We have also seen that in Russia there is no private financial system, but a state financial system. The answering of the question whether we can speak of state capitalism or state socialism in this connection, depends on the definition of the word capitalism. If with capital we mean interest bearing values, sums of money or such, then we can only speak of the Russian soviet regime as state socialism. But if we by capital mean the sum total of the values of land, machines, the means of production and the mines, etc., in short, the sum total of the accumulated values, not of the individual, but of the whole collectivety, then we would strike the right meaning by using the word state capitalism. With capital and capitalism, however, the socialists, disregarding all mo-re or less scientific and hair-splitting explanations, have meant the power through which the workers are being exploited, through the medium of private property and the wage system connected therewith. But that the wage system exists not only under private ownership but also under a collective or state ownership, is demonstrated to us by the municipalities, the stateowned railways and the nationalized post offices, as well as all nationalized undertakings in the capitalist state, on the one side, and in the Soviet republic on the other. But for the worker who is employed by the municipal administration, the state railways and the post offices, their employer, even if it is the state, has the same significance as the private capitalist Krupp, Thyssen or Stinnes. As long ,as they are wage slaves they feel the ruling power of capitalism and the state over themselves. Just as little as it would occur to the workers employed by a state employer to consider themselves as members of a state socialist system, just so is it in the case with Soviet Russia. From now on we must recognize the word "state capitalism" as more correct. By so doing we shall in no way paint the actual conditions worse than they are, but have only found a more correct definition, which in a concise way designates the conditions with a single phrase. And that is state capitalism.
More important than this purely formal definition is the nature of the financial system. As a result of the revolution, the nationalization of private property and with the cancellation of the national debts of the former governments came the colossal crash of the Russian ruble. This is no new phenomenon. In the French revolution of 1789-1793 the assignats had comparatively a still lower value than the present soviet ruble. In Moscow (1920) you could for a German mark obtain 100 soviet rubles from speculators, and for a Swedish crown 500-600 rubles; the rubles of the old regime (paper) are generally valued ten times as much as a soviet ruble. Czar and Kerensky rubles are not permitted to circulate, but in spite of this prohibition one finds them in trade.
The increased cost of food stuffs which resulted from the crash of the ruble, is not by far proportional to the fall in the money value, and the food stuffs, such as 1 Ib. of bread for 500 rubles, is to-day more dearly bought than formerly at 5 kopek. The soviet ruble has, just like the assignats, not sunk in this manner through the purposes of the politicians but through the revolutionary situation. When now the bolsheviks declare that the depreciation of money was splendidly suited for the purpose of banishing the spirit of capitalism from the thought of the people, they are only trying to make a virtue out of necessity. Looking at it one-sidedly, a physician who treated me, may have stated the matter correctly when he said that to-day, with an income of 30,000 rubles he did not have as much as before with 300 rubles, and that he was not particular about getting paid in money, but would prefer to get his pay in clothes, and what else he needs in order to live. Speaking subjectively the desire for money is certainly curbed, if not altogether killed.