Economic Policies Of Lenin And Stalin Essay

, Research Paper

“Both Lenin and Stalin adopted well-structured economic policies in order to build their country into a well-established and powerful state”

Robin Ronne

Both Lenin and Stalin had enormous power to change Russia as the leaders of the ‘Dictatorship of the Proletariat’; the question is how did they succeed in giving economic power to Russian people.

The first solid economic policy instituted in Russia after the abdication of the Tsar and the overthrow of Kerensky’s Provisional Government was Lenin’s policy of War Communism. War Communism was not a policy designed to promote economic stability in Russia. Russia was in civil war and war communism was a policy designed to get food to the soldiers fighting the Whites (anti-Bolshevik soldiers) and then next in line for food were the workers who supplied the soldiers. One must keep in mind that Russia’s economy was in a bad state even before the institution of War Communism. In economic terms War Communism was an abysmal failure. The state was forced to pay wages in kind to workers because money was simply worthless. With the ban on private trade there was a break down of the currency system and rural communities reverted back to a barter economy. The Bolshevik party forcibly seized all surplus grain from the peasants causing resistance from peasants by hiding grain and not producing more than was needed for themselves – Russia had gone back to subsistence farming. This lead to a drop in production with some historians claiming that by 1921 there was more than a 60% percent drop in agricultural productivity since pre-war Russia. The peasant reaction is justified considering that some historians estimate well over 5 million peasants were killed during the grain requisitions. In the cities factories were taken over by the state and the state commissioned managers to run the factories – the Bolsheviks felt that loyalty to the Bolshevik party and Communism was more important than competency. As a result there were staggering drops in industrial production especially in fossil fuels. Oil production dropped from 9.2 million tons in 1913 to 3.8 million in 1921 under war communism. Coal production dropped a massive 67% from 29.1 million tons produced in 1913 to 9.5 million in 1921 (Statistics from Economic Systems in Action – Oxenfeldt and Holubnychy). A clear sign of economic catastrophe in Russia was the estimated depopulation of 60% of the population of the large centres of Moscow and Petrograd. The situation in Russia got so bad that 8 million children were left homeless and millions died in famine caused by inefficient peasant farming. Russia was under immense financial strain from the Civil War and the dissidence of the peasants, something had to collapse and it was the Rouble.

Once the Civil War was under control and Lenin saw citizens growing restless he decided that a new economic policy was in order and the policy was given the name New Economic Policy. The Policy was a drastic measure and I think it was just what Russia needed and it was just in time. Politically, Lenin stepped on the toes of a few hardcore Communist Party members (Bolsheviks) but economically the policy was sound. The policy was a hybrid Socialist-Capitalist economy and was called state capitalism by Lenin. Lenin said the New Economic Policy was a temporary measure and was going to slow down the transformation into communism to ensure that when the state ‘withered away’ (In Marxist theory) the withering would be as smooth as possible. I think that the New Economic Policy was Lenin putting the brakes on the communist revolution, even if only for a while. There were two things that needed to be done urgently in Russia. Firstly, the populous needed to be calmed down and made happy because not even the mighty Lenin would be able to stop the people of Russia if they had a third revolution. The policy was employed to ensure the survival of the Bolshevik Party. Secondly, the economy needed to recover to some extent if the Bolsheviks wanted to industrialise Russia, which I believe they did want to do in order to compete with the west and capitalism. The transition from a command economy to a slightly capitalist one had immediate and far-reaching benefits such as peasant farmers having their surplus grain taxed instead of requisitioned. The taxation along with the legalisation of free trade meant that farmers with excess grain could go and sell it at the market and earn money, this had a crucial spin-off – money became the medium of trade once again. The standard of life in Russia increased somewhat. The Bolsheviks gained more peasant support because of the new policy. There was a drawback that occurred as far as communism is concerned, some peasants became wealthy and were known as kulaks. Having wealth amongst the peasants was, however, positive for the economy in exactly the same way as an increase in middle class wealth is good for any developing economy today. Industrial sectors remained mostly under state control except small concerns (employing fewer than 20 workers). Capitalism still crept into industry in the form of bonuses for workers for incentive purposes. The results were astonishing, by 1928 the coal and oil production mentioned earlier had risen to above the 1913 levels with oil at 11.6 million tons and coal at 35.5 million tons. The New Economic Policy was an economic success.

By the end of Lenin’s