Results of State Capitalism

Effects of State Capitalism

The measures Lenin issued under State Capitalism gave the workers a great amount of power, but eventually became disastrous. Production had fallen because workers had decreased their hours, violently dismissed their managers and given themselves huge pay rises. There was also a sense of conflict between workers who controlled individual businesses and the government, who wanted complete power over the economy. The demands of the Civil War also began to have an effect on the economy, so Lenin was forced to make changes.

From June 1918, State Capitalism was replaced by a system called War Communism. This was a step closer idealogically to a communist system and would also help deal witht eh demands…