Industrial and agricultural change, 1917-85

The Land Decree

The Land Decree

• October 1917, abolished private ownership of land, to be in the hands of the people.

The Decree on Workers’ Control

• November 1917, placed control of the factories into the hands of the industrial workers.

Peoples bank of the Russian Republic

• 27th December, all private banks nationalised

Why War communism was introduced

• The ideological basis: aligned with the aim of Bolsheviks to abolish private enterprise.

• The response to the reality of economic collapse: The economy was in collapse, key element of state direction of the economy.

• A reaction to early Bolshevik excess: War communism being a response to the earlier rush of Bolshevik decrees.

The key features of War Communism

• Nationalisation of all industry without compensation

• All industry placed under the control of the Supreme Council of National Economy.

• Reintroduction of hierarchical structures in industry.

• Harsh military-style discipline introduced in factories.

• All private-trading was banned.

• Money replaced by bartering using goods.

• Forcible requisitioning of food from peasants in order to feed the army.

• Intro of rationing to make sure workers were fed.

Consequences of War communism

• Ensured the Red Army got the resources needed to fight and win the civil war.

• Left the economy in a collapsed state, 1921 industrial production one-fifth of the figure in 1913.

• Disease and starvation

Why the NEP was introduced in 1921

• Economic considerations- Production of industry fell to 20% of its 1913 level by the end of the war. Food production fell only 48% of the 1913 figure, breakdown in transport led to a famine. 20 million people died from famine/disease in the 1920s.

• Unpopularity of War Communism

• The Tambov Rising- Peasant uprising in 1920-21. Tambov Rising in central Russia peasants violently reacted to requisitioning teams.

• The Kronstadt Mutiny- Mutiny was over the increase in the power of the Party and it’s officials at the expense of the workers.

Key features of the NEP

• Agriculture: end to requisitioning and no forced collectivisation

• Industry: Legalisation of private trade, developed Nepmen, return small-scale industry to private hands

How successful was the NEP

• Rapid increase in industrial output

• Corruption from the black-market

• Widespread prostitution

• Imbalance between agriculture and industrial goods, food prices fell prise of industrial goods rose, discouraging peasants from growing food for the market ‘scissors crisis’

First Five Year Plan

• 1928-32

• Concentrated on rapid growth in heavy industry, saw an enormous growth in industrial production

• Consumer industries were neglected, justifying this was that it needed to focus on building up industry and communication networks.

Second Five Year Plan

• 1933-37

• Initially set higher targets for production of consumer goods

• Coal production rose (1927 35.4 million tons- 1937 128 million tons)

• Hitler rose focus on defence

• Heavy industry focus continued

Third Five Year Plan

• Launched 1938

• Directed to arms production to meet the threat of Germany

• 1928-41 saw a 17% growth rate, progress was unbalanced

Reasons for Collectivisation

• Industrialisation could only be achieved if agriculture was more efficient, because an increase in population would need to be fed, export of food to obtain foreign exchange.

• The economy: collectives in large farms would create economies of scale. Use of machinery would increase production.

• Politics: Extend socialism to the countryside. Get rid of the Kulaks (rich peasants).

Results of collectivisation

• Devastated the economy, removing kulaks was damaging as they were the most productive farmers, 1928-33 population of cattle halved due to the kulaks slaughtering them. 1930- 52.5 million 1933- 38.4 million

• Grain production fell in 1928 73.3 million tons to 67.6 million in 1934.

• Widespread famine 1932-33

Fourth Five Year Plan

• 1946-50, economic reconstruction

• Large industrial plants needed to be rebuilt

• Aimed to restore the economy to pre-war levels

• Focus on heavy industry

The Fifth Five Year Plan

• 1951-55

• Aimed to achieve continued growth

• was slower and more realistic

• Emergence of the Cold War led to increase in arms expenditure

Light Industry

• Khrushchev wanted to focus economic policy away from heavy industry into light industry, chemicals and consumer goods.

• Khrushchev made the following reforms: working week reduced from 48h to 41 1960, Managers of industrial enterprises were given more influence in factories, emphasis of vocational education.

Sixth and Seventh Five year plans

• Sixth (1956-60) development of the Virgin Land Scheme

• Seventh (1959-65) shift from coal to oil and gas, light industry, footwear and housing.

• Quality of the goods were poor, 1964 economic growth slowed

Virgin Land Scheme and results

• 1954, encouraged the opening of new areas to agricultural production

• Volunteers, young communist league were put to work in areas like Siberia and Kazakhstan

• 1952-58 incomes of farmers doubled

• 1953-58 food production increased by 51%

• Failed grain production target in Kazakhstan, poor harvest 1963

Ninth Five year plan

• 1971-75, Brezhnev push for greater consumer goods

• Greater increase in consumer goods than heavy industry

• Better living standards, 1980 85% of families had a TV

Economic Decline

By the 1980s economic growth in decline. The 1950s growth rate 7%. 1960s growth rate of 5%. 1970s decline to 3%.

Reasons for economic Decline ‘Legacy of the stalinist system’

• Legacy of the Stalinist System (Stalinist approach was towards rapid growth in industrialisation. However, this move was difficult to achieve)

Reasons for economic Decline ‘Problems inherent in a command economy’

• Central control did not encourage initiative and creativity in the system

• Production of everything was decided by central planners

Reasons for economic Decline ‘The social contract’

• The contract between government and workforce in a failure to grasp the issue of inefficiency.

• Resulted in large numbers of workers doing very little of real productive use

Reasons for economic Decline ‘Lack of investment’

• Investment in agriculture increased during Khrushchev and Brezhnev years but was not enough to address the chronic underfunding from Stalin’s era

Reasons for economic Decline ‘Outdated technology’

• Soviet successes were in areas that advanced economies were moving away from and were becoming outdated i.e steal, coal

• The USSR was behind in areas that the post-industrial nations were now developing (computers and microchip technology)

• Brezhnev’s policy of coupling industries with scientific research centers in the 1970s helped but not solve the issue.

Reasons for economic Decline ‘Dominance of the military-industrial complex’

• soaked up 18% of Soviet resources and employed 30 million people out of a working population of 150million