Soviet Economic Policy 1929 - 1941

1. Soviet Economic Policy1929 - 1941

2. Policies in the early 1920s • War Communism • Pure form of communism • Grain Requistioning • Banning of Private Trade • Nationalisation • Labour Discipline • Passports to prevent movement of workers • Rationing • Red Terror used to impose changes • Deeply alienated many – including potential supporters • Inefficient – disincentivised work • Peasants particularly alienated • Kronstadt Mutiny • ‘Soviets without Communists’ rallying cry

3. Policies in the early 1920s • NEP (New Economic Policy) • Lenin’s pragmatic about turn • Trotsky hostile to deviation from communism • Features • Grain Requisitioning abolished • Tax in kind • Could sell surpluses • State maintained control of heavy industry • But some small businesses allowed • To allow products for peasants to buy • Private Trade allowed • Rationing abandoned

4. Policies in the early 1920s • NEP • General revival in economy • Small businesses recovered faster than Heavy Industry • Production increased across the board • Although unemployment increased in urban areas as profit motive meant that workers could be laid off • Nepmen – the big winners • Speculators who bought up surpluses and sold them in towns • Controlled 75% of trade by 1925 • Corruption – bribes to local officials to allow goods to be obtained and sold • Uneven distribution of success • Conspicuous displays of wealth by Nepmen speculators • Peasants did not get the full profit due • Urban workers jealous of peasants, Nepmen and of party workers • New Exploitation of the Proletariat

5. Policies in the early 1920s • NEP becomes entangled with political power struggle • Death of Lenin • Loss of unity behind Lenin’s pragmatic approach • Industrialisation a goal of all • Needed an Urban proletariat to build Socialism • What was the most effective way of industrialising? • NEP • State control

6. Policies in the early 1920s • NEP loses its appeal to the Communists • Lack of direction for industry • Responding to market – not to strategic goals of USSR • Rich superclass developing • Corruption • Speculation • Gambling and Prostitution • Hoarding by peasants • Deliberately create shortages to maximise profits • Food shortages • Urban unemployment • Periods of Boom and bust

7. Policies in the early 1920s • Ideological struggle in Politburo • Leftists • Trotsky, Zinoviev and Kamenev • Wanted a return to a purer form of State Controlled Communism • Fully organise workforce • Force peasants to produce more food to pay for industrialisation • Rightists • Bukharin (Tomsky and Rykov) • Wanted NEP to continue • Allow peasants to become richer so that they can buy the products made in the urban centres • Avoids conflict with the peasant class (the majority) • Stalin – Centre?

8. Stalin Shifting for Power! • Portraying himself as the moderate voice • 1925 • Allies with Bukharin against Trotsky, Kamenev and Zinoviev • Socialism in One Country appeals to rightists • Leftists identified with permanent revolution • Uses Factionalism charges to isolate and expel Trotsky, Kamenev and Zinoviev from party • 1927/8 • Stalin turns against Bukharin and the Rightists • Uses support in Communist Bureaucracy and lack of rivals to isolate Bukharin, Rykov and Tomsky

9. Stalin’s Great Turn • Reasons for • NEP not Communist enough for rank and file communists (who Stalin depended upon) • Peasantry becoming too powerful vis-à-vis Urban Proletariat • Conspicuous consumption by Nepmen • Unemployment Rising in the Worker’s Paradise • Speculative Hoarding • 1928 War Scare – Not enough strategic materials • Allows Stalin to isolate Rightist rivals • 15th Party Congress - Stalin Declares • Collectivisation • First Five Year Plan • The 5YP depended upon the success of Collectivisation

10. Cash Crisis • For 5YP Money was required • To invest in or purchase: • Factories/Plant • Machines • Workers/Wages • Raw Materials • Possible sources of money • Tax Soviet citizens • Not a rich society – hit by war, Civil war, exile, confiscations, war communism, hiding of assets from Communists • Borrow money from abroad • Reneged on Tsarist loans • Capitalists unlikely to lend to nationalising communists • Encourage greater grain production • How?

11. Grain converted into Hard Cash • Encourage greater grain production • Sell grain on open market • Collectives would allow: • Access to expensive new machinery to improve efficiency • Mechanisation would allow surplus workforce to migrate to towns • Update farming techniques by learning from experts • Economies of Scale • larger units of production brought efficiencies • Easier for State to collect • Socialist answer to USSR’s problem • Easier political control of hostile peasant classes

12. The Kolkhoz • No wages • Holidays, board and lodging in return for labour • The collective’s profit would be shared out equitably at the end of the year • Quotas Prices set by State • State would sell in cities as slight profit • State Support • Machine and Tractor Stations • Had to pay 20% of produce to access machinery • Private Plots • Once collective duties completed

13. Collectives Anyone? • Few Peasants willing to move into collectives • Conservative Peasants: • The NEP seemed to be working fine for them • Unfamiliar working practices • Suspicious of new machinery and techniques • Memories of War Communism and forced requisitioning • Little sympathy for plight of urban poor

14. The Pressure Builds • 1928/9 Grain Procurement Crisis • Not enough grain to allow 5YP to proceed • Food shortages in Cities • Price rises – inflation • Stalin’s Pressures • Credibility attached to success of 5YP • Urban workers support base for Stalin • Power struggle not yet complete • Urals –Siberian experiment • Long term goal of Industrialisation of Agriculture • Ideological distrust of peasant class • Stalin’s Solution • Requisitioning • Forced Collectivisation

15. De-Kulakisation • Class warfare declared on Kulaks • Communist classification of peasants: • Kulaks – better off Peasants –hired help • Middle Peasants – moderate incomes • Poor Peasants - landless • “We will hit the Kulaks so hard that the middle peasants will snap to attention before us” Molotov • Ukraine targeted for being less reliable than Russian areas • Ukrainian nationalism

16. Forced Collectivisation • Rural Communist parties resisted collectivisation quotas • Too unpopular • Special Urban party activist task force created • 25,000 attended special Two Week courses • Tactics • Root out Kulaks? • Confiscate goods • Would become basis of new commune • ‘Persuade’ remaining peasants to volunteer to join a collective • Tools used • Propaganda • Controlled all sources of information • Force • OGPU, Police, Military • Terror • Denunciations, Executions of Kulaks, ‘Necessary Measures’ • 10 Million deported Siberia and Labour camps • Quotas

17. Kulak Dispersal

18. Peasant Resistance • Riots • Armed Resistance • Peasants destroyed own goods rather than hand them over to the State • Mass slaughter of livestock • Raids on Collectives to liberate goods and livestock • All women raids made troops reluctant to shoot to kill • “Dizzy with Success” temporary climbdown by Stalin 1930 • Claims over eager officials getting carried away

19. Results of Collectivisation • 23 Million tonnes of grain seized in 1931 (chart page 171) • Enough to feed urban areas • 5 million tonnes of grain sold overseas • However • Desolated rural areas • Famine 1932 – 1934 • Millions died of starvation in rural areas • 7 Million according to Robert Conquest • Ukraine particularly hard hit • Fall in production 1930 - 1934 • Not enough livestock to do work • Best farmers annihilated as Kulaks • Pre-collective era grain production not reached until 1937 • But • Stalin content to see the end of the ‘accursed problem’ of the peasant class • Demonstrates power of Communist Party • Confirms Stalin’s control of Communist Party • Gulag Labour increased massively • Migration of peasants to cities

20. Essay Title • Collectivisation was a political success but an economic failure and a human disaster. Discuss.

21. Industrialisation • Collectivisation was only a means to an end • The food grown could be sold on the world market to allow investment in industry • Soviet Industry was designed to provide for the State (not the consumer) • Hence, very little produced that would be wanted by world market

23. Industrialisation Speeds Up • 1926/7 15th Party Congress • Due to NEP, Manufacturing had recovered to 1914 levels • But factories operating at full capacity • No excess capacity • Stalin strong enough to assert ‘leftist’ ideas of super-industrialisation • Trotsky and Preobrazhenski removed • Foreign Policy concerns • Britain broke off relations 1927, China debacle, Japan acting suspiciously, France and Poland allying • Agricultural productivity ‘seems’ to be improving • Same techniques could be applied to industry?

24. The Socialist Offensive • Industrialisation advertised as if it were a war • “Mobilising Forces” • “Offensives” • “Objectives” • “Breakthroughs” • “Ambushes” by “Class Enemies” • Suited communists to recreate memories of sacrifices during Civil War • Could blame Foreign Capitalists or Class Enemies for any setbacks

25. Unreal Targets • 1928 – 1933 Goals • Communist Officials bidded with one another to prove their socialist credentials • Layers of Bureaucracy added their own hoped for targets • Shakhty Affair- Show Trial • 55 Engineers arrested – 5 executed for ‘sabotage’ (Targets to low) • Ended up with plans to: • Electrification of Entire Economy • Pig Iron to Triple • Coal to Double • Light Industry ^ 70% • National Income ^ 103% • Failure to meet targets was a crime that could be punished as sabotage.

26. New Industrial Areas

27. 1932/3 Crisis • Some successes in First 5YP but many problems were stored for the future (Few targets actually met) p179 • Costs rising • Bottlenecks • Infrastructure could not carry increased volume of goods/investment • Consumer goods/workers needs not catered for • Eg housing did not keep pace with factory production • Lack of skilled workforce • Many experts in exile • Russian workers changed jobs to try and find better conditions • Lack of Coordination • Managers paranoid that they would be blamed for not fulfilling quotas • Impact of collectivisation kicking in • Food shortages • Rationing • World wide depression • Prices falling

28. Economic Overview • 1919 – 1920 • War Communism • 1921 – 1928 • NEP • 1928 – 1932 • First 5 Year Plan • Collectivisation • Over-ambitious Targets • 1932/3 • Economic Crisis • 1934 – 1936 • Three Good Years • 1937 – 1941 • Slump • 1941 • Second World War

29. Magnitogorsk • Magnitogorsk was a huge industrial combine created in Central Russia near to iron ore and coal mines • Turnover rate • Page 186 • Dealing with turnover rate • Wage differentials/incentives • Piece Rates • Training • Tough measures for ‘wrecking’ • Force Labour • Propaganda • Use page 187 to give examples

30. Three Good Years • 1934-36 • Initial investment in Plant coming on stream • First 5 Year Plan starting from scratch! • Collectivisation Crisis and Famine Declining • Peasant markets reintroduced • Stakhanovite Movement • How did he break the record? • Page 191 • Increase focus on Consumer Products • Footwear • Food • Gulags have no shortage of labour • Do the jobs that working class Russians do not want to do.

31. 1937 – 1941 Slowdown followed by War • Military Production Focus • Consumer needs fall down priority list • Heavy Industry • Strategic relocation of militarily sensitive industries • East of Urals • Difficult Winter • Fuel shortages, Transportation problems • Stalin’s purges of ‘wreckers’ • Looking for scapegoats • Removed many genuine experts • Caused bureaucratic confusion as key individuals removed • Caused managers to lie, cheat and steal rather than be blamed for failing to meet targets • World War Two doesn’t Help • But… USSR successfully rebuffs Nazi advance • Relocation of industrial base essential in ultimate victory!

32. Essay Titles • “Life has become better comrades, life has become more joyous” Stalin, 1935 • How far would Russian workers agree with Stalin’s statement? • Write an Introduction, list paragraph titles and a conclusion for this essay title. • Find supporting and/or opposing quotes pages 189 & 194/5

33. Essay Titles • The sacrifices of Russian workers in the 1930s allowed the Soviet Union to face the might of the German Army in 1941. How far do you agree with this statement?