The Economy under Lenin Flashcards
Problems facing Russia:
- Economy backwards and unsophisticated
- Economy still far behind the more developed nations
Karl Marx economy quote
“The increase in value of the world of things is directly proportional to the decrease in value of the human world”
Lenin’s state capitalist economy was based on…
nationalisation of industry which ended capitalism by taking industry away from middle-class owners
War communism designed to ensure:
- High levels of industrial output of war goods
- Efficient allocation of resources
- Food production to feed soldiers, workers and civilian population
Lenin’s food dictatorship’ consisted of:
Grain requisitioning:
Cheka seized grain from peasants without payment
Rationing:
Supply Commissariat rationed the seized foods. Largest rations went to workers and soldiers, smallest rations given to members of the bourgeoisie
War communism brought out labour discipline:
In 1918, working day extended to 11 hours
In 1918, work was made compulsory to all people who were able
Harsh punishments given to people who were late or caught slacking
Following measures introduced to try to abolish the market:
Abolition of money:
More money printed which led to hyperinflation
Abolition of trade:
Private trade made illegal
Complete nationalisation:
All businesses taken over by state
Conscription:
Workers assigned to either work or fight in the army
What were the consequences of war communism?
Kept Red Army supplied and won civil war
Led to economic collapse
Failed to abolish market
Grain requisitioning led to…
lower rates of agricultural production
Why did grain requisitioning lead to lower rates of agricultural production?
Peasants not paid for their grain or labour:
- Therefore the peasants had no incentive to work
Secondly, industrial production declined:
- Too few incentives to work.
- Hunger led to workers leaving the cities and seek work on farms where there was a greater chance being fed
Total workforce declined from ___ million workers in 1917 to ___ million in 1922
3
1.2
Growth of a black market during the Russian Civil War
Lenin’s economic controls failed to abolish the market
Historians estimate that only 40% of the food consumed in Russia’s cities came from rationing of food during the Civil War
Mass starvation deepened…
the economic crisis, leading to a political crisis
Why did Lenin introduce the NEP?
To retain political power
Lenin described the NEP as…
an economic retreat
Lenin NEP quote
“one step backward in order to take two steps forward”
Lenin argued that the NEP, over War Communism was…
the correct economic foundation on which to build socialism
Argued that the Communist Party must learn to trade and use capitalism to build Communism
Also emphasised that the NEP would create peace with the peasants
NEP was a major economic…
compromise
Consequences of the NEP
NEP led to political and economic stability
Did not lead to rapid industrial growth, nor popular within the Party
Political and economic stability
Ending grain requisitioning was very popular amongst the peasants
Free trade encouraged peasants to grow more food.
Therefore famine ended
Food became more widely available
Led to a growth in grain production
Market Reforms
Under the NEP, market mechanisms were reintroduced, including the establishment of agricultural markets. This allowed for greater flexibility in pricing and encouraged farmers to produce more grain to meet market demand. The increased competition and potential for profit motivated farmers to invest more effort into grain production
Positive Growth Rates
Historical data indicates that grain production experienced notable growth during the NEP period. For example, between 1921 and 1926, grain production in Soviet Russia increased from 37.6 million metric tons to 56.2 million metric tons, a significant rise
Agricultural Investments
The NEP facilitated increased investments in the agricultural sector. Private individuals and cooperatives had the opportunity to invest in machinery, fertilizers, and modern farming techniques, leading to improved productivity and higher grain yields
Industrial growth under the NEP
By the end of 1921, Lenin argued that the NEP was not merely the right policy for creating economic growth. But the best way to industrialise the USSR and lay the foundations for socialism
Scissors Crisis
Agriculture recovered quickly, more supply of food led to a fall in prices of agriculture. Industry recovered much slowly.
Therefore prices rose.
A gap opened up between farmers’ incomes and industrial prices.
The rise in industrial prices meant that farmers could not afford to buy industrial goods and therefore there was no incentive for farmers to produce large quantities of grain
The scissors crisis was a strong indicator that the NEP was…
failing to industrialise the economy
NEP led to the re-emergence of …
inequality and corruption
NEP led to emergence of…
“Nepmen” traders who made money by finding gaps in the market.
Communist government regarded the Nep as parasites - why?
Produced nothing and made money from selling luxurys.
Sometimes, Nepmen would be arrested by the Cheka for profiteering.
Continued to operate all the way till the end of the NEP
Nepmen grew rich whilst…
ordinary peasants stayed poor despite hard work
Right-wingers like Bukharin argued that the NEP would be…
The best way to industrialise
Building socialism with capitalist hands
