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.
• Fear of industrialisation, would create proletariat
• 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
• 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
• Bunge replaced by
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
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.
• 1909-1913 GNP increased
• 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
• 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.
• 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.
• 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
• 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
Read pp.112-113 and assess
statistics and success.
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…)
• 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
• 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.
• 1937 = 98% of peasants • Disrupted by 1932-34
• 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
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