Economy under Stalin

Command Economy: an economy in which business activites and the application of reources are determined by government order rather than market forces such as supply and demand. 

Also called a planned economy.

Implemented in Russia by Joseph Stalin. 

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      Names/terms

      Key dates

      Definitions

Political:

• To keep Stalin in the leadership struggle. This measure would allow him to act against the Right of the Party, who wanted to keep the New Economic Policy.
• To make the USSR more powerful, thus improving his image as its leader. 
• To compete/catch up with the west.
• Centralised control via the Vesenkha and Gosplan. 
• To get rid of the Nepmen and Kulaks.

Social:

• Increase education
• Increase size of working class
• Improve lives of workers 
• End unemployment

Economic:

• Trade with the West was reduced, so Russia had to become an Autarky- self sufficient 
• To build + modernise industry. 
• Stagnation of NEP.

Military:

• 1927: offices of the Soviet Union trade mission were raided by British forces. The government believed there would be an attack from the West. 
• Build economy to sustain an attack.
• Provide more materials for Red Army.

The First Five-Year Plan was announced at the 15th Party Congress in 1927, as a replacement for the NEP. 

Although the Soviet economy had advanced under Lenin, it was still behind the rest of Europe. 

The Five-Year Plans would remove capitalist elements from the economy, rapid industrialisation, move to socialism.

'Socialism in one country': the slogan used to describe the policy of industrialising the USSR and moving towards socialism by using the resources of Soviet Union.

Known as the 'Great Turn' because it marked a shift to a 'Command Economy'.

15th Party Congress 1927: decision to abandon NEP.

Industrialisation directed by Gosplan, the State Planning Authority.

Drive against Nepmen and bourgeoise experts. 

1928: show trials against bourgeoise experts. 

From 1928-32:

• Focused on rapid growth in heavy industry, such as coal, steel and iron. 
• Consumer goods, textiles and household goods ignored. 
• Industrial sites were built, and cities were built around them. Workers were housed in temporary huts. 
• 'Shock brigades' of skilled workers were used to set an exmaple to other workers. 
• Some reosources were located in Siberia, where nobody wanted to work. The population of the Gulags were used instead. 
• Projects built using forced-labour: White Sea Canal: used 180,000 prisoners. The canal was useless due to its depth, as it was reduced from 22 feet to 12 feet to speed up construction. 
• Lateness was criminalised, strikes outlawed.
• 7 hour work day, 7 day work week. 
• Wages pushed up to encourage workers to stay. 

Economic successes:

• Russian economy grew 14% a year. The West in comparison were suffering from the Wall Street Crash. 
• Most successful of all economic systems in Russia; more oil, coal, steel.

Political successes:

• Stalin used good production figures to show he was a good leader. 

Social:

• Urban populations trebled. 
• Members of working class promoted. 
• Workers could attend classes in technical subjects, universities opened for people with little academic qualifications. 
• 'Proletarian advancement programme': removed bourgeoise experts from their jobs and gave the postions to newly trained 'red experts'

Economic failures:

• Local administrators lied about the amount of resources they produced. This made it seem like Stalin's targets were being exceeded, when in reality few were met. 
• Quantity of quality. 
• Focus on production whilst ignoring consumption. This meant raw materials were never used. 

Political failures:

• Lack of consumer goods lead to a black market, worsened Stalin's image. 

Social failures:

• Introduced 7 day working week.
• Factories were constructed hastily, leading to accidental deaths. 
• High labour turnover as peasants and workers wandered around to find a better life. 
• Overcorwding in cities
• Water shortages.

Second Five-Year Plan from 1933-37

Third Five-Year Plan from 1938-41 (ended early due to WW2)

• Aimed to meet the threat of Nazi Germany. 
• Aimed to produce more consumer goods, but the rise of Hitler made the government decide to focus on defence, so heavy industry was top priority again. 
• Consumer industries suffered, textiles and housing industry ignored. 
• New industry set up in remote areas to spread industrialisation across the Soviet Union. 
• Footware and food production grew. 

• Production of raw materials expanded.
• Transport: first lines of Moscow Metro opened 1935.
• 1934: bread rationing ended.
• Wages for industrial workers increased.
• Defence spending rose 4%

Stakhanovite Movement: 

• Propaganda campaign to counter lack of productivity and discipline in work force.
• Media reported that Alexei Stakhanov could mine 14 times the output of a normal miner. He was rewarded with 200 roubles, a new apartment, telephone, holidays. 
• Workers were told that if they emulated him by working hard, they too would be rewarded. 

• To meet targets managers would hoard supplies, leading to scarcity. 
• Lack of spare parts meant that broken machinery stayed broken. 
• Managers lied about figures.
• Shortages of essential items. 
• Lack of household goods. 
• The 55,000 Communist Party members had access to better food, clothes and accommodation, limos, and 'secret shops' with goods not available to the public. 

In 1929, Stalin ordered all farmers to pool their land and equpiment to make larger 'collective' farms. 

Farms worked under the collective farm committee, which was under the control of the Communist Party.

The state provided tractors, fertilisers and mechanised agriculture in order to increase production. 

By 1930 'socialist agrotowns' emerged, where communities would live and work together. 

Punishments for 'enemies of collectivisation' such as Kulaks.

Motor Tractor Stations (MTS) set up to improve mechanisation. 

90% produce to the state, 10% to feed the farms. 

• More food to feed the workers in industry.
• Surplus food to sell overseas.
• Excuse to destroy the kulaks. 
• To buy new technologies and chemicals, currency was needed. 
• Farming was outdated and inefficient.

Toz:

• Peasants owned their own land, but shared machinery and co-operated in activities like sowing and harvesting.
• Common before 1930. 

Sovkhoz:

• Owned and run by the state. 
• Peasants worked for a set wage. 

Kolkhoz:

• All land run by elected committee. 
• Made of around 50-100 households. 
• Farmed together, however each household could have 1 acre of land for private farming. 
• Farmers not paid, but were credited with 'workdays'. At the end of the years wages were divided based on the number of workdays. 

Fifteenth Party Congress, December 1927: programme of voluntary collectivisation announced. 

Article 107 of the Soviet Criminal Code stated that grain hoarding was illegal. Peasants were rewarded if they informed on their neighbours. 

The use of MTS were announced to local villages. The MTS was used to provide farming machinery and new techniques to improve production. 

Peasants who refused to join were labelled 'class enemies'. 

• Violent opposition from peasants. 
• Kulaks set fire to their farms and slaughtered their animals instead of handing them over. 

Response:

'Twenty-five-thousanders' or 'dekulakisation squads' were sent from the cities. They were industrial workers who were sent to forcibly organise collectives. Kulaks were placed into 3 categories: 1) Actively hostile- sent to labour camps. 2) Economically potent- sent to distant farms 3) Others - were allowed to stay in the area, but could not work on farms. 

OGPU were used to deport kulaks. 

The Red Army were used to quell unrest. 

The peasants opposition lead to a slow-down of collectivisation, following a March 1930 article by Stalin, in Pravda. In this article, Dizzy With Sucess, he blamed overzealous local Party officials for 'excesses'. Deflected blame from himself. By June 1930, the process started again. 

• Kulaks in Smolensk were forced to pay higher taxes and higher wages for hired labourers. They were also prosecuted for grain concealment. 
• Peasant's households gave fixed quotas of grain, they were penalised or imprisoned for failure to do so. 
• 'Workers brigades' were sent in to forcibly seize grain. This caused resentment; in 1929 ten chairment and eight party members were murdered. 
• Kolkhozes were also attacked by the peasants.
• The halt to collectivisation in 1930 was well met. 
• 90% of peasant housholds in Kolkhoz by the 1930s.  

Germany's invasion:

• 1) Operation Typhoon: Germany attempted to capture Moscow. Law and order broke down in the city, rioting, looting. They were successfully pushed back. 
• 2) Operation Blue: Aimed to capture Stalingrad, as this would take an important industrial base and would be a propaganda victory. The battle lasted 6 months, over 1.9 million people died. 

Stalin's Counter attack:

• 1) Operation Uranus: Launched September 1942. German forces were driven back. and Stalin recaptured Crimea, Belarus, Latvia and Estonia. 
• 2) Russia forces entered German territory: They completely destroyed towns and villages. 
• 3) April 1945: Red Army tanks, artillery and aeroplanes reached the outskirts of Berlin. Germany surrendered to the allied forces

• He was given precise information from British intelligence + Russian spies on the timing of the attack.
• He purged the army, weakening it. Those who survived only did because they told Stalin what he wanted to hear, thereby concealing the issues in the army. 
• He ignored the advice of his generals. 
• He made himself Supreme Commander and became chairman of the High Command.

August 1939: Nazi-Soviet Pact signed

• Respect territories.
• Increase trade.
• Settle disputes through negotiations.

September 28: New Pact signed

• Russia gave Germany more of Poland, and Russia got Lithuania. 
• Russia also provided Germany with grain and raw materials, which were integral to Hitler's plans.

Reasons for this:

• Stalin wanted to buy time.
• France and Britain were uninterested in an alliance. 
• Wanted to recapture territory owned by the Tsar. 

The Grand Alliance:

• Formal pact between United States, United Kingdom, Soviet Union.
• Lend-Lease: USA supplied Britain and Russia with resources. They provided food, aeroplanes, tanks and artillery. 

War Economy:

• Gosplan: State Planning Committee, repsonsible for economic planning. 
• Industry relocated so that it could not fall into enemy hands. 

Nationalism:

• Named the 'Great Patriotic War'.
• Stalin called on the people to protect the 'Motherland'. 

• German invasion strained resources.
• Centralisation of economy helped to co-ordinate war production. 
• Defence Committees at a local level. 
• Factories converted to production of war materials. 
• Little production of consumer goods. 
• 25 million left homeless. 
• 26 million losses during WW2, 20 million wounded. 

From 1946-195

Aim: To restore the economy to pre-war levels. 

Changes:

• Machinery taken from East Germany.
• Trade agreements signed with Soviet-dominated governments of Eastern Europe. 
• Retraining programmes gave workers basic skills to get jobs. 
• Focus on heavy industry. 
• Consumer industry negelected. 

During the Cold War:

• Increase in military spending. 
• Reconstruction of factories.

Successes:

• Industrial production recovered.
• Central planning allowed government to redirect wartime labour towards reconstruction. 
• Metal and heavy engineering industries successful as focus was on arms. 

Failures:

• Consumer industry negelected.
• Failure to adopt new technologies and chemicals. 

• 'Link' systems were created where small groups of peasants were responsible for areas within a collective farm. 
• When targets for food production were met, they could sell the rest for profit. After the war this system was abolished. 
• Supervision of agricultural resources went to the MTS.
• By 1952, 100,000 collectives had been created. 

• Emergence of Cold War resulted in an increase in arms expenditure. 
• Resources used for large building projects.
• Housing conditions improved.

Stalin's Prestige Projects:

• 1) The Dnieper Canal: provided energy for steel and aluminium industries in the region
• 2) The Volga-Don Canal: Not successful as it was placed in an area of low traffic. 
• 3) The White Sea Canal: Linked Leningrad to the White Sea. 10,000 died during its contruction. Failed because it was made shallower to save money and time, which meant that it froze over during winter.

Stalin's 'Revolution from Above' established the basic nature of the soviet economy, however it determined the main problems for future leaders: low labour productivity, unproductive agricultural sector, inefficient industry, scarce consumer goods, military spending. 

Changes:

1) Plateau in industrialisation under Lenin → 18.30 million tons of steel compared to 4.00 in 1927

2) NEP was capitalist → Command economy was the path to communism.

3) Rapid growth in heavy industry during First Five-Year Plan → Focus on arms spending.