Theme 2 - Industrial and agricultural change, 1917-85

How did the government exercise control over the economy between 1917 and 1928?

The nationalisation of industry

• Lenin had no real plan for the transistion, so resorted to trial and error
  
• They first resorted to 'State capitalism' - a transitional phase which kept on bourgeoisie experts
• There was also the issue of retaining control once the peasants had the power
• The key measures of Lenin's initial policiy were:
• October 1917- 'Land decree' abolished private ownership of land - pleased peasantry
• November 1917 - 'Decree on Worker's control' - factories controlled by workers
• December 1917 - Banks nationalised - merged into 'People's Bank of the Russian Republic'
• Power given to the workers and peasants was bad for economy - inflation and less production
• December 1917 - Supreme Council of the National Economy (Vesenkha) set up to supervise economy
• Was a tension between proletariat and government

War communism and the NEP

Why was War Communism introduced?

• Ideological - They saw WW1 as a destruction of the old world which gave way for Marxism. Nationalism was a way of realising this dream. It was a liberation from capitalism
• Response to economic collapse - Drastic measures were needed to win civil war after WW1
• Reaction to early Bolshevik excesses - The initial Bolshevik decrees didn't work very well

What were the key features of War Communism?

• Nationalisation - only workplaces with less than 10 workers were exempt
• All industry placed under control of the state through Vesenkha
• Hierarchical structures in industry - managers instilled discipline into workers
• Military-style discipline - Execution for those who striked. Volunteering expected
• Private trading banned - Trade controlled by state; however black market thrived
• Money replaced by batering because of inflation
• Forcible requisitioning of food - Seized food from peasants which led to tension and violence
• Rationing - Despite food shortages, workers in city and Red Army were fed
• War communism helped Red Army win war, but left economy in state of collapse

Why was the NEP introduced in 1921?

• Economic considerations - Industry and agriculture production was very low. There was a huge famine and soliders had to be resettled into civilian life
• The unpopularity of War Communism - rationing was unpopular among bourgeoisie and peasants. Introduction of managers unpopular with workers
• The Tambov Rising - peasants reacted violently to the seizing of grain. Revolt was put down by a huge military force. This was among other revolts that showed the need for change
• The Kronstadt Mutiny - Previously loyal sailors revolted because of the increasing control of the Bolsheviks - shocked Lenin as they were big part of revolution

What were the key features of the NEP?

• End to requisitioning - replaced by taxation so peasants could sell remaining food at a profit
• No more forced programme of collectivisation
• Basically a compromise with the peasantry
• Small-scale industry privatised
• In SOEs, piecework and bonuses were used to raise production
• Reintroduction of currency in 1921
• Legalisation of private trading (to stop black markets)
• Development of 'Nepmen', small-scale business owners…