Economy
‘Soviet leaders successfully created a socialist economy in the years 1917 – 41.’
Socialist economy – centralised planning, focus on heavy industry, workers’ control, state control, setting
prices
Socialist economy created Not created/other
• War Communism under Lenin restricted -> New Economic Policy under Lenin was not a
free market (ban on private trade), socialist policy. It allowed for private trade and free
nationalised all industry and put economy market. Many Bolsheviks opposed it as it was a
under centralised control. This was deviation from the socialist principles in the
ideologically compliant with socialism. economic policies.
• Planned and centralised economy could be But! This was a temporary policy, needed to
seen. The State controlled industry appease the peasants and workers, tired of grain
(nationalisation) and set Five-Year plans, 1- requisitioning and shortage of food and goods.
year plans and quarterly plans were Moreover, heavy industry still remained under
introduced by Stalin state control
• Focus on heavy industry compiled with • There was no people’s control over the
socialism. For example, Five-Year Plans resources. For example, although 1917
focused on heavy industry (coal, electricity, decree by Lenin allowed workers to be in
iron). charge of the factories, the right was taken
• In agriculture, collectivisation implied away by Lenin in War Communism
abolishment of private property and it was • There was little regard for people’s rights
successfully carried out (25 million of and wishes – they did what they were told
people) under Stalin. to do, which looked more like a
• Price mechanism could be seen – the dictatorship.
government set prices on grain for the
peasants (War Communism) and industrial
goods, which complied with socialism
Conclusion: Soviet economy indeed complied with many socialist principles, so it could be said that by 1941,
a socialist economy was created.
‘The transformation of Russian industry, in the years 1917 to 1941, was achieved through the application of
socialist/Marxist principles.’ June 2019
Under Lenin 1917-24 and Stalin 1928-41. WW2 coming. There was bigger focus on economy under Stalin
Talking about socialist principles, as Bolsheviks’ ideology was Marxism-Leninism
Socialism: equality, high industrialisation, no private ownership, central planning of economy, proletarisation
Application of socialist/Marxist principles Other principles/other
• Focus on heavy industry (although this • The targets set by Stalin and the terror
meant stagnant consumer industries) (‘motivating’ the managers and
compiled with Marxist idea that communist consequently the workers) of not
, revolution (which was Bolshevik aim) would completing it were not the socialist
start in highly industrialised country. Five- principles.
Year Plans focused on heavy industry (coal, So, the industry was developing under the pressure
electricity, iron). of the terror and punishment if the targets were
So, the economy focused on heavy industry, which not fulfilled, and not through the principles.
was what it should be doing if it wanted to follow • There was a competition with the West,
socialism. especially under Stalin, which encouraged
• Protection of Soviet Union from the West the development of the industry.
capitalism through the development of So, the main motivation could be the competition,
heavy industry and armaments. Some new and not the aim to become a socialist state.
industrial centres were built, like But! Industrialisation and competition were anyway
Magnitorsk. achieved through application of socialist principles.
So, the application of the socialist principles could Competition was just motivation factor.
be seen through the focus on heavy industry, which • The threat of war, particularly from 1930s
would protect the socialism from the capitalism. signalled the need for quicker
• War Communism restricted free market industrialisation, particularly in the arms
(ban on private trade), nationalised all field, to be able to sustain the army during
industry and put economy under the war.
centralised control. This was ideologically So, the war was a moving factor for the
compliant with socialism. industrialisation, not the application of socialist
So, the socialist principles could be seen to be principles on economy.
employed under Lenin and they helped the industry
to develop. Not Marxist principles:
But! They seemed to be ineffective and industry • New Economic Policy under Lenin was not a
was stagnant, because the NEP was brought in, socialist policy. It allowed for private trade
which was not based on socialist principles. and free market. Many Bolsheviks opposed
• Proletarisation and militarisation of labour, it.
as the communist revolution should start in So, there were some deviations from the socialist
highly industrialised country with principles in the economic policies.
disciplined labour. Managers, punishments But! This was a temporary policy, needed to
and rewards, better education in cities appease the peasants and workers, tired of grain
were brought in. requisitioning and shortage of food and goods.
So, Russian workforce was also transforming Moreover, heavy industry remained under state
through socialist principles of highly qualified, control
disciplined proletariat.
But! Workbooks, bonuses and punishments were
implemented by Labour 1938 and 1940 decrees,
which created inequality within the workforce. This
was not compliant with socialism
• Planned and centralised economy could be
seen. The State controlled industry
(nationalisation) and set Five-Year plans, 1-
year plans and quarterly plans.
So, there were definitely socialist principles and
they massively contributed to the development of
the industry.