5. socioeconomic developments

• War Communism


  The first version of the Soviet planned economy
• Aims of War Communism

  • Abolish private trade
  • Control labour
  • Nationalize all large-scale industry
  • Replace the money system with a universal system of state rationing
• Grain monopoly introduced on 9 May in response to the urban food crisis


  1918
• Millions fled the hungry cities


  Travelled to the countryside to barter with the peasants or live closer to the sources of food
• The great industrial cities of the north - the power-base of the Bolsheviks - lost half their population between 1918 and 1920
• The Bolsheviks became the vanguard of a disappearing working class
• Grain monopoly

  All the peasants' harvest surplus became state property
• Grain requisition by the Bolsheviks

  1. Armed brigades sent into the villages

  2. Requisition grain by force

  3. Assume grain is being hidden by 'kulaks' (phantom class of 'capitalist' peasants)

  4. Beat and torture peasants until required amount of grain is handed over
• There were hundreds of peasant uprisings against the grain requisitioning
• The Bolsheviks reacted to peasant uprisings

  They tightened their policies
• Food Levy (prodrazverstka)

  Replaced the grain monopoly, extended the monopoly to all foodstuffs, Moscow would take what it needed from the peasantry without any calculation as to whether it was taking its last stocks and food and seed
• The NEP was announced at the Tenth Party Congress

  March 1921
• NEP


  Replaced food requisitioning with a relatively lenient tax in kind and legalized the return of small-scale private trade and manufacturing
• The NEP was conceived as a temporary retreat
• Bukharin: 'We are making economic concessions in order to avoid political ones'
• Lenin's view of the NEP

  • A necessary concession to the market to get the country on its feet again
  • The survival of the Revolution depended on the smychka, the union of the peasants and the proletariat, which could only be sustained by increasing the exchange of food for manufactured goods
• How long the NEP should last was left unclear, although this would be the crucial question dividing party leaders during the 1920s
• Lenin: 'Not less than a decade and probably more - suggesting that the NEP was not 'a form of political trickery that is only being carried out for the moment' but had to be adopted 'seriously and for a long time''
• Lenin's view of the NEP

  • A serious attempt to build socialism on the basis of a mixed economy
  • As long as the state retained control of the 'commanding heights of the economy' (e.g. steel, coal, the railways), there was no serious risk in allowing small-scale private farming, trade and handicrafts to grow and create wealth as a tax-base for socialist industrialization
• To prevent the country sliding back towards capitalism

  1. The state could employ regulation

  2. Fiscal measures

  3. Agronomic aid

  4. Encourage the development of a socialist economic sector through cooperatives and collective farms
• The restoration of the market brought back life to the Soviet economy
• Private trade responded quickly to the chronic shortages that had built up in years of Revolution and the Civil War
• Private trade in the Soviet economy

  1. Traders set up booths and stalls

  2. Flea-markets boomed

  3. Peasants sold their foodstuffs in the towns
• To many Bolsheviks the return of the market seemed like a betrayal of the Revolution
• There was a widespread feeling that the NEP was sacrificing the workers' interests to the peasantry, which was growing rich at their expense, because of higher food prices
• It seemed to them that the boom in private trade would inevitably lead to a widening gap between rich and poor and to the restoration of capitalism
• NEPmen

  Private traders who thrived in the 1920s
• Much of their anger was focused on the 'NEPmen', the private traders who thrived in the 1920s
• They dubbed the NEP the 'New Exploitation of the Proletariat'
• 'Scissors crisis'


  Widening gap between industrial and agricultural prices which led to urban fears of a 'grain strike'
• Crisis peaked when industrial prices were 290% of 1913 levels, whereas agricultural prices in the state sector were at only 89%

  October 1923
• The problem was that industry was slower to recover from the Civil War than the peasant farms, whose bumper harvests of 1922 and 1923 deflated food prices
• As the price of manufactures rose, the peasantry reduced its grain sales to the state depots
• To combat the crisis

  1. Government resorted to requisitioning

  2. Reduced industrial costs

  3. Closed down 300,000 shops and market stalls in response to working-class resentment of the private traders
• Immediate crisis had been solved


  April 1924
• The shortage of industrial goods and the withdrawal of the peasants from the market remained a basic problem of the NEP
• Bolsheviks were divided about how to deal with this problem

  • Those on the left of the party favoured keeping agricultural prices low and taking grain by force when necessary to increase industrial production
  • Those on the right advocated paying higher prices to the peasants for their food, even if this entailed slowing down the rate of capital accumulation for industrialization, in order to preserve the market mechanism as the fundamental basis of the state's relationship with the peasantry