2a: Towards a Command Economy, 1917-28

Why did Lenin want economic revolution?

Because he believed it essential to build socialism.

Lenin's 4 economic objectives - M.

Modernisation -believed socialism required the construction of a highly advanced economy.

Lenin's 4 economic objectives - C.

Consolidation -needed economic stability to hold onto power.

Lenin's 4 economic objectives - MV.

Military victory -needed economy to supply the Red Army.

Lenin's 4 economic objectives - DC.

Destroy capitalism -wanted the economy to be more efficient than Capitalism and to end inequality.

What did Lenin prioritise?

Immediate pragmatic goals over long-term ideological goals.

Marx and the economy.

Marx argued a socialist economy would be highly advanced and organised to a 'common plan', but argued that it was impossible to describe the future in detail.

Nationalisation.

Governments take control of privately run businesses.

When was state capitalism?

March 1918 - was the phase between capitalism and socialism.

What was state capitalism based on?

On the nationalisation of large-scale industry - designed to end capitalism by passing ownership from capitalists to the state.

What did Lenin hope of nationalisation?

That it would lead to greater efficiency as the government could employ experts to run the economy.

Who were control of the nationalised industries centralised by?

The Vesenkha - organisation that controlled the economy during War Communism.

What did the Vesenkha do - discipline?

Re-establish worker discipline by offering higher pay to productive workers.

What did the Vesenkha do - management?

Ensure factories were properly managed by placing them under the control of well-pad specialists.

What did the Vesenkha do - needs?

Co-ordinate economic production to meet the needs of new society.

What was state capitalism replaced by? Why?

War communism.
SC was always intended to be temporary - Civil War led to a series of emergency economic measures (War Communism).

What was the main goal of war communism?

To ensure Communist victory in the Civil War,

Measures of War Communism - industry.

Nationalisation of all industry.

Measures of War Communism - food.

Food dictatorship - food free market was abolished - grain was requisitioned - food was rationed by the Supply Commissariat.

Measures of War Communism - labour.

Labour discipline - Lenin introduced an 11-hour work day - compulsory work or all able-bodied men aged 16-50.

Measures of War Communism - market.

Abolition of the market - money = worthless due to hyperinflation + then abolished - private trade = made illegal.

How did rations work during War Communism?

Workers and soldiers got the largest rations.
Members of the bourgeoisie got the smallest rations.

Consequences of War Communism.

Military victory, but economic ruin.
Destroyed incentives to work as workers were not rewarded for their labour.

Consequences of war communism - countryside.

By 1920 - famine in the countryside.
1921 harvest = only 46% of the 1913 harvest - led to the deaths of around 6 million people.

Consequences of war communism - cities.

Workers fled the cities in search of food - industrial workforce declined from 2.6million (1917) to 1.2 million (1921).

What did the economic crisis of 1921 lead to?

The creation of the NEP.

Why did Lenin introduce the NEP? (political power).

Retain political power - Lenin described it as an economic retreat - designed to stop political defeat.

Why did Lenin introduce the NEP? (the economy).

Revive the economy - Lenin needed a policy that would stimulate grain production to end the famine.

What did the NEP create?

A mixed economy.

Why did Lenin introduce the NEP? (socialism).

Build socialism - hoped the NEP would generate wealth that could be used to industrialise and modernise the Sov. econ.

Features of the NEP (farming).

Farming = free market - peasants could buy, sell and produce freely requisitioning was ended - 'tax in kind' replaced it.

Features of the NEP (small factories).

Small factories and workshops = denationalised and allowed to trade freely.

Features of the NEP (large factories).

Large factories and industries remained nationalised.

Features of the NEP (money).

Money was reintroduced.

'Tax in kind'.

Tax paid with goods rather than money - a certain portion of the grain produced had to go to the government.

Consequences of the NEP - farming.

Ending grain requisitioning = extremely popular for the peasants.
Free trade encouraged peasants to grow more food - so, famine ended and farming revived.

Consequences of the NEP - industry.

Lenin authorised a major electrification campaign - revived an industry effectively destroyed by the Civil War.
Industrial recovery was slow.

Consequences of the NEP - scissor crisis.

Agriculture recovered quickly - industry more slowly = fall in price of food and rise in price of industrial goods.
Gap opened between farmers' incomes and industrial prices.

Government involvement in the scissor crisis.

Gov. = forced to step in and impose price cuts on industrial goods.

Consequences of the NEP - inequality.

Large farms prospered + small farms did less well.
'NEPmen' = traders who travelled the country selling desirable goods, growing rich - parasites to Communists.
These inequalities horrified many communists.

Consequences of the NEP - corruption.

Gambling, prostitution and drug dealing took place under the NEP - prostitution was also a result of wider social and economic problems.

Consequences of the NEP - political stability.

Ending grain requisitioning = extremely popular among peasants - began supporting the regime - a deliberate part of Lenin's policy.

Consequences of the NEP - right wing.

Right-wing supported the NEP, arguing it was a form of state capitalism and a necessary transition stage.

Consequences of the NEP - left wing.

Left-wing opposed the NEP, arguing it was allowing the problems of capitalism to re-emerge.

Consequences of the NEP - centre.

Centre supported NEP, arguing that it was helping to rebuild the economy.