Essay on Economic and Social Reconstruction in Soviet Union

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In War Communism, the Bolshevik leaders paid attention to the eco­nomic and social reconstruction of the country while the revolution was still in progress. They prepared a blue print of the future society based on Marxian principles and introduced system of governmental control and direction of economic life.

They paid special attention to the interests of workers, poor and middle class peasants and resorted to government con­trol over every possible economic activity. This policy was pursued by them from 1918-21 and is popularly known as policy of war communism. The basic features of this policy were tightening of control over farmers, nationalism of industries, greater control over labour, nationalism of trade and commerce.

In the first instance they tried to tighten government control over peas­ants and farmers. They asked the farmers to surrender all their surplus stocks to the government at fixed prices. This collection was mainly made from the kulaks or the well-to-do farmers. In 1919 collective farming was introduced through a decree.

Three types of collective farms were set up- communes, cartels and associations. It was asserted that the right to decide as to how the land should be used rested with the state. These measures were naturally resented by the farmers who stopped cultivation and killed most of their live stocks so that they could not be confiscated for the benefit of someone else. As a result the country witnessed a severe 'man-made' famine in 1921-22, which resulted in death of over three mil­lion people.

In the second place, the Soviet leaders adopted policy of centralization and nationalization of industry. Nationalization of industry was felt essen­tial in view of conflicts between the workers and the owners.

Through a decree issued on 28 June, 1918 over 3700 large industrial enterprises were nationalized. In 1920 nationalization was extended to enterprises employ­ing more than five workers with mechanical power or ten workers without mechanical power. While nationalizing the various enterprises the govern­ment did not pay any compensation to the owners.

All the nationalized enterprises were placed under the control of the Supreme Economic Council which was set up in December 1917.

Thirdly, the government introduced the principle of compulsory labour. Through a decree issued in December 1918 it was made obligatory for all persons between 16 and 50 years to tender manual work. It was asserted that all those who were exercised to eat must work. Initially there was no restriction regarding the nature of the work to be done by the workers, but later on the skilled workers were compelled to take up any work assigned to them. Through another decree issued in Janaury 1920 all labour was subjected to mobilization.

Fourthly, the government nationalized trade and commerce. Initially trade only in some industries was nationalized but through a decree issued in November 1918 the entire trade was nationalized. Private commercial establishments were replaced by government owned stores and co-operatives.

All articles of individual consumption were purchased by the government and distributed through these stores and co-operatives. Rationing was introduced and social ration was given to industrial workers and soldiers. The peasants were not covered by rationing because they were expected to supply their own food needs.

However, sometimes they were provided manufactured goods on rationing. In services like housing, postal and telegraph, medicine and newspapers, the workers were paid in the form of goods. As a result the monetary system was to a large extent rendered inoperative. The state also established its monopoly in foreign trade through a decree in April 1918. But actually no foreign trade could take place because the goods were not permitted to move across the frontier.

Though the policy of 'war communism' pursued by the Soviet leaders proved a great failure, it produced far reaching effects. As Prof. Harcave has observed, "For a space of two and a half years the economy under its pressure did manage to sustain the war burdened country, albeit at the lowest possible level.

The system of grain requisitioning met the food needs of at least the favoured urban groups; industry supplied at least the minimum needs of the Red Army; and the system of distribution and transportation continued to function in some way."

However, it cannot be denied that as result of this policy the difficulties and sufferings of general public greatly increased. By doing away with the incentives of a money economy and by adopting compulsive methods, the enthusiasm of the producers was completely dampened and they tried to produce the minimum. In agricultural sphere also the production greatly declined due to division of large estates, lack of agricultural machinery and fertilizers and above all the useless money given to the peasants in ex­change for the grain.

As a result they began to produce only as much as they needed for themselves or could hope to sell or barter on the black market. Likewise the production of commercial goods also sharply declined and there was sharp rise in the prices. The private trade could not be fully eliminated and people continued to indulge in private trade secretly.

Growing discontent against the new rules gave rise to hostility among various sections of society and a number of revolt were organized by the peasants against the high-handed policy of the collectors. Though the government succeeded in suppressing these revolts, it was an indication of the simmering discontent prevailing in the country side. The leaders themselves were sharply divided about the desirability of pursuing this policy.

Accordingly at the Tenth Congress of the Communist Party at Moscow in March 1921 it was decided that the policy of requisitioning surplus grains should be replaced by fixed taxes in kind and the peasants should be permitted to dispose of their surplus after tax through private trade channels. This marked the end of the policy of 'war communism' and paved the way for the adoption of new economic policy.


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