Unit-10 Russia II October Rev & Economic Development 1917-1920

7/27/2019 Unit-10 Russia II October Rev & Economic Development 1917-1920

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Economk D c r m t R d - I The nationalisation that took place in the first months of Soviet rule was in factcarried out only for very specific reasons pertaining to the imperatives imposed uponthe government by the unique conditions of the immediate post revolutionary period.Among the enter~rises hich were nationalised first, above all were those individualenterprises which were in one way or the other involved in the defence productionproviding armaments and other goods and materials for the ongoing war. Theseproduction units were of crucial importance for the government. Secondly thoseenterprises were nationalised where the proprietors had declared a lockout on onepretext or the other. Thirdly, enterpriseqwhere the implementation of the provisionsof the Worker's Decree met with hostility on the part of the proprietors who resistedits implementation,were nationalised. It was not until the summer of 1918 that fullscale nationalisation of large sectors or the whole of the industries was carred out.

10.2.2 Organisation of Industry

Of much greater historical relevance are the experiments which were carried out bythe government with an objective of creating new forms of organisation of productionand which would be most appropriate to the new and qualitatively differentrequirement?

Mixed Companies

For some of the larger enterprises and for those which had a substantial participationof foreign capital the government put forward a proposal that the State and theprivate investors jointly manage the affairs of running the enterprise so as to facilitatethe process of these enterprises evolving into a form of mixed companies. Theseproposals could not materialise at that time in spite of a series of negotiation roundsbetween the government and the representatives of leading entrepreneurs to create onexperimental basis similar companies preferably with foreign participation in themetal producing industry for a beginning. Only much later when t4e New EconomicPolicy was introduced that this form of organisation of industrial product~on ould beestablished.

Centre

Another organisation to have been established during this period was that of the'Centre'. This form was instituted mainly in the light industry where private andgovernment owned enterprises continued to exist side by side. These centres wereconceptualised as controlling bodies which were given the power of regulating andexercising general control. All the parties-private businessmen trade unions and theGovernment-were given de su at e representation in the cornpodtion of the centres.There was no fixed number (quota) of representatives from each side anddhis wourddiffer from case to case depending on a number of factors. But usually about half ofthe overall members were supposed to represent t3e tmde unions and the other halfwould usually consist of equal number of representatives of the government andprivate owners.

The ceet.Kswerrrgiven the authority to :i) regulate the distribution of stocks and materials;

ii) regulate the prices of the products within the area of their competence;iii) determine and ovetsee the merger of various enterpriises;iv) regulate nationalisation of any enterprise if need arose.

There was also a provision enabling the centres in very specific cases to exercise theirrights to :

i) take over the supply of basic resources-raw materials and-fuel-to variousenterprises within their ownindustry;

ii) market the produce of a n enterprise belonging to their branch of industry;iii) exert a monopoly on export and import operations of the enterprises belonging to

their branch of economy;%

iv) draw up plans for purchase quality control and distribution of products;


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Glavki 0aok r ~ e~ o ldka . . 1Dci- : 9

The function of control by the government over the production process in the varioussectors of the heavy industry was exercised mainly through the organisation of'Glavki* falling under the competence of 'Verrenkha* or the government's SupremeEconomic Council. The status of the 'glavki* was tha t of a 'department* in theVesenkha structure. Glavki were plenary organs of the government with the samepowers on a scale limited to their respective spheres as those which the Vesenkhaexercised on the scale of the economy as a whole. The 'glavki' constituted a moredirect and centralised form of governmental regulation of industrial production whencompared to the 'centre'. Contrary to the objectives of joint management of the'centre', the 'glavki* were constituted with the specitic purpose of coordinating theactivities of 'Workers' control' committees and of helping the authorit ies inproceeding with nationalisation in a systematic manner. This meant passing on to the'glavki' functions like : acquiring exclusive rights of explorat ion of new resources incase of raw materials, control over private companies, establishing new companies,distribution of the product of companies belonging to their branch of industry,shutting down technically obsolete enterprises, formulation of production plans(defining output targets), transport and delivery schedules, determining wage scalesfor different categories of workers and employees, distr ibution of inputs etc.

The managing body of these 'glavki* consisted of representative$ from thegovernment, Trade Unions and a team of technical experts, the lat ter purely in thecapacity of an advisory group.

10.2.3 State C apitalism and Nationalisation

One of the most widely debated problems of the post revolutionary economicdevelopment in Russia concerns the question of nationalisation. Was thenationalisation wave that followed the ascendency of the bolsheviks to power aconscious long-term policy decision of the government,or was it a crisis response onthe part of a beleagured and unstable government?

Many prominent authors and students of Russian economic history hold the opinionthat though accelerated nationalisation appears to be the most outstanding

phenomenon of the first decade after the revolution, it is absolutely necessary toidentify two well demarcated stages in progression of this phenomenon-the earliereight-month phase which began with the bolsheviks coming to power and ended inJune 1918; the second phase which began immediately after-when large scalenationalisation was,effected as a means of 'expropriating the expropriators'. ThZ firstphase is seen as a crisis response on the part of the government on the one hand , andmanifestation of anarchical tendencies among the workers on the other. This was a farcry from a conscious, pre-planned effort at extensive socialisation of the.country'seconomy. In contrast, thesecond phase which began after the summer of 1918 wasundoubtedly a part of a pre-conceived long-term policy.

The government had to res ar tlo large scale and forcible nationalisation after June1918. This indicated that its attempts to limit direct takeovers to a minimum number

of enterprises and exercise control by means of economic organisations like 'centre*and 'glavki' were unable to survive the pressures of the existing political conditions.

Two basic reasons are put forward in explaining the failure of the government topursue its course of compromise and gradual transition, its fa ih re to build up on itsachievements in developing State Capitalism characterised by 'joint' ma'nagement ofthe economic and productive activity.

7'hc rcasons fo t the government's failure are seen in the excessive revolutionary zealand uncoordinated initatives of the workers and their organisations-trade unionsand the local ~ovie'ts. t was not uncommon for the factory committees to take,overthc administration of their enterprise without approval from higher authorities indefiance of specific directives from the central bodies refraining the factorycommittees Srom taking over the administration as it was beyond the powers accordedt o t h c m by the Decree on Workers' Control. The usual practice was that the workerswould break into the office of their enterprise and declare that they are taking over'


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eonodc D e v d o p m a t of ~ d - I eality. Such cases were not by all accounts isolated phenomenon. On the contraryone can consider it to be a trend characteristic of the period. There was a markedtendency on the part of the factory committees towards such illegal takeovers of theadministration of their enterprises. This endericy was sought to be justified or; theground that all productive assets in the country must belong to those who work onit : actories to the workers as land t o the peasants. The tendency that these factoriesmust be run by the workers of this o rt ha t factory above all for their own benefit cameto be known by the name of ' s y n d i h ' . Syndicalism proved to be an extremelynegative phenomenon resulting in gross indiscipline among the workers. It led tochaos and decline in production and often pitted one section of the workers againstthe other. The' rise in sectarian interests among the workers was seriously underminingthe larger interests of the class and the revolution as the workers tried t o oppose anykind of coordination of their activities with outside agencies as it &ually meantcompromise and acceptance of outside advice or directions.

Any organisation of the production process on a large scale or any systematicrestructuring of the industry and other sphere of the economy was practicallyimpossible by the syndicalist tendencies among the workers. Moreover,suchtendencies were limited not only to the workers. Among the bolsheviks too there wasa section of extreme left who did not like the management of the factories to be runby professional managers. At the Third Congress of Trade Unions the bolsheviks?demand of introducting scientific management procedures in the factories was met

with a lot of hostility and opposition and was labelled as 'heritage of capitalism' and'remnants of capitalist exploitation' etc.

Check Your Progress 1

1) Which were the two major Decrees issued by the Soviet government immediatelyafter the October Revolution?

2) Say whether the following are true or false :

a) Nationalisation was massive after the October Revolution. (True/ False)

b) Nationalisation was a deliberate policy.

c) Only selected enterprises were nationalised.

(True/ False)

(True/ False)

d) Workers wanted to leave the enterprises with their owners. (True/ False)

3) Describe the new forms of organisation of industrial production created by theSoviet government.


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b) Nationalisati.>n was massive after June 19 18

c) Takeovers by the workers were rare.

(True/ False) ~ R ~

l b m m k Da*dop.#t : 91(True/ False)

5) What were the laajons for the failure of the Soviet government to pursue agradual course cf' economic reforms?

6) What was 'syndicalism'?

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10.3 WAR COMMUNISM

One of the most neglected points on War Communism as an economic system is thatthis system did in the end prove t o have played a crucial role in the victory of thebolsheviks in the civil War against incredible odds. But this kind of~success f thesystem of War Communism,once admitted,must not deter us from asking an even morebasic question : whether or not War Communism, in historical perspective, can beconsidered a viable economic system which was capable of solving long-termeconomic problems facing the bolsheviks in the twenties of this century.

In order to answer this question we will have to conduct a Proper evaluation of thesystem in terms of how differerit sectors and other participants in the overal leconomic arena responded to the policies of the government, and to what extent thisresponse coincided with the expectations of the policy makers. Finally, we would liketo know whether the functioning of this system led to a consolidation of the economy 'or to disruption of the vital links between various sectors of the national economy.However, any exercise with such an objective will have to include a proper evaluationof the concrete historical conditions prevailing during the period under study, and ofthe events leading toa dop tion of this or that policy by the leadership of the country.

10.3.1 Background

These conditions, as far as the economy is concerned, could not have been w o n t forany government in the world, even for those best placed to tackle them. The Sovietgovernment had lost most of its territories to a host of armies fighting against therevolutionary regime. In the north General Yudenich stood at the gates of Petrograd;the British were in control of the extreme north with the British navy laying a virtualblockade at th! entrance of the river.Neva into the Gulf of Finland, thereby cutt ingoff a n important water transpor t route. The east was under the White armies ofAdmiral Kolchak and the Czeks and the rebellious Czek. The whole area in the southfrom the sea of Azov to the volga was occupied by the forces under the overallcommand of General Denikin.

The resulting shortage of raw materials coupled with a severe disruption of the foodsupplies had a crippling effect on the economy, exacerbating further thedisoiganistion and administrative chaos that had been created in the wake of workers'anarchy and syndicalism of the first eight months of Soviet power.


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production in 1913. The supply oi these crucial inputs was now effectively cut oi i. '1 heother pig iron producing region of the country was also cut off from Moscow byAdmiral Kolchak and the Czeks. As a result the production in those metal producingunits which were still in the central Soviet held area was drastically cut down

depriving the ammunition industry and engineering sector of crucial inputs.

Coupled with it was the stoppage of supply of oil from the Baku region. The Sovietsfound themselves being deprived of it. This created a fuel crisis which ~ s u l t e d nconverting the railway to the use of wood as fuel. The inability of procuring fuel and

metal led to repairs being not done on time or not at all, thus disrupting the alreadydecrepit transport system. An idea of this transport crisis can be had from the factthat only about 50 per cent of the locomotives in working condition were being usedfor purposes other than military. About 47 per cent of locomotives were standing idleat the end of 1918 for want of repair. The government was able to avail of lessnumber locomotives with time-there were about 14,500 locomotives in the hand ofthe government in 1917 but by the end of 1918 it could make use of only 5000 andabout 20 per cent of railroad wagons were also not available due to want of repairs.The Soviets had lost almost 60 per cent of their railway network to the Whites.,

10.3.2 Productivity and Inflation

Under these conditions the productivity of industrial production was bound to have

been affected. A situation was created where there was a lot of chaos in theadministrative system which was unable to cope with the magnitude and complexityof the situation. Added to this was the acute shortage in food supplies to the cities.This had a very demoralising effect on the workers. It greviously lowered theircapacity to work with the required intensity and affected their capacity to regularlyattend work, as virtually starvation and semi-starvation conditions made themphysically yeak. There was also a spurt in petty thefts and robberies. It is estimated

that fhe average productivity of workers was reduced by almost 65 per cent in 1920with absenteeism reaching a level of about 60 per cent at its highest and remaining ata considerable level of 30 per cent most of the time.

Under such extreme conditions of (i) shortage not only of inaterials and fuel, but alsoof food products and other necessities (ii) an acute shortage of workforce due to

physical inability to work (iii) recruitment of a large number of workers for fighting atthe various fronts (iv) migration of a large urban populace t o the country side toescape f r ~ m he hardships of city life and (v) the heavy strain put by the war on thefinances and the government's incapacity to augment the same, made it impossible forthe government to tackle the problem of inflation in a n effective manner. Some effortwas made on a very limited scale to tap extra f inancial resources by mainly targettingthe rich city dwellers and businessmen by slapping extra levies on them. But in thegiven ci rc umtanc ts the possibility of raising revenue through this method was verylimited and absolutely inadequate. Thus he government was not left with anyalternative other than resorting to printing Inore money.

One of the reasons that f o r d he government to resort to ~r in ti ng more and moremoney was that in an economy where shortages have become endemic and chronicit was the only way by which the government could augment its reserves. This means thatinflation helps the governmen1 to acquire more resources than it would haveotherwise. In a shortage economy it leads to further deprivation of the; non-government consumers as the government is able to incyease its share of consumption.The increased demand leads to a further increase in'prices. In this case, people witha fixed income or those holding money reserves are the first to suffer as the fixedamount of money in their hands come to represent less and less of goods in physicalterms which they are able to buy and their incomes lag behind the movement ofprices. Professionals, employees and workers are the main sections who have to carrythe main burden in a runaway inflation. But the revolutionary government which hadcome to power on a promise to safeguard and promote social and economic interestsof the working class could not,with any moral justification,conduct a deliberate policyof curtailing the already meagre income of the workers in real terms. Therefore, thegovernment resorted to paying the workers in kind in exchange for the anlount ofwork done by them Though it did not stop the overall deterioration ol' t h t ~ r


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inhition. Firstly, it was the huge mass of the peasantry which had to buy ind ustrialproducts from the urban market and,secondly, thc moneyed class consisting ofbusinessmen and professionals (private. doi.tors. engineers ctc.). Th e positiono f th epeasants was unique in the sense that they had to do ubl x hcar the burden . Firstly.ngrain monopol>,was introduced after the revolution in ord cl- to cu rb rhc rise in theprices of upriculturnl products. Therefore, with the inflation prog~.essivelygetting outof cont rol there was a steeper increase in the prices of industrial goods a s there was norestraining factor unlikein the case of agricultural good s. So now the peasants inreality could get less of industrial good s in exchange for the sam e am ou nt of produ ce.

Secon dly, there was always a longer lag of time between reciept of paymen ts by thepeasants and their consequent spending for purchase of industrial goods. I n themean time the am oun t of money held by them w ould fall in value in real terms du e toextremely high rateof increase in prices of indus trial goods.

October R e v

Ecoaomk D c v e l o p w n t : 9

IJnder these circumstances the peasantry reacted in th e only way possible in ord er tominimise their losses. The peasantry resorted to dehoarding of money. It now kept aslittle of paper money w ith itself as possible and instead started h olding stocks inphysical form, that is to say, it started buying and hoardin g industrial goods in largerquantities tha n it did previously and , secondly, parted with their produ ce only in asmuch as it was necessary at a given point of time. The peasa ntry a lso realised th at itcan m inimise its losses by cuttin g the time interval between the sale of its prod uce an dpurcha se of goo ds during w hish it held m oney in balance. These practices of the

peasants Icd to a heighxning of'upward pressure on the market price of industrialp ro du cts and n a t i ~ r ~ ~ l ! ~ ,e5ulted in a new round of price increases witha subsequentfall in the value of the currclicy.3-he govcr ~ ~ m e n tas thus not very successf;rl in itspolicy of acquiring large quantity of extra resources by printing mo re money. It isestimated that by 1920 the ability of the governme nt to raise extr a resources byprinting excessive amount ofmoney w as drastically reduced an d the value ofresources it could raise thereby was only a third of the real value of the currency in1918.


1) Describe the general conditions du ring the Civil Wa r period.

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Stat e briefly why th e government w as forced to resort to the printing of theexcessive amou nt of m oney.............................................................................................................................................. . . . . . . . . . . . .. . . . . . . . . . . . . . .. . . . . . . . . . . . . . .

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10.4 WAR CO MMUNISM A S AN ECONOMIC SYSTEM


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~c on om ic evelopment of Russia-1 exchange between the various sectorsof the econorn!: and b road sectio ns of thesociety.

10.4.1 Economic Measures of the Soviet Government

'I'he rnarket mechanism had proved its inadequacy for achieving the objectives of thcgovernment. A new system was needed and it was adopted as a series of urgenteconomic measures in relation to the peasantry and agricultural production. Thegovernment moved to take control over the distribution and supply of agriculturalproduce, even if it meant ,useof coercive methods. Now it would be the governm entwhich would decide how much of the agricultural produce will be left with the

Pc:lsantry.ln o t h c ~words, what would be the quantity which will be requisitioned bythe Government on an obligatory biisis as surplus produce? Where and how much ofthe surplu s thus acquired will bc directed'? Therefo re, the corn ersto ne of this policywas centralised collection and dk tribu tion of agricultural surplus. The org anisation ofthis system was handed over to 'Narcomp rod' or the Ministry of Supplies.

Such a policy could only antagonise the peasantry as it went against itsin'terest as a nindependent econo mic entity, which could, and did in certain region, bring abou t arup ture in the alliance of the workers and the peasantry against the previous regime.Apa rt from serious political conseqences, pursuance of this policy, a s historical eventswere to prov e,'was also fraught w ith very serious economic consequences. Th epeasant wh o was now n ot able to utilise the reward t o his labour according t o his ownfree will and was forced to p art w ith a large part of it, retaining only that am oun twhich the government thoug ht w ould be sufficient for him, did n ot have m otivationto work beyond a certain limit. As a result of this lack of motivation,the peasant,naturally, started to sow onlya part of thc 2nd he had, a practice which on allationwide scale led to a su bstan t;al slirinkaglil: the ;~reaown. Wit11 substantialshrinkageof sown area in a sho rt period of time coupled with primitive methods, agricultural'production had the inevitable ~ es u lt f going do..,n. The total cro p yield by 1920 haddeclined by more th an a third.

This was also a period of extensive nationalisation of industry. Nationalisation wasthen no t restricted only to enterprises of crucia imp ort fo r the b;r.vernment, but all thelarge scale and medium as well as a majorityof small and very small scale productionunits were nationalised because of theCOP- t.,sions of coordinating the centralised

distribution of agricultural and in dus tk:~i esources and consu mer goods amo ng therural population, industrial workers, industrial enterprises, the army and othergov ernd ent agencies.A decree was issued on Novemb er 1920 regarding the kind ofenterprises to be n ationalised. A ccording to the Decree all produ ction units w heremechanical power is used and mo re than five people are employ ed, and those wheremechanical power is not used with more th an ten people employed were to benationalised. S uch a massive nationalisation led to 37 thou sand enterprises beingtransferred to the jurisdiction of the State, amon g which there were thousan ds ofsmall factories bo th using and not using mechanical power.

During this period (1918-1920) the government came to monopo lise and controlthc movem ent of all the produ ctive inputsas well as comm odities meant lorindividual consump tion. M ost of the distribution activities were now conducted in

kind, the m arke t mechanisms were almost eliminated w hich led to exclusion of m oneyas a viab le med ium o f e~ c h a n '~ e .he exclusion of money as a medium of exchangewas facilitated by two Decrees of 1918-one of which mad e it oblig atory to carry outexchan ge only by means of boo k entries,and the other prohibited all internal tradean d the function of supplying goods for individual consum ption was given toNarcomprod.

It was necessary for th e government to identify and elabo rate a system of well definedtransactions between its agencies involved in the organisation and c ontr ol of thedistribution process on the one hand, and the producers, be it the peasant or theworker, on the other hand. As far as the workers were concerned such transactions

. were rather simple -they w ere paid a n equivalent of the work performed by them inkind. But such transaction s were rather com plex to org anise in the case of equitable

exchan ge with the peasa nts in view of determinin g the relative value of thecommodities involved and the minimum amount to be left with the peasant. Theh f d d d d h h l f l l d


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type of product. The agricultural products were thus divided into three categories :. October Revolu

i) products which were to be requisitioned on an obligatory basis; ii) those which were Fmmdc Dcvelopmcnt :,

-not to be requisitioned but could be sold only by government agencies, and iii) thoseproducts which could be freely traded or exchanged in kind. Here again the resultswere not exactly in line with the expectations of the government. It had expected toincrease the availability for itself of those products which were of importance for the

gavernment by means of compulsory requisitioning. But the peasants again were leastmotivated in the production i f these products . On the contrary thGy were interested ingrowing or producing products included in the third category.

10.4.2 Centralisation

The government reaction to such practices of the peasants was to trans fer more andmore products from the third category to the first. Apart f rom this the governmentmade provisions for giving certain incentives to the peasants so as to persuade them toput additional stocks at the disposal of the government. These additional collection tosome extent could suplement the stocks procured through compulsory requisitioning.The procedure used involved organising a special fund of industrial goods which wasthen put up for sale in the peasant market. At the initial stages sale and purchase wasconducted by.medium of money. But the Decree of 1918 announced that industrialgoods would be supplied only against receipts of grain delivery. Hence, such

transactions began to be conducted without involving money transfers giving rise to asystem of barter trading between differetlt sectors of the economy.

A large number of government agencies and cooperatives were includ.ed in the systemof control. The apex bodies in the structure of this system were 'Narcomzem' or theMinistry of Agriculture and Narcomprod mentioned earlier. These were the agenciesgiven the responsibility for collection of goods included in the first category.Consumer cooperatives as well as agricultura l cooperatives were used in order tocarry out the task of distribution of the industrial goods to the rural population andthe agricultural produce to the industry in th e form of foodstuffs and raw materialsaccording to the plan chalked out by 'Narcomprod'. Involvement of a large number of.agencies in the distribution process necessitated a proper classification of thetransaction according to the criteria of category of goods in order to identify the role

and func tions of these agencies. I f the cooperatives were to be involved in thedistributmn of the products included i'n the first category-they needed to procurespecial licences for the purpose and were obliged to carry out the plans of the State.Secondly they could act as independent trading agencies and take part'in thedistribution of products in the other two categories. In carrying out the orders ofthe State the cooperatives simply passed on the industrial goods fund to the 'villages,exchange it for the peasants' produce and deliver it to the State. Needless to say, withan increase in the number of goods being transferred to the first category from theothe r two, the scale of independent functioning of the cooperatives wasproportionately reduced. This centralisation of decision making was not in the least tothe liking of the cooperatives as they had until then acted as independent econorilicentities and were used to taking independent decisions regarding their priorities. 'R'owthey were reduced to a position of subordinate agencies of the Government. A brief

tussle ensued between the 'Centrosoyuz', a kind of super union of cooperatives, andthe government, but i n the end the government managed to gain control of this superbody of the cobperatives with the help of industrial cooperatives where the bolshevikswere in a majority. This brought about a very high degree of centralisation of thedistributive system.

I f the compulsions o f the civil war in Russia forced the government to take specificmeasures and counter measures which finally led to an extreme degree ofcentralisation of the distributive and supply system, then these very compulsions wercalso a cause of a similar process of centralisation of industrial administration .

Immediately after the October Revolution the bolsheviks as we had. seen hadconducted nationalisation on a limited scale due to many factors. They had also tricdto create new organisational forms. They had also been quite successful in establishingtwo different kind of organisations suitable for the purposes of administration o f

i d t i l d t i 'b th i th light d h i d t i l t ' t ' Pol thc


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Ecowmk Development of R U L - I I'orms in thc~iiscl\s had pro ~iio tctl .c~itl.;llisatioli1' ilid u5triaI ad ministratio 11,al hcit011;I \.cr!. l im ite d sc.ulc. I ~ u t , l : ~ t c l ; t l c t c ~ ~ i ~ ~ ~ ~ ; ~ t i ~ i g\col ;oniic co~ idit ion s111ti cth;~cks t tl1c\ar iou s 1 '1 -onts 'o rcct l the h o l~ l i c \ iL ~o ;rc.cclc~.a~cllc ~ia~ionaIi \ ; i t ic)nl 'rl lc i l idu\t~i i . .an d rapidl!. e xp an d i t to include alnio\ t \ \hole \cc. toria n d a ~n;!iol. 1x1l.11' I I ICindustrial secto r in gcncl.al. All ol' tlicsc ~l ati o~ la li\ cdlldustric\ \\cl.c.1 1 i l \ \ bii::; t i l l I I L . ~ ~o\. cr to 'glavkis' and 'ccnt!ca' \\.it11 a ~xt ra l lc l nc~ cas cn ~ l i c l u ~ l l h c ~ .1 ' \ ( i C l lo~.ganisations,cspcci;~lly rl ' the lattctjas I h i \ 101.111 pro\.idcci I Iic g o \ ~ I . I ~ I ~ ~ L . I ~ I\ itlc.1.o p p o r t u n i ty t o co n t ~ .o ll ic adminis t~.n t io~i1' the cn tc~rpri \c \ I I I ~ ~ ~ I .h cg l a ~i ' . I I~IIwith I'urthcr deterio ration of tlic situ;itioll ali(l the in lpC rati \c1 ' t lo\ .ctai l i~ig nt icc!ordinating the work of the enterp rises\ \ i l l ) the \ \ ( ) I hi1121 ' ;I c , c ~ l ~ ~ . ; ~ l i \ c t l!\lcnl 01distribution, tlic go\;crnmcnt\\ hiell had carlicl. I1cc.n cc~lltl~l~tinslll! ~ h c'utlc.tion 01'general coordination. \ .cryw o n \ \ a \ I'o~. ccd o c.olic.critr.;Ilcl l i l \ Ii;rncl\ ~ l l c,I\L O Icontrol l ing even the opcrat i \ .c\\.ark of 10s ( 11 i i 1 \ ( I I I ~ L * I ; ~ r i o ~ ~ splil\kiq.L!' I~L~I~I I Cnumber of cl l tcrpriscs incrca\cd suh\~;~rl~i; l l l !r l ~ t l l ic.! c.anlc 10 h c c c ) ~ l c c ~ l t ~ ; ~ ~ c dl l ;II'oirly large num ber ol"glavk i'(ahoirt 50.illI L ) 2 0 )\ \ l i icl i \ \c~.cll t i l rn \ u h o ~-J i l ~a t cd0tllc Vcscllhhn, it bccunic impossihlc1.01. I I ~ L .\ : ~ - \ c ~ i h l l ao coord ina te l l i c i~. pc~.a t io l l \ .So a l !t il isation Coun cil( lJC) \a s I'ol.luc.tl ;is ;in apex hotf! ancl\ \ as \ i ~ ! )o l t l i ~ l ; l ~cdothe Vcscnhlia. Tllus \\c 3c.ct l i ; ~ tin i ~ i c ! i ~ \ t ~ . !oo tllc d~ ci zio ii n;ikiliy~ i r r i l ~ ~t ) Ilcconcc~l rra tcd n a >i l lg I~*c ~ i t ~ . e ~I ( . ' 01' \ 'c\L,~lkll:~.( I \ [ ; I \ ;1griL.t111i ~I ! ~ l , ~ . ~ l ; ~ ~ ~ : ~i i i ) ~ . ( ihe conccn~l.atcdll Narcoln l>roJ .

O\ c r c c ~ ~ ~ r ; ~ I i s : ~ t i o ~ ~1' 11ic cc o~ lo ~n ic!.\1e1il i~ ~ c\ ~ i t ;~ b lyc s ~ ~ l ~ c c ill 11) 1 1 ~ 1 : ~)pIl! 1 llicSti~tc 's \d~li in istrat io n !,stcnl. II lc slal l 'il l the adm ili istrat i \c \ccl iol l \\ \ a \ irlcrcaacdmanil'olcl and a new So\.ict hurcaucrac! \\a s created \\.llich1;11- Irolll \()I\ llg tllcprohlc~i l s \ as no\\ intcrc\tcd in o111! 'papc~.\\orL'.\\ a ~ . c s ~ l triici;~l cci\ioll\ \\erenot taken in time. /\lid \\lic~ia k c ~ lllc! \\ er e ol'tcu 1101 ilnplclncntcd I'ull! a n d i n t imeor implemcntcd onl! on paper ;IS agaill \\ 11i1t c on cc rn cd t h e t ~ u r ~ a u c r a c yost M:as theI .CPOI.I O I I its ; ~ c I i i e \ ~ ~ ~ i l e ~ ~ t ~111c1 1101 ~ I I I ~ ~ ~ L ~ I I I ~ I I I ; I I ~ ~ I ~ll rc;~Iit!.. 1 ' 1 1 ~ ureaucrats in theCen tral bodies would not k now the conditions, l places si tu: i tid fi r l ' ro~il hem. \ .ctthey m ade decisions regarding t he vi tal interests of the peop le l iving there about v\!l i~kagain they had inadequate information. Th e result was tha t most of th e t ime the!-could not tak e t imely and prop er decisions.

M ass i \ c d i s ru p t i o ~ l1' tllc ccc)nolnic linLagc\ant! di \cx)~l lc~l tn l o n g ~ I i c eop lesprciall!. the pcasalltr! \\ Ilicli \ \ ; I \ Ino>t se\ crcl! ;~l'lc~.tccI\as the result 01' tlicscpolicies and hcca~nc real tlircatic w tile So\ ict go\crnnlcllt. .A \cric> 01' re\ 011s br ok eout and it \\ .as these rc\olts\\ Ilicll C O I I \ inccd the go\c r ~ l ~ i i ~ * ~ ~ tI ~ O L I I 1 1 ~ ~illdchir;lbilit!.of continuing thesepolitic$. Nc\\ L.cxlno~llicpolic! \\;!\ [ I ; ( \ \n ~ ; ! ~ l cIn Iii\tol.ic;ll


1) ln to what ca tegories were the agricu l tu ra l p rodu cts d iv ided?

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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2) What were the i l leffects of requisi t ioning?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3) Explain the phenomenon of central isat idn.

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10.5 LET U S SUM U P

t .l'lic crirx 01' the ccoriori iic systcni of W ar Co n~ m un isn i as thc policy01'rcqirisi t ioning. Sat ional isat ion was the second major policyof thc systcni ol ' W art C'ornmunisrn. I'ri\atc trade was reduced to the minimum. 7'licsc were the most snlicatI'catirrcs 01' War Conim unistn. Th e govcrnnlcnt was cut01.1' fro m 111ost ol' its su pp ly

\oi~r.ccs1' alrnost all the m:rtcrial inpu ts needed fo r thc arm am ent industry as well asol 'supplics of' I'oodstufl. I t resulted in ncar starvat ion condit ions in the towns. Thcyo\crnmcnt had to tahc rirdicul stcps in rcsponsc to such a crisis. 'This rcsponsc tookthe 1'or.m o l natio ~ial is at ion f large sectorsof industry. abolishing of privatc t radecc!itralisrtion 0 1 ' the distribution system.

-Plic\c I;)rccd cconoriiic nicasurcs allowcd thc Sovict govcrnnlcnt to. collect cnoughrc si) ur cc \ f or u i n a i ~ ~ ghe Civil W ar, but clearly brought in thcir wakc cconom icdisrirption a n d \ocial discontent on such a scalc that thc govcrnm cnt was forced tod i s ~ o ~ l t i ~ l i r c11;rn) 01' ~ I I C S C 'p r~ c t i c c s n d ad o p t a n cw eco n o mi c p o li cy.

10.6 K E Y W O R D S --Glavki : A n o rg an ih at io n by ~ h i c hhc Sovict goLcrnmcnt control lcd the productionprocess i l l th e \ ari ou s 5cctor.s ol' t l ~ c cavy industr),.

Snrcornprod : bl ihibtry 01. Supplics dealing with thc policy ol. centralised collectionand d is t r ib u t ion of agricu l tu ral surp lus:

Requisitioning : Com pulsory conl ' isca t i .~n1' a part o f the pcasan ts ' p roduce above theam ou nt needed for his subst incncc and sow ing for a payment in mondy or kind .

Syndicalism : Factories ri111by workers primari ly for thcir own benefi t .Vesenkha : Sup rcm e Economic Co uncil , the apex bod y for al l 'g lavki' .

10.7 SOM E USEFUL BOOKS . . . .

Nove,, Alcc, 1969,A n E c o n o r ~ ~ i cis to ry o f t h e USSR,Ch. 2-3, London.

Carr. E.14. and K . W. Davies, 1969, Foundation of a Planned Econom y, Vol-I,I .ondon .

S / amu c l y I . . , 1974. First Models o f he Socialist Economic Systems, Budapest .

Do b b . M at1 ricc, 1960 ,Sor.kt Economic Development Since 1917, 5th ed ., Lo n d o n .

10.8 A N SW ER S TO CHECK Y O U R PR O G R ESSEXERCISES


I) Read sect ion 10.2.1 to answer2) (a), (b ) and (d), are false3) Read 10.2.2 to answer4) (a) and {b) are fulsc. (c) is tru e5) Kcad 10.2.3 to answ ert,) Re ad 10.2.2 t o answc.1.


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L

ckonomk tkvebpment of R w b - I Check Your Progress 2

I ) Read 10.3.1 to an swer2) d e a d 10.3.2 to an swer


1) R e a d 10.4.1 to an swer2) R e a d 10.4.1 t o an swer3) R e a d 10.4.2 t o an swer

Documents

Unit-10 Russia II October Rev & Economic Development 1917-1920