Extent of economic change Flashcards
Industrialisation under both Tsars/communists
-Consistent emphasis on heavy industry (e.g steel/engineering) as opposed to light (everyone but Krushchev)
-Main motive to catch up with West/emulate their industrial revolution to increase/maintain world power status
-Affected by relationship with agriculture/peculiar nature of Russian society
Industry under Alexander II
More committed move towards state involvement🏭 in industry (not scared of proletariat unrest like others)
=Mikhail Reutern as Minister of Finance
-Sensible approach revolving around railway construction🛤️/foreign technical expertise🌍/employment of foreign investment capital
=Modernisation/expansion
Example of the value of employing foreign technical expertise to move Russia forwards (Alexander II/industry)
Welshman J.J Hughes was responsible for 1/2 steel production in Russia start of 20th century
Railway construction under Nicholas I (industrialisation)
-1837= first railway
-1851= St Petersburg-Moscow line inspired by Manchester-Liverpool railway
👇
Built to high technical standard/shows competing with West
Railway construction under Alexander III/finance minister Reutern (industrialisation)
-Sevenfold increase in track🛤️7️⃣= doubling of industrial output🏭2️⃣/6% annual growth rate💸6️⃣
-also showed importance of attracting foreign investment capital (got through gov bonds/taxation exemptions/monopoly concessions)🌍
-Construction placed in hands of private contractors like West (94% by 1880)🌎🍔, downside= corruption/expensive transport system😈🛤️🫰
-“First state managed exercise in industrial advance”
-Efforts cut short by Russo-Turkish war⚠️ BUT paved the way for others (e.g Sergei Witte)
Who took over finance minister after Reutern/Alexander III
Bunge
Economic reforms under Bunge/Alexander III (industrial)
More liberal approach
-Fiscal amendments (e.g 1886 poll tax based on number of ppl in household)
-1883 Peasant Land Bank
-Greater state ownership (69% by 1911)
Not long-lasting as blamed for declining value of rouble/replaced
Who was Bunge replaced by
Vyshnegradskii
Economic reforms under Vyshnegradskii (Alexander III)
-More efficient utilisation of income
-Revenue raised through Medele’ev tariff of 1891
-Exported large amounts of grain (even when shortage/starvation)
=Balance of budget but still surplus
Summary of industrialisation achievements of finance ministers before Witte
Modest
-e.g 1893 still largely agrarian economy
-Witte first to show commitment to industrialisation🏭 to compete with West🌍/improve military🪖
(may have influenced Stalin’s industrialisation)
Sergei Witte’s industrialisation plans (Alexander III)
-Restarted encouraging foreign expertise/taking foreign loans/raising taxes/interest rates🌎
-1897 placed rouble on gold standard🪙🥇
-Most investment on heavy industry (like West)⛏️🏭🌎
-Moved away from private enterprise
=Great spurt🤑🤑🤑🤑🤑🤑🤑
Effect of “Great spurt” (Sergei Witte/Alexander III industrialisation)
-Coal production doubled⛏️2️⃣
-Steel/iron production increased sevenfold⚒️7️⃣
-Stimulus provided to development of technologies in oil/chemical industries🛢️⚗️🏭
-Big increase in railway track🛤️ (from 120% annual increase in capital from abroad)🌎💸
-Income from industry shot up 119 million roubles🏭🪙1️⃣1️⃣9️⃣
-Catching up (e.g surpassed France in iron production 1900)🐸
-Increase in industrial production of 7.5%- higher than any other period
Criticisms of Witte’s policies
-Neglected other industries (e.g textiles)
-Reliance on foreign capital dangerous as loans could be recalled at short notice
-Using foreign expertise stunted home talents
-Railway construction expensive/often rushed/not as impressive as other places (e.g 11x less than Germany)
-Neglecting agriculture= rural unrest/mistrust from other members of gov
Evidence that without WW1 Russia would have caught up with West
-Great spurt
-Stolypin/Witte together= revival of economy, e.g 1909 industrial output increased 7%/year and GNP by 3.5%
Evidence that even without WW1 Russia wouldn’t have caught up with West
-Still behind- e.g coal production only 10% of Britain’s/GNP 20%
-Factories employed vast amounts of labour to compensate for lack of modern technology/equipment
-Gains masked by huge population increase
-Neglection of agriculture made future famine likely
-Fact economy fell apart during WW1
(Shows Witte’s reforms maybe only short-term positive effect)
Summary of industry under Tsars
-Growth of proto-industry/early factory system with production plants/railway
-“Great spurt”
-Impact of WW1
=Rapid economic growth at times comparable with West
Impact of WW1 on economy
-Industry struggled to meet demands🏭😢
-Railway system lacked efficiency🛤️😢
-More money borrowed from abroad🌍
-Taxes increased💸
-Gold standard abandoned= rampant inflation (food/fuel prices quadrupled but NOT wages)😢😢
-Bolsheviks took over= major turning point to management of economy
Impact of WW1 on economy
-Industry struggled to meet demands
-Railway system lacked efficiency
-More money borrowed from abroad
-Taxes increased
-Gold standard abandoned= rampant inflation (food/fuel prices quadrupled but NOT wages)
-Bolsheviks took over= major turning point to management of economy
Lenin strategies to revive economy after WW1
War communism
State capitalism
NEP
State capitalism (Lenin/Bolshevik)
State took control of economy until it could be handed to Proletariat (Nov 1917)
How was state capitalism introduced (Lenin/Bolshevik)
-Nov 1917 Decree on land= private land given to peasants
-Nov 1918 Decree on Workers control= Workers committees get “extra powers” to run factories
-December 1917= Supreme Economic Council formed to manage nationalised enterprises (over 30,000 by 1920)/council of labour defebce
Impact of State capitalism (Lenin/Bolshevik)
Opposition within/outside party, worsened by signing of Brest-Litovsk (March 1918)🥷
Civil war🪖 nullified any positive impact as:
-Industrial output fell dramatically🏭😭
-Hyperinflation (e.g rouble worth 1% what it was in 1917= abandonment of currency)💸💸😭😭😭
War communism (Lenin/Bolshevik)
State capitalism/grain requisitioning:
-Nationalisation of larger enterprises/state monopoly of markets🏭
-Partial militarisation of labour🪖👷
-Grain requisitioning🌾🫳
Impact of war communism (Lenin/Bolshevik)
-Nationalisation= unrest as ppl lost ownership/control of businesses
-Militarisation also disliked
-Requisitioning= most hated, disincentive to grow more than needed as majority of food taken away/starvation
Quickly replaced with NEP
NEP 1921 (Lenin/Bolshevik)
-Denationalisation of smaller enterprises (to allow production of consumer goods)🏭🆓🛍️
-Use of trust organisations to help manage heavy industry⚒️
-Removal of trade restrictions
-Re encouragement of foreign trade/investment/expertise🌎
-End to grain requisitioning🌾🆓/peasants could sell in markets👨🌾🧺
Positive impact of NEP (Lenin/Bolshevik)
-Removal of trade restrictions= shops flourished/rationing ended/new rouble🛍️🍒🪙
-New breed of entrepreneur Nepman 🧑🔬(1923 responsible for 60% retail trade)
Negative impact of NEP (Lenin/Bolshevik)✂️
Scissors crisis:
-Food increased faster than demand= lower prices🍒-🫰
-Industry increased much slower= high prices🏭+🫰
=Peasants reluctant to sell at lower prices but industrialists needed them to
-Debates over continuation= 1929 Stalin replaced with the Great turn
Stalin’s aims in industry
More worker autonomy/system that made workers believe they were key to economic success= becoming major industrial source
Prepare for potential conflict with capitalists (linked to economic autarky)
Using 7 five-year plans
Weaknesses of five-year plans (Stalin)
-Little strategic planning
-Targets set by ruling elite with little research
-Managers constantly feared failure
-Little guidance for managers