At the Congress of the Soviets of People’s Economy in May, Rykov, the president of the Superior Council of the National Board of Economy, reported, concerning the nationalization of industries, that so far it had been carried out without regard to industrial economy or efficiency, but exclusively from the point of view of successfully struggling against the bourgeoisie. It was, therefore, a war measure, and must not be judged by ordinary economic standards. Miliutin, another Bolshevist Commissar, declared that “nationalization bore a punitive character.” It was pointed out by Gostev, another Bolshevist official, that it had been carried out against the wishes of many of the workers themselves quite as much as against the wishes of the bourgeoisie. “I must laugh when they speak of bourgeois sabotage,” he said. “_We have a national people’s and proletarian sabotage. We are met with enormous opposition from the labor masses when we start standardizing._” For good or ill, however, and despite all opposition, Bolshevism had turned to nationalization and to the erection of a powerful and highly centralized state. What the results of that policy were we shall see. IX THE NATIONALIZATION OF INDUSTRY--I To judge fairly and wisely the success or failure of an economic and political policy so fundamental and far-reaching as the nationalization of industry we must discard theories altogether and rely wholly upon facts. Nothing could be easier than to formulate theoretical arguments of great plausibility and force, either in support of the state ownership of industries and their direction by state agencies or in opposition to such a policy. Interesting such theorizing may be, but nothing can be conclusively determined by it. When we come to deal with the case of a country where, as in Russia, nationalization of industry has been tried upon quite a large scale, there is only one criterion to apply, namely, its relative success as compared with other methods of industrial organization and management in the same or like conditions. If nationalization and state direction can be shown to have brought about greater advantage than other forms of industrial ownership and control, then nationalization is justified by that result; if, on the other hand, its advantages are demonstrably less, it must be judged a failure.