NEW ECONOMIC POLICY (I)
• Lenin replaced War
Communism with New
Economic Policy (NEP)
in 1921
– Never saw it as
permanent policy
but as a temporary
retreat from
socialism that would
give Russia a
chance to recover
economically and
socially
NEW ECONOMIC POLICY (II)
• Provisions
– State retained ownership of large
industry
– Private enterprise allowed in
small industries and retail trade
– Peasants freed from forced
requistions
• Had to pay tax in kind to
government but were
otherwise free to sell rest on
free market
• Given strong incentive to
produce more
• NEP was tremendous success and it
quickly revived the Russian
economy
“DANGERS” OF THE NEP
• 75% of all retail trade fell into private
hands during NEP
– Caused rise of “Nepmen”
• Numerous and prosperous
• Fear was that they would
become new “bourgeoisie”
• Caused rise of “kulaks”
– Peasants grown wealthy because
of private enterprise provisions of
NEP
• Debate over NEP would become
linked to power struggle after Lenin’s
Nepmen death
BAN ON “FACTIONS”
• In response to criticisms of NEP,
Lenin and Politburo ban all
“factions” in 1922
– Any party member who joined
others to oppose or criticize
any party policy would be
expelled
– Stalin would later use policy to
eliminate rivals
– Leaders who would later suffer
because of this policy all voted
for it in 1922
TWO MISTAKES
• Lenin suffers from a
series of increasingly
series strokes between
late 1921 and 1924
– Left him speechless
and paralyzed
• Made two tragic mistakes
during this period
– Supported ban on
factions
– Appointed Josef Stalin
General Secretary of
Communist Party
LENIN MOVES TO GET RID OF
STALIN
• Lenin discovers Stalin had
used terror and murder to
stifle peaceful opposition of
local communist leaders in
Georgia
– Criticized Stalin’s “Moscow
chauvinism” and began to
meet with Trotsky to kick
Stalin out of party
• Stalin learned of meeting and
berated Lenin’s wife,
Krupskaya, when she would
not let him meet with Lenin
LENIN’S LAST TESTAMENT
• Began in December 1922
• Did not name successor and instead offered his
personal evaluation of all possible candidates
– Stalin: should be replaced with someone
“more patient, more loyal, more courteous,
and less capricious”
– Trotsky: most pre-eminent member of party
but suffered from excessive self-confidence
and highhandedness
– Barely mentioned Zinoviev and Kamenev
– Highly praised Nicholas Bukharin and Felix
Pyatokov
LENIN’S CONCLUSION
• No one was fit to
succeed him
– Wanted Trotsky,
Zinoviev, and
Kamenev to form
caretaker
government until
Bukharin and
Pyatokov were
ready to take over
DEATH OF LENIN
• Lenin takes final steps
to eliminate Stalin
• Final stroke on March
10, 1924 completely
paralyzes Lenin before
he could get rid of
Stalin
– Dies in early 1924 at
age 54
JOSEF STALIN
• Born in Georgia in 1879
– Real name was Iosif Djugashuili
• Joined seminary to study to become a priest
– Expelled and drifted from job to job
• Gradually drawn into revolutionary movement
and became Social Democratic agitator in
Georgia by his early 20s
– Eventually came to the attention of Lenin
and came to Petrograd after February
Revolution
– Named Commissar of Nationalities after
October 1917 and made member of
Politburo and Council of People’s
Commissars
– Named General Secretary of Communist
Party in 1922
GENERAL SECRETARY
• Used position to build powerful power
base
– Controlled the appointment and
dismissal of all party bureaucrats
– Set agenda for Politburo
– Sole provider of information for
Politburo
– Packed Central Committee with
flunkies
• All rival factions in party courted him
after Lenin’s death
– Because he could deliver votes on
Central Committee and hence
determine outcome of any debate
POWER STRUGGLE BEGINS
• Stalin stood out in rituals surrounding
Lenin’s funeral
• Trotsky’s position weakened by:
– He had joined party late
– Never bothered with day-to-work of
ordinary politics
– Talents as intellectual critic and
engineer of policies not as valuable
with Lenin gone
– Trotsky made tactical errors
• Voted for proposal that Lenin’s Last
Testament be kept secret
LEFT POSITION
• Proposed by Trotsky and
supported by Zinoviev and
Kamenev
• Socialism in Russia was
doomed without worldwide
communist revolution
• Soviet Union should
therefore support
revolutionary movements
abroad and pursue a
militant and “pure”
socialism at home
– Get rid of NEP
Kamenev
RIGHT OPPOSITION
• Led by Nicholas Bukharin
• Agreed that socialism in Russia
depended on “world revolution”
for its ultimate success
– But he didn’t see this
happening soon
• Therefore he argued that Soviet
government should not push too
far ahead of the rest of the world
by pursuing militant socialism
– Wanted to continue
compromise between
socialism and capitalism
embodied in NEP
CENTER POSITION
• Even though world revolution had
failed to materialize, socialism
could still succeed in the Soviet
Union
– Because of huge population,
huge territory, and tremendous
resources
– All effort should be dedicated to
exploiting these advantages to
make socialism strong in Russia
and Russia strong in the world
– Then the Soviet Union would be
ready to ignite a world
revolution
STALIN WINS
• Power struggle after Lenin’s
death was not merely over
personal power
– It was over the future of Russia
• Stalin eventually won the day
– Used variety of tactics
• Accused opponents of
factionalism
• Accused them of deviating
from party line and trying to
split the party
• Used General Secretary
position to pack party
congresses with his
supporters
ULTIMATE TRIUMPH
• Final victory came at 15th All-
Russian Congress of the
Communist Party
– Prohibited “all deviation
from the general party line”
as interpreted by Stalin
– All opponents forced to
publicly apologize for their
“errors”
– Trotsky kicked out of party
and, in 1929, expelled from
Russia
• Murdered in 1940 on
Stalin’s orders in Mexico
City
SOCIALISM IN ONE COUNTRY
• Stalin’s victory also had an ideological
component
• Of the three views, only his had the most
attraction for rank-and-file party members
– The Right merely told people to bide
their time
– The Left made Russia and its Revolution
seem ineffective and unimportant
– Only Stalin offered a program and goal
that could be achieved by Soviet efforts
alone without dependence on
developments elsewhere
• To underline this point, the 15th Party
Congress also adopted measures that
ended NEP and began a new era of Five-
Year Plans
FIVE YEAR PLANS: OVERVIEW
• Made Russia a great industrial
nation
– Rose from 5th in industrial
production in 1928 to neck-
and-neck with United States in
1980
• New system of collective farming
introduced
• A vast social transformation
accompanied the economic
changes created by the Five Year
Plans
REASONS FOR GIVING UP NEP
• NEP was viewed as a temporary retreat from socialism
– Unacceptable to most communists
• Industry had gained prewar levels but future growth depended on massive
investment--from peasants in the difference between what agricultural
products were worth and what the state actually paid for them
– Peasants felt state prices were too low and refused to sell and felt prices
for manufactured products were too high and refused to buy
– Five-Year Plans would fix situation by insuring steady supply of food at
low prices and squeezing necessary capital for industrial growth out of
peasants
• Stalin knew war with Germany and Japan was inevitable
– Victory depended on absolute control of population and industrial
strength
– Five-Year Plans would collectivize agriculture and put peasants in
centralized areas where they could be watched and would increase
industrial production
FIRST FIVE YEAR PLAN
• Projected that
industrial
production would
increase by 200%
– Emphasis on heavy
industry
• Investment capital
would come from
collective farms
COLLECTIVE FARMS
• 20% of all agricultural
production would be
performed on collective
farms
– Large consolidated blocs
of land made up of
formerly independent
peasant smallholdings
– Peasants would live and
work together on these
farms and equally share
income derived from it
COLLECTIVE FARMS:
ADVANTAGES (I)
• Would halt growth of
petty capitalist
mentalities among
peasants
• Would consolidate
scattered peasant
population and make it
easier to watch and
educate them
• Would promote
improved productivity
because large farms
would be more
amenable to use of
machinery
COLLECTIVE FARMS:
ADVANTAGES (II)
• Would create large industrial
workforce since, with
machines, fewer peasants
would be needed to run
collective farms
• Would provide capital for
industrial development
– State would pays farms
1/8 market value for
products
– Difference would be
diverted into industry
– Farmer would also pay
sales tax and this would
be invested into industry
COLLECTIVIZATION GETS
ROUGH
• Collectivization was supposed to
be voluntary
– Soon became clear that
peasants would not voluntarily
give up their small parcels of
land
– Stalin then abruptly
announced the abandonment
of his 20% collectivization goal
and stated that all peasants
would be collectivized, by
force if need be
• Also announced his
intention to liquidate all
kulaks
COERCIVE COLLECTIVIZATION
• Thousands of kulaks had their
property and possessions
confiscated
– Many sent to labor camps or
deported to Siberia
• Any peasant who resisted
collectivization was labeled a
“sub-kulak” and punished as
though he was a real kulak
• All this done with a great deal
of armed force
PRICE OF COLLECTIVIZATION (I)
• 98% of all farmland collectivized
by 1941
• Very high price
– Peasants slaughtered
livestock, causing huge drop in
number of sheep, cattle, and
hogs
– Urban communist party
members sent to manage farms
• Ignorant of agriculture
• Combined with peasant
resistance, contributed to
huge drop in agricultural
production
PRICE OF
COLLECTIVIZATION (II)
– Famine hits
Russia again in
1932-33
• Crime of
“pilfering”
imposed on
starving
peasants who
stole their
own grain
– At least 5 million
people died
during
collectivization
campaign
INDUSTRY
• Industrial labor force doubled
during First Five Year Plan
– Due to peasants who moved to
cities
• Uncooperative factory managers
who argued goals were too high
were imprisoned and replaced with
more enthusiastic men and women
• Stalin declared plan fulfilled in 1932
– All targets were actually
underfulfilled but production had
increased dramatically
• Coal and iron production
increased by 200% (although
goal had been 300%)
FIRST FIVE YEAR PLAN
• Most glaring shortfalls occurred in
consumer goods
– Targets had been low to begin with
but they still were not met
• Textile production actually declined
• Urban housing went from bad to
abysmal
• Waste, chaos, and mismanagement
accompanied rapid industrialization
– Expensive equipment was ruined by
trying to produce too much too fast or
by untrained workers
– Blame was put on “saboteurs”
• Often technically educated men of
pre-1917 generation
SECOND FIVE YEAR PLAN
• (1933-1937)
• Had to be scaled down after one year
– Realization that a limit had been reached as to what
the economy could do and what people could take
• Emphasis placed on improvement of efficiency and
improving living standards
• Things got better for three years and then leveled off
– Due to increased emphasis on military production
and chaos of the Great Purges
THIRD FIVE YEAR PLAN
(1938-1942)
Projected 200% increase in production and
increase in consumer products
Neither goal fufilled
Due to outbreak of WWII, oil shortage, and
severe labor shortage
Main goal had been achieved by 1941
Although demoralized and exhausted, the Soviet
Union had become one of the world’s great
industrial superpowers
PROBLEMS
• Involved creating of huge planning
bureaucracy
– Main job was to produce tons of
paperwork
• Stalin interfered with planning
process and caused problems
– Hired flunkies who gave him the
numbers he wanted
• No one would point out mistakes
in the planning process, thereby
guaranteeing that when a
mistake was made, it would be a
giant one
• Centralized planning failed to make
the Soviet Union competitive in the
world marketplace
