NEW ECONOMIC POLICY (I)

1. NEW ECONOMIC POLICY (I) • Lenin replaced War Communism with New Economic Policy (NEP) in 1921 • Never saw it as permanent policy but as a temporary retreat from socialism that would give Russia a chance to recover economically and socially

2. NEW ECONOMIC POLICY (II) • Provisions • State retained ownership of large industry • Private enterprise allowed in small industries and retail trade • Peasants freed from forced requistions • Had to pay tax in kind to government but were otherwise free to sell rest on free market • Given strong incentive to produce more • NEP was tremendous success and it quickly revived the Russian economy

3. “DANGERS” OF THE NEP • 75% of all retail trade fell into private hands during NEP • Caused rise of “Nepmen” • Numerous and prosperous • Fear was that they would become new “bourgeoisie” • Caused rise of “kulaks” • Peasants grown wealthy because of private enterprise provisions of NEP • Debate over NEP would become linked to power struggle after Lenin’s death Nepmen

4. BAN ON “FACTIONS” • In response to criticisms of NEP, Lenin and Politburo ban all “factions” in 1922 • Any party member who joined others to oppose or criticize any party policy would be expelled • Stalin would later use policy to eliminate rivals • Leaders who would later suffer because of this policy all voted for it in 1922

5. TWO MISTAKES • Lenin suffers from a series of increasingly series strokes between late 1921 and 1924 • Left him speechless and paralyzed • Made two tragic mistakes during this period • Supported ban on factions • Appointed Josef Stalin General Secretary of Communist Party

6. LENIN MOVES TO GET RID OF STALIN • Lenin discovers Stalin had used terror and murder to stifle peaceful opposition of local communist leaders in Georgia • Criticized Stalin’s “Moscow chauvinism” and began to meet with Trotsky to kick Stalin out of party • Stalin learned of meeting and berated Lenin’s wife, Krupskaya, when she would not let him meet with Lenin

7. LENIN’S LAST TESTAMENT • Began in December 1922 • Did not name successor and instead offered his personal evaluation of all possible candidates • Stalin: should be replaced with someone “more patient, more loyal, more courteous, and less capricious” • Trotsky: most pre-eminent member of party but suffered from excessive self-confidence and highhandedness • Barely mentioned Zinoviev and Kamenev • Highly praised Nicholas Bukharin and Felix Pyatokov

8. LENIN’S CONCLUSION • No one was fit to succeed him • Wanted Trotsky, Zinoviev, and Kamenev to form caretaker government until Bukharin and Pyatokov were ready to take over

9. DEATH OF LENIN • Lenin takes final steps to eliminate Stalin • Final stroke on March 10, 1924 completely paralyzes Lenin before he could get rid of Stalin • Dies in early 1924 at age 54

10. JOSEF STALIN • Born in Georgia in 1879 • Real name was Iosif Djugashuili • Joined seminary to study to become a priest • Expelled and drifted from job to job • Gradually drawn into revolutionary movement and became Social Democratic agitator in Georgia by his early 20s • Eventually came to the attention of Lenin and came to Petrograd after February Revolution • Named Commissar of Nationalities after October 1917 and made member of Politburo and Council of People’s Commissars • Named General Secretary of Communist Party in 1922

11. GENERAL SECRETARY • Used position to build powerful power base • Controlled the appointment and dismissal of all party bureaucrats • Set agenda for Politburo • Sole provider of information for Politburo • Packed Central Committee with flunkies • All rival factions in party courted him after Lenin’s death • Because he could deliver votes on Central Committee and hence determine outcome of any debate

12. POWER STRUGGLE BEGINS • Stalin stood out in rituals surrounding Lenin’s funeral • Trotsky’s position weakened by: • He had joined party late • Never bothered with day-to-work of ordinary politics • Talents as intellectual critic and engineer of policies not as valuable with Lenin gone • Trotsky made tactical errors • Voted for proposal that Lenin’s Last Testament be kept secret

13. LEFT POSITION • Proposed by Trotsky and supported by Zinoviev and Kamenev • Socialism in Russia was doomed without worldwide communist revolution • Soviet Union should therefore support revolutionary movements abroad and pursue a militant and “pure” socialism at home • Get rid of NEP Kamenev

14. RIGHT OPPOSITION • Led by Nicholas Bukharin • Agreed that socialism in Russia depended on “world revolution” for its ultimate success • But he didn’t see this happening soon • Therefore he argued that Soviet government should not push too far ahead of the rest of the world by pursuing militant socialism • Wanted to continue compromise between socialism and capitalism embodied in NEP

15. CENTER POSITION • Even though world revolution had failed to materialize, socialism could still succeed in the Soviet Union • Because of huge population, huge territory, and tremendous resources • All effort should be dedicated to exploiting these advantages to make socialism strong in Russia and Russia strong in the world • Then the Soviet Union would be ready to ignite a world revolution

16. STALIN WINS • Power struggle after Lenin’s death was not merely over personal power • It was over the future of Russia • Stalin eventually won the day • Used variety of tactics • Accused opponents of factionalism • Accused them of deviating from party line and trying to split the party • Used General Secretary position to pack party congresses with his supporters

17. ULTIMATE TRIUMPH • Final victory came at 15th All-Russian Congress of the Communist Party • Prohibited “all deviation from the general party line” as interpreted by Stalin • All opponents forced to publicly apologize for their “errors” • Trotsky kicked out of party and, in 1929, expelled from Russia • Murdered in 1940 on Stalin’s orders in Mexico City

18. SOCIALISM IN ONE COUNTRY • Stalin’s victory also had an ideological component • Of the three views, only his had the most attraction for rank-and-file party members • The Right merely told people to bide their time • The Left made Russia and its Revolution seem ineffective and unimportant • Only Stalin offered a program and goal that could be achieved by Soviet efforts alone without dependence on developments elsewhere • To underline this point, the 15th Party Congress also adopted measures that ended NEP and began a new era of Five-Year Plans

19. FIVE YEAR PLANS: OVERVIEW • Made Russia a great industrial nation • Rose from 5th in industrial production in 1928 to neck-and-neck with United States in 1980 • New system of collective farming introduced • A vast social transformation accompanied the economic changes created by the Five Year Plans

20. REASONS FOR GIVING UP NEP • NEP was viewed as a temporary retreat from socialism • Unacceptable to most communists • Industry had gained prewar levels but future growth depended on massive investment--from peasants in the difference between what agricultural products were worth and what the state actually paid for them • Peasants felt state prices were too low and refused to sell and felt prices for manufactured products were too high and refused to buy • Five-Year Plans would fix situation by insuring steady supply of food at low prices and squeezing necessary capital for industrial growth out of peasants • Stalin knew war with Germany and Japan was inevitable • Victory depended on absolute control of population and industrial strength • Five-Year Plans would collectivize agriculture and put peasants in centralized areas where they could be watched and would increase industrial production

21. FIRST FIVE YEAR PLAN • Projected that industrial production would increase by 200% • Emphasis on heavy industry • Investment capital would come from collective farms

22. COLLECTIVE FARMS • 20% of all agricultural production would be performed on collective farms • Large consolidated blocs of land made up of formerly independent peasant smallholdings • Peasants would live and work together on these farms and equally share income derived from it

23. COLLECTIVE FARMS: ADVANTAGES (I) • Would halt growth of petty capitalist mentalities among peasants • Would consolidate scattered peasant population and make it easier to watch and educate them • Would promote improved productivity because large farms would be more amenable to use of machinery

24. COLLECTIVE FARMS: ADVANTAGES (II) • Would create large industrial workforce since, with machines, fewer peasants would be needed to run collective farms • Would provide capital for industrial development • State would pays farms 1/8 market value for products • Difference would be diverted into industry • Farmer would also pay sales tax and this would be invested into industry

25. COLLECTIVIZATION GETS ROUGH • Collectivization was supposed to be voluntary • Soon became clear that peasants would not voluntarily give up their small parcels of land • Stalin then abruptly announced the abandonment of his 20% collectivization goal and stated that all peasants would be collectivized, by force if need be • Also announced his intention to liquidate all kulaks

26. COERCIVE COLLECTIVIZATION • Thousands of kulaks had their property and possessions confiscated • Many sent to labor camps or deported to Siberia • Any peasant who resisted collectivization was labeled a “sub-kulak” and punished as though he was a real kulak • All this done with a great deal of armed force

27. PRICE OF COLLECTIVIZATION (I) • 98% of all farmland collectivized by 1941 • Very high price • Peasants slaughtered livestock, causing huge drop in number of sheep, cattle, and hogs • Urban communist party members sent to manage farms • Ignorant of agriculture • Combined with peasant resistance, contributed to huge drop in agricultural production

28. PRICE OF COLLECTIVIZATION (II) • Famine hits Russia again in 1932-33 • Crime of “pilfering” imposed on starving peasants who stole their own grain • At least 5 million people died during collectivization campaign

29. INDUSTRY • Industrial labor force doubled during First Five Year Plan • Due to peasants who moved to cities • Uncooperative factory managers who argued goals were too high were imprisoned and replaced with more enthusiastic men and women • Stalin declared plan fulfilled in 1932 • All targets were actually underfulfilled but production had increased dramatically • Coal and iron production increased by 200% (although goal had been 300%)

30. FIRST FIVE YEAR PLAN • Most glaring shortfalls occurred in consumer goods • Targets had been low to begin with but they still were not met • Textile production actually declined • Urban housing went from bad to abysmal • Waste, chaos, and mismanagement accompanied rapid industrialization • Expensive equipment was ruined by trying to produce too much too fast or by untrained workers • Blame was put on “saboteurs” • Often technically educated men of pre-1917 generation

31. (1933-1937) Had to be scaled down after one year Realization that a limit had been reached as to what the economy could do and what people could take Emphasis placed on improvement of efficiency and improving living standards Things got better for three years and then leveled off Due to increased emphasis on military production and chaos of the Great Purges SECOND FIVE YEAR PLAN

32. THIRD FIVE YEAR PLAN • (1938-1942) • Projected 200% increase in production and increase in consumer products • Neither goal fufilled • Due to outbreak of WWII, oil shortage, and severe labor shortage • Main goal had been achieved by 1941 • Although demoralized and exhausted, the Soviet Union had become one of the world’s great industrial superpowers

33. PROBLEMS • Involved creating of huge planning bureaucracy • Main job was to produce tons of paperwork • Stalin interfered with planning process and caused problems • Hired flunkies who gave him the numbers he wanted • No one would point out mistakes in the planning process, thereby guaranteeing that when a mistake was made, it would be a giant one • Centralized planning failed to make the Soviet Union competitive in the world marketplace