- Key element of State Capitalism was nationalising the economy/
- Lenin made a number of dramatic decisions in 1917:
- Land Decree: abolished private ownership giving peasants control of their farms.
- Decree of Workers' Control: placed control of factories in hands of the workers.
- People's Bank of the Russian Republic: all banks nationalised and merged into one.
- This gave considerable power to the people, making the Bolsheviks very popular.
- However, it caused a crisis in the economy as workers: gave themselves massive pay-rises, violently dismissed managers, and experts were purged.
- In December 1917, Lenin stepped in by setting up the Vesenkha (Supreme Council of National Economy), which provided greater centralised decision making over the economy.
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Key features of War Communism
- Nationalisation - All industry without compensation.
- Vesenkha - State control of the economy.
- Hierarchical Structures - Replace Workers' Councils with managers.
- Military Discipline - Death penalty for workers who went on strike.
- Rationing - Soldiers & factory workers received preferential treatment.
- Grain Requisitioning - 150,000 volunteers sent to countryside to seize peasant's grain; starvation became common.
- Private Trading Banned - Trade controlled trade, but sheer demand led to the spread of black markets.
- Bartering - All good traded for other goods; workers received wages in goods.
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The Tenth Party Congress
- At the Tenth Party Congress in 1921, Lenin announced an end to War Communism.
- He suggested it was because they had now won the war so there was no further need for it.
- However, it was actually because of a number of critical factors put massive pressure on Lenin to make this decision:
- Economic collapse:
- Heavy industry fell by 20%
- Food production also dropped to 48%
- Led to death of 20 million through famine and disease through out the 1920s.
- Rationing detested as it was linked to social position.
- The return of managers caused resentment.
- Workers resented loss of control over industry.
- Tambov Rising:
- Grain requisitioning caused conflict in the countryside.
- The uprising took place in a key grain production area in Central Russia.
- It took an army of 50,000 to crush the uprising.
- Kronstadt Mutiny:
- Serious military challenge to the Bolsheviks.
- They were previously the most loyal group of Communists.
- Economic collapse:
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