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Post-War Dislocation

p H. G. Wells, the well-known English writer, made a trip to Russia in the autumn of 1920, which resulted in a hook which he called Russia in the Shadows. An English or American reader could hardly picture to himself, wrote Wells, the devastation and poverty which prevailed in Russia. And that was the bitter truth, for the country did lie in ashes and ruins. The decrease in population over the period of the First World War and the Civil War that followed topped the 20,000,000 figure. The 1920 output of heavy industry was but one-seventh of that of 1913, the output of cotton textiles was back where it was in the middle of the 19th century and that of cast-iron—200 years ago. Transportation had broken down. Agricultural production was down to half of what it used to be. There was a critical shortage of the barest necessities.

This appalling destruction and devastation must be ascribed to international imperialism and the counter-revolution at home. Wells did not share the principles and aspirations of the Bolsheviks, but he was fair, and he was not going to conceal the truth; and this is what he told his readers: "And this spectacle of misery and ebbing energy is, you will say, the result of Bolshevist rule! I do not believe it is.” ".. .Bolshevik government in Russia is neither responsible for the causation nor for the continuance of these miseries.” "It was not communism that plunged this huge, creaking, bankrupt empire into six years of exhausting war. It was European imperialism. Nor is it communism that has pestered this suffering and perhaps dying Russia with a series of subsidised raids, invasions, and insurrections, and inflicted upon it an atrocious blockade. The vindictive French creditor, the journalistic British oaf, are far more responsible for these deathbed miseries than any communist."  [54•1 

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p In addition to the economic difficulties there were difficulties of a political nature. Now that the Civil War was over and the danger that the landlords might come back had passed, the peasants began to openly show their resentment of the surplus appropriation system which required them to deliver surplus grain to the government. Demands were voiced that this system should be ended and that they, the peasants, should be free to sell their surplus grain in the market, using the money thus earned to buy manufactured goods.

p Peasant discontent with the surplus appropriation system was used by the Socialist-Revolutionaries who organised kulak uprisings in various localities, which were supported by rather numerous groups of middle peasants. More dangerous than all others was the revolt at Kronstadt in February 1921, where the SocialistRevolutionaries and Mensheviks had succeeded in instigating some unenlightened elements of the Baltic Fleet sailors to action.

The grave difficulties caused by the war bred discontent among a section of workers as well. This, too, was made use of by the Mensheviks and Socialist-Revolutionaries who strove to provoke strikes. To make matters worse many workers were going to the country to make a living and taking to handicrafts inasmuch as most factories were idle, and this process of dispersal of the working class presented a very real danger.

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Planning Russia’s
Economic Reconstruction

p Such were the exceptional hardships and difficulties that the Soviet people had to face when it turned to the work of peaceful construction. By the time the Civil War ended a vast programme of economic revival on the basis of nation-wide electrification was already in existence. It had been worked out in 1920 by a special commission made up of prominent experts in energetics, economists and other members of the technological intelligentsia and headed by G. M. Krzhizhanovsky, specialist in energetics, old Party member and Lenin’s personal friend, who, in 1921, was put in charge of the State Planning Commission. The electrification plan was adopted by the Eighth All-Russia Congress of Soviets in December 1920. It provided for the construction in the span of from ten to fifteen years of thirty large power plants with an aggregate capacity of 1,500,000 kw, that is to say, one and a half times more than that of all the power plants built in previous years. It also provided for a re-equipment of existing industrial plants, further development of industry with special emphasis on heavy industry, that is, metallurgy, engineering, etc. In short, the plan envisaged the development of a material and technical basis of a socialist society.

The vast scope of the plan astounded even H. G. Wells, author of fantastic tales that he was. "Can one imagine,” he said, "a more courageous project in a vast flat land of forests and illiterate peasants, with no water power, with no technical skill available, and with trade and industry at the last gasp?" He referred to Lenin as the "Dreamer in the Kremlin" and said that he had "succumbed at last to a Utopia, the Utopia of the electricians”. But he was greatly mistaken, for Lenin’s electrification plan was implemented ahead of schedule.

New Economic Policy Adopted

p The most urgent task that the Soviet state had to face when it turned to the work of peaceful construction was to establish proper economic relations between town and country, which had been sadly lacking during the years of the Civil War. No recovery or development of the national economy was possible until this problem was solved. It was necessary to evolve an economic policy that would help accomplish that all-important task.

p Working on the fundamental principles of the new policy, Lenin subjected to a painstaking analysis the measures taken by 57 the Soviet Government up to date in the economic field. He talked with workers and peasants and read with diligent attention letters addressed by peasants to the newspaper Bednota (The Indigent) in order to sound out the needs and general frame of mind of the people. Lenin considered these peasants’ letters to be genuine human-interest documents. The material he was able to assemble helped him find the right solution to the problem of drafting the new economic policy and outlining ways and means to implement it.

p The first step, under the New Economic Policy, was to abolish the surplus appropriation system and to impose on the peasants a fixed tax in kind. A decision to that effect was made by the Tenth Party Congress in March 1921, and subsequently by the AllRussia Central Executive Committee. The total collections under the taxation scheme were nearly 50 per cent less than those under the surplus appropriation system. The tax was assessed proportionately to property ownership, that is, indigent peasants paid nothing, middle-class peasants paid a moderate amount, and the kulaks a greater amount. Surplus produce remaining after payment of tax could be freely sold in the market. Trade, then, was to be the main factor in the economic relations between town and country. Private trade was permitted, and state and cooperative trade began to develop.

p Introduction of the tax in kind on farm produce and permission to sell surplus produce in the market offered the peasantry a greater incentive to increase their output, which was in the interests of the peasants themselves and the society alike.

p The government encouraged and stimulated the organisation of various forms of rural co-operation on a strictly voluntary basis. Government loans were made available to co-operatives, and tax exemptions allowed. Co-operatives gradually began to play an important role in the development of peasant farms and the establishment of close economic relations between town and country.

p In line with its policy of accelerating industrial reconstruction and the production of more and more consumer goods, the government concentrated efforts and means on the revival of the major industrial plants, while leasing many of the smaller enterprises to co-operatives and private individuals. Some industrial plants were leased on a concession basis to foreign capitalists. Private individuals were permitted to build small factories.

p Management of the state-owned industry was reorganised, excessive centralisation was done away with, and individual enterprises began to be shifted from a government subsidy to a self-supporting basis. Extraordinary methods designed to supply industry with labour were discontinued (as, for instance, labour 58 conscription or mobilisation) and workers began to be hired through employment bureaus, which kept a record of people seeking employment. The principle of remuneration based on quantity and quality of work done was introduced, and this supplied the workers with an incentive to improve their skill and increase their productivity.

p The development of trade and the shift to a self-supporting basis in industry called for a stable monetary system. The Civil War, however, had left the country with a totally depreciated currency. To cope with this situation a currency known as " chervonets”, 10-ruble notes fully supported by gold, was placed in circulation in 1922, and a reform put through in 1924 served to strengthen the ruble rate of exchange.

Such features as private trade, concessions and the leasing of state-owned enterprises to private individuals were conducive to a certain increase of capitalist elements in the national economy. This inevitably led to a keen rivalry between the capitalist and socialist elements, each interested in eliminating the other. The key positions in the national economy, however, such as the major and medium-size industrial enterprises, transportation, land, and monopoly of foreign trade, remained in the hands of the Soviet state, which was taking all the necessary steps to strengthen and develop them, while implementing a policy of restriction and gradual elimination in respect of the capitalist elements. The socialist elements were therefore bound to win. The New Economic Policy cemented the economic union of the working class and peasantry, strengthened the Soviet state, contributed to the development of the nation’s productive forces along socialist lines, and guaranteed success in the construction of a socialist economy.

Agricultural Recovery

p Russia’s workers and peasants welcomed the New Economic Policy and went to work enthusiastically on the reconstruction of the national economy. The spring sowing campaign of 1921 was carried out successfully. But the summer brought a disastrous drought in the country’s main grain-growing areas—the Volga area, the Ukraine and the Northern Caucasus. In the Volga area, which was especially hard-hit, the crops perished completely. And famine descended on the country.

p The Soviet Government took urgent action to ward off starvation by rushing thousands of tons of grain to the stricken areas and organising free meals to feed the starving, the children first and foremost. The public health services worked hard to prevent 59 any outbreak of epidemics. Throughout the country aid was organised under the slogan "Let Ten Who Have Enough to Eat Feed One Famine Victim!”

p An International Workers’ Relief Committee was formed abroad, headed by Clara Zetkin, prominent member of the international communist movement. Workers’ contributions were used to buy food and medical supplies for the famine victims and to establish several children’s homes in the stricken gubernias. A great deal of help came from F. Nansen, the celebrated Norwegian polar explorer, H. Barbusse and A. France, noted French writers, and other progressive Western intellectuals.

p This broad relief campaign saved millions of lives. The very successful autumn sowing campaign of 1921 and the bumper crops of 1922 and 1923 helped cope with the after-effects of the drought, replenish the nation’s granaries and improve conditions for the peasantry.

p The Government gave the peasants permission to lease land, employ paid labour, and choose the form of land tenure they wanted. Measures were taken to accelerate the reconstruction of industrial plants producing agricultural machinery and implements. In 1924, the Putilov Works in Leningrad and the Kharkov Locomotive Works began to build tractors. Large numbers of tractors and farm machines were bought by the Soviet state abroad and sold to the peasants on generous terms. A Central Agricultural Bank was created in 1924, with numerous branch offices, which made credit available to the peasants on easy terms.

p In 1923 peasants encountered difficulties in marketing their produce. Grain prices experienced a sharp drop while prices on manufactured goods, which were still in short supply, rose, on the contrary. As a result there was discontent among the peasantry.

Resolutely attacking these economic difficulties, the Soviet Government lowered prices on manufactured goods and raised the prices it paid for grain and other agricultural produce. The country began to export grain abroad. Recovery in agriculture picked up speed, and may be said to have been accomplished, in the main, before the close of 1925.

Industrial Recovery

p The reconstruction of factories, mines, power plants and so on proceeded at an ever increasing pace, so that the aggregate output of state-owned enterprises for 1923 was more than triple that of 1920.

p This reconstruction of industrial facilities managed by the state proceeded according to a programme. Priority was given 60 to the largest and most important plants, where equipment, raw materials, fuel and labour were methodically transferred from plants temporarily laid up.

p A piece-work wage system was introduced in state-owned enterprises, that is to say, pay increased proportionately to the increase in productivity and the higher skill required by the job. Outstanding work meant money premiums and honorary titles and medals which were introduced especially for this purpose at that time (the title of Hero of Labour and the Order of the Red Banner).

p Realising their responsibility for the operation of state-owned enterprises, leading workers searched for ways and means to accelerate their reconstruction and further development. Production conferences, initiated in 1923, became increasingly useful, for they afforded leading workers and engineers an opportunity to discuss together important production problems and suggestions on improvement of methods and items of production.

p In 1924 and 1925 there developed a very successful movement for higher productivity. Leading workers deliberately set themselves higher output quotas, took on an increasing number of machine tools for simultaneous operation, made efforts to reduce idle time, and took a firm stand against any breaches of labour discipline.

p This collective effort on the part of the working class and other improvements in industrial production raised productivity over the year September 1924 to September 1925 by 33 per cent as against the preceding twelve-month period. "Heroic conduct in the field of economics is no different from that displayed by our workers and peasants in battle,” said, in 1925, F. E. Dzerzhinsky, chairman of the USSR Supreme Council of the National Economy.

p Dzerzhinsky, it should be added, made a valuable contribution to the country’s economic recovery. Appointed in 1921 head of the People’s Commissariat of Railways, he re-established normal operation on the country’s railways. He was appointed chairman of the USSR Supreme Council of the National Economy in 1924. Unfortunately, the gigantic task of economic reconstruction he undertook and his uninterrupted strenuous work as head of the country’s security organs undermined his health, and, in 1926, heart failure ended his life. Chairmanship of the Supreme Council of the National Economy was given to V. V. Kuibyshev.

p The process of industrial reconstruction was completed in a short span of time, taking only five years. This had been made possible by the heroic effort of the working class and the efficiency of management displayed by the government. This achievement was contrary to the expectations that had prevailed in the 61 West. United States Secretary of State Hughes, for instance, opined just two years earlier, in 1923, that there was no reason to believe that Russia would be able to recover. That proved to be wishful thinking, however. Russia did get back on its feet, and did so, incidentally, much sooner than many other countries that had fought in the First World War, even though they had suffered less. Thus France, whose industrial output of 1920 was 62 per cent of that of 1913 (in Russia the relative figure was 14 per cent), took six years to reach her pre-war level, and Germany nine.

An all-important factor in the acceleration of industrial recovery and subsequent development of the Soviet Republics was their voluntary unification in the Union of Soviet Socialist Republics towards the close of 1922.