How did Stalin transform the economy of the USSR in the 1930s?

GCSE History

Why did Stalin make the Great Turn?

General Overview…

The NEP under the Soviet Union had recovered from seven years of warfare (1914-1921). However, by 1927, the industry had not developed much from the pre-1914 level, and agriculture was still severely backward.

By the late 1920s the NEP was presenting the Communists with a variety of economic and social problems. Stalin and the majority of the party felt that the NEP was not delivering the economic performance or the type of society that had been envisaged.

The Communists wanted to press on with rapid industrialisation to build a socialist society.

What were the Driving forces behind Stalin’s economic policies?

The overriding aim of Stalin’s policies was to industrialise and modernise the USSR as quickly as possible.

Stalin wanted ‘backward Russia’ to become the ‘Soviet America’, for the Russians to beat the Capitalists at their own game and to become a force to be reckoned with world over.

There were a number of reasons, both practical and ideological to force the pace upon this issue.

Why did Stalin want to industrialise the USSR so quickly?

Increase Military Strength:

An un-industrialised country was a weak country.
To fight a modern war a country would need a well-developed industrial base to manufacture the huge quantities of weapons and munitions that would be required.
There was a war scare in the 1920s and during the 1930s Stalin became increasingly convinced that the USSR would be attacked.

To Achieve Self-Sufficiency:

Stalin wanted to make the USSR much less dependent on Western manufactured goods, especially the heavy industrial plant that was needed for industrial production.
It was important that the USSR had a strong industrial base to produce the goods its people needed. This would make it self-sufficient and more independent in the world.

To Increase Grain Supplies:

Stalin wanted to end the dependence of the economy on a backward agricultural system. In the past, this had created major problems; whenever there had been a bad harvest or when the peasants did not produce enough food.
Stalin did not want the new Socialist State to be at the mercy of the peasantry.

To Move Towards a Socialist Society:

According to Marxist theoreticians, Socialism could only be created in a highly industrialised state where the overwhelming majority of the population were workers.
In 1928, only about twenty per cent of the population in the USSR were workers.

To Establish his Credentials:

Stalin needed to prove himself and other leading Bolsheviks that he was the successor or equal of Lenin. His economic policies were central to this.
The economic transformation of the USSR, taking the revolution forward in a giant leap towards Socialism, would establish him as a leader of historic importance.

To Improve the Standards of Living:

Stalin wanted to catch up with the West, not just militarily but also in terms of the standard of living that people enjoyed.
Industrialisation created wealth for a society.
The Communist life should be a good life and ...

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Stalin needed to prove himself and other leading Bolsheviks that he was the successor or equal of Lenin. His economic policies were central to this.
The economic transformation of the USSR, taking the revolution forward in a giant leap towards Socialism, would establish him as a leader of historic importance.

To Improve the Standards of Living:

Stalin wanted to catch up with the West, not just militarily but also in terms of the standard of living that people enjoyed.
Industrialisation created wealth for a society.
The Communist life should be a good life and people in other parts of the world should appreciate what it had to offer the working people of the USSR.

Was the NEP working at the end of the 1920s?

The 1926 Party Congress had charged the leadership with ‘the transformation of our country from an agrarian into an industrial one, capable by its own efforts of producing the necessary means’.

The push for industrialisation was on. However, at the end of the 1920s it seemed that the NEP had run out of ‘push’. By 1926, the excess capacity in industry had been used up. This meant that all the factories, machinery and equipment that had existed pre-1914 had all been put back into use as far as this was possible.

A massive injection of capital investment was now needed to move the industrialisation process forward, to make matters worse; the economy was facing serious difficulties at the end of the 1920s.

The NEP and the Peasants…

Although grain supply had increased enormously under the NEP and the fear of famine had receded, the peasants were not producing the quantities of grain the government needed for its industrialisation plans.
In 1913, Russia exported twelve million tons of grain; in the best years of the NEP the amount never exceeded three million. This was having a devastating effect in foreign trade: in 1926-27 exports were at thirty three per cent and imports at thirty eight per cent of their 1913 levels due to the decline in grain exports. So the Soviet Union could not bring in the technology (machinery etc.) it needed for industrial expansion. The grain was simply not reaching the market. There were a number of reasons for this:

Agriculture was still very backward, strongly relied on traditional methods of farming, for example, in 1927; over five million inefficient wood ploughs were still in use.

When the land was shared out after the revolution, peasant landholdings had tended to become smaller than before 1917. The large estates and large farms that supplied cities disappeared. They had been divided up amongst the land-hungry peasants. On the majority of these smaller holdings, people ate most of what they could produce.

The relationship between the government and peasants deteriorated towards the end of the 1920s.

The government tried a new tactic to encourage the peasants to put more grain on the market. It stopped collecting taxes from the peasants in the form of grain and made them pay money tax. At the same time, the government clamped down on private traders who were paying peasants around twice the price that the state was paying for grain. So the peasants had to sell theirs at much lower prices to be able to pay their taxes.

Although this plan had worked initially, the peasants soon got wise to the government’s ploy. Since meat prices were still going up, they started to feed grain to their animals rather than sell it at the lower prices. Also, they found that there was not much point in having surplus money because there was little that they could buy with it, since industrial consumer goods were still in short supply, so the peasants started to hold back their grain from the market, hoping for the price to rise. As a result, the grain procured by the state at the end of 1927 was about ¾ of what it had been in 1926.

Was the NEP working for the Urban Workers?

The NEP had not brought great rewards for the urban workers, although they were better off than at any time before the revolution, real wages had, by 1928, only just passed the pre-war level. True, they had an eight-hour working day and other social benefits, and in state-run factories they had some power. Local trade union representatives often sat on a panel running the factory alongside the specialist director (usually an old Bourgeois manager). But most industrial organisations were still hierarchical and the trade unions tended to support government-appointed managers rather than their own members. Lenin himself had favoured schemes from the USA, which used time and motion studies to speed up production.

Worse than this, thousands of workers did not have jobs at all. High unemployment persisted throughout the NEP. The workers complained bitterly about the gap between themselves and the ‘better off’. They complained about the high prices charged for food by the peasants and market traders and about the bourgeois specialists and officials who were paid so much more than they were.

Women had been particularly hard hit by the NEP. Many had been forced to move from skilled to unskilled work. So large numbers of jobless, unsupported women ended up on the streets.

Housing was still a major problem and most workers lived in overcrowded, poor-quality houses and flats. For instance, in Smolensk in 1929, the factory committee of cement works reported: ‘every day there are many complaints about apartments: many workers have families of six and seven people, and live in one room.’

There was also a mounting crime problem in the cities. As a result of the turmoil of the war and civil war, thousands of young people were parentless and rootless, forming gangs that roamed the streets to find their victims. It was hardly the workers’ paradise that the revolution had promised.

The Great Turn…

The 15th Party Congress in December 1927 the announcement of the ‘First Five- Year Plan marked the end of the NEP.

This Plan demanded more rapid industrialisation, with higher targets for the industry to achieve.

In the Agricultural section, the plan called for collectivisation, some fifteen per cent of peasant households were to be ‘collectivised’.

The NEP had initially provided ‘breathing space’ while the industry and agriculture was recovering from the dismal depths of War Communism- NOT developing an Industrial, Urban, Proletarian or Socialist Society!

From the Bolshevik point of view it had been creating the wrong image and type of society.

The NEP encouraged private markets, private enterprises and Nepmen.

The Peasants (who were still a great mass majority of the population) showed no signs of becoming ‘good socialists’ and therefore, could not be relied upon for their grain production demands towards state plans of industrialisation.

The majority of party members accepted these constraints of the NEP but they had never liked it.

Itching to move forward towards the establishment of a Socialist Society. So they warmly welcomed Stalin’s ‘Left-Turn’ (adopting ideas from the left-wing of the party) in his policies for modernisation and industrialisation of the USSR.

The Five-Year Plans represented a significant step towards achieving the goals of the revolution. Another factor, which encouraged the party to support more rapid industrialisation, was the fear of invasion. By 1927, relations with France and Poland were vastly deteriorating, Britain had broken off diplomatic relations and there were suspicions about Japanese intentions.

The USSR needed an industrial base to build up their armaments. The change from the NEP to the Five-Year Plan is called the ‘Great Turn’ because it marks a major shift in the Soviet economy towards central planning- the ‘Command Economy’. The land was to be socialised through collectivisation; no longer would individual peasants own it.

Industrialisation would lead to the growth of the Proletariat, along with new cities and new wealth. The ‘good workers’ aspired to, and would, build a strong sufficient state. This was a big step forward towards a new Socialist Society. It indicated a significant cultural shift, in the process of which ‘NEW SOVIET MAN’ would emerge. (Chapter 18- Corin and Fiehn).

Stalin’s policies were not new. Planning by the centre had been an important feature of the Soviet economy since the revolution. Lenin had assumed direct control of the industry after 1917 and had kept control of ‘Commanding Heights’ of the industry (Large-scale industry, banking etc) under the NEP. It was the way Stalin carried out his policies that new… He was to take the plan to a new level unimaginable at the time of Lenin’s death in 1924 and to implement his policies in a way unforeseen before.

Another reason for why the Great Turn is significant is that these policies also wrought great changes within the Communist party and the relationship between the party and the people of the USSR. Some historians maintain that it is at this point that the Soviet Union ‘went wrong’ – that it now followed a path that led to a path of Totalitarianism, Tyranny and Inhumanity. Historians suggest that the USSR would have done better to continue with the NEP! (Reference Page 197).

Summary of the Great Turn…

The NEP was not producing the sort of Society that many Communists wanted by the end of the 1920s.

There was a continuing debate about the NEP in the Communist party throughout the 1920s the right wing of the party want to keep it and the left wing wanted to end it.

No Communists liked the outward manifestations of the NEP – the Nepmen and the strength of the private market. Nor did they like being held to ransom by the peasants.

Urban workers and Communist party members wanted to move forward to take the revolution on and build a Socialist Society.

The workers were suffering from high unemployment rates and very low wages.

The peasantry were starting to hold back food from the market and food shortages were extremely serious in 1928-28.

There was a War scare in 1928, which increased the Soviet Union fears about their invulnerability to attack and that from this they may need to produce armaments urgently.