Towards a Command Economy 1917 - 1928

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  • Towards a Command Economy 1917 - 1928
    • Nationalisation of Industry
      • Marx was vague about the nature of a future communist society
      • Communism needed an advanced economy, however it was unsophisticated and backward, less developed than Europe and shattered during WW1.
      • Lenin called his economy 'state capitalism' as it was in between capitalism and communism, however country was not strong enough to implement full socialism
      • Lenin's view of a socialist economy included; highly efficient, well educated, expert management, disciplined workers
      • Nationalism took industry away from middle class owners and was run by National economy (Vesenkha)
        • This ensured factories were well managed under control of well paid specialists, Co-ordinated economy to meet needs of new society
        • Only large industry was nationalised, small industry left alone
          • State capitalism was unpopular, little difference to before revolution. Many rejected in favour of workers control. Nonetheless it was enforced until the civil war
      • Land reform introduced to win popularity, land was took from churches and aristocracy and given to peasants
    • War Communism
      • emergency economic measures created to ensure victory in civil war
      • Designed to ensure; high production of war goods, efficient allocation of workers, high levels of food production
      • Food dictatorships introduced; grain requisitioning (seized grain from peasants without payments), rationing (less food to rich)
      • Labour discipline; 11 hour work days, compulsory work 16 - 50 year olds, harsh punishments for workers
      • abolition of market; abolition of money (due to hyperinflation), abolition of private trade, complete nationalism, conscription
      • Red army was supplied so won civil war, but led to economic collapse
      • Requisition led to low agricultural output, industrial output low, workers fled to farms where they might find food (3 million to 1.2 million)
      • Black market was used more 60% food came from it, workers stole
      • Russian economy was near collapse, mass poverty occurred, lack of fuel, lack of food, 6 million died
      • Political crisis occurred, peasants rebelled, sailors mutinied, government responded harshly
      • In order to save revolution, Lenin was forced to accept economic compromised
    • New Economic Policy
      • NEP was introduced because; retain political power, economic retreat to protect political defeat, To revive the economy (increase grain production end famine), build socialism without foreign aid (no european revolution)
      • Lenin believed war communism was the correct economic foundation, made peace with peasants, use capitalist methods to achieve communist goals
      • The NEP ended war communism, created mixed economy; agriculture left to free market (taxed), small factories denationalised, large factories remained nationalised, money reintroduced
      • Stable currency needed for factories, workshops and government run industry to make profit, people were expected to pay for services, e.g transport
      • Inequality and widespread corruption arose, Nepmen profited, gambling, prostitution and drug dealing took place
      • Industry grew slowly (more funding), but reached 1913 levels, build socialism with capitalist hands
      • However Scissor crisis occurred as agriculture grew rapidly, industry slowly, a gap opened between farmers incomes and industrial prices
        • Government subsidised industry, but meant little money could be spent on economy, NEP failed.
      • NEP led to political and economic stability, no rapid industry growth, no support from left
    • State Control of Industry and Agriculture
      • Debate on correct policy to use when Industrialising Soviet Union
      • Left; radical social policy, Right; continue NEP,   Centre; back whatever worked
      • Left wanted Dictatorship of industry; full collectivisation, low popularity with peasants
        • Right wanted to build socialism with capitalist hands; industry growth would happen slowly, gave peasants independence and happy, but threatened a return to capitalist class
          • Centre; whatever worked; practical position, could change approach
      • Left congratulated war communism as being true socialism, NEP was lost sight, Right however called war communism extreme measure that caused Chaos and rebellion
      • Right won economic debate until NEP failed, Stalin took left approach that was popular
      • Economic policy went through a series of changes, showing the lack of detailed plan, war communism created political and economic crisis, NEP meant left wanted change, only caused slow growth, so Stalin initiated economic revolution.

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