KT2 - Industrial and Agricultural change

• Problems facing Russia included an economy that was backwards and unsophisticated, though it had begun to industrialise and grow significantly from 1890-1914, it was still far behind more developed nations
• Lenin's early ideas


  Believed that socialism was compatible with Russia in 1917, argued that as the revolution progressed, advanced countries would send aid to developing countries and therefore Russia would grow without capitalism, argued that the revolution had destroyed capitalism but the economy was not strong enough for socialism
• Lenin's vision of a socialist economy


  Believed it required modern technology, expert management and a well-educated and highly disciplined workforce, workers would be free from the capitalists and better paid and treated, no time for leisure, assumed people would find their work fulfilling and therefore leisure would be unnecessary
• State capitalism


  Lenin's state capitalist economy was based on nationalisation of industry, which ended capitalism by taking industry away from middle-class owners, all industries nationalised were run by Vesenkha, a group of economic experts designed to ensure factories were managed by placing them under the control of well-paid specialists to co-ordinate economic production, only large industries were nationalised, small factories controlled by workers or back to capitalists, very unpopular, little change from state capitalism and life before the revolution
• Many workers rejected state capitalism in favour of workers' control
• Land reform


  In order to win support and stimulate agriculture, Lenin pushed out land reform, took land from the church and aristocrat owners and gave them to the peasants, therefore the land reforms were very popular with peasants
• War Communism


  Designed to ensure high levels of industrial output of war goods, efficient allocation of resources, and food production to feed soldiers, workers and civilian population, measures included food dictatorship with grain requisitioning and rationing, labour discipline with extended working hours and compulsory work, and abolition of the market with abolition of money and trade
• War Communism kept the Red Army supplied and won the civil war, but led to economic collapse
• War Communism failed to abolish the market, as a black market grew and workers stole government resources to barter for food
• The economic collapse under War Communism led to mass poverty, unemployment, and famine, as well as political crises and peasant rebellions
• New Economic Policy (NEP)


  Introduced to retain political power, revive the economy, and build socialism, ended War Communism and created a mixed economy with both socialist and capitalist elements, including leaving agricultural production to the free market, denationalising small factories and workshops, reintroducing money, and requiring government-run industries to make a profit
• The NEP led to political and economic stability, ending famine and restoring grain production, but did not lead to rapid industrial growth
• The NEP led to the re-emergence of inequality and corruption, with the growth of "Nepmen" traders who made money through gaps in the market
• There was debate within the Communist Party over the path to industrialisation, with the left wanting radical socialist policies like agricultural collectivisation, the right wanting to continue the NEP, and the centre pragmatically supporting whichever policy worked
• The "Great Industrialisation Debate" was a central part of the leadership struggle, with the right-wingers associated with the NEP holding on to power until the NEP failed, at which point Stalin began advocating for a new more left-wing economic policy
• Lenin's economic policy went through a series of changes, from War Communism to the NEP, reflecting the fact that he did not have a detailed plan and was responding to the crises of the civil war and the lack of a European revolution
• Problems facing Russia included an economy that was backwards and unsophisticated, though it had begun to industrialise and grow significantly from 1890-1914, it was still far behind more developed nations
• Lenin's early ideas


  • Believed that socialism was compatible with Russia in 1917
  • Argued that as the revolution progressed, advanced countries would send aid to developing countries and therefore Russia would grow without capitalism
  • Argued that the revolution had destroyed capitalism but the economy was not strong enough for socialism
• Lenin's vision of a socialist economy

  • Believed it required modern technology, expert management and a well-educated and highly disciplined workforce
  • Workers would be free from the capitalists and better paid and treated
  • Assumed that following the revolution people would find their work fulfilling and therefore leisure would be unnecessary
• State capitalism


  • Lenin's state capitalist economy was based on nationalisation of industry, which ended capitalism by taking industry away from middle-class owners
  • All industries nationalised were run by Vesenkha, a group of economic experts designed to ensure factories were managed by placing them under the control of well-paid specialists to co-ordinate economic production
  • Only large industries were nationalised, small factories controlled by workers or back to capitalists
• State capitalism was very unpopular, with little change from before the revolution, and many workers rejected it in favour of workers' control
• Land reform


  Took land from the church and aristocrat owners and gave them to the peasants, which was very popular
• War Communism


  1. Designed to ensure high levels of industrial output of war goods, efficient allocation of resources, and food production to feed soldiers, workers and civilian population

  2. Measures included food dictatorship with grain requisitioning and rationing, labour discipline with extended working hours and compulsory work, and abolition of the market with abolition of money and trade
• War Communism kept the Red Army supplied and won the civil war, but led to economic collapse
• War Communism failed to abolish the market, as a black market grew and workers stole government resources to barter for food
• The economic collapse of War Communism led to mass poverty, unemployment, and famine, deepening the political crisis
• New Economic Policy (NEP)


  • Introduced to retain political power, revive the economy, and build socialism without foreign aid
  • Ended War Communism, creating a mixed economy with both socialist and capitalist elements including free agricultural production, denationalisation of small factories, and reintroduction of money
• The NEP led to political and economic stability, ending famine and restoring grain production, but did not lead to rapid industrial growth
• The NEP led to uneven economic growth


  Agriculture recovered quickly, leading to a fall in agricultural prices, while industry recovered much more slowly, leading to a "Scissors Crisis" where industrial prices rose faster than agricultural incomes
• The NEP led to the re-emergence of inequality and corruption, with the growth of "Nepmen" traders who made money through gaps in the market
• Rival economic policies debated within the Communist Party

  • Trotsky's "Dictatorship of Industry" with forced agricultural collectivisation
  • Bukharin's continuation of the NEP to maintain social peace
  • Stalin's pragmatic approach of supporting whichever policy worked
• The "Great Industrialisation Debate" was a central part of the leadership struggle, with right-wingers associated with the NEP holding on to power until the NEP failed
• Lenin's economic policy went through a series of changes, from War Communism to the NEP, reflecting the lack of a detailed plan and the need to respond to crises and the lack of foreign aid
• Five Year Plans


  • A lot of propaganda used to inspire workers to fulfil the objectives of the plans
  • Focused on heroic objectives of the plans
  • Celebrated successes of the plans
  • Plans will lead to destruction of capitalism
  • Simply a list of targets, and nothing to do with HOW the economy would function and create a strong economy, merely a propaganda campaign used to try and achieve the targets set by Stalin
• Main economic objectives of the Five Year Plans


  • Industrialise Russia
  • Ambitious goals
  • Catch up with the west
  • Eliminate Nepmen
• Production of iron, steel, coal and electricity increased greatly under Stalin's economic policies
• Transport


  Major success of the Plans, Moscow Metro's first lines opened in 1935, easy transport around Moscow, therefore transported goods more efficiently
• Labour productivity


  • Very low in the USSR, workers were less productive in the USSR than in Britain, the USA or Western Europe
  • Little to no incentive to work hard due to low pay and long hours (1st FYP)
• Stakhanovite movement


  • Began during the second FYP in 1935 as a new stage of socialist competition
  • Took its name from Aleksei Grigorievich Stakhanov, who had mined 102 tons of coal in less than 6 hours
  • As a result, workers who wanted to be like him, wanted to beat his records and hence productivity rose on the UK
• Estimated productivity gains


  • Chemicals 34%
  • Electricity 51%
  • Coal mining 26%
  • Oil production 25%