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
- October 1917 Land Decree
- 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
- Why was it introduced?
- 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
- Why was it introduced in 1921
- Initial Economic Policy - 'State Capitalism'
- 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
- Large industrial centres like Magnitogorsk were built, which later became large cities/
- Focus
- 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
- Focus
- 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
- Results
- 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
- Reasons for introduction?
- 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
- Focus
- 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
- Focus
- 1st Five Year Plan: 1928-32
- 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
- 1957 - 105 Regional Economic Councils
- 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
- 1957 - 105 Regional Economic Councils
- 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
- Consumer goods became more abundant which Standards of Living increasing
- Focus
- 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
- Individual collectives
- Initial Economic Reforms in industry
- Brezhnev & Andrapov
- Further Reforms
- Industrial Complexes
- Joined with scientific research institutes to ensure the latest technology in 1873
- Centralisation of the system of targets
- Industrial Complexes
- 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
- Focus
- 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
- Decentralisation schemes reversed
- Attempted Reforms under Andrapov
- Improve Labour discipline
- Spot checks for slackers by Government officials
- Sought to remove corruption
- Improve Labour discipline
- Further Reforms
- 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
- Growth Rates
- 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
- Stalinist system
- Evidence
- Lenin
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