NEW ECONOMIC POLICY (I)

1
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

2
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

3
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 Lenins death

Nepmen
4
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

5
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

6
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 Stalins Moscow chauvinism and began
  to meet with Trotsky to kick Stalin out of party
• Stalin learned of meeting and berated Lenins
  wife, Krupskaya, when she would not let him meet
  with Lenin

7
LENINS 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

8
LENINS 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

9
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

10
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
  Peoples Commissars
• Named General Secretary of Communist Party in
  1922

11
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
  Lenins death
• Because he could deliver votes on Central
  Committee and hence determine outcome of any
  debate

12
POWER STRUGGLE BEGINS

• Stalin stood out in rituals surrounding Lenins
  funeral
• Trotskys 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 Lenins Last Testament be
  kept secret

13
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
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RIGHT OPPOSITION

• Led by Nicholas Bukharin
• Agreed that socialism in Russia depended on
  world revolution for its ultimate success
• But he didnt 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

15
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

16
STALIN WINS

• Power struggle after Lenins 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

17
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 Stalins orders in Mexico
  City

18
SOCIALISM IN ONE COUNTRY

• Stalins 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

19
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

20
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

21
FIRST FIVE YEAR PLAN

• Projected that industrial production would
  increase by 200
• Emphasis on heavy industry
• Investment capital would come from collective
  farms

22
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

23
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

24
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

25
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

26
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

27
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

28
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

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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)

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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

31
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

32
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 worlds great
industrial superpowers
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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