An Economic History of Russia: 1900-1924

Posted in economic institutions, history of economic growth, political institutions
Based on Orlando Figes, A People’s Tragedy: A History of the Russian Revolution (Viking, 1997), and Paul Gregory, Before Command: An Economic History of Russia from Emancipation to the First Five-Year (Princeton, 1994)

Jump to: Russia in 1900, Revolution and Its Aftermath, War Communism, The New Economic Policy

Twentieth-century Russia was tempest-tossed. In just the first half of the century, it went from autocracy, to revolution and civil war, to dictatorship and the Great Terror. Economically, it went from an impoverished market economy, to War Communism and the New Economic Policy, to a rudimentary command economy. Russians took communism out of the philosophers’ books and deployed it in the real world — but the human costs were extraordinarily high. This post deals with the first part of that history.

Russia in 1900

The twentieth century opens on a great, sluggard, contradictory power. The Russian empire stretches from the Arctic to the Black Sea, from Poland to the Pacific. A population of 126 million Slavs, Turks, Kirghiz, Tatars, Turcomen, countless others, gathered in wildly various polities under the tsar. Cities full of cutting-edge industries imported from Europe punctuate a vastness where four-fifths of the people are peasants tied to the soil, in near-feudal abjection.1

Russia was poor, with a per capita income less than half of those of France and Germany. It was divided by both ethnicity and class, and tenuously held together by the power of the tsar.

The peasants had been serfs until 1861, and even after that date, they were strongly bound to communal institutions. The peasants of each village were governed by a mir under the direction of village elders. The mir

… controlled the land transferred to the peasants from the landlords during the Emancipation and was made collectively responsible for the payment of redemption dues on the land. In most parts of Russia the arable land was kept in communal tenure and every few years the mir would redistribute the hundreds of arable strips between the peasant households according to the number of workers or “eaters” in each. It also set the common patterns of cultivation and grazing on the stubble necessitated by the open field system of strip-farming; managed the woods and communal pasture lands; hired village watchmen and shepherds; collected taxes; carried out the recruitment of soldiers; saw to the repair of roads, bridges and communal buildings; established charity and other welfare schemes; organized village holidays; maintained public order; arbitrated minor disputes; and administered justice in accordance with local custom.2

The state, by contrast, was almost invisible to the peasants.

The power of the imperial government effectively stopped at the eighty-nine provincial capitals where the governors had their offices. Below that there was no real state administration to speak of.3

For every 1,000 inhabitants of the Russian Empire there were only 4 state officials at the turn of the century, compared with 7.3 in England and Wales, 12.6 in Germany and 17.6 in France…For a rural population of 100 million people, Russia in 1900 had no more than 1,852 police sergeants and 6,874 police constables. The average constable was responsible for policing 50,000 people in dozens of settlements stretched across nearly 2,000 square miles. Many of them did not even have a horse and cart.4

Russia’s agriculture was inefficient: its per capita output of grain was comparable with that of Austria-Hungary, but well below that of Germany and the United States. In well-established areas, farming was small-scale and communal, employing outdated techniques. The land allotments were often too small to support a family, forcing the peasants to accept subsistence-wage work from the local gentry. There is strong evidence that the peasants’ standard of living declined over the last decades of the nineteenth century.5

Agricultural output grew not by improving productivity, but by increasing the area under cultivation. The development of the railroad system in the late nineteenth century facilitated this expansion. Farming in the frontier areas did not follow the traditional pattern. The farmers of Western Siberia, for example, owned their own land and operated as independent businessmen. There is no evidence of declining standards of living in the frontier areas.

The decline in the peasants’ standard of living in established areas was largely driven by population growth, as the same communal lands had to support more and more people. As rural life became more precarious, peasants — especially young peasants — sought employment in the cities.6 Some of these migrants returned seasonally to help with the harvests, while others stayed put and sent back a little money when they could. It was not uncommon for even second-generation workers to retain some connection with the countryside.

The cities of the Russian empire were little more than outposts.

Only a few miles from any city centre one would find oneself already in the backwoods, where there were bandits living in the forests, where roads turned into muddy bogs in spring, and where the external signs of life in the remote hamlets had remained essentially unchanged since the Middle Ages.7

The empire’s largest cities were St. Petersburg and Moscow, each with a population of more than a million people. The other large cities were beyond Russia’s borders: Warsaw and Lodz in Poland, Odessa and Kiev in the Ukraine, Riga in Latvia. Kiev was the smallest of the “large” cities, with a population of 250,000.

The cities were industrializing, often with the assistance of Western technology and capital. The Westerners were attracted by Russia’s very low industrial wages: unskilled peasants were willing to work for any wage that improved their meager prospects. Count Witte regarded these low wages as “a fortunate gift to Russian enterprise,” and neither he nor any part of the national government wished to see them rise.8 There was also no pressure to make the factories safe, and disabling injuries were not uncommon. One commentator observed, “The factory owner is an absolute sovereign and legislator whom no laws constrain.”9

Low wages, coupled with a shortage of housing, led to poor living conditions.

Many workers had to make do with a narrow plank-bed in the factory barracks, where hundreds of men, women and children slept together in rows, with nothing but their own dirty clothes for bedding…There were neither washing nor cooking facilities so the workers had to visit the bath-house and eat in canteens. There were whole families living in such conditions…Others, even less fortunate, were forced to live in the flophouse or eat and sleep by the sides of their machines.10

Typhus and cholera were continuing hazards — St. Petersburg had the highest death rate of any European capital.11

Unions might have been able to improve the workers’ living conditions, but they were banned. Their absence encouraged both the firms and the workers — especially the skilled workers — to take uncompromising positions.

During the 1890s strikes became the principal form of industrial protest and they required the sort of disciplined organization that only the most urbanized workers, with their higher levels of skills and literacy, could provide. In this context, the peasant immigrants were unlikely to play a leading role. Indeed, they were often reluctant to join strikes at all. With a piece of land in the village, to which they could return when times got hard, they had less inclination to take the risks which a strike entailed, compared with those workers who had broken their ties with the village and depended exclusively on their factory wage. The latter stood at the forefront of the labour movement.12

The antagonism between the workers and the firms led the most skilled workers to support the Marxist and Socialist Revolutionary (SR) parties.

Atop all of this striving was a curiously anachronistic tsar.

The Romanovs had ruled Russia since 1613. The tsar was initially imagined to rule by divine right, implying that his will “should be unrestrained by laws or bureaucracy and he should be left to rule the country according to his own consciousness of duty and right.”13 Peter the Great (1672-1725) proposed a very different system of government. The tsar would be subject to the law, and a skilled bureaucracy would do much of the work of developing and executing policy. The people’s loyalty would be to the state rather than to the tsar.

The government of Alexander II (1818-81) followed the path of Peter the Great. It featured a well-educated and reform-minded bureaucracy that seemed capable of modernizing the empire. Its goal was

… to remodel completely the enormous state,…to abolish an age-old order founded on slavery, to replace it with civic decency and freedom, to establish justice in a country which had never known the meaning of legality, to redesign the entire administration, to introduce freedom of the press in the context of untrammelled authority, to call new forces to life at every turn and set them on firm legal foundations, to put a repressed and humiliated society of its feet and to give it the chance to flex its muscles.14

The bureaucrats’ efforts were stalled by a conservative faction of government, and then rebuffed completely when Alexander II was assassinated. His successor, Alexander III, claimed to rule by divine right and entirely rejected reform. He was succeeded by his son, Nicholas II, the last Romanov, who also claimed to rule by divine right. Nicholas’s fate was to advocate a reversion to medieval norms at a time when the Russian people — more literate, more aware, more impatient — were seeking greater liberties.

Revolution and Its Aftermath

Communism came to Russia in two steps. The revolution of February 1917 ousted the tsar, replacing him with a Provisional Government that was unable to control the capital, let alone the country. The revolution of November 1917 replaced the Provisional Government with a Bolshevik government. Civil war followed, with the right-wing White Army pitted against the new government’s Red Army. The Red Army had defeated the White Army and its allies by the end of 1920, but the new government was no more in control of the country than the old one had been.

The revolution’s principal actors were in place long before the revolution occurred. Interest in Marxism had grown during the 1890s, and in 1898, Marxists formed the Russian Social Democratic Labour Party. Vladimir Lenin, already a revolutionary, became a party member in 1903. He wanted the party to become as disciplined and regimented as the police state that it hoped to push out. He argued that the party should be led by an elite, with the rank-and-file members obeying the leaders’ instructions without reservation. Lenin was opposed by orthodox Marxists, who believed that a socialist revolution was not yet possible, and that forcing a revolution would only bring “despotism in Communist form.”15 Their goal was to move Russia from autocracy to Marx’s “bourgeois democracy,” and this goal required the extension of democracy, not its abridgment. The party split between Lenin’s supporters and his opponents. Based on the results of a single unrepresentative vote, his supporters became known as Bolsheviks (majoritarians) and his opponents became known as Mensheviks (minoritarians). The divide between the two factions widened over time, and the Bolsheviks formed their own party in 1912.

Marxism appealed most strongly to middle-class intellectuals and self-educated workers, so it was very much an urban doctrine. By contrast, the Socialist Revolutionary Party (SR) was a populist party with broad support among the peasants. Its principal interest was land reform.

Additional actors appeared during the uprising of 1905. In January of that year, in St. Petersburg, the Russian capital, demonstrators marched to the Winter Palace to present a petition to the tsar. The march was peaceful, but the guards panicked, shooting into the crowd and killing hundreds of petitioners, including many women and children. “Bloody Sunday” shocked the Russian people, and the tsar’s authority began to unravel. Strikes by students and workers began in St. Petersburg and spread around the country, culminating in a general strike in Moscow and St. Petersburg. Peasant rebellions and land seizures became common: the army put down more than 2700 peasant uprisings during the first ten months of the year. The crew of the battleship Potemkin mutinied in June. This mutiny was put down at a cost of 2000 dead and 3000 wounded, but many more mutinies would follow. There were 211 mutinies in just the last three months of the year.16 The tsar was ultimately able to suppress the rebellion, but not without significant changes to the political landscape.

Much of the organizational work of the general strike had been done in St. Petersburg by a newly-formed organization, the Soviet of Workers’ Deputies (“soviet” means “council”). In addition to its organizational work, the Soviet distributed food, organized a militia, and published a newspaper. Leon Trotsky was one of its leaders. The St. Petersburg Soviet was so successful that workers in fifty other cities set up their own soviets. The Mensheviks supported the soviets because they facilitated the workers’ participation in a democratic movement, and the Bolsheviks slighted them because they were insufficiently hierarchical. The St. Petersburg Soviet ceased to exist in December 1905, but was the direct antecedent to the Petrograd Soviet that participated in the revolution of 1917.

The tsar had attempted to diffuse the crisis by making concessions to middle-class liberals. He had issued the October Manifesto which created an elected assembly, the Duma, but the Duma’s powers were limited. The tsar continued to appoint the prime minister and the council of ministers, and these officials were not answerable to the Duma. The tsar could dissolve the Duma and call for new elections whenever he wished.

One of the parties that won representation in the Duma was the Constitutional Democratic Party (Kadets). It was a liberal party, and most of its members were nobles or professionals. When a counter-revolution began at the end of 1905 — tens of thousands of dissidents are executed or sent into internal exile — the Kadets began to fear that they would be targeted. The party condemned the strikes and the peasant land seizures, and many of its members drifted away to safety. As had often happened in Western Europe, middle-class liberals abandoned the lower classes at a crucial moment.

The 1905 uprising caused both Lenin and Trotsky to rethink their expectations about revolution in Russia.

In Lenin’s view, three things had been made clear by 1905: the bankruptcy of the “bourgeoisie” and its liberal parties as a political force against the power of autocracy; the immense revolutionary potential of the peasantry; and the capacity of the nationalist movements in the borderlands to undermine the empire fatally.

It was these conclusions that led him to advance the essential Bolshevik idea (a heresy for orthodox Marxists) that a “vanguard” of the working class could seize power and carry out a socialist revolution without first having to go through a “bourgeois-democratic revolution,” so long as it formed an alliance with the peasantry and the nationalities to destroy the old regime.

Trotsky advanced a similar idea in his theory of the “permanent revolution” which emerged from his analysis of 1905. The Russian bourgeoisie, Trotsky argued, had shown itself incapable of leading a genuinely democratic revolution. Yet its weakness made it possible for the working class to carry out a socialist revolution in backward Russia earlier than in the more advanced societies of the capitalist West, where Marxist theory had supposed that socialism would develop from the revolution’s “bourgeois democratic” phase.17

In 1906 Trotsky was arrested and sentenced to internal exile, but escaped to Western Europe where he remained until 1917. Lenin avoided arrest by crossing into Western Europe and staying there until 1917.

Over the next few years the Russian government was ineffectual. The workers had little faith in the Duma and none in the tsar, and became increasingly militant. Although they were open to Bolshevik ideas, there were still only 10,000 Bolsheviks in all of Russia at the beginning of 1917.

Beyond Russia’s borders, the Ottoman and Austro-Hungarian empires were falling apart. Both Germany and Russia hoped to annex parts of these empires. (Russia’s objectives were to capture Constantinople and take control of the Dardanelles, and to add to its Slavic territories.) By July 1914, both countries had declared war and mobilized their military forces against each other.

The war required sacrifices. The most obvious sacrifice was of human life: millions of men were sent away to fight the war, and by the end of the war, more than two million of them would be dead. The war also impacted the material well-being of the civilian population. Removing millions of men from the workforce reduced Russia’s productive capacity, and a large part of that capacity was allocated to the military’s needs. The Russian people found themselves not just impoverished, but starving: “Between 1914 and 1916 the caloric intake of unskilled workers fell by a quarter.”18

The situation became particularly difficult in Petrograd19 in February 1917. Severe cold caused the transportation system to break down, so that little food or fuel could be brought into the city. On February 23, more than 100,000 workers went on strike to protest the shortage of bread. Their numbers were greater on the following day, and on February 25, there was a general strike of factory workers. Agitators encouraged the protesters to clash with the police, and urged the soldiers to side with the common people. That evening, the tsar ordered the military to forcefully end the demonstrations. The workers marched again the next day and were fired upon. Thousands of soldiers mutinied, often encouraged by junior officers with lower-class backgrounds. The more senior officers were driven away or killed. The workers, aided and organized by renegade soldiers, occupied strategic locations around the city: the arsenal, the artillery department, the telephone exchange, some railway stations. Pickets were set up at bridges and critical junctions. The police continued to support the tsar, sometimes firing into the crowds; the rebels responded by taking over police stations, courts, and prisons.

The Duma, acting on the tsar’s orders, dissolved itself on February 27. It then reconvened as an unofficial body, and established a carefully named committee, the Provisional Committee of the Members of the State Duma for the Restoration of Order in the Capital and the Establishment of Relations with Public Organizations and Institutions. The committee was moderate, with no representatives of the Bolsheviks or the extreme right. Many of its members were Kadets. Only two were socialists — Alexander Kerensky was one of them. The committee was not an alternative government. Its members did not believe that autocracy could be sustained, but were unwilling to claim governmental authority so long as the tsar remained in place.

On that same day, the Petrograd Soviet — officially, the Soviet of Workers’ and Soldiers’ Deputies — was hurriedly formed. Its leaders were overwhelmingly moderate socialists who, for ideological reasons, did not want to take power. Instead, they wanted the Duma committee to take power, as the first step toward bourgeois democracy. Among the deputies, soldiers’ representatives greatly outnumbered workers’ representatives. The soldiers’ alignment with the Soviet foretold the eventual failure of Duma-led government: a government that doesn’t control the military doesn’t control anything.

On March 1, a delegation from the Petrograd Soviet met with the Duma committee. The Soviet agreed to support a Provisional Government so long as it adhered to principles set out by the Soviet. A Provisional Government was then formed under the leadership of Prince Lvov, a liberal noble. The cabinet largely consisted of members of the “propertied elite.” The only socialist minister was Kerensky, who was minister of justice.

Tsar Nicholas II abdicated the next day.

Kerensky quickly dismantled the instruments of Russian autocracy.

Russia overnight was effectively transformed into “the freest country in the world.” Freedoms of assembly, press and speech were granted. Legal restrictions of religion, class and race were removed. There was a general amnesty. Universal adult suffrage was introduced. The police were made accountable to local government. The courts and the penal system were overhauled. Capital punishment was abolished. Democratic organs of local self-government were established. Preparations were made for the election of a Constituent Assembly.20

But for many of the common people, democracy was an abstraction that they could not absorb.

These reforms helped to create a new culture of democracy. It became politically correct to call oneself a “democrat”…Yet in Russia the word “democracy” was not just a political label. It was also a social one. The Left, in particular, used it to describe the “common people” as opposed to “the bourgeoisie”. The language of 1789, once it entered Russia in 1917, soon became translated into the language of class. This was not just a question of semantics. It showed that for the vast mass of the people the ideals of “democracy” were expressed in terms of a social revolution rather than in terms of political reform. The peasants and the workers were used to seeing power based on social domination and coercions rather than on the exercise of law. They saw the revolution mainly as a chance to gain autonomy and turn the tables on their former masters rather than as a chance to reconstruct the power system on universal legal principles. Retribution, not a constitution: that was the people’s first priority.21

The Provisional Government was confronted by crises on every front. In the towns and cities, workers went on strike in support of demands that the government could not satisfy: higher wages, reliable food supplies, an eight-hour day. In the villages, the traditional communes were strengthened by the breakdown of state authority. They forced concessions on the local landlords and then appropriated their lands. Ethnic minorities demanded concessions or outright autonomy. Soldiers on the front lines mutinied.

The Petrograd Soviet had originally intended to support the Provisional Government but not participate in it. The persistence of chaos and violence forced the Soviet to reconsider its decision, and in April it agreed to participate in government. The Provisional Government’s new cabinet had six socialists among its sixteen ministers. Many of the workers and peasants viewed this development as a betrayal of socialism, and switched their allegiance to the unbending Bolsheviks.

The Bolsheviks also benefited from the failure of the Provisional Government to end the war with Germany. The Bolsheviks promised an immediate end to war, making them the best choice — perhaps the only hope — for soldiers.

Prince Lvov was unable to halt Russia’s disintegration. He resigned from his position as Prime Minister in July 1917. Kerensky took his place. By late August Kerensky was plotting the imposition of a military dictatorship, supported by the forces of General Kornilov. However, when Kornilov prematurely moved troops into Petrograd, Kerensky began to suspect that Kornilov intended to supplant him rather than support him. He broke with Kornilov, publicly identified him as a counter-revolutionary, and called for the people to defend Petrograd. Soldiers and armed workers loyal to the Soviet successfully defended the city. Kerensky stayed in power, but he had no significant support: he had openly betrayed the right-wing, and the left-wing suspected his connivance in the attempted counter-revolution.

The common people now believed that their interests were best served by the soviets.

After the Kornilov crisis there was a sudden outpouring of resolutions from factories, villages and army units calling for a Soviet government. But almost without exception they called on all the socialist parties to participate in its establishment, and often showed a marked impatience with their factional disputes.22

The Bolsheviks were satisfied with this development. They had gained control of the Petrograd Soviet, and with it, control over Petrograd’s military forces and armed worker battalions. They had also gained control of the soviets in Riga, Saratov, and Moscow. The power of the soviets would be their power.

Lenin had wanted to take control of government at the earliest opportunity. He had been held back by the recognition that ousting the Provisional Government would cause power to be split between the Bolsheviks and the soviets. Now that the Bolsheviks had consolidated their control over the most important soviets, Lenin was prepared to act. On the evening of October 24, he persuaded the Bolshevik’s Central Committee to order an insurrection. The insurrection was carried out the following day. Its pivotal act was the arrest of the Provisional Government, with the exception of Kerensky who had fled. It was

… such a small-scale action, being in reality no more than a coup, that it passed unnoticed by the vast majority of the inhabitants of Petrograd. Theatres, restaurants and tram cars functioned much as normal while the Bolsheviks came to power.23

The revolution was over but not yet won. The Bolshevik government — the Council of People’s Commissars, with Lenin as its Chairman — had partial control over Petrograd and no control over the countryside. It would be years before they could assume effective control over the country.

Rather than “ruling” Russia, as the Provisional Government had tried to do, the Council of People’s Commissars merely lent its approval to a vast disintegration of previously established authorities, social relations, and legal forms. A kind of gold-rush atmosphere prevailed. The peasants were seizing the lands of the large landowners, the soldiers were deserting their units or refusing to take orders from their commanders, the workers were assuming control over production in the factories, national minorities were setting up autonomous nations — everywhere a gigantic scramble was underway that central authority, weakened as it was, could not realistically aspire to control.24

The new government had to contend with three wars: the war against the counter-revolutionary White Army, the war against “enemies of the people,” and the war against Germany.

The war against the White Army and its European allies would feature unspeakable savagery on both sides, but when it was over, it was over. By contrast, the war against internal enemies would never end.

The Red Terror, the war against Russian citizens suspected of opposing the revolution, was embraced by Lenin, Trotsky, and Stalin. Lenin believed that class conflicts were inherently irresolvable. The only way to remove class enemies was through terror: “How can you make a revolution without firing squads?”25 Trotsky likewise argued that terror was essential to the success of the revolution.

The Red Terror is a weapon utilized against a class, doomed to destruction, which does not wish to perish…[It] hastens the destruction of the bourgeoisie. This hastening — a pure question of acceleration — is at certain periods of decisive importance. Without the Red Terror, the Russian bourgeoisie, together with the world bourgeoisie, would throttle us long before the coming of the revolution in Europe. One must be blind not to see this, or a swindler to deny it. The man who recognizes the revolutionary historic importance of the very fact of the existence of the Soviet system must also sanction the Red Terror.26

Stalin’s own Great Terror, when it came, had impeccable provenance.

The Red Terror started during the revolution, when the proletariat were encouraged to take violent action against the bourgeoisie. Terror was quickly institutionalized through the formation of the Cheka, which was the forerunner to the OGPU, the NKVD, and the KGB. The Cheka was a nation-wide organization by the summer of 1918. It summarily executed tens of thousands of Russian citizens.

The war against Germany was a difficult issue. The Bolsheviks wanted to end it so that they could more effectively contest the civil war, but they believed that the war of attrition in Western Europe was driving the proletariat toward revolution. Surely, if they could hold out a little longer, Western Europe’s workers would overthrow their governments, and Russia could negotiate with fellow socialists rather than implacable enemies. Lenin was particularly vulnerable to this argument.

In November 1917 a delegation was sent to Brest-Litovsk to negotiate a peace treaty with the Germans. The Russian envoys, still hoping to be saved by proletarian revolution, slow-walked the negotiations. In February 1918 the Germans, tired of the game, announced that their troops would advance into Russia if the envoys did not immediately accept their demands. The envoys refused; German troops advanced; the Russian army collapsed. The Russians now feared that Petrograd would be captured, and they capitulated to German demands. The ensuing Treaty of Brest-Litovsk gave to Germany all of the territory that it had captured in its final advance, including the Ukraine and most of the Baltic. Poland, Courland (in Western Latvia), Finland, Estonia, and Lithuania were all given independence under German protection. The economic impact of the treaty was disastrous: the Russian empire lost 34% of its population, 32% of its agricultural land, 54% of its industry, 89% of its coal mines.27 These lands were partly restored by the Treaty of Versailles (1919); but Finland, Latvia, Lithuania, and Estonia became independent nations, their Eastern borders fixed by a series of treaties with Russia in 1920.

War Communism

The Bolshevik government struggled for survival during its early years. The regime’s enemies were everywhere: “the Germans in the Ukraine, the British in the north, the Czechs on the Volga, the Japanese in the Far East and the Whites aided by the allies on the Don.”28 The Red Army rapidly expanded to repel these territorial incursions, but Russian industry could not satisfy its demands for material resources. There were shortages of weapons, fuel, food, and medicine. The railway system was crucial to the military for transportation, to the people for food distribution, to industry for raw materials — and it was collapsing.

Food became colossally important. Grain production had fallen dramatically: the Germans had occupied the Ukraine, civil war had devastated agricultural areas, and peasant farmers were being conscripted into the Red Army. Consumer goods were so rare and so expensive that the peasants who did have grain were reluctant to sell it for cash, preferring instead to feed the grain to their cattle or convert it into alcohol. And when the peasants did sell their grain, the distribution system could not reliably move it.

The urban food crisis became so severe that it hollowed out the cities.

Millions fled from the hungry cities and tried to settle in the countryside to be closer to the sources of food. The great industrial cities of the north lost half their populations as Russia returned to its rural past…Railway stations were thrown into chaos as crowds battled to get on to trains bound for the countryside. People travelled on the roofs of the carriages, and hung on to the windows and the brake-pads, risking life and limb.29

It was the workers who made up the bulk of those who fled the starving cities of 1917-18…The war industries were the hardest hit, particularly munitions and chemicals, losing in all some half a million workers. The metal industries of Petrograd, in particular, were devastated by fuel shortages, demobilization and the evacuation of the capital. The workforce of these factories declined from a quarter of a million to barely 50,000 during the first six months of 1918…The Bolshevik Party, in the words of Shliapnikov, was becoming “the vanguard of a non-existent class.”30

The people who remained in the cities were constantly in search of food.

Industry and transport were thrown into chaos by the endless travelling of city people to and from the countryside to buy up stocks of food. Millions of townspeople, from all classes, relied on this petty trade — or “bagging,” as it was called — to feed themselves. They would leave the cities with bags of clothes and household goods to sell or exchange in the rural markets, and return with bags of food.31

Virtually everyone was forced to turn themselves into a part-time trader — workers, officials, even Communists. It was a natural and spontaneous response to the economic crisis and the breakdown of the market between town and country.32

The sharp decline in the number of industrial workers, coupled with the chronic inattention and absenteeism of those who remained, drastically reduced industrial output. Russia was deindustrializing, returning to autarky.

War Communism was a series of measures that the Bolshevik government took to reverse the economy’s collapse. Agriculture was collectivized, and the grain trade brought under government control. Private trading was suppressed. Large firms were nationalized, and the workers were more strictly controlled.

Peasants, Land, and Grain

The peasants were always going to be a problem for the Bolsheviks.

Once power was seized, the problem of the peasants would loom very large…Lenin was well aware of this. He saw that while the peasants as a whole were likely to be a revolutionary force so long as land was to be obtained from the landlords, at least the better-off peasants would turn conservative once this aim was achieved. He pinned his hopes on the increasing and deepening differentiation among the peasants. The majority of the poorer peasants, he held, would remain in alliance with a working-class government and perhaps collaborate in a future socialist transformation of society.33

The alliance between the peasants and the workers had been a loose one before the revolution. Both groups had wanted to overthrow the system, but the peasants had cared mostly about the distribution of land while the workers had cared mostly about factory conditions. They had been not so much comrades-in-arms as fellow travellers. Nor was there much evidence of “deepening differentiation among the peasants” after the revolution. In its absence, the Bolsheviks would try to instil it through divisive policies.

Redistribution of land officially began with the Land Decree of November 1917. The decree abolished private ownership of land, and called for the establishment of local committees to distribute the land among the peasants. No-one would be allowed to have more land than he could cultivate, or more than he needed to maintain a reasonable standard of living. Hiring labour to work the fields was prohibited. Redistribution of land had unofficially begun somewhat earlier. The breakdown of state authority had allowed the peasants to seize the landlords’ lands and allocate them as they pleased. Peasant life continued to be organized around the mir.

The mir was the institution that had confiscated and redistributed the land of the gentry, and it remained the principal voice of legal and administrative authority within the village during the early years of Soviet rule. The village assembly settled most of the questions of interest to the peasants and was able to steer a course independent of the local administrative arms of the Bolshevik government…The peasants remained attached to their village communities, and in their eyes the purpose of the revolution was to give them their own farms. That the land was nationalized and belonged to the mir did not detract from the peasants’ conviction that the land was theirs to farm and manage as they saw fit.34

In May 1918 the government responded to the urban food crisis by declaring that the peasants’ “surplus grain” was state property. It would be appropriated by the state and then distributed to the soldiers and workers. The government justified its grain policy by claiming that rich peasants (kulaks) were withholding grain in an effort to bring down the revolutionary government. These peasants, they said, were the class enemies of the poor peasants who had gained so much from the revolution. This claim did not resonate with the peasants. Their communities were close-knit, egalitarian, and bound together by kinship. Moreover, rich peasants were not very different from poor peasants.

In the vast majority of villages all that distinguished the richest from the poorest peasant was the ownership of an extra horse or cow, or a house made out of brick, as opposed to one of wood, with a raised floor instead of boards laid on the ground.35

Class conflict between factory owners and workers was believable; class conflict between rich and poor peasants was not.

The grain policy was poorly conceived and even more poorly executed. Food brigades were sent from the cities to the countryside to seize the grain. The peasants tried to avoid its seizure.

Most peasants tried to hide their precious grain stocks from the food brigades. Bags of flour were buried under floorboards, in the lofts of barns, deep in the woods and underground. The brigades assumed that all the villages did this and that the hidden grain was surplus, whereas in fact [they] often found vital reserves of seed and food. A “battle for grain” thus began, with the brigades using terror to squeeze out the stocks and the peasants counteracting them with passive resistance and outright revolt. During July and August 1918 there were over 200 uprisings against the food brigades.36

The food brigades were supposed to be assisted by local committees of poor peasants, the kombedy, which would identify the rich peasants and uncover hidden grain. Many villages recognized that the kombedy would divide their communities, and simply refused to appoint them. A kombedy from outside the community was then used, and in many cases, these kombedy were not even composed of farmers. The outsiders were often extremely brutal and violent. Their behaviour incited still more rural rebellions.

The 1918 requisition campaign was a failure. Lenin recognized that attempting to embroil the peasants in class conflict had been a mistake, and that the kombedy had engaged in a “reckless war of destruction.” A new grain policy, the food levy, was introduced. It was hardly less ruinous than the original policy.

Whereas the quotas of the grain monopoly had been set by the local food organs in accordance with the harvest estimates, the quotas of the food levy were set from above, by the central state, in accordance with its general needs and then simply divided among the provincial authorities.37

There was no attempt to match the quotas with an estimate of the surplus.

The requisitioning brigades were simply instructed to extract the necessary amounts of food by force, even if this meant taking the peasants’ last vital stocks of food and seed. It was assumed, in this terrifyingly ignorant calculus, that an empty barn was a sign that its owner was a kulak hiding food.38

The government’s draconian and destructive attempt to gain control of grain at its source was accompanied by a crackdown on bagging. The bagmen nevertheless persisted. At least half of the food brought into the cities was brought in by bagmen; without them, the cities would have starved.39

The Bolsheviks began to push for the collectivization of agriculture during 1919. By December 1920 there were 16,000 collective farms. The peasants resisted collectivization, and half of the collective farms were destroyed by peasant revolts in 1921.

Workers and Industry

The Bolsheviks started to take control of the economy as soon as they gained power. The State Bank and all private banks were nationalized in December 1917. Their shareholders were expropriated and all foreign debt was repudiated. In January 1918 the railways and merchant fleets were also nationalized. All factories (but not small workshops) were nationalized in June 1918.

The Supreme Council of National Economy (VSNKh) was established in December 1917. Its purpose was to guide and co-ordinate economic activity. It did not yet have either the powers or the ability to institute a command economy.

One of the local soviets’ revolutionary tactics had been to establish worker committees in the factories to act as a countervailing power to the management. In November 1917 these committees were given more power — their decisions were made binding on management — but factory discipline quickly broke down. The Bolsheviks, recognizing the strategic importance of industry, were forced to reverse course.

By April 1918, Lenin had come round to the view that industry had to be brought under state control, as opposed to workers’ control through collegial boards, with a traditional management structure (“one-man management”) capable of restoring labour discipline…Lenin demanded that the working-class offensive against the capitalist industrial system should be halted in the broader interests of economic reconstruction. The expertise of the “bourgeois” managers had to be tapped in the interests of the state; this, he admitted, meant using capitalist methods to construct the socialist order. It would be necessary to pay the bourgeois managers a high salary, and to restore their authority on the shopfloor, in order to ensure their co-operation with the Soviet regime, even though this went against the egalitarian principles of the Left.40

Industrial strikes over food supply and working conditions had been common. Once industry had been nationalized and one-man management had been imposed, the threat of dismissal was used to end protests. Trade unions were sidelined. Strike organizers were arrested as counter-revolutionaries. Mensheviks and SR who had supported the workers’ protests were arrested or driven underground.

The Bolsheviks had financed their war efforts by printing money, which led inevitably to rapid inflation. Money did not hold its value, so no-one was willing to give up physical goods for the chance of receiving physical goods at some other time and place. By 1920 most factory workers were being paid at least partially in kind — goods that they could either consume themselves, or that they could trade for food. Russia was reverting to a barter economy. Unable to reverse this process, the state instead tried to ensure that scarce goods went to the workers in the most important industries.

Trotsky had led the Red Army since its creation, and in the spring of 1920, he proposed that labour work under military discipline. He argued that the state should be able “to send every worker to the place where he is needed in accordance with the state plan.”41

The reversion to barter and the militarization of the labour force came together in a new policy governing strategically important industries.

Strategic factories would be placed under martial law, with military discipline on the shopfloor and persistent absentees shot for desertion on the “industrial front,” in exchange for which the workers would be guaranteed a Red Army ration. By the end of the year 3,000 enterprises, mainly in munitions and the mining industry, had been militarized in this way.42

Conscripted labour was used elsewhere in an effort to jumpstart the economy. Peasants were drafted to cut timber, build roads and railways, and to collect harvests.

The New Economic Policy

War Communism was a policy born of desperation. It kept the communist regime in power, but at great cost.

The still powerful trade unions were revolting against the crippling centralization of industry and the conscription of labor. Alienated peasants called for abolition of the state grain monopoly. Indus­trial workers were restive, the military was in a rebellious mood, and the Soviet regime was in danger of falling victim to internal discontent. Factory output had fallen to less than 15 percent of its prewar level.43

In 1921, with Russia’s borders secure and the civil war won, the Bolsheviks were able to shift to a less oppressive policy. The New Economic Policy (NEP) remained in place until 1928-9, when the first command economy came into existence.

Lenin had long believed that market mechanisms could be used to rebuild the shattered Russian economy, and the NEP reflected this view. It was a measured shift away from authoritarianism, centralization, and state ownership.

[The NEP] was a compromise blend of market and com­mand. The state continued to control the “commanding heights” sectors — heavy industry, banking, transportation, and wholesale trade — while markets directed agriculture, retail trade, and small-scale industry…In agriculture, a proportional tax replaced forced requisitioning, and peas­ants were again allowed to sell in relatively free agricultural markets.44

Market links between industry and agriculture and between industry and consumer replaced attempts at state control. Most industrial en­terprises were denationalized. The largest enterprises, which produced three-quarters of industrial output — the so-called commanding heights — remained nationalized. It was hoped that the state could provide general guidance by retaining direct control of the commanding heights of the economy…while allowing the remainder of the economy to make its own decisions.45

These changes were accompanied by currency reform and by a shift away from an administrative economy. By the end of War Communism, almost everyone’s food had been supplied through rationing and government services had been free. Firms had relied on the state to deliver raw materials. The result was a general laxity among both workers and management. Now, an attempt was made to reintroduce incentives. From 1921, wages were again paid in cash, government services had to be paid for, and the rationing system was ended. State firms had to pay cash for labour and all of their raw materials, and these expenses had to be covered by the sale of their production.

The new agricultural policy required the peasants to pay a tax (initially set at 20% of their output), after which they were free to sell their surplus in competitive markets. The prices set by competitive markets were expected to be high enough to ensure a secure food supply for the cities. The tax revenue would be used to fund capital investment in the industrial sector. The state would also purchase grain for export, at a price that it set, in order to fund additional capital investment. The tax rate and the state’s procurement price largely determined the pace of industrialization: a higher tax rate or a lower procurement price expanded the resources of the state at the expense of the peasants.

In 1920 the activist Emma Goldman had described Petrograd as a city of “living corpses,” and Russia’s other cities were little different. The NEP revived them.

By 1921 the whole population was living in patched-up clothes and shoes, cooking with broken kitchen utensils, drinking from cracked cups. Everyone needed something new. People set up stalls in the streets to sell or exchange their basic household goods,…flea markets boomed, while “bagging” to and from the countryside once again became a mass phenomenon. Licensed by new laws in 1921-2, private cafés, shops and restaurants, night clubs and brothels, hospitals and clinics, credit and saving associations, even small-scale manufacturers sprang up like mushrooms after the rain…Moscow and Petrograd, graveyard cities in the civil war, suddenly burst into life, with noisy traders, busy cabbies and bright shop signs filling the streets just as they had done before the revolution.46

The NEP certainly improved the welfare of the peasants, who were freed from the tyranny of the grain monopoly and its enforcers. The workers were more ambivalent about the changes. They saw the NEP as a step back from socialist principles. They particularly resented the “nepmen,” the middlemen who took their profits from the trade between the city and the countryside.

The Union of Soviet Socialist Republics was formed at the end of 1922. At that time it consisted of just four republics (Russian, Transcaucasian, Ukrainian, and Belorussian). It was expanded and restructured several times during the subsequent decades.

In 1924, with the NEP in place and economic conditions rapidly improving, with the wars over and the borders secure, the Soviet people must have believed that a measure of prosperity awaited them. But in that year, Lenin died. The compromises on which the NEP had been built soon collapsed.

  1. China Miéville, October (Verso, 2017), p. 28. ↩
  2. Orlando Figes, A People’s Tragedy: A History of the Russian Revolution (Viking, 1997), p. 89. When the peasants were emancipated, the government purchased land from the landlords for the peasants’ use, but demanded repayment through redemption dues, which included both principal and interest. ↩
  3. Figes, A People’s Tragedy, p. 46. ↩
  4. Figes, A People’s Tragedy, p. 46. ↩
  5. Paul Gregory, Before Command: An Economic History of Russia from Emancipation to the First Five-Year (Princeton, 1994), p. 38. ↩
  6. The literacy rate doubled in the decade or so after 1900. Young educated men were malleable — they could acquire skills that their fathers could not — and for them, the city offered the chance of a better life. ↩
  7. Figes, A People’s Tragedy, pp. 88-9. ↩
  8. Figues, A People’s Tragedy, p. 113. Witte was Minister of Finance from 1892 to 1903, and the empire’s first prime minister after the tsar was deposed. ↩
  9. Figues, A People’s Tragedy, p. 114. ↩
  10. Figues, A People’s Tragedy, p. 111. ↩
  11. Figues, A People’s Tragedy, p. 112. ↩
  12. Figues, A People’s Tragedy, p. 115. ↩
  13. Figues, A People’s Tragedy, p. 6. ↩
  14. Boris Chicherin, a nineteenth-century Russian jurist. Quoted by Figes, A People’s Tragedy p. 40. ↩
  15. Georgi Plekhanov, quoted by China Miéville, October, p. 22. ↩
  16. Figes, Revolutionary Russia, 1891-1991, (Henry Holt and Company, 2014), pp. 29-34. ↩
  17. Figes, Revolutionary Russia, 1891-1991, pp. 37-8. ↩
  18. Figes, A People’s Tragedy, p. 300. ↩
  19. St. Petersburg was renamed Petrograd at the beginning of WW I, and Petrograd would be renamed Leningrad following Lenin’s death in 1924. ↩
  20. Figes, A People’s Tragedy, p. 358. The claim that Russia became “the freest country in the world” was made by Lenin ↩
  21. Figes, A People’s Tragedy, pp. 358-9. ↩
  22. Figes, Revolutionary Russia, 1891-1991, p. 91. ↩
  23. Figes, Revolutionary Russia, 1891-1991, p. 96. ↩
  24. Albert Lindemann, A History of European Socialism (Yale University Press, 1983), p. 203. ↩
  25. Lenin, quoted by Figes, Revolutionary Russia, 1891-1991, p. 117. ↩
  26. Trotsky in 1920. Quoted by Figes, Revolutionary Russia, 1891-1991, p. 117. ↩
  27. Figes, A People’s Tragedy, p. 548. ↩
  28. Figes, A People’s Tragedy, p. 594. ↩
  29. Figes, A People’s Tragedy, p. 609. ↩
  30. Figes, A People’s Tragedy, p. 610. ↩
  31. Figes, A People’s Tragedy, p. 611. ↩
  32. Figes, A People’s Tragedy, p. 611. ↩
  33. Alec Nove, An Economic History of the U.S.S.R. (Pelican Books, 1969), pp. 36-7. ↩
  34. Paul Gregory, Before Command: An Economic History of Russia from Emancipation to the First Five-Year (Princeton, 1994), p. 84. ↩
  35. Figes, A People’s Tragedy, p. 617. ↩
  36. Figes, A People’s Tragedy, p. 619-20. ↩
  37. Figes, A People’s Tragedy, p. 622. ↩
  38. Figes, A People’s Tragedy, p. 622. ↩
  39. Figes, A People’s Tragedy, p. 623. Also, Nove, An Economic History of the U.S.S.R., p. 64. ↩
  40. Figes, A People’s Tragedy, p. 625. ↩
  41. Quoted by Figes, Revolutionary Russia, 1891-1991: A History, p. 113. ↩
  42. Figes, A People’s Tragedy, p. 724. ↩
  43. Gregory, Before Command, p. 86. ↩
  44. Gregory, Before Command, p. 5. ↩
  45. Gregory, Before Command, pp. 86-7. ↩
  46. Figes, A People’s Tragedy, pp. 770-1. ↩