Russia: Industrial and Agricultural change 1917-85

• Lenin's economic objectives: (often but pragmatism above ideology)
• Modernisation: Socialism required advanced technology
• Consolidation: Economic Stability
• Military victory: Supply the Red Army
• Destroying capitalism: Ending inequality 

• State Capitalism: Nationalisation of industry, March 1918
• Stage between Capitalism and Socialism
• Control of industry to the Vesenkha which established:
• Worker discipline & Proper management 

• War Communism Summer 1918 
• Nationalisation of all industry 
• Food dictatorship 
• 11-hour working day, men aged 16 to 50
• Hyperinflation, private trade illegal 
• Consequences: Destroyed incentives to work
• Famine 1920 countryside, 1921 harvest 46% of 1913 harvest 
• 6 Million deaths, Ind. Workers 2.6mil 1917 to 1.2mil 1921

• Reasons: Retain political power 
• Revive the Economy- Needed to stimulate grain production
• Build Socialism- NEP would build generate wealth for industrialisation 

• Compromise of the NEP
• Farming left to free market, Grain requisitioning ended 
• Small factories could trade freely 
• Large Factories remained nationalised 
• Money reintroduced 

Consequences of the NEP

• Farming: popular w/peasants, famine ended, grain production 1921 37.61mil to 1926 76.8mil
• Industry: Economic growth, back to 1913 levels, the best way to industrialise 
• Scissor Crisis, 1923 Gap between Ag income & Ind prices were a crisis. Gov forced to cut PL
• Inequality: NEPmen arrested for profiteering, Corruption grew in 1920s
• Political Stability, peasants supported 
• Divided party, left oppose, centre support for economy, right support as transition

FYP formed by GOSPLAN and set targets for the industry (plans were more like targets)

• Reasons: Ideology- Abolish capitalist markets
• Economics- NEP failed further industrialisation
• Military- Needed to prepare for war against Capitalist countries
• Political- Won support of left wing.
• Aims:  Build up heavy industry (catch up 100 years in 15), Rearmament 

• 1stFYP October 1928-December 1932
• 2ndFYP January 1933-December 1937
• 3rdFYP January 1938-Jue 1941

Nature of plans:

• Focus on heroic objectives
• celebrated successes
• Plans led to destruction of capitalism
• Massive propaganda 

• Heavy industry:
• Electricity 10 fold increase
• Coal and Steel 5x increase
• 3 fold increase in oil production
• Transport
• Moscow's first train lines 1935
• Labour Productivity 
• 1stFYP very low, 
• Consequential Stakhanovite movement 1936: Rose by 25-50% 
• Rearmament 
• By 1940, 1/3 of gov. spending was on rearmament

• Low quality, 40% wasted 
• Lack of consumer goods 1938 ques of 6000 in Leningrad
• Poorer living conditions than the NEP
• Black Markets due to lack of consumer goods

• Causes: ideology- Communists wanted to end private ownership
• Economics- Allowed gov to take more wealth from farms, which could be invested
• Failure of NEP- Ag. production fell in 1927, food shortages 
• Political- Lenin won the support of left 

July 1928 NEP ended after Kulak grain strike

By 1930 100% success of full-scale collectivisation. 

Consequences:

• Falling production- 73mil tons of grain 1928 to 68.4mil 1933
• Dekulakisation 1.5mil sent to labour camps 
• Famine- Ukraine, Stalin seized livestock 1932-33 5 million deaths
• Mechanisation- 75,000 tractors had little impact 
• Grain Procurement- 1928 10.8mil, 1933 22.6mil. Exports rose to 5mil by 1931
• 90kilos per hectare less efficient than private farms 

• Economic Consequences of WW2:
• 25mil homeless
• Industry producing 1/3 of 1940 
• Agriculture producing 1/2 of 1940
• Fourth Five Year Plan 1945-50
• Industrial Recovery:
• 90% of investment in heavy industry 
• by 1950 producing more coal, oil, electricity, iron and steel than 1940
• By 1950 The fastest growing economy in the world

• Military Spending 
• 1952 25% of govt spending
• 1949 first atomic bomb

• Economic Problems
• Inefficient, unproductive workers
• Light industry did not grow, consumer goods also scarce
• Low productivity due to lack of incentives 

• Incentives- farmers income increased by 250% (due to higher prices)
• Virgin Lands Scheme- Sept 1953, increased land sown from 18.2mil 1953 to 97.4mil 1964
• Investment- artificial fertilizer, tractors, boosting production 30%
• Soviet agricultural budget 3% 1954 to 12.8% 1959

Successes: Ag production increased by 35.3% 1954-58 (over promise to produce more than US by 1930, 300% increase in four years)

• Problems: 
• Inefficiency- Virgin lands scheme required irrigation, Cost of production high
• 50% of Pop in Ag, US 5% yet doubled USSR production
• Slow Growth- 1959-64 15% growth
• Central farming didn't understand farmers needs
• Contradictory reforms caused confusion
• Food wasted due to storage

Brezhnev 1964-85

• Authorised large imports, selling oil allowed this due to high oil prices

Industrial Problems:

• Military Spending- limited funds for industry 
• Comand Economy- couldn't create sophisticated goods e.g. cars, radios
• Inefficiency- wasted resources instead of modernisation 
• Seven-Year Plan January 1959 
• Aim: increase production of consumer goods
• Production of chemical fertilizers such as Corn Campaign (caused animal food to drop 1958 30% to 1964
• Successes: Production of consumer goods rose to 5% below target
• Chemical production 20% below target
• Problems: 1957 decentralised economic planning. 1958-64 re-asserted central control (Confusion)
• Changed targets in 1962, too ambitious 

Economic Decline

• By 1980 growth was almost 0 
• Refusal to change, 1964 last economic reforms
• Brezhnev increased military spending 

Soviet economy 1964-85

• Abandon promise of communism by 1980
• Achieved better standard of living by: 
• Subsidising prices- prices low, caused excess demand
• The second economy- Brezhnev tolerated black markets

Andropov Reform

• Operation Trawl- KGB cracked down on drunkenness and absenteeism 
• shortlived did not fix productivity
• By 1985 economy was stagnant