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Economy - Coggle Diagram
Economy
STALIN
Developments in industry
Industrial development under Stalin 1945-53CHALLENGE OF WAR:
- The war had destroyed 70% of the Soviet Industrial capacity; Western areas were destroyed.
- Foreign aid had ceased.
- Policing the USSR's new 'Satellite states in the Eastern bloc demanded a huge defence budget.
Comecon - Est in 1949 to coordinate Eastern Bloc countries.
Gosplan - coordinated two more 5-year plans:Fourth five Year plan 1946-50:
- AIMS:
- Rebuild heavy industry and transport (western catchup).
- Revive Ukraine.
- RESULTS:
- Most heavy industry targets met.
- USSR stronger than Pre-war, with industrial capacity second to the USA.
Fifth Five-year Plan 1951-55
- AIMS:
- initially focus on heavy industry and rearmament.
- Under Malenkov - a new emphasis on consumer goods, housing and services.
- RESULTS:
- Most targets met.
- Some improvement in consumer supplies.
KHRUSHCHEV
Developments in industry
Industrial developments under Khrushchev 1953-64
- Khrushchev pushed his own agricultural proposals.
- Opposed Malenkov's proposal to move the economic focus away from heavy to light industry.
- Moved away from Stalin's rigid planning system once in power.
Decentralisation and industrial planningPROBLEMS WITH STALINIST SYSTEM:
- Central planning was too complex
- Managers avoided improving output (avoid rising targets).
- Targets did not reflect consumer demands.
- Inefficient use of resources demanded increased investment.
KRUSCHEV KEY CHANGES:
- Sixth 5 year plan was launched (abandoned after 2)
- 60 Central ministries abolished.
- USSR divided into economic regions, with local economic planning and supervisions.
- Seven year plan announced. Merged into 7th '5 year plan' (1961-65).
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Industrial changeSEVEN-YEAR PLAN:
- Focus on improving living standards for ordinary people.
- 'Modern Industry' - emphasis moved from old heavy industry to chemicals, housing, natural resource exploitation and building of Power stations.
- Communications, transport and technology, above all space science, were also promoted.
LIMITATIONS:
- Decentralisation added another layer of bureacry. (His system would be abandoned in 1965).
- Quality of life remained poor despite living standards improving.
- Distorted economy due to heavy spending on space race and armament.
- Failure to overtake USA economically - Growth rate fell between 1958-64.
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LENIN
Economy under Lenin
State capitalism
- Initially allowed peasants to take over the land and gave workers 'control' of factories. This decreased production, leading to hoarding since there were fewer goods to buy.
- This encouraged Lenin to introduce a longer transition stage to socialist economy. He accepted the need for an interim stage-state capitalismwhere private ownership would still exist.
- December 1917 - Veshenka(council of the national economy) was introduced to supervise economic development. But there was no nationalisation of industry.
War communism
The demands for feeding and supplying the Red armies in the civil war forced a new economic direction known as war communism.
Policies
- Food requisitioning (May 1918)
- Grain and other produce were forcibly bought or confiscated from the peasants.
- Kulaks (viewed by Bolsheviks as 'enemies of the people') had their stocks seized.
- Nationalisation of industry
- By November 1920 most factories and businesses had been nationalised.
- The state employed professional managers to reimpose worker discipline and increase output.
- Working hours were extended.
- Private trade and manufacturing were forbidden.
Problems
- Most peasants hid their crops, grew less and some even murdered members of requisition squads; grain shortages worsened, culminating in widespread famine in 1921.
- Industrial production fell, as transport was disrupted and factories were inefficient; money was largely replaced by a system of barter.
- Urban population declined, as workers tried to flee to the countryside, or succumbed to the typhus epidemic of 1920
Demands for economic change
- Food crisis brought a new wave of peasant revolts and further strikes and riots in the cities. Red armies crushed the unrest in the cities and in 1921 martial was declared to deal with protests.
- In March 1921 the sailors at the Kronstadt naval base demanded an end to one-party rule. The red army and the Cheka suppressed the rebellion and its leaders were shot.
- Some Bolsheviks pressed for greater worker control and opposed those who wanted to intensify war communism.
- These factors culminated in a new economic direction for Lenin in 1921.
New Economic Policy
In February 1921, Gosplan was created to advise on a new economic policy. The NEP was announced in August 1921. It was supported by Bukharin, Zinoviev and most leadership but lower-ranking Bolsheviks saw it as ideological betrayal.
The NEP restarted the economy. By 1926, the production levels of 1913 had been reached again. Living standards rose, revolts and disputes ended and favourable trade agreements were reached. A money economy and private wealth returned and the kulak class re-emerged.
Terms:
- State control of transport, banking and heavy industry was retained, but private ownership of smaller businesses and private trade were permitted.
- Rationing ended and industries were made to be more efficient.
- Grain requisitioning was halted and peasants could sell any grain left over after supplying a proportion to the government.
The economy under Stalin
Industrial development
In December 1927 Stalin announced the end of the NEP. This was known as the Great Turn.
Reasons for the Great turn:
- NEP was failing to produce sufficient growth.
- War scare in late 1920s made it important to rely less on on foreign imports and increase military strength.
- 'True socialism' demanded a developed industry rather than dependence on peasantry.
- Stalin wanted to be associated with a new and successful economic direction.
Five-year Plans
Implemented Stalin's economic programme through a series of five-year plans. These set challenging targets - to fail to achieve them was a criminal offence. This is resulted in corruption and false reporting of statistics. These plans were accompanied by much propaganda.
First five year plan
1928-32Aims:
- increase production by 300%
- Develop heavy industry.
- Boost light industry and electricity production.
Results:
- Stalin claimed targets were met in the four years
- Shortage of skilled workers and poor central coordination
- No major targets achieved but impressive growth.
Second Five year Plan
1833-37Aims:
- Continued growth of heavy industry.
- New emphasis on the light industries.
- Concentration on engineering and tool-making.
- Development of communications.
Results:
- Rapid industrial growth (mainly heavy industry).
- Improvements to communications.
- Not all targets met.
- Emphasis on quantity not quality.
Third five year plan
1938-42Aims:
- Focus on heavy industry.
- Promote rapid rearmament.
- Complete transition to 'Socialist economy' (communism).
Results:
- Heavy industry grew strongly.
- Lack of good managers, specialists and technicians following stalin's purges.
- Hard winter in 1938 and diversion of funds into rearmament and defence undermined plan. Plan finished early following 1941 German invasion.
Agricultural change
Changes in agricultural organization were seen as necessary for rapid industrialization. By 1927 the peasants were still not producing sufficient grain for export, which was necessary to feed and supply the industrial workforce. Also, there was pressure to create a more socialist system in the countryside.
The Great turn therefore involved a move towards collective farming. This was announced in December 1927. It was intended to make farming more efficient, allow more mechanization, facilitate grain collection and 'socialize the peasants'
Collectivization stage 1 (1929-30)
In December 1929, Stalin announced forced collectivization into state farms (Kolkhozes) and the annihilation of the Kulak class. In January 1930, collectivization began using force and propaganda. Over half of households were collectivized by march. This created such hostility that the programme had to be shut down.
Collectivization stage 2 (1930-41)A new drive to collectivisation proceeded more slowly and involved the establishment of machine tractor stations. By 1941, All peasant households were collectvised.Problems with the implementation:
- Dekulakization removed millions of successful farmers.
- Grain and livestock was destroyed.
- Peasants had little incentive to work hard for the collective. They were only interested in their small private plots from which they could sell any surplus to markets.
- 1922-33 brought disastrous famine, millions of peasants starved.
- Grain export levels did not reach pre-collectivisation levels until after 1935.