Russia- Theme Two


Nationalisation of Industry

Lenin believed that Socialism was possible in Russia in 1917.

The nationalisation of industry

  • Lenin argued that the revolution had destroyed capitalism, however the econmony was not yet strong enough to start building socialsim. New Phase= state capitalism
  • Lenin's state capitalism economy was based on nationalisation of industry.
  • Nationalisation ended capitalism by taking industry away from middle-class owners.

Land Reform

  • In order to win support and stimulate agriculture, land reform was introduced by Lenin.
  • Land Decree (Oct '17) abolished all private ownership of land.
  • Land reform was extemely popular with the peasants- they were allowed to own the land they worked on.
  • Large estates were broken up.
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War Communism

War Communism- ensure Communist victory during the civil war.

War Communism ensured;

  • High levels of industrial production of war goods
  • Food production to feed soldiers, workers, and civilian population.

'Food Dictatorship'- Series of measures to ensure food was available for soldiers and workers.

  • Rationing and Grain Requistioning

Labour Discipline- War communism entailed intesnse labour discipline

  • 1918- workind day increased to eleven hours
  • 1919- work made compulsory for able-bodied people between 16 & 50 yrs old.
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War Communism (continued)

Abolition of the Market- Conditions of the Civil War led to the breakdown of the exisiting market. Measures were introduced to try and abolish the market;

  • Abolition of money- led to hyperinflation.
  • Abolotion of trade- Private trade was made illegal 
  • Complete nationalisation- All bussiness taken over by the state

War Communism succeeded in ensuring Red Army stayed supplied and allowed them to win the Civil War, however it led to economic collapse and failed to abolish the market.

Econmoic Collapse

  • Grain requestioning= lower rates of agricultural production. peasants were not paid for their grain or labour so had no insentive to work.
  • Industrial production declined, as there were very few insentives to work harder.
  • Industrial workforce declined as a result. 1917= 3 million workers, 1922- 1.2 million workers.

Mass poverty- 1921 harvest was 46% of 1913 harvest. Led to famine in rural areas and 6 million deaths.

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New Economic Policy

Introduced by Lenin to; retain political power, revive the economy and build socialism.

The NEP ended War Communism, creating an econmoy with a mix of socialist and capitalist elements.

  • Agricultural Production- left to the free market. Peasants could buy sell and produce freely.
  • Factories employing less than 20 people were denationalised.
  • Large factories remained nationalised.
  • Money was reintroduced. 

NEP led to political and econmoic stability.

  • Free trade encouraged the peasants to grow more food which ended the famine.

Industrial Growth

  • Market stimulated production, and the governemnt invested the money from taxing the peasants into reopening factories closed during the civil war. 
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New Economic Policy (continued)

Scissor Crisis 

  • NEP= uneven economic growth.
  • Agricuture recovered quickly, however recovered at a much slower rate. 
  • This meant a gap opened up between farmers income and industiral prices.
  • 1923- the gap had reached crisis point. The rise in industrial prices meant that farmers could not afford to buy industrial goods.
  • This caused the farmers to have no incentive.
  • Governemnt intervened-subsidised prices of industrial goods, making it affordable for peasants.
  • However, this meant, that there was less money avilable to improve the econmoy.

Failures of the NEP

  • 'Nepmen' made money by spotting gaps in the market.
  • Gambling, prostitution and drug dealing all took place under the NEP.
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The Five-Year Plans and industrial change, 1928-41

Centralised econmoic planning of industry= Key feature of Stalin's industrial policy.

1928- Stalin introduced first Five-Year plan. The plans were designed to replace the market with a more efficient and socialist econmoic system.

Aims of the Five-Year Plans 

  • Primary objective= industrialise Russia through combining centralised planning with large-scale investment.
  • Eliminate Nepmen
  • Believed that government- controlled production & distribution= more efficient
  • Stalin wanted to assert his authority. - wanted to demonstrate that he was initiating a new phase of building socialism.

Between 1928-42 there was three Five-Year plans.

  • First: October 1928 - December 1932. ( Cut short due to issues with the plan)
  • Second: January 1933 - December 1937
  • Third: January 1938 - June 1941 (Ended early due to German invasion of Soviet Union)
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The Five-Year Plans and industrial change, 1928-41

The nature of the plans

  • Designed to increase production
  • Gosplan (Soviet Union's cental econmoic angency) formualted targets for all factories, mines and workshops.
  • Workers and managers were responsible for meeting these targets.
  • At the same time, a large propaganda campagin was designed to inspire workers.

Stalin's econmoy can be seen as a command econmoy rather than a planned one, as there was no attempt to ensure factories had the needed resources.

Achievements, 1928-41

Overall Stalin's first three plans succeeded in industrialising the Soviet Union.


  • Heavy Industry- Biggest success. Production of coal, iron, steel, oil... all largely increased.
  • Transport- The Moscow metro train lines opened in 1935. Created efficeint public and goods transport.
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The Five-Year Plans and industrial change, 1928-41


  • Inefficent way of industrialising 
  • Production quality was often low- set targets for production, not quality
  • Plans were disorganised.
  • Stalin's terror led to the purge of industrial managers & economic planners- the people necessary for making the plans work.

Consumer Goods

  • 1928-41 there were contiual shortages of consumer goods and most had to be rationed.
  • Stalin prioritiesed heavy industry and defence over consumer goods.

Housing and Living Conditions 

  • Housing= large problem between 19328-41
  • Plans required large rban workforce and the necessary houses were never built.
  • Living conditons at this time were poorer than they had been under the NEP- Living Standards were not one of Stalins key objectives. 
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Agricultural Collectivisation and its impact

Between 1928 and 1941 soviet agriculture was collectivised.

Collectivisation= Small farms were merged and all ownership was taken over by the state.


Communist Ideology-

Believed that private property was a foudation of capitalism and a cause of inequality, therefore all communists wanted to ablish it. Communists also wanted to create an efficient econmoy. They believed that large farms were likely to be more efficient.

Failure of the NEP-

Until 1926 the NEP had led to rising agricultural production. However, in 1927 and '28 agricultural production was lower than it had been in 1926. The levels fell beacuse there was no market for additional farmed goods.

Increased production in '26 led to a fall in prices as farmers produced more than consumers wanted. therefore, in '27 farmers decresed production to push up grain prices.

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Agricultural Collectivisation and its impact (cont

The leadership struggle-

Stalin also had political reasons for wanting to end the NEP. at the end of '27, Stalin and Burkharin defeated Zinoviev, Kamanev and Trtosky expelling them from the party.

Stalin introduced full-scale collectivisation in 1929. Farmes were merged, and equpiment was taken from the richer peasants and given to the poorer. Those who worked on the collective farms were allowed to keep a small proportion of the grain to live on. By 1930 he claimed 100% success. 


  • When requistioning was introduced the peasants responded with violence. They resisted requestioning by either hiding or even destroying grain.
  • Stalin believed that the resistance was an attack on socialism by the capitalist Kulaks.
  • in response to this Stalin initiated 'liquidation of the Kulaks' (dekulakisation). In relaity this resulted in mass deportations and around 1.5million peasants were sent to labor camps.
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Agricultural Collectivisation and its impact (cont

The consequences of collectivisation, 1929-34

  • Devastated soviet agriculture, but relased larger sums of money to fund industrialisation.
  • 1929-30= drive to ensure all farms were collectivised, however this led to chaos and Stalin had to temporarily stop collectivisation in 1930.
  • Collectivisation reinsteated in 1931.

In repsonse to collectivisation and requestioning the peasants detroyed their crops, animals and machinery. Stalin's policied therefore led to the destruction of 17 million horss, 11 million pigs and millions of other animals.

Collectivisation also led to famine in Ukraine, as they were unable to reach the government targets for farm production. Stalin punished these farmers by seizing their grain and livestock, which led to 5 million deaths.

Long-term consequences 

  • Grain harevests were regulalrly below that of the years during the NEP.
  • The falinings of the collective system were obvious during WWII. Farming was not able to meet the needs of the citizens and army.
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Recovery from war after 1945

WWII= widespread devastation- the war destroyed almost all economic progress that had been made during the first the Five-Year plans.

1945- 25 million people were homeless and the industry was producing two thirds less than it had done in 1940.

Stalin Planned full-scal reconstruction over the course of three more Five-Year plans.

The Fourth Five-Year Plan

  • Led to high levels of industrial growth, with roughly 88% of investment going into heavy industry.
  • Focus on military spending was continued and by 1952, total military expenditure was almost a quater of the governemnt's budget.
  • During the plan production of consumer goods doubed, however the primary focus was still heavy industry. This meant only 12% of investment went into food production & consumer goods.
  • Reconstruction focus= factories not homes.
  • Wages were kept low which meant; more money was available for reconstruction and women had to work as families needed the income.
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Recovery from war after 1945

Post-war agriculture

  • Soviet agriculture recovered slowly from the devastation of war.
  • Stalin's Top econmoic policy after the war was industrial reconstruction. This meant agriculture suffered shortages of resources & workers between 1946-49.
  • As soon as the war was over, Stalin put strict discipline over farms. During the war there had been an increase in priavte farming and when Stalin ended this production dropped.
  • However, production did grow between 1947-53. By 1952 grain production had reached pre-war levels.
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Investment in agriculture

Khrushchev could see that reforms were necessary in order to increase productivity and ensure a better standard of living for agricultural workers. In order to revive the economy a series of reforms were introduced.

Improved Incentives

  • 1954- Khrushchev changed the relationship between collective farms & the government.
  • He wanted to invest in farming by offering farmers high prices for their produce. Under the rule of Stalin farms had to produce a quota of goods, which was brought by the state at vert low prices. Khrushchev reduced the quota and introduced higher prices for everything produced on top of the quota. This led to a 250% rise in farm income between '52-'56.

Virgin Lands Scheme 

  • Through turning unfarmed land into new farms, Khrushchev hoped to increase agricultural production.
  • Launched in September 1953 and the investment caused agricultural investment to grow from 3% per year to 12.8% per year.
  • This scheme was extremely successful. it led to a larger avilability of food in sops and therefore a better standard of living.
  • The success also allowed Khrushchev to consolidate his position.
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Investment in agriculture (continued)

The Corn Campaign

  • From September 1958 Khrushchev encouarged farmers in Ukraine to grow maize.
  • His plan was to shift wheat production to the new Virgin Lands farms and produce maize on the taditional farms. The maize produced would be used to feed animals and thereofre increase the amount of meat avilable. 
  • Campaign= failure. Khrushchev's campagin was based on US farm sucess. Farms only managed to produce 50% of the corn per hectare that farms in the US managed. 

Problems in agriculture, 1954-64

  • Remained inefficient.
  • Virgin Land schemes= expensive and failed to lead to further growth. Harvest levels dropped.
  • Soviet agriculture was labour intensive. During the 1950s and 60s between 54 & 44 % of the soviet population worked on farms.

There were various probelms with Khrushev's policies which led to slower growth rates.

  • Machinery and tractor stations were abolished meaning there was less modern equipment.
  • Khruschev cut agricultural investment. 12.8% per year from1954 to 1959 to 2% in 1960.
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Industrial modernisation, 1953-64

New leadership that followed on from Stalin emphasised the need to modernise the Soviet economy.

In order to compete with advanced economies the soviet union needed to move awya from heavy industry towards light industry.

Military Spending

  • High levels of military spending= problem for soviet leaders after 1953
  • The soviet leaders who followed on from Stalin were committed to raising the standard of living for the people of the soviet union.
  • In order to be able to improve living standards, Khrushchev made cuts to to military spending in 1955. Military spending fell from 12.1% of GDP in '55 to 9.1% in 1958.
  • When nuclear stand-offs took place between the USA and USSR Khrushchev had to up military spedning and in 1964 it was around 11% of GDP.
  • The rise of military spending coincided with a fall in econmoic growth, which indicated that increased military spending led to reduction in econmoic growth.
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Industrial modernisation, 1953-64 (continued)

The Seven-Year Plan: Light Industry

  • Khrushchev's econmoic ambitions were set out in a Seven-Year plan (January 1959).
  • Plan was designed to boost agricultural production and the production of consumer goods through the investment of light industry.
  • Khrushchev hoped the plan would begin to enable the soviet economy to overtake the USA by 1970 abd build communism by 1980.


  • Production of chemical and consumer goods increased between '59 and '65. However, the increases were not as significant as the planners had hoped.  There was a 60% increase in production of consumer goods, however this was 5% below the target set by Khrushchev.

Problems- Khrushchev continually introduced econmoic re-organisation. The reforms were counterproductive or short lived.

For example;

  • Feb '62- Khrushchev split the party in two, Agriculture and Industry= deeply unpopular.
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Economic reform and decline after 1964

The failure of Khrushchev's reforms discredited the idea of reform at least until the end of the 1970s.

There were changes in priorities ad small econmoic changes between Khrushchev's fall (1964) and Chernenko's death (1985).

Restoration of the econmoy- After Khrushchev's fall many of his reforms were rejected;

  • The party was reunited.
  • The Seven-Year plans were abandoned.

The 'Kosygin reforms'

  • Thos who followed on after Khrushchev attempted to stimulate light industry.
  • Kosygin advocated reforms that were designed to cut investment in inefficient collective farms and move the money into light industry.
  • The 'Kosygin reforms' were introduced in Jan 1968, however ended in the August.
  • When these reforms ended authority was returned to central planners.
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Economic reform and decline after 1964 (continued)

Increased military investment

  • Brezhnev was behind this, and his goal was to achieve parity with the USA in terms of their nuclear firepower.
  • Khrushev was forced to back down during the Berlin Crisis '61 and the Cuban Missile Crisis '62, because he knew that the USA had much larger nuclear power. Brezhnev wanted to ensure that the USSR never again had to back down.
  • Militay spending increased from 11% of GDP '64 to 13% in '70.

'Developed Socialism'

  • Brezhnev dropped khrushchev's commitment to building Communism by 1980.
  • Brezhenv argued that the Soviet Union needed to deliver a rising standard of living, which meant abondoning Khrushchev's promise of Communism by 1980 and replacing it with 'developed socialism'.
  • Developed Socialism= an economy with job security and low prices achieved by importing grain from the West.
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Economic reform and decline after 1964 (continued)

Andropov's reforms, 1982-84

Andropov also refused to talk reforms, however was willing to admit that there were economic problems that needed to be fixed.  Andropov's key issue= labour discipline and to improve productivity he put three campagines into place.

  • Anti-corruption 
  • Anti-alcohol (Workers could be sacked for drunkness and fined for damaging machinery)
  • Operation Trawl ( KGB officers arrested people who were drunk or absent from work)

Soviet economic decline became evident in the 1970s.

Declining Growth- In 1945 the soviet economy was the fastest growing in the world. However, in the years that followed the growth began to decline. For example; growth rates in the soviet union declined by 5.3% between 1958 & 1964, to 2% in 1970.

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