Russia KT2

• 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 life 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, 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 as it failed to abolish the market
• War Communism led to economic collapse, with lower agricultural production, declining industrial output, growth of a black market, and mass poverty and famine
• The economic and political crisis caused by War Communism led to a risk of the end of the Communist government
• 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 prices, while industry recovered much more slowly, leading to a "Scissors Crisis" where the gap between farmers' incomes and industrial prices reached crisis point
• 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
• Positions within the Communist Party on economic policy

  • Left (Trotsky): Favoured a radical socialist policy of forced agricultural collectivisation and state control
  • Right (Bukharin): Wanted a continuation of the NEP
  • Centre (Stalin): Argued the best policy was the one that actually worked
• The "Great Industrialisation Debate" was a central part of the leadership struggle, with the right-wingers associated with the NEP consistently winning the debate until the NEP failed
• Lenin's economic policy went through a series of changes, reflecting the fact that he didn't have a detailed plan to begin with, and was forced to adapt to the crises of the Civil War and the lack of a European revolution
• The Five Year Plans and industrial change: From 1928-41
• Main economic objectives of the Five Year Plans

  • Industrialise Russia
  • Ambitious goals
  • Catch up with the west
  • Eliminate Nepmen
• Nature of the Five Year Plans

  • A lot of propaganda used to inspire workers to fulfil the objectives
  • Focused on heroic objectives
  • Celebrated successes
  • 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
• Successes under Stalin's economic policies

  • Heavy industry: Production of iron, steel, coal and electricity increased greatly
  • Transport: Major success, Moscow Metro's first lines opened in 1935
  • Labour productivity: Very low in the USSR, workers were less productive 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, productivity rose as a result
• Estimated productivity gains: Chemicals 34%, Electricity 51%, Coal mining 26%, Oil production 25%
• By 1940, 1/3 of government spending priorities were on arms production
• Issues with the Five Year Plans

  • Low production quality: Plans set targets for production, not quality, factory managers rewarded for producing large quantities regardless of what was actually produced, materials produced were often stored at a factory and left to decay, rather than being used, 40% of what was produced was wasted
  • Stalin purged the economic planners and industrial managers, the ones who made the economy work, huge pressure on the Gosplan to meet the demands of the 5Y plans
• Reasons for constant shortages of consumer goods

  • Stalin's priorities: Heavy industry and defence rather than consumer production
  • Poor planning, planners did not anticipate the needs of general consumers
  • Poor production techniques, the economy still didn't have the complex techniques required for consumer goods production
• Housing and living conditions were a significant issue from 1928-41, the necessary housing was never built, a better living standard was not a priority for Stalin
• The Five Year Plans failed to end the free market, the shortage of goods led to a growth of a black market
• Conclusion to Stalin's industrial policies

  • Pre 1928, the USSR was a largely capitalist agricultural economy with a small working class, by 1941, the USSR was a powerful, urban, industrial economy that was able to produce the resources necessary to defeat the German Army
  • Unbalanced economy, arms production led to the expense of consumer goods
  • Wastage of resources was a strong reason why economic growth did not lead to higher standards of living
• Private property was the foundation of capitalism, during the NEP period peasants with large farms were able to grow rich, the communists wanted to abolish private property and replace private farming with state run farms
• Agricultural production fell during the NEP because there was no market for additional farmed goods, there was a limit to how much food that consumers wanted
• Stalin had political reasons for ending the NEP, Zinoviev, Kamenev and Trotsky had advocated a radical left- wing policy of collectivisation and rapid industrialisation, Stalin defeating them led to the left wing of the Party having no leader, Stalin shifted to the left and hoped to retain his supporters of the United Opposition and therefore gained more supporters than Bukharin
• Introducing Collectivisation


  • Emergency measures: 1928, Stalin ended the NEP, reintroduced grain requisitioning from the peasants through the Cheka, free trade=>Command economy, rationing and requisitioning did not mean collectivisation but did signal an end to the NEP
  • Dekulakisation: Peasants responded to requisitioning with violence, Stalin initiated "Liquidation of Kulaks", 1.5 million Peasants sent to labour camps
  • Collectivisation: Introduced in 1929, farms forcibly merged, equipment taken away from richer peasants and given to the poorer, peasants allowed to keep a small proportion of grain to live off of, rest used to feed workers in the city or sold abroad to fund industrialisation
• Consequences of collectivisation


  • Ruined soviet agriculture, however funded industrialisation
  • From 1929-1930, there was a drive initiated to ensure all farms were collectivised which led to chaos and therefore Stalin halted collectivisation temporarily, by 1941, almost all farms were collectivised
• Destruction of Soviet Farming

  • Peasants responded by destroying their crops, animals and machinery, 17 Million horses, 26 Million cattle, 11 Million pigs, 60 Million Sheep and goats destroyed, grain harvest fell from 83.5 million tons in 1930 to 67.6 million tons in 1934
• Collectivisation led to famine in the Ukraine, Stalin punished the farmers by seizing their grain and livestock, used famine to end resistance in the Ukraine
• Collectivisation allowed the government to procure more grain than the NEP in 1928, grain procurement rose from 10.8 million tons in 1928 to 22.6 million tons by 1933, grain export rose from 1 million to 4.7 million from 1928-1930
• Long term issues of collectivisation

  • Agriculture: Collective farms a lot less productive than private farms, led to a decrease in production, decline in grain production, private farming continued on small scale in 1941, private farms very important for soviet agriculture
  • Agriculture during WW2: Consistently unable to meet needs of the soviet people and the army, Soviet government relied on US imports to provide almost a fifth of the calories consumed by the Red Army, harvests decline from a pre-war high of 95.5 million tonnes to 46.8 million tonnes by 1945, bread rations fell by 40%, potato rations fell by 80%
• Recovery from war after 1945

  • Fourth Five Year Plan, 1945-1950: Led to extremely high levels of industrial growth, 88% of investment went into heavy industry, industrial output increased by 80% from 1945-50
  • Consumer goods: Production increased, however FYP focused mainly on heavy industry, only 12% of investment went into consumer goods like food production, although production of consumer goods doubled, they continued to be scarce, reconstruction focused on factories rather than homes
  • Employment: Wages were kept low, made money more available for reconstruction, women were forced to go out to work because their families needed income
• Post War Agriculture


  • Soviet agriculture recovered slowly from the impact of the War, Stalin's top economic priorities after the war was industrial reconstruction, as a result, Soviet agriculture suffered shortages pf resources and workers from 1946 to 1949, after war was over, Stalin re-imposed strict discipline over soviet farms, during the War, there had been a small increase in private farming which was ending following the end of WW2, overall, production still grew from 1947-1953, grain production reached its pre-war levels
• Stalin's great turn transformed the soviet economy and the USSR, policies were harsh, inefficient, and wasteful, however, they transformed the USSR into an industrial giant, equally, collectivisation placed farming under Stalin's control