]

RGASPI. F. 558. Op. 11. D. 1118. L. 42–63.