Russian History: Theme 2 - Economy

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  • Created on: 04-04-18 16:06
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  • Russia History: Theme 2 - Economy
    • Lenin
      • Initial Economic Policy - 'State Capitalism'
        • October 1917 Land Decree
          • Abolished private ownership of land and put it in the hands of the people.
        • November 1917 Decree on Workers' Control
          • Placed control of the factories in the hands of the industrial workers
        • All banks nationalised into the People's Bank of the Russian Republic
        • Supreme Council of the National Economy (Vesenkha) set up
          • Set up to supervise the economy
          • Lenin's measures had led to huge pay rises, poor productivity and the violent removal of managers
      • War Communism
        • Why was it introduced?
          • The application of a Communist ideology.
          • Ensure the Red Army was well supplied
          • Economy was in a state of collapse
          • Response to the problems of early decrees, like the fact that giving control to the workers proved too idealistic
        • Key Features
          • Nationalisation of all industry, which were then placed under the control of Vesenkha
          • Reintroduction of hierarchical structures in industry to instil discipline
          • Private trading banned, all trade put under control of the state
          • Money replaced by bartering due to massive inflation
          • Forcible requisitioning of food from the peasantry
          • Introduction of Rationing
      • New Economic Policy
        • Why was it introduced in 1921
          • By the end of the war, industry had ground to a standstill, and so the economy needed to be considered
          • Aspects of War Communism were hated. Rationing was hated, due to the size of rations being dependent on the persons class
          • Forced Requisitioning had led to the Tambov Rising in 1920-21
          • Many sailors revolted against the centralisation of power at the Kronstadt Mutiny in 1921
        • Key Features
          • Requisitioning was replaced by a system of taxation.
          • No forced programme of collectivisation. The mir (village commune) would stay the same
          • Small-scale industry returned to private hands, except heavy industry. banks and transport (the commanding heights)
          • piecework and bonuses were used to raise productivity
          • Reintroduction of the currency to pay wages
          • Legalisation of private trading to stop the growing black market
        • Effects and Impacts
          • Many saw NEP as a retreat back to Capitalism
          • Growth of Nepmen, those who gained under NEP
          • Left-Wing hostile of the policy
          • Industrial Output rose rapidly in the first 3 years
    • Stalin
      • 1st Five Year Plan: 1928-32
        • Focus
          • Rapid growth in heavy industry, such as coal, steel and iron.
          • Consumer industries were neglected
          • Need to build up industrial infrastructure of factories, communication networks and plants
        • Results
          • Large industrial centres like Magnitogorsk were built, which later became large cities/
            • Worker facilities were poor
            • Did not make a significant impact till after 1934
          • Shock brigades to set examples to workers
            • Alexei Stakhanov was a model worker
          • Diversion of prisoners to mines, railways etc.
            • 180,000 employed for the White Sea Canal
          • Quality often sacrificed due to rush to fulfil targets
      • 2nd Five Year Plan: 1933-37
        • Focus
          • Initially set targets for consumer goods
          • Rise of Hitler led to heavy industry to be prioritised again for defence
        • Results
          • Learnt from the chaotic 1st FYP and put technical expertise to use
          • Industrial centres started producing
            • Coal production rose 6-fold
            • Chemical industry made progress
            • Oil production lagged behind
            • 4-fold increase in steel production
          • New industry located in more remote areas like Kazakhstan to promote an even distribution of industrialisation
          • Period of 1928-41 saw a 17% growth rate, but it was unbalanced
          • Advance in Consumer goods under 2nd FYP
            • Food processing made significant increases
      • 3rd Five Year Plan: 1938
        • Results
          • Learnt from the chaotic 1st FYP and put technical expertise to use
          • Industrial centres started producing
            • Coal production rose 6-fold
            • Chemical industry made progress
            • Oil production lagged behind
            • 4-fold increase in steel production
          • New industry located in more remote areas like Kazakhstan to promote an even distribution of industrialisation
          • Period of 1928-41 saw a 17% growth rate, but it was unbalanced
          • Advance in Consumer goods under 2nd FYP
            • Food processing made significant increases
        • Focus
          • Arms production due to threat of German invasion
      • Collectivisation
        • Reasons for introduction?
          • Industrial development was only possible if supported by an increase in agricultural production
          • Collective farms could create economies of scale
          • Extend socialism to the countyside
        • Process
          • It began in 1927 with voluntary collectivisation at the 15th Party Congress
          • Stalin went on to liquidate the Kulaks by sending Party officials to villages to organise collective farms
          • Farmers were promised machinery through Machine and Tractor Stations (MTS)
          • Opposition led to dekulakisation squads which forcibly organised collectives
            • Those who didn't cooperate were sent to the gulag
          • By 1937, 93% of households were collectivised
        • Results
          • Removal of kulaks were damaging as they were the most productive
          • Opposition damaged productivity
            • Grain production fell
          • Supply of machinery and tractors were slow
          • Slaughtering of livestock by the kulaks halved the number of cattle between 1928-33
          • Forced requisitioning led to huge famine in areas like Ukraine in 1932-33
      • 4th Five Year Plan: 1946-50
        • Focus
          • Economic Reconstruction
          • rigid state control was enforced
          • Stalin could now exploit Eastern Europe
        • Results
          • Retraining programmes ensured workers had the skills for jobs in demand
          • Industrial production had recovered quickly, especially metal and heavy engineering
          • Consumer industry remained neglected
      • 5th Five Year Plan: 1951-55
        • Focus
          • Achieve continued growth at a more realistic pace
          • Emergence of the Cold War meant an increase in arms expenditure
        • Results
          • Living standards started to recover
          • Growth in over industries were less impressive
    • Khrushchev
      • Initial Economic Reforms in industry
        • 1957 - 105 Regional Economic Councils
          • Supervise enterprises
          • Move decision-making power to regional levels
        • Reduction of working hours
          • Reduced from 48 to 41 by 1960
        • Managers of Industrial Enterprises
          • They were given more influence
          • Allowed to keep some profit to invest with
      • 7th Five Year Plan: 1959-65
        • Focus
          • Discovery of new minerals encouraged a push in the fuel and chemical industries
          • Shift of emphasis from coal to oil and gas
        • Results
          • Consumer goods became more abundant which Standards of Living increasing
            • Quality of goods remained poor
          • Initial Economic Reforms in industry
            • 1957 - 105 Regional Economic Councils
              • Supervise enterprises
              • Move decision-making power to regional levels
            • Reduction of working hours
              • Reduced from 48 to 41 by 1960
            • Managers of Industrial Enterprises
              • They were given more influence
              • Allowed to keep some profit to invest with
          • First Space Satellite 'Sputnik' launched in 1957
          • Annual growth rate in the 50's: 7.1%
            • This had slowed down by 1964, leading to the reduction of spending in areas like consumer foods
          • Poor labour productivity, inefficiency and waste remained
          • His reforms faced strong resistance from the Party bureaucrats and the influence of the military-industrial complex
      • Measures to agriculture
        • Individual collectives
          • They were given greater power and flexibility
        • Machine & Tractor Stations
          • Abolished
          • Replaced by a system that expected peasants to buy their own machinery
        • Collectives increased in size
          • Many became agro-industrial villages that linked food production with processing
          • Created greater economies of scale, and a rapid increase in machinery. fertilizer etc
        • Individualism to Peasants
          • They were allowed to sell produce from their own private plots at private markets
          • Encouraged peasants to grow more food
        • 1954 Virgin Lands Scheme
          • Volunteers from Komsomol sent to more remote areas like Sibera to open them up for agricultural production
          • 6 million acres were brought under cultivation
        • Impact on Agricultural Production
          • The failure to meet targets signalled the failure of the VLS
          • Investment was inefficient in solving the problem of years of under investment
          • Poor harvest in 1963
          • Shortage in harvest led to millions of livestock being slaughtered
          • Wages for farmers doubled, but still remained low compared to industrial workers
    • Brezhnev & Andrapov
      • Further Reforms
        • Industrial Complexes
          • Joined with scientific research institutes to ensure the latest technology in 1873
        • Centralisation of the system of targets
      • 9th Five Year Plan: 1971-75
        • Focus
          • The emphasis on consumer goods continued under Brezhnev
        • Results
          • Growth of consumer goods higher than heavy industry
          • Goals not fulfilled
          • Standards of Living rose
            • By 1980 85% of families had TV
      • Agriculture
        • Decentralisation schemes reversed
          • Power returned to Ministry of Agriculture
          • VLS was dropped
          • By 1976 26% of investment went to agriculture
          • Bigger role allowed for peasantry
      • Attempted Reforms under Andrapov
        • Improve Labour discipline
          • Spot checks for slackers by Government officials
        • Sought to remove corruption
    • Economic Decline
      • Evidence
        • Growth Rates
          • 1950''s had seen a growth rate of 7%
          • This dropped to 5% in the 60's, and to just 3% in the 70's
        • Quality sacrificed for quality
          • Shoddy goods for a constant complaint from the population
        • Poor productivity
      • Reasons for decline
        • Stalinist system
          • Under Stalin, the economy had been geared towards rapid industrialisation in the 1930's. and then reconstruction after WW2
          • Under Stalin, the system had become highly centralised
          • Those who owe their position to Stalin's system were resistant to change
        • Command Economy
          • The economy was planned by Gosplan, which was too rigid and inflexible for a complex modern economy
          • Central planners couldn't cope with change
        • Lack of investment
          • Investment in agriculture wasn't enough to address the serious under investment in previous years
          • agricultural machinery were in short supply
        • Outdated Technology
          • By the 1980's. the USSR were struggling to cope with western technological advances
          • Outdated methos persisted
          • By 1980, tech was old and worn out
        • Military-industrial complex
          • Used up 18% of Soviet resoures
          • Brezhnev Doctrine of intervention meant that expenditure on arms and defence were necesssary

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