Russian Economy

From Bunge to Stalin and the five-year plans

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  • Created on: 14-01-12 19:16
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Alexander III:
Russia the most economically underdeveloped in Europe
o Mainly based on agriculture
o Difficult to sell enough grain at export to raise money for large-scale industrial
development
o Needed to improve to maintain position as a Great Power
o Only small areas of industry ­ Ukraine, Moscow & St Petersburg
Ivan Vyshnegradsky introduces a financial incentive for peasants to migrate to the Eastern
lands of Siberia
Vyshnegradsky began to finance Russian economic development from foreign loans (France
& Britain)
1892-1914 (Mainly Tsar Nicholas II)
In the 1890s Russia experienced an industrial expansion "Great Spurt", Count Sergei Wittte
Railways
o 5,800 km between 1961-1890 but rate accelerated to produce a national system of
59,616 km by 1905
o Trans-Siberian Railway
o 1908-13 slowest rate of growth since 1880s
o Railway network totalled 62,200km compared with USA 411,000km
o Other forms of communication inadequate
o Only major inner-city roads matched up to European standards
o Merchant Marine was small - meant most of Russian trade travelled in foreign ships
Foreign Trade
o Major feature of pre-1914 industrialisation
o Steady increase in exports & imports
o Exports mainly agricultural produce
o Balance in industrial goods was to Russia's disadvantage
o Heavily involved with Germany, followed by Great Britain
Impact on living condition
o By 1900 half of industrial workforce was employed in factories
o Large cities grew quickly
Heavy Industry
o Not very industrially developed
o 1910 ­ only 30% of Russia's national production was industrial
Had increased rapidly
o During 1890-1912 faced serious foreign & domestic disruptions
o Different Russian areas developed differently
o Textile production produced 40% of Russia's industrial output in 1910
Foreign Investment
o Vast amounts of foreign powers and individuals involved themselves in Russian
industry
o About half went into mining & metallurgical industries
o By 1900 as much as 90% of the finance behind these sectors came from foreign
investment

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Oil production & banking were the next largest recipients of foreign funds
o France's input was 33%
o Great Britain 23%
o Germany 20%
o Belgium 14%
o USA 5%
The Counter-Revolution 1906-14 (Stolypin's)
Land reforms to encourage higher production, aimed to encourage Kulaks to become
efficient producers
o Allowed them to consolidate their land into one holding & buy up the land of poorer,
less efficient peasants
o Production increased, leading to record harvests by 1913
1906 ­ freed peasants from control of the…read more

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City population decreasing
o Wages less
o Black market grew
o Transport collapsed
Impact on life
o Cheka
o Fuel short ­ no heating
o Sanitary conditions poor
o Black market & bagmen
o Townhouses taken over
o Revolts/strikes
o Mutinies e.g.…read more

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More appealing to the left0wing than importing grain
Ideological reasons:
Essential if peasants were to embrace socialism
Economic reasons:
Prospect of economic benefits
Greater efficiency meant less people needed to work, releasing manpower for developing
industry
Promised significant increase in production
Economic Success:
By 1941 all farms were collectivised
The amount of grain procured and exported by the state increased
Economic failures:
Economic chaos
Labour productivity in rural areas declined
Failed to raise agricultural production
Number of animals dropped
Cost was astronomical
Value of wages…read more

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Ideological causes:
Socialism was only possible in a highly industrialised nation
Believed revolution should serve working class (wanted workers to prosper)
Political causes:
Inspired by collectivisation
Want a reputation to surpass that of Lenin
Concerned Russia unable to defend self
The First Five-Year Plan: (1928-32)
Aims: heavy industry
Success:
Economy grew
In terms of iron, steel, coal & oil plan outperformed any previous economy
Urban population trebled
Members of working class promoted
Failures:
Meetings targets (unrealistic targets)
o Large scale fraud
o Officials demoted if…read more

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Defence spending rose
Failures:
Little cooperation between different branches of industry
Factory managers hoard resources
Poor coordination
Fear lead to lying
Shortages of essential items
1931 Govt outlawed private production of shoes
Housing & amenities failed to improve
Social inequalities
The Third Five-Year Plan: (1938-41)
Aims: heavy industry, rearmament & creation of a war economy
Success:
Rearmament
o Initiated a number of important innovations in Soviet technology
o Stalin took direct control of defence industry
o Central committee decreed all of the country's resources should…read more

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