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Russian Economy - historyatwoodlands


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									      Russian Economy

  Money, money, money, must be
funny, in a Capitalist’s world. I thank

1. Explain industrial and agricultural changes.

2. Identify turning points.

3. Begin to assess social and economic impact.
                  Alexander II
• Fear of industrialisation, would create proletariat
  and revolts.
• New work discipline – rules and regulations for
  employees in factories.
• Did develop state involvement, particularly in
  railways, coal and iron production.
• Managed, with Mikhail Reuturn as Finance
  Minister, to attract foreign investment (J.J.
  Hughes – steel in Ekaterinoslav).
• New industries open up, including oil industry in
  Baku and Caucasus.
Railways – Al II next to a train,
                 • Used foreign expertise.
                 • Stimulated by British
                 • Reutern helped increase
                   railway 7x from 3532km to
                   22,498km by 1878.
                 • Boosted industry and
                   cushioned from 1873-1882
                 • Did cause some corruption,
                   i.e. government bonds, tax
                   exemptions and monopoly
                 • By 1880 94% of railways in
                   private hands.
     • 1881 Bunge takes over as
     • Abolished Salt Tax in 1881
       and Poll Tax in 1886.
     • Created Peasant Land
       Bank 1883, started to
       allow railways to go into
       state hands.
     • Bunge replaced by
       Vyshnegradski, hardliner
       and balanced books, but
       responsible for 1891
                      Great Spurt - Witte
                                • Encouraged foreign investment.
You looking at me?              • Sacrificed agriculture, some
Ain’t no one else                  anger.
around, so you must             • Raised taxes, interest rates and
be looking at me…                  foreign loans.
                                • Focussed on railways, iron and
                                • 1897 rouble placed on the gold
                                 Coal doubled and iron and steel
                                   increased 7x.
                                 52,612 km railways by 1901.
                                 Industrial income increased from
                                   42m Roubles 1893 to 161R 1897.
                  WWI and Nic II
• Witte dismissed 1903,         • WWI killed economy.
  ignored agriculture and       • Inflation rampant, loans
  railways costly and poorly      called in, food and fuel
  built.                          prices rocketed.
• Became PM in 1905,            • Killed off Romanovs.
  Stolypin FM.
• 1909-1913 GNP increased
  by 3.5%p.a.
• BUT – population boomed,
  small scale producers still
  around and productivity not
• Starvation still a real
• Russia faced WWI hangover and Civil War.
• Introduced State Capitalism, reaction to situation
  – nationalised economy until it could “safely” be
  passed back.
• Nov. 1918 – Land Decree, Nov.1918 Decree on
  Workers Control (power to run factories).
• Dec. 1917 Supreme Economic Council, helped to
  nationalise over 30,000 entities. This was
  subservient to Council of Labour and Defence,
  chaired by Lenin.
                  Civil War
• Nullified all gains from State Capitalism.
• Industrial output fell.
• Inflation rocketed.
• By Oct 1920 the rouble was worth 1/10th of
  value from 1917.
• 90% of all wages were paid “in kind” due to
  worthless nature of money.
            War Communism and NEP
   War Communism                        NEP
• State capitalism saw Bol. take        • Denationalisation of small
  over economy.                           scale enterprise and private
• 1917 Decree on Land.                    ownership allowed, small
• 1917 Supreme Economic Council           workshops flourished.
  (SEC) nationalised all enterprises,   • State control of heavy industry
  1918 Decree on Workers Control          continued.
  = “extra powers”,.
                                        • Trade increased with less state
• 1920 30,000+ enterprises, SEC           restrictions, i.e. food sales.
  struggled to control.
• Labour militarised, nationalisation   • Rouble re-valued and
  meant workers lost control of           introduced.
  production and distribution and       • Grain requisitioning ended and
  grain was forcibly requisitioned.       peasants able to sell surplus.
• By 1921 Party and people wanted
                      Impact of NEP
Economic Impact                     Political Impact
• Initial results were strong.      • “Temporary deviation, a
• Market goods improved.              tactical retreat”.
• Nepman were created,              • Papered over by call for
  entrepreneurs who by 1920
  were responsible for 60% of         greater party unity,
  trade.                              instigated by 1921
• Scissors crisis kicked in, food     Kronstadt uprising.
  increased and outstripped         • Lenin’s death in 1924
  demand, prices fell.
                                      exacerbated divisions.
• Peasants reluctant to sell
  surpluses, but industrialists     • Stalin remained ambivalent
  needed them to.                     between rightists and
                                      leftists, pulled NEP in 1929.
Stalin and 5 Year Plans
        • Two aims:
           – Economic autarky for war footing.
           – Improved value of workers.
        • Based on strict control and
          centralised planning.
        • Plans were set on often flimsy
          evidence and targets were often
        • Gosplan set targets, passed on to
          regional commissariats then
          industrialists. Only guidelines on
          what was required, not
          instructions on how to do it!
                      5 Year Plans
• First set in 1929, but did not
  run full course, often
• Stalin even upgraded targets
  towards the end of each
• Statistics are impressive, but
• Khrushchev also centralised,
  but saw eventual slowdown
  in growth.
Read pp.112-113 and assess
   statistics and success.
Russian Agriculture
          Agriculture in Russia
• Both Tsars and Commissars experienced similar
• Most of the population was working on the land.
• Industry was always seen as more important to
  agriculture and peasants were always seen as
  second class citizens.
• Land was always problematic and no leaders
  managed to deal with it adequately. Peasant
  anger was always fuelled by resentment that they
  could not own land outright.
Emancipation (we know this, but…)
             Impact                             Unrest
•   Peasants freed, able to     •   Peasants given poorer
    marry whoever and own           quality land and less than
    land.                           before Emancipation.
•   Nobles compensated,         •   Many couldn’t afford
    payments over 49 years at       payments or earn enough
    6% interest.                    from the land.
•   Nobles allocated land to    •   Mir still in charge of what
    peasants.                       was grown.
•   All redemption payments     •   Subsistence farming kept so
    dealt with by the mir.          no motivation to farm more.
Al III 1891 Famine
         • Blamed on peasant
           attitudes and out-dated
         • Land captains introduced
           to maintain control.
         • Consumer taxes raised to
           encourage more grain to
           be sold, grain also
           continued to be exported.
         • 500,000 died.
                     • Appointed PM in 1906 following
Stolypin’s Reforms     peasant unrest that lasted 1905-
                     • Hoped to improve land
                       distribution and create stronger
                       peasant class as role models
                       (wager on the strong).
                     • Peasant land bank had unused
                       land made available.
                     • Consolidation of strip farms
                      Rich peasant class expanded, but
                       remained angry over available
                      2m peasants left land and created
                       labour shortages, exacerbated by
War Communism                  NEP
• Showed lack of care for      • Wealthier peasants
  peasants.                      increased [kulaks].
• Grain requisitioning.        • In 1925 they were defined
                                 as owning 3 cows, 1928 it
• 3 types of peasant, poor,      was 6.
  middling and the kulak.      • Suffered from higher taxes,
• Denounced by village poor      disenfranchised and
  = Cheka class war.             children barred from
• Peasants still looked down     secondary school.
  on by Bolsheviks.            • Were able to criticise
                                 Bolsheviks = Bol. attacks.
• Small farm units into bigger
• Lenin wanted gradual
  approach, only 3% by 1929.
• Shortages believed to be
  part of hoarders during NEP.
• 1927-8 saw push for
  collectivisation – “socialism
  in the countryside”.
• Matched by de-kulakisation.
Process of Collectivisation
            • Meant to be voluntary.
            • Explained to peasants, komosols
              and poor peasants denounced
              kulaks ad created fear.
            • Kolkhozy (pure) or Sovkhozy
              (state) collectives.
            • 1930 58% claimed collectives,
            • Opposition saw Bransk-oblast
              reject Komosols, migrationin
              Kazakhstan saw 75% migrate.
            • Opposition led to “Dizzy with
              Success” paper and peasant
              allowed to leave collectives.
        Renewed Collectivisation
• 1937 = 98% of peasants      • Disrupted by 1932-34
  re-collectivised.             famine.
• Now allowed to keep         • Payments of kolkhozy
  small plots of land (more     farmers improved.
  productive than             • 1941 98% collectivised,
  collectives).                 still disliked.
• MTS stations set up,        • Hated 1930 end of the
  meant to distribute seed,     mir, wanted to make
  collect grain and decide      extra independence,
  levels of payment.            realised famine not
                                prevented by collectives.
       Khrushchev and Agriculture
• G. Hosking “[Khrushchev]        • Tried to provide more
  never fully got to grips with     incentives by reducing
  the authoritarian and             taxes, increasing electricity
  bureaucratic structure of         provision to rural areas and
  agricultural administration”.     raised prices on state
• Khrushchev believed               procurements.
  himself to be an expert.        • Changes angered urban
• Removed MTS stations and          workers over price rises.
  merged smaller collective       • 1962-63 saw bad weather
  farms, believed this would        and harvests = riots, worst
  improve production.               at Budyenni Locomotive
                                    Works, 23 protesters shot
                                    by KGB.
Virgin Land Scheme
• Designed to increase       • Failures:
  cereal production.            – Land overused and crops
• Meant to be achieved            not rotated.
  through increase in           – Soil fertility fell and soil
                                  erosion made many areas
  cultivated land.                too arid for cultivation.
• 1950 96m acres allocated      – Largely cut corners due to
  for wheat production,           speed of implementation.
  1964 = 165m acres.            – Productivity and
• Sense adequate food was         production fell.
  being produced.               – Main reason Khrushchev

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