NEW ECONOMIC POLICY (I)

1. NEW ECONOMIC POLICY (I) • Lenin replaced War Communism with New Economic Policy (NEP) in 1921 • Never saw it as a 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 demands • Had to pay tax to government but were otherwise free to sell rest on free market • Given strong incentive to produce more • NEP was a 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 “kulaks” • Peasants grew wealthy because of private enterprise provisions of NEP • Debate over NEP would become linked to power struggle after Lenin’s death Nepmen

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

5. LENIN MOVES TO GET RID OF STALIN • Lenin discovered 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 when she would not let him meet with Lenin

6. 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” • Trotsky: Most pre-eminent member of party, but suffered from excessive self-confidence

7. LENIN’S CONCLUSION • No one was fit to succeed him

8. DEATH OF LENIN • Lenin took final steps to eliminate Stalin • Final stroke on March 10, 1924, completely paralyzed Lenin before he could get rid of Stalin • Died in early 1924 (at the age 54)

9. JOSEPH STALIN • Born in Georgia in 1879 • Real name was JosifDjugashuili • 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 was made member of Politburo and Council of People’s Commissars • Named General Secretary of Communist Party in 1922

10. GENERAL SECRETARY • Used position to build powerful power base • Controlled the appointment and dismissal of all party bureaucrats

11. CENTER POSITION • Even though world revolution had failed to materialize, socialism could still succeed in the Soviet Union • Because of its 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

12. ULTIMATE TRIUMPH • Final victory came at 15th All-Russian Congress of the Communist Party • 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

13. 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

14. 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

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

16. 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

17. 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 open to use of machinery

18. 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

19. 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

20. 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 was done with a great deal of armed force

21. 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

22. PRICE OF COLLECTIVIZATION (II) • Famine hit 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

23. Great Purges • 1934-1938 • Communist party falsely accused millions of Soviet citizens for committing crimes against the government • Stalin’s secret police, NKVD, arrested, imprisoned, tortured and killed millions of suspected traitors. • Factory workers were killed just to intimidate coworkers; children turned in parents for talking about the government at home; people lied to get better jobs

24. Great Purges • 15 million people experienced: * being arrested * being exiled * starvation * death

25. Soviet Foreign Policy • As Communists, both Lenin and Stalin wanted to bring about worldwide revolution as Marx had predicted • But as Russians, they wanted to guarantee their security by winning the support of other countries. • The propaganda that they created against capitalism made the western powers highly suspicious of the Soviet Union • The “Red Scare” began in the early 1920’s in the United States.

26. 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 under-fulfilled, but production had increased dramatically • Coal and iron production increased by 200% (although goal had been 300%)

27. 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

28. (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

29. 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