Early Economic Policy Flashcards
(39 cards)
Economy when Bolsh took powrr
When the Bolsheviks took over Russia in October 1917 the economy was in chaos. It had been severely
damaged by the First World War and was to be devastated by the civil war that followed.
The key measures of Lenin’s initial economic policy were as follows.
• The Land Decree of October 1917 abolished private ownership of land, which was now to be
in the hands of ‘the people’. It was a vague statement, but enough to please the peasantry, who
viewed the decree as giving them control over the land they farmed and worked.
The Decree on Workers’ Control of November 1917 placed control of the factories into the
hands of the industrial workers.
• On 27 December, all private banks were nationalised, and, along with the State Bank,
amalgamated into the People’s Bank of the Russian Republic.
‘state capitalism.
Ideologically, the
Bolsheviks wished to see the means of production in the hands of the proletariat but, in reality, the
bourgeoisie had expertise in management and technical skills that were desperately needed. Lenin
talked of working with these groups, at least initially, until Bolshevik experts could take their place.
This transitional phase was termed ‘state capitalism.
Result of Lenin’s initial economic policies
These measures gave considerable power to the workers and peasants, but it had a detrimental
effect on the economy. Workers’ councils voted to give themselves huge pay rises, which did little to
improve production and resulted in inflation. Managers were often dismissed, sometimes violently,
and those with industrial and technical expertise were removed by workers seeking revenge for
the way they had been treated previously.
The Bolsheviks quickly recognised that the government
needed to exert greater control over the economy. What did they set up?
In December 1917, the Supreme Council of the National Economy (Vesenkha) was set up to provide greater supervision of the economy.
Why was War Communism introduced?
Faced with the desperate circumstances of the civil war, the Bolsheviks introduced a series of
measures to ensure that the Red Army was supplied with enough food and resources to emerge
victorious. These measures entailed much greater government intervention in the economy and
collectively became known as War Communism.
Why was War Comm introduced? The ideological basis
The measures of War Communism went along with the long-term aim of the Bolsheviks to abolish
private enterprise and could be seen as the application of communist ideology. The result of this
optimism was a radicalisation of policy, pushing the Bolshevik leadership into implementing large-
scale nationalisation before it had originally intended to. The nationalisation of all industries with
ten or more workers in June 1918 was followed by a series of measures that showed the Bolsheviks
were mesmerised by the opportunities that presented themselves to extend government control.
Why was War Comm introduced- The response to the reality of economic collapse
Bolsheviks
had inherited an economy that was in a state of near collapse and drastic measures were needed
if they were to fight and win the civil war.
Why was War Comm introduced? A reaction to early Bolshevik excesses
response to the problems that resulted from the rush
of early Bolshevik decrees. Some of the Bolshevik policies for giving control to the workers
proved to be idealistic and unworkable, especially during the emergency context of the civil war.
The abolition of army ranks was reversed and factory managers had to be used to create some
order in industry.
What were the key features of War Communism? Nationalisation of Industry
• Nationalisation (that is, state ownership) of all industry without compensation. Only workplaces
with fewer than ten workers were exempt.
All industry was placed under the control of the state through the Supreme Council of National
Economy (Vesenkha), set up in 1917.
• The reintroduction of hierarchical structures in industry. In factories, the Workers’ Councils
were replaced by management in order to instil discipline into the workers.
What were the key features of War Communism? The death penalty
Harsh military-style discipline was introduced into the factories. The death penalty was
introduced for all workers who went on strike. The unemployed were forced to join Labour
Armies’ and set to work on projects such as road building and woodland clearance. All workers
were expected to volunteer for unpaid work on ‘Communist Saturdays’, days designated for serving the Party.
What were the key features of War Communism? Private trading
• All private trading was banned. Trade was to be controlled by the state, but because it could
not satisfy demand a large black market in goods developed.
What were the key features of War Communism? No money
Transactions using monev became limited due to massive inflation. Money was replaced by
bartering using goods, and many workers received their wages in goods rather than money.
What were the key features of War Communism? The forcible requisitioning of food from the peasantry
The forcible requisitioning of food from the peasants in order to feed the army and the towns
. The government attempted to use
Committees of the Village Poor to spy on any peasants who might be hoarding food. The result
was a rise in tension in the countryside and serious outbreaks of violence, often directed at the
requisitioning teams. Malnutrition and starvation became commonplace.
What were the key features of War Communism? Rationing
The introduction of rationing to ensure that, despite food shortages, the workers in the cities
were fed. Those industrial workers whose work was crucial to the war effort received preferential
treatment.
Why was the NEP introduced in 1921?
The reality of the social and economic situation, coupled with
a worrying deterioration in the political position of the Bolsheviks, led the government to abandon
War Communism and replace it with the New Economic Policy (NEP). War Communism may have
delivered the resources needed to win the civil war, but it was at a huge cost in terms of its impact
on the economy and on the popularity of the Bolsheviks. The ending of the civil war produced a new
situation that required a different response from the government.
Why was the NEP introduced in 1921? Economic considerations
By the end of the war, industry had ground to a virtual standstill. Production of heavy industry
had fallen to 20 percent of its 1913 level and, in some sectors, production had stopped altogether.
Food production had also fallen, to only 48 percent of the 1913 figure, and the breakdown in the
transport and distribution systems had resulted in widespread famine (see Source 2). Weakened
by a lack of food, many Russians succumbed to diseases such as typhus and smallpox and over
20 million died from famine and disease in the 1920s. In addition to this, army soldiers had to be
resettled into civilian life. It was clear that War Communism was not delivering the goods, nor
would it be able to cope with the post-war situation.
Why was the NEP introduced in 1921? The unpopularity of War Communism
Several of the key features of War Communism were loathed by the Russian population.
The system of rationing was disliked, as the size of the rations was dependent on the social
classification a person was given. Members of the Red Army and industrial proletariat received the
most; members of the bourgeoisie received very little and, in some cases, none at all. The use of
managers and the return to hierarchical systems within the factories caused resentment among the
industrial workers, leading to violence on occasions. Many workers felt that their opportunity for
self-regulation was being undermined by the increasing dictates of the state.
Why was the NEP introduced in 1921? The Tambov Rising
In the countryside, resentment of War Communism was greatest in relation to the forcible
requisitioning of food and the plans to get rid of the mir (village commune), which had become a
genuinely peasant organisation since the Revolution. Peasant resentment against the government
came to a head in a series of uprisings in 1920-21. There were risings in the important grain areas
of the Volga basin, North Caucasus and Western Siberia. The most serious was the Tambov Rising
in central Russia, where peasants reacted violently to requisitioning teams arriving in the area to
seize grain. The revolt was only put down after 50,000 Red Army troops were sent into the area.
The seriousness of these risings put pressure on the government to change its policy.
Why was the NEP introduced in 1921? The Kronstadt Mutiny
This revolt by sailors at the naval base outside Petrograd increased pressure on the government.
The mutiny alarmed the Bolsheviks because it was by a group that had previously been a mainstay
of the Revolution and they could not be easily dismissed as counter-revolutionaries’. The mutiny
was over the increase in the power of the Party and its officials at the expense of the workers. Its
slogan was “Soviets without Bolsheviks. The mutiny was suppressed by Red Army troops, but the
revolt was a shock to the Bolshevik leadership and was a key factor in Lenin’s decision to change
his economic policy. To Lenin, the Kronstadt Mutiny had lit up reality like a flash of lightning!
What was NEP
A series of measures, known as the NEP, that
saw a move away from the tight state control of War Communism towards a more mixed economy,
where a private sector could emerge in addition to that controlled directly by the state.
What were the key features of the NEP? In agriculture:
• There was to be an end to requisitioning. It was to be replaced by a system of taxation, which
allowed the peasants to sell any remaining food at market for a profit.
The Bolsheviks also announced that there would be no forced programme of collectivisation. Without
collective farms, the mir would stay as the means of peasants self-regulating their farming activities.
These measures were clearly a compromise with the peasantry, but the Bolsheviks knew that,
without increased food production, the economy would never be able to revive.
What were the key features of the NEp? Industry- small-scale industry and state owned factories
The NEP returned small-scale industry to private hands, although the state kept control of
heavy industry, transport and the banks. This allowed Lenin to claim that the party still held the
commanding heights of the economy
• In state-owned factories, piecework and bonuses were used to try to raise production. To some
Bolsheviks these were the techniques of the capitalist.
What were the key features of the NEp? Some ideological limits
• The reintroduction of a currency for paying wages in 1921 was also viewed with suspicion by
many communists as the re-emergence of capitalism. The legalisation of private trading seemed the logical way of stopping a growing black markel a
factor that had already led to some local authorities allowing private trade.
• With the growth of small-scale business and private traders, the Soviet Union saw the
development of the so-called ‘Nepmen’, people who gained under the NEP.
