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1

three decrees by Lenin

• Land Decree of 1917 abolished private land & gave it to ‘the people’
• Decree on Workers Control of 1917 – gave industry to the hands of the people
• The People’s Bank of the Russian Republic 27th December 1917- all banks were nationalised

2

State capitalism

Lenin believed that there was a transition phase between capitalism and communism.
- bourgeoisie had the experience and management that were needed to establish the economy
- workers & peasants would not want to give up their power if they were left to their own devices.

3

When was Vensekha set up ?

December 1917 - to organise economy as Worker’s Councils would often vote to give themselves pay rises

4

War Communism

-introduced in order to ensure the Red Army had enough food and supplies during the Civil War 1918-21

5

Ideological reason for war communism

WW1 provided an opportunity to establish Marxist ideology. Bartering replaced currency which some Bolsheviks saw as the dismantling of capitalism BUT due to high inflation. ALL industries were nationalised. - STATE DIRECTION OF ECONOMY WAS NECESSARY

Moved away from decrees as giving power to the people proved idealistic. Army ranks were established and factory managers employed.

6

Policies of war communism

• NATIONALISATION OF ALL INDUSTRY
• FORCIBLE REQUSITIONING OF FOOD- 150,000 volunteers seized grain
• ALL INDUSTRY PLACED UNDER CONTRL OF VESENKHA
• HIERARCHAL STRUCTURES IN INDUSTRY- Workers Council replaced by management
• BARTERING
• MILITARY-STYLE DISCILPLIE IN FACTORIES- DEATH IF WENT ON STRIKE ‘Communist Sundays’- volunteer for unpaid work ‘Labour Armies’- build roads & armies
• PRIVATE TRADING WAS BANNED
• RATIONING- workers would be fed

7

When/why was NEP introduced ?

NEP introduced 1921 because:
• PEOPLE HATED WC- rations based on social class. Rationing despised.
• ECONOMY WAS CRAP- industry had fallen 20% of 1913 level, food production had fallen to 48% of 1913 level. 20 million people died from famine & disease in the 1920s.
• THE TAMBOV RISING- forcible requisitioning of food led to uprisings in Tambov where peasants reacted violently to volunteers trying to requisition their grain. 50,000 red army soldiers sent in to suppress the uprising.
• THE KRONSTADT MUTINITY- over the increase of power by the Party. “Soviets without the Bolsheviks”, but it was frightening because the group had been loyal to the Bolsheviks. “Lit up reality like a flash of lightening”

8

policies of NEP

AGRICULTURE
• END TO REQUISTIONING & PUT TAX ON FOOD WHICH ALLOWED THE PEASANTS TO PROFIT
• NO COLLECTIVISATION
INDUSTRY
• RETURNED SMALL-BUSINESSES TO PRIVATE HANDS THOUGH THE STATE HAD CONTROL OF TRAVEL & BANKS
• REINTRODUCTION OF WAGES 1921
• PRIVATE TRADING=LEGALISED
• “NEPMEN”- PEOPLE THAT THRIVED UNDER THE NEP

9

How did left wing Bolsheviks view NEP

as a retreat back to capitalism. Lenin said “one step forward, two steps back”

10

Successes of NEP

-Industrial output rose during the first 3 years, due to the repairing of the roads and putting existing factories back into production
-Growth was also helped by Nepmen

11

Failures of NEP

-Children stole stuff from markets
-There was an imbalance between the production of industrial and agricultural growth. Aka the “scissor crisis”. -As food prices fell, the price of industrial goods rose.
-Black market
(allowed stalin to outmanoeuvre the right as argued that the NEP was affecting the industrial and agricultural production)

12

Economy after war

-By 1924- industrial production was 45% of its 1913 figure, but by 1926 the pre-war economy had been restored
-STALIN & BUKHARIN = continuation of the NEP, TROTSKY- wanted greater state control.

13

Fifteenth Party Congress 1927

Push for rapid industrialisation. Industrialisation organised under Gosplan. Drive against Nepmen. Campaign against ‘bourgeois experts’ who had retained their position because the state needed them. The loss of this group hindered the progress made by the 5YPs

14

FIRST 5YP 1928-1932

-focused on rapid growth in industry e.g. steel, coal & iron.
-ignored Textiles & household goods -Needed to focus on industrial infrastructure

15

SECOND 5YP 1933-37

-focused on higher targets for production of consumer goods -Hitler called, focus on heavy industry
-ignored textiles

16

THIRD 5YP 1938

-stopped due to war 1941
-focused on arms production
-ignored textiles

17

Stalins transformation of the economy via industrialisation

In 1928 it was a capitalist agricultural economy, but by 1941 it was a powerful, urban economy that was able to produce the resources to defeat Nazi Germany. However, the consumer goods industry suffered, especially due to wastefulness, which is a reason why the standard of living was quite poor.

18

Successes of 5 year plans

• Reward for model workers.
• Stakhanovites- Alex Stakanhov who was rumoured to be able to lift 15 times as much coal as the average person in a night. This was introduced in 1935 and rewarded workers who worked hard. These workers were often resented by their colleagues
• 1928-41- 17% growth rate
• Transport- Moscow’s first metero line opened up in 1935. Moscow-Volga Canal was built between 1932-1937.
• Rearmament- plans led to successful reconstruction of nine military aircraft factories between 1939 and 1941 BUT shortages in steel held up production

19

Failures of 5 year plans

• Corruption & bribery flourished by factory managers under pressure & a black market formed where workers would steal goods to sell. DID NOT END THE FREE MARKET.
• Consumer industries neglected, despite the 2nd 5YP advancing in consumer goods. Due to Stalin’s priotites of developing industry, poor planning by Gosplan and the production techniques were awful. They dealt with this by enforcing rationing from 1928-1941 and 1000 people in Leningrad were queuing for shoes.
• Low productivity due to low pay, long hours and a lack of incentives
• Little coordination between factories & nowhere to store materials. 40% of material was wasted
• Lateness and absenteeism was criminalised and internal passports were introduced to stop people from moving from town to town in the 1930s
• Housing was a mega problem between 1928 and 1941, but due to the urban workforce there was severe pressure to build houses, which were often poor quality. E.g. there was not a single bathhouse for the 650,000 people in one of the districts in Moscow
• The plans were unorganised- the 1st 5YP was supposed to begin in October 1928, but was published in April 1929. Stalin’s terror attacked managers of the 5YPs and in Gosplan which meant that the 3rd 5YP was never finished.
• Unrealistic targets set by Gosplan

20

White sea canal (failure of 5yp)

• Use Gulag & slave labour -1932 180,000 prisoners & 10,000 prisoners died on the project. Reduced from 22 feet to 12 feet to avoid costs and finish it on time. Showed that Stalin & government only really cared about the result rather than human cost.
• Working conditions brutal

21

Magnitogorsk

1929- Magnitorsk 25 people to 250,000 - state of the art houses were built for the American specialists to stay in, but when they left the managers moved into the houses whilst the workers lived in shacks

22

Leningrad tractor factory

• Poor quality products- 1930, 500 tractors were supposed to be produced but only 8 were made in June and most of them broke down. Production quality was low

23

When did Stalin end the NEP

JULY 1928 - sent in Red Army troops & the Cheka to forcibly requisition food from the peasants. RATIONING AND REQUISTIONING

24

LIQUIDATION OF KULAKS AS A CLASS

the peasants responded violently to the requisitioning by burning and destroying grain. Stalin said this was an attack on socialism by the kulaks and so called for the liquidation of the kulaks as a class. 1.5 million peasants were killed or sent to labour camps.

25

COLLECTIVISATION

introduced in 1929 - Farms were forcibly merged and equipment was taken from rich peasants and given to poor peasants. Peasants who worked on collectivised farms could keep a small amount of food but the rest was sent to workers in the cities - sovkozy, kolkhoz

26

Consequences of collectivisation

-devastated agriculture but made money to fund industry
-1929-1930- drive to ensure that all farms were collectivised = chaos - Stalin temporarily halted the collectivisation in 1930. Collectivisation was reinstated in 1931
- peasants killed 17 MILLION HORSES , 26 MILLION CATTLE, 60 MILLION SHEEP AND GOATS in protest
-grain produce went down from 73 million tonnes in 1928 to 68 million tonnes in 1934→ due to execution & deportation of kulaks who were the best skilled and the absence of incentives because farmers could no longer profit.

27

Famine in Ukraine

• Biggest resistance to requisitioning in Ukraine.
• Led to Stalin seizing their grain and cattle. 5 million people died between 1932-1933 (Holomodor).
• Stalin did not accept international aid. He wanted to use the famine to destroy the resistance from the Ukrainian farmers

28

MECHANISATION

Gov’t allowed the farmers to hire tractors. Provide 75,000 tractors but they had a limited impact on Soviet farming from the MTS 1928 (machine and tractor stations)

29

GRAIN PROCUREMENT

-Collectivisation meant that the government seized more grain than they had during the NEP
-1928 gov’t procured 11 million tons of grain from the peasants -Risen to 23 million tons in 1933 -Grain exports rose from 1 million tons in 1928 to 5 million tons in 1931

30

Agriculture 1934-41 (result of collectivisation)

• Recovered slowly
• Grain harvests were smaller than they had been during the NEP
• 1937- RECORD HARVEST decreased from 1938- 1940.
• Low harvests were due to the fact collectivised farms were less productive than private farms e.g. private farms produced 410 kilos of grain per hectare and collectivised farms produced 310 kilos of grain per hectare
• 7% of farmers stayed in private farms and produced double the milk and meat that state farms did.

31

Agriculture during WW2

• Farmers unable to meet the demands of the government
• USSR relied on US imports (1/5 calories consumed by them)
• Harvests declined from a pre-war high of 96 million to 45 million tonnes in 1945
• Bread rations fell by 40%
• Potato rations fell by 80%

32

Economy after WW2

• Led to widespread destruction.
• 1945- 25 million people were homeless.
• Soviet industry was producing 2/3 of what it had been in 1940

33

The Fourth Five-Year Plan

1945-50- INDUSTRY
• 88% investment went into heavy industry
• Industrial output increased by 80%
• Coal- 1940 from 166 to 262 million tons
MILITARY
• Focused on military spending due to emergence of the Cold War in 1946.
• 1952- military spending was a quarter of the government’s budget. 1950- 79 milliard roubles vs 1952 113 milliard roubles.
*between 1945-50 the USSR’s economy was the fastest growing in the world

34

Production of consumer goods - 4th Five Year Plan

• Production of consumer goods doubled
• 12% investment of the Fourth Five Year Plan went into food production and consumer goods
• Reconstruction focused on factories rather than houses
• Reconstruction of historic towns were also more important than reconstructing remote towns e.g. Kiev being rebuilt compared to Dneiper until the late 1950S
• Wages were kept low- meant that money could be spent on industry and also it meant that women were forced to work because families needed income

35

Agriculture after WW2

• Agriculture recovered extremely slowly because Stalin prioritised industry. Meant that agriculture suffered from 1945-49 due to loss of workers and investment.
• After the war, Stalin imposed strict disciplines on state farming. There had been a little bit of private farming during the war but Stalin completely abandoned this.
• However, production grew from 1947 and 1953, and by 1952 grain production had reached pre-war level of 92 millions of tonnes. Had dropped to 30 millions of tonnes in the early 1940s but then had increased from 37 millions of tonnes in 1946 to 66 millions of tonnes in 1947.

36

What did Khrushchev argue ?

-Khrushchev argued that reform was the best way to increase productivity in the USSR for a better standard of living for agricultural workers

37

Improved Incentives under Khrushchev

• 1954- Khrushchev changed the relationship between agricultural workers and the government. He offered farmers high prices for their produce with reduced quotas and higher prices for everything produced in addition to the quotas UNLIKE STALIN WHO HAD QUOTAS WITH LOW PRICES. Led to 250% rise in farm incomes between 1952 and 1956
(LIBERMAN PLAN REJECTED)

38

Investment in resources under Khrushchev

• K invested in farm equipment and fertilisers.
• 1954 K introduced the construction of a new fertiliser factories and increase in the production of tractors. 1955 led to a 30% increase in the number of tractors available and 40% increase in the amount of fertiliser produced.

39

Reforms under Khrushchev

-improved incentives
-invested in resources
-Virgin land schemes
-corn campaign
-centralisation - set up 105 regional economic councils in 1957

40

Virgin Land Schemes

-September 1953
• K wanted to turn unfarmed lands in Kazakhstan & Siberia.
• Needed a lot of investment and so agricultural investment increased from 3% to 13% of Soviet budget between 1954-1959.
• Led to the amount of farmland increasing MASSIVELY- 1953- 18 million hectares and in 1963- 68 million hectares.
• The workforce quadrupled from 1953- 2 million people working to 1963- 8 million

41

The Corn Campaign

- September 1958
• K encouraged Ukranian farmers to grow maize. He wanted the VL farms to grow maize and meanwhile maize would be grown in the Ukranian farmers. The maize would be used to feed animals and so more meat would be available to the people.
• IT WAS A FAILURE. K had based the VLS on the US farms, but the USSR farms were only able to produce 50% of what the US farms did due to different climates, lower labour productivity and worse farming tools.
• Growing maize meant that animal feed decreased and so the production of animal feed decreased by 30% from 1958-1964.

42

Agricultural Success 1954-58 (K)

• VLS - partially successful
• Grain harvests, meat and milk production rose between 1953 and 1958 by 35% e.g. meat production increased from 6 million tons to 8 million tons
• Led to a better standard living for farmers and society generally.
• 400% rise in the pay of farmers.
• 1956- Khrushchev wanted to produce more food than the US by 1960. Meant he would have to increase their food production by 300% in 4 years.
• Allowed K to consolidate his power.

43

Problems with agriculture 1954-64 (K)

• Agriculture remained inefficient
• VLS was expensive and areas of Kazakhstan were naturally dry and so expensive irrigation systems were needed - aimed to increase produce by 300% but only achieved by 30% - 1962 - lack of produce meant USSR had to import - great debt
• 1950s-1960s- 54-44% of people worked on farms compared to US (5%) which produced twice as much food.
• Harvests in 1959 and 1960 were below the 1958 levels.
• Between 1960-64 production slowly increased so that overall agricultural production was 15% in 1964 than it had been in 1958. Nothing compared to the targets Khruschev had set in 1956.
- by end of 1970 garden plots which took up 4% of agricultural land where producing 40% of pork and poultry, 42% fruit and 50% of potatoes

44

PROBLEMS WHICH LED TO SLOW GROWTH RATES BEWTEEN 1958-64:

1) MTS abolished, meant that farmers did not have access to modern farming equipment
2) Centrally directed campaigns= inefficient, didn’t take into account local conditions e.g. maize production which was bad for Soviet climate
3) Soviet planners- did not deliver right fertiliser to farms or when it was needed
4) Khrushschev reformed the ministries dealing with agriculture= CONFUSION!
5) Soviet farms had bad storage space- some of the food produced was wasted
6) Pay for agricultural workers increased= still inadequate!
7) K cut investement into agriculture from 12.8% from 1954-1959 to 2% in 1960.

SOVIET AGRICULTURE TOO INEFFICIENT AND KHRUSHCHEV TOO AMBITIOUS

45

Post Stalin military spending

• High military spending= big problem for leaders after 1953.
• The leaders were determined to improve the living standards of the Soviet people but the problem was that the economy did not produce enough money to continue high levels of military spending and improve living standards.
• 1955- K cut military spending from 12% in 1955 to 9% in 1958
• 1964- military spending was 11% of the GDP

46

The Seven Year Plan:

- Jan 1959 - FOCUS ON LIGHT INDUSTRY
• Boost agricultural production and the production of consumer goods by investing in light industry
• More chemical production would lead to better fertilisers and therefore increased crop production like synthetic fibres which could be used for clothes. Therefore Khrushchev thought that investing in the chemical industry would encourage growth in both sectors
• BUT military pressures meant that Khrushchev had to abandon his hopes of peace and falling military spending and between the years 1958-61 military spending increased
• He thought that the VLS was successful until 1958 - high rates of economic growth -Soviet had launched satellites in 1957 and 1959 (Sputnik)

47

Success of the 7 year Plan

• 1959-1965 the production of chemicals and consumer goods increased
• 60% increase in the production of consumer goods, which was 5% below K’s targets
• Fertiliser production increased by 19 million tons which was 3.5 million tons less than the target
• Synthetic fibre production increased by 240,000 tons around 200,000 below target
• Radios- 7500 of the population had them in 1955 compared to 1966 where 180000 had them.
• The number of people in 1955-66 that had a car doubled.

48

Problems with the 7 year Plan

• February 1957 Sovnarkoz Reforms- decentralised power from Gosplan to 105 soznarkhoz regions
• 1958-64 K introduced centralisation in order to solve the problems around the sovnarkhoz reforms but the responsibilities of the sovnarkhoz were not clear and so there was confusion in the planning system
• February 1962- K divided the party in half, one for industry and one for agriculture
• 1962- K set the targets of the 7 year plan to be higher and more ambitious
• Economy was not designed to meet consumer goods but was designed to meet targets e.g. factories made thicker sheets of steel because it met targets because the light industry needed thin sheets of steel
• Consumer industry was set targets based on the value of the goods they made, so they made fewer more expensive goods that nobody could afford
• inflexibility of the command economy due to the focus on production rather than consumption -consumer desires were not focused on -> expensive and useless products

49

Restoration of the Economy under Brezhnev

-very against reform - MATURE SOCIALISM
- ENDED VIRGIN LAND SCHEME
-• Party was reunited (no longer a split in industrial and agricultural sectors)
• Seven Year Plan was abandoned and from 1966 the economy followed the Five Year Plans
• Brezhnev was less ambitious about what he wanted from the Soviet economy. 1976-80- 10th Five Year Plan which met no targets
- ended limits on terms in party - led to gerontocracy + oligarchy as very few rich ppl ruled the country - position not based on meritocracy
-implemented developed socialism which was job security and low food prices and this was achieved by getting grain imported from the West - DEBT

50

Kosygin Reforms

January 1968 - wanted to introduce reforms to make production in soviet union greater by offering incentives to workers based on a supply and demand economy - use cost and profit ad main indicator of economic success rathe than quantity of goods

51

Increased Military Investment under Brezhnev

• B wanted to be on the same level with nuclear firepower as the USA
-8 fold increase in military spending and took up 15% of country's GNP 1982
• During the Cuban Missile Crisis in 1962 Khrushchev had been forced to back down because he knew that the USA had more weapons than the USSR
• B wanted to achieve parity which would mean the USSR would never be forced to back down again
• Military spending increased from 11% in 1964 to 13% in 1970
• SUCCESS- nuclear parity was achieved by 1970

MILITARY INDUSTRIAL COMPLEX TOO POWERFUL

52

Standard of living under brezhnev

standard improved as by 1980 85% of people had a tv, 70% had a washing machine and 7% had a car

53

Andropov's reforms (1982-84)

-attempted to remove corruption by falsifying production targets
-Anti corruption campaign Nov 1982 investigated senior party members who were using soviet resources to get rich e.g Brezhnev's minister of the interior Nikolai Shchelokov put on trial for corruption
-targeted alcoholism by carrying out spot checks on workers - workers sacked for drunkenness -made him unpopular
-targeted absenteeism by sending KGB officers to parks, train stations and restaurants to arrest absentees
DIED BEFORE HE COULD MAKE AN IMPACT (result of gerontocracy)

54

Failure of Andropov's reforms

Although reduction in sales of vodka consumption of illegally produced alcohol increased
-his campaigns were poorly enforced and so drunkenness and absenteeism continued
-materials were stolen from enterprises and used in private production -> black market

55

Declining economic growth of USSR

• 1945- the Soviet economy was the fastest growing in the world .
• 1950-58 it grew at 7% a year whereas the USA grew at 3% a year
• 1958-1964- 5% a year
• 1970s- 2% a year

56

Long term problems with economy for Brezhnev

-FLAW IN COMMAND ECONOMY
- inherited collectivisation and 5 year plans - great waste from prestige projects
-Bolsheviks old guard too committed to stalinist collective farm system - no cooperation w new reforms

57

The Impact of Oil Prices

• 1970s- increasing prices of oil and this meant that the USSR could make money from it
• Oil production increased from 240 million tons in 1965 to 600 million tons in 1980
• This meant that the Soviet economy could import grain from the West and the USSR was able to borrow money from Western governments based on their income for oil.
• Meant that standard of living improved in spite of lower growth rate

58

Chernenko

1984 - INEFFECTIVE + TOO OLD (Gerontocracy)
-focused on increasing quantity to hide poor productivity - goods often rotted in storage
-production targets prioritised -> waste became serious issue + environmental damage