Impact of dictatorial regimes on
the economy and society:
Economic Changes
Economic changes
1. Describe the Russian economy before 1855
2. State and describe three problems that hinder the
development of industry in Russia
3. What policies were used to industrialise Russia during the Great
Spurt
4. What was the mir and how did it impact upon economic
development?
5. Why was NEP a controversial economic policy?
6. What is hyperinflation?
7. What is the difference between Kolkhoz and Sovkhoz?
8. Why were five year plans effective?
9. Was the virgin land campaign effective?
10. Compare the economy from 1964 to the start of the course,
1855. What are the main developments in the Russian
economy?
1855-1881
• Russian industry virtually non-existent and agriculture very
traditional – development of industry by middle-class, or even by
aristocracy, unlikely to occur due to a) lack of middle class and b)
suspicion from aristocracy
• Few efforts from peasants or landowners to modernise
• Lack of industry / predominance of agriculture affected all areas
of life – mir, zemstvo, no desire for economic change (failure of ‘to
the people’)
• Serfs emancipated in 1861
• No “economic emancipation” – freed peasants often in debt,
often fall behind on redemption payments and were often
allocated poorer-quality land than before.
• Lack of the geographical and political requirements for an
industrial revolution – no middle class, little coal, few consistent
rivers, no interest or investment from upper class
1881-1905
• Witte’s Great Spurt: got foreign loans, raised taxes and increased
interest rates. Joined gold standard. Built railways
• “Save Russia through rapid and forceful industrialisation”
• By 1900, 20% of Russian budget is just paying off loans. Light
industry virtually ignored. Railways often single track or
incomplete
• Nicholas II believes Russia will defeat Japan due to the Great Spurt
• Redemption payments for serfs reduced (1881); peasant land bank
set up (1883); peasant poll tax abolished (1887.)
• Land captains appointed – could overrule mir
• Grain exported to fund industrialisation causes famine (1901);
1,000,000 die
• In 1893, a tax law allowed the mir to raise taxes. This stopped
attempts by Russian businessmen to develop their enterprises
(although that was not the aim)
1906-1913
• Military spending dramatically increased- Further foreign loans
• Strikes decrease; health insurance introduced; trade unions
legalised
• Stolypin’s Wager on the Strong – improves Land Bank
• 2,000,000 voluntarily settle in Siberia; as many again set up
independent farms. “By 1914, the agrarian crisis seemed like a
bad dream” (Gatrell, historian)
• Western industries and economies grew much quicker
• Some strikes were brutally put down (Lena gold fields, 1912)
• Only 5% of Russians were industrial workers – vast majority were
still peasants
• Stolypin said his wager needed “20 years of peace” to work. It got
3. Stolypin’s reforms arguably divided the peasantry and created
tension
• Agricultural growth was a poor 1% per year
1914-1918
• The Provisional Government increased income taxes and
created a New Economic Council
• The railways were unable to supply soldiers effectively (or
at all)
• Wages fell 50% but the price of bread increased 300%. The
response of the Provisional Government was to print more
money, meaning Hyperinflation
• As prices meant so little, peasants simply grew enough for
themselves
• 1,000,000 were threatened by starvation
• After February 1917, peasants started seizing land for
themselves. The Provisional Government didn’t endorse
this, but was unable to stop it
1919-1920
• War Communism
• Industrial workers supported the Reds and Lenin used
factory committees to set economic targets: improved
production figures in industries: guns and munitions
• “Peace, bread, land” was popular with peasants
• 80% of peasants who were forced to join the White Army
deserted
• Lenin replaced worker’s councils with skilled, bourgeoisie
specialists
• By 1920, industrial production was about 14% of the
1913 levels
• Grain shortages led to serious famine – 6,000,000 had
died by 1921
1921-1927
• Due to the Kronstadt Uprising, Lenin introduced NEP –
small scale capitalism
• By 1923, NEP allowed the grain harvest to rise 50% and
the worst of the famine was over
• Trotsky’s “Scissors Crisis” occurred – industrial prices
rose, agricultural ones fell (this meant that peasants'
incomes fell, and it became difficult for them to buy
manufactured goods. As a result, peasants began to stop
selling their produce and revert to subsistence farming,
leading to fears of a famine)
• Was NEP the New Exploitation of the Proletariat?
• Nepmen, those who did well out of NEP, were resented,
especially in the countryside
1928-1940
• First Five Year Plan – economic growth doubled whilst the rest of
the world was in Depression
• New railways laid
• Industries developed in the heart of Russia (useful in WW2)
• Kolkhoz (collective farms) and Sovkhoz (state farms) set up from
1927. Motorised Tractor Stations established
• Type of goods limited; military or industrial, not consumer
• Quality of goods questionable at best
• Methods of production (forced labour) were not particularly
communist
• Kulaks killed their animals rather than hand them over
• Agricultural production did not reach level of 1928 until 1953
• Stalin was inconsistent. Kulaks persecuted (until 1930), then not
so much (1930) then again (1931)
1941-1945
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New cities founded based on economic need (Tankograd)
Foreign loans, mainly from America, help industry
Russian industry moves east
War could have been worse; Five Year Plans meant there
was some preparation
25% of all industry was destroyed; production levels fell
70%
Strongest farm workers conscripted into army
Western provinces devastated in German advance
100,000 large farms (65% of all state/collective farms)
destroyed
1946-1953
• USSR loots or ‘claims’ vast amounts of equipment/material
from Germany
• Fourth Five Year Plan aims to re-establish heavy industry/build
up defence
• By 1950, production ahead of pre-war levels and big projects
like the Dnieper Dam were working again
• Ambitious plan for ‘agro-cities’ and ‘the transformation of
nature’
• Citizens working 12 hours a day; rationing maintained; rouble
devalued by 90%
• Few consumer goods
• Farms and countryside simply seen as the way of providing
the cities
• State seized up to 70% of harvest on occasion
1954-1964
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Seventh Five Year Plan focuses on consumer goods
Farming decentralised
Khrushchev put emphasis on agriculture
Virgin Land Scheme produces 50% of all the harvest in 1956
Agricultural wages double
Consumer goods created, but of poor quality
Party divided over Khrushchev’s agricultural policy
Stalin’s era was found to have had less grain than the era of
Nicholas II
• Tractors broke after being sold and could not be repaired
• Mistakes in Land Campaign (wrong seeds for the soil) meant that
the 1963 harvest was 35% less than anticipated
• Private farms were only 3% of land but produced 30% of the total
harvest