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Lenin Seizes power
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State Capitalism
based on nationalisation of industry. All companies would now be run by Vesenkha (supreme soviet of the National Economy). Only large industries were nationalised
He also reformed land with his 1917 Decree on Land, this decree broke up land which used to belong to the Church or Aristocrats and allowed peasants to own the land they worked on -
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War Communism
Designed for Bolshevick victory in the Civil War :
-high levels of industrial production of war goods
-an efficient allocation of workers
- Food production to feed soldiers
'Food dictatorship'
- Grain requisitioning by the Cheka
- Rationing: The Supply Comissariat rationed the seized food and gave largest rations to workers and soldiers
Labour Discipline
1918 working day extended to 11 hours
1919 work made compulsory for all aged from 16-50
Punishments for lateness -
Abolition of Market
- Abolition of Money: gov printing money led to hyperinflation and essentially money became worthless so workers were paid in rations
- Abolition of trade: Private trade was made illegal
- Complete nationalisation
- Conscription to work or army
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Peasant Uprising in Tambov region against Communist Government
Lead by Antonov -
Economic collapse
- Grain requisitioning led to lower rates of agricultural production
- Industrial production decreased as well as workers who weren't getting paid migrated to farms as it was more likely to be fed, as a result workforce halved in the War Communism years Gross output of all industry declined by 70%
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Growth of Black Market
only 40% of food in cities came from rations. Most food came from the Black Market -
Kronstadt mutiny
demanded return to free trade and multiparty elections to the soviets. They were eventually crushed just like the Tambov ones -
Mass poverty
Mass shortages in all kinds of necessities in all cities such as fuel and food. (Lenin ordered the destruction of wooden buildings in Petrograd to use as fuel, and harvests were 46% of the 1913 ones, famines led to the death of 6 million people) -
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NEP
New Economic Policy
Created to satisfy the people and retain power as well as stimulate agricultural production
Incorporated capitalist elements such as free market and private companies (those that had less than 20 workers, the rest were still nationalised). Money was also re-introduced -
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Industrial growth
Government invested money gained from taxing peasants in reviving industry. Lenin lead a major electrification campaign
Lenin argued that the NEP was the best way to industrialise the soviet union.
By 1926 industrial production had recovered to 1913 levels with the exception of pig iron and steel
The taxes collected from peasants provided enough money to reopen factories but not to build new large-scale ones and therefore the economy from 1926-28 plateaued -
Political and economic Stability
Ending War communism and allowing free trade was very popular amongst the farmers and encourage them to grow crops, ending the famine. (Grain production was back to 1913 levels) -
Inequality and Corruption
Emergence of Nepmen which made money by travelling around the Soviet Union selling luxury goods. They were sometimes arrested by the Cheka fro profiteering. Gambling and prostitution and drug dealing all took place under NEP. Prostitution came as a result of wider social and economic problems and mean many women were poor in the 1920s -
Scissors crisis
Because the NEP led to uneven economic growth. agriculture recovered much more quickly than industry and therefore whilst agricultural products became cheap and farmers wages decreased, industrial prices rose. This meant industrial goods were no longer available to farmers and without incentives why would farmers continue to work. The government subsidised industrial prices at the cost of expanding and investing in the economy. Showing the NEP was not the way forward -
Grain procurement crisis (Kulak grain strike)
As increased production in 1927 led to a fall in prices of farmed goods, farmers deliberately reduced production to increase prices. Which led to shortages of food in cities but an increase in profits of farmers. This in the eyes of the Communist Party was yet again individuals putting their own needs above those of the whole population and was seen as the re-emergence of the Class war, and signaled that the NEP need to end and a new economic plan needed to deal with the Kulaks -
Ending the Kulak grain strike
To end it Stalin ordered the Red Army and Cheka to requisition grain from farmers. This would then be sold overseas(money raised would be invested in industrialising) and used to feed workers. -
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First 5 year plan
These plans were designed to centralise the economy much more than the NEP. His main objective industrialising Russia.
They wanted to eliminate Nepmen and since they made money through trade rather than production
Targets were set by Gosplan
Campaigns focused on inspiring people to fulfil the plans
The first plans were simply campaigns and targets with no attempt to ensure these factories had the materials or what would be done with those goods produced
and therefore called a command economy -
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Achievements in Heavy Industry of the First 3 Five Year Plans
Production of iron, steel, coal, electricity and oil all increased
Electricity increase= 960%
Coal= 470%
Oil= 280%
Pig Iron= 460%
Steel= 450%
This was achieved by builiding new factories.
The factories in Magnitogorsk, Kuznetsk, Zaporozhye, Tula and Lipetsk all contributed to the increase in steel and iron production -
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Achievements in Labour Productivity of the first Five Year Plans
At first productivity was very low as it was long hours no incentives and low pay
Stalin introduced incentives in factories to fix the productivity problems. And allowed Stakhanovite workers (those who were extremely productive) to reorganise their workplace to make it more efficient.
Productivity gains 1936-40
Chemicals- 34%
Electricity production- 51%
Coal mining-26%
Oil production- 25% -
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Achievements in Transport of the first 3 Five Year Plans
- Moscow Metro first train lines opened in 1935
- Moscow-Volga Canal constructed between 1932-37 (made transportation of goods more efficient)
- White sea Canal 1933
- Dnieper hydroelectric dam 1932
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Achievements in Rearmament of the first Five Year Plans
by 1940 1/3 of government spending was dedicated to military rearmament. Plans also led to the construction of nine military aircraft factories. However production of arms was held back by shortages in steel. -
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Failures in Production of the Pre-War Five Year Plans
- quality low to meet targets
- Materials produced were often wasted and sat ion factories due to a lack of coordination (some industries 40% wasted)
- Stalin's Terror led to many managers and economic planners being purged as well as officials in Gosplan so economy was disorganised.
- Because of unrealistic targets many factory managers falsified information
- Massively inefficient
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Consumer goods under Stalin pre-War
Continual shortages of consumer goods because Stalin prioritised heavy industry, planners underestimated the needs of the people, and economy lacked the skill to produce consumer goods.
Gov rationed these goods but even then failed to supply minimum amounts, shoe queues in Moscow exceed 1000 people -
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Housing and living conditions under Stalin pre-war
Housing deficiency during plans, most houses didn't have running water. And bathhouses were scarce. Living conditions were by far the worst they had been since communist takeover. food continued to be rationed working conditions were harsh, long hours and low pay.
Internal passports introduced to prevent workers from moving to other cities searching for a better job -
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Collectivisation
Process by which small farms were merged into big farms with 20 to 150 families in them. And these were state owned farms as was all of the produce they harvested
One of the many reasons was to abolish private property.
During NEP owners of big farms had gotten rich while those in smaller ones had struggled, collectivisation was a way to equal the system. large farms would also be more efficient -
Dekulakisation
The liquidation of the kulaks as a class.
Grain requisitioning angered many Kulaks and Stalin's solution was to kill the problem. Leading to mass deportations and assassinations of peasants who resisted grain requisitioning. (Around 1.5 million were sent to Gulags, 400,000-600,000 deaths) -
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Consequences of Collectivisation
Devastated Soviet agriculture but helped raise funds for industrialisation.
Peasants responded to collectivisation by destroying their machinery and burning crops:
- 17 million horses
- 26 milllion cattle
- 11 million pigs
- 60 million sheep and goats
And grain production decreased by 6 million tons this decrease was due to kulak expert being deported or executed and a lack of incentives for farmers to grow grain -
Mechanisation
The government allowed farms hire tractors from MTS (Machine Tractor Stations). The 75,000 tractors provided didn't prove to have much of an impact in Soviet agriculture -
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Asharshylyk / Zulmat
Famine in Kazakhstan. 1.5 million deaths.
40% of Kazakh population died. -
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Holodomor
Famine in the Ukraine caused by Stalin requisitioning grain and livestock as greatest opposition was faced here. 5 million deaths -
Grain procurement
Gov procured 22.6 million tons in 1933 and grain exports had also increased to 5 million in 1931 -
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Second Five Year Plan
Focused on chemical industry, transportation -
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Agriculture Under Stalin pre-War
Grain harvests declined because private farms were more productive than collective farms (28%). Only around 7% of farmers remained private but these produced double the amount of mean and milk produced by state farms. -
Black Market under Stalin pre-war
the inefficiencies of the Plans meant there was a shortage of food that led to a growth in the black market. Workers would simply steal goods from factories and these thefts would be covered up by falsifying paperwork -
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Third Five Year Plan
Focused on preparing for War
Cut short due to WWII -
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Agriculture in WWII
Soviet Gov relied on US imports to provide almost a fifth of the calories consumed by Red Army
Harvests halved from pre-War high of 95.5 million to 46.8 million
bread rations fell by 40%
potato rations fell by 80% -
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Fourth Five Year Plan
High levels of industrial growth to recover from World War II (25 million people homeless and producing 2/3 of what it had in 1940)
88% of investment into heavy industry
Industrial output increased by 80%
Some industries were able to surpass pre-WWII levels
Increase in military spending (41%) as Cold War tensions rose
Production of consumer goods did increase but was still scarce
Reconstruction focused more on factories than homes
Wages were kept low
Soviet economy fastest growing -
Agricultural production back to pre-war levels
92.2 million tonnes -
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Economy under Brezhnev
Returns to five year plans and continues with system Stalin set up. He did want to provide more consumer goods but goals weren't ambitious -
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Brezhnev Military Spending
As a result of the massive failure that the Berlin Crisis and Cuban Missile crisis had presented for the USSR, Brezhnev wanted to achieve nuclear parity with the US and he achieved it by 1970 by increasing percentage of GDO spent on military by 2%. However, maintaining this parity proved to be very costly for the USSR and lead to failures in the economy -
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Developed Socialism
With the increase in military spending and the worsening economic conditions Brezhnev couldn't continue with Khrushchev's idea of building communism. He replaced it with the term Developed Socialism, which meant job security and low prices. He did so by abandoning investment in the Virgin Lands Scheme and importing grain from the West -
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Black economy
He accepted and saw it as a necessary evil. It also helped his goals of providing consumer goods to all Soviet citizens -
Kosygin Reforms
Under Brezhnev, reforms designed to cut investment in inefficient collective farms and divert money to light industry
And proposed judging success of managers by the profit they made rather than by the production levels.
But due to similar plans having been used in Czechoslovakia and the resulting Prague spring the reforms were halted shortly after they started -
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Uskorenie
Initial economic reforms designed to stimulate economic growth, modernise the economy and increase production. Economy had stagnated and so he embraced reforms. Due to government money being reduced as revenues from Alcohol dropped and oil prices decreased (Soviet revenues dropped by 2/3), Gorbachev used money from Western countries to fund Uskorenie and created a greater debt (from 18.1billion to 27.2 billion) -
Law on Individual Economic Activity
Legalised families making money from small private enterprises such as teaching or repair and maintenance jobs -
Law on State Enterprises
Power devolved to factory managers from government. But this failed because Gosplan found new ways to control economy and allowing managers to increase prices led to government having to spend more and therefore increasing its debt -
Law on Co-operatives
Legalised setting up large-scale private companies. By 1990 the number set up thanks to the law was 200,000. These were extremely successful as turn over increased by 3500% in the first year, the salaries of those employed in them was on average 3x higher than those in state enterprises -
500 Day Programme
Plan to transition to a market economy devised by Shatalin and Iavlinskii. In the end party hardliners forced gorbachev to abandon it -
Gosplan abolished
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Private property introduced
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Citizens allowed to trade stocks and shares