Nationalisation of Industry, Communism & the NEP

• The new government wanted to end capitalism in Russia.
• To do this, they had to end the free trade of goods and balance out social classes by evenly distributing money.

• Fixed prices for grain were introduced in order to keep the price of grain and the cost of buying grain for the army low.
• But, this meant that peasants did not want to sell their grain for low prices. They just kept the grain they produced.
• The Cheka (secret police) was sent to requisition grain from peasants.
• The brutality of this war communism made the party unpopular.

• Food rationing was brought in, and people with jobs that were important to the war effort were given the most food.
• Money was abolished, and instead people were paid in material goods.
• In July 1918, all large industries were nationalised. Production targets were set in Moscow.
• Public transport was made free in the cities, and private trading was banned.

L. Siegelbaum (1992): ‘At heart, “War Communism” is a contradiction in terms, a conceptual trap that has hindered more than it has helped to make sense of Bolshevik attitudes and behavior before 1921. The only reality assumed by War Communism was retrospective, that is, as a foil against which could be highlighted more “realistic,” or even “human” policies. Other than to interpolate later Communist Party discourse, it should be dropped from our vocabulary.’

Jonathan Coopersmith (1992):

• ‘Although militarily successful, war communism failed to transform Russia into a socialist society. By 1921, the worsening political and economic situation demanded another approach.'
• 'The economic situation looked bleak: a devastated transportation network, empty factories, rampant inflation, recalcitrant peasants, famine and accompanying epidemics, high unemployment, little trade with the West, and distinctly nonrevolutionary, if not hostile, international relations.'

• War communism failed.
• Peasants destroyed their own crops so that the Cheka (secret police) could not seize them.
• There were large food shortages, particularly in rural areas.
• There was a peasant uprising in Tambov Province.
• The Bolshevik leaders did not give workers an active role in decision-making and this caused discontent.

• The New Economic Policy tried to fix these problems.
• Money was reintroduced and so were some other aspects of free markets (capitalism).
• Small businesses flourished (did well) across Russia, and it was acceptable for private businesses to employ workers.
• Peasants no longer had grain seized from them. They now had to pay taxes, first in goods, then in cash.
• The peasants could then sell their grain and keep the money from this. Those who were successful were called the “NEPmen”.

• Some communists were disappointed with the NEP. They felt that it betrayed their principles.
• Trotsky was one of these opponents.
• There were more and more cases of suicide in the Bolshevik party.

• There was growth in agriculture and industry (although it was slow).
• The Scissors Crisis
  • Whilst food prices were affordable, the price of factory-made goods increased because of communist policies.
• Inequality also increased. Some groups made more money than others from the new system and trade with other countries remained lower than 1913 levels.
• As before, the ‘Commanding Heights’ (banks and major industries) stayed nationalised. Russia also remained a one-party state.

Robert Himmler (1994) argues that Stalin's receptiveness to the NEP in 1921 was staged:

• '...Stalin delivered a blast against the NEP at the Twelfth Party Congress in April 1923, just a month after Lenin was incapacitated by strokes. Stalin charged that the two-year-old policy "exposed [the party] to the corrupting influence of NEP elements." Worse yet, it nurtured the growth of nationalistic and reactionary thinking, which has "acquired many supporters among Soviet officials" and "has penetrated even into some of our party institutions."'

• Lenin wanted to modernise the economy because socialism required a highly advanced economic system.
• He also wanted to create a more stable economic system.
• Ultimately, Lenin and the Bolsheviks wanted to destroy capitalism.
  • He believed the socialist economy would be more efficient and would lead to the end of inequality.
• Lenin had to balance this ideology with meeting pragmatic needs.

• March 1918: Nationalisation began very early in the Bolsheviks' rule.
  • It was a core economic policy.
  • This meant that the state took control of industry.

• March 1918: Lenin brought in state capitalism.
• He saw state capitalism as a way to move from capitalism to communism.
• Part of this involved moving ownership of large industries from capitalists to the state.

• To create a more efficient economy, Lenin centralised control of industry under the Vesenkha.
  • Vesenkha brought back worker discipline, with higher pay for the most productive.
  • These bodies also appointed specialists to run factories.