In the early 1920s the USSR was established. However, the economy of the USSR was a mess after the conflict of the first World War, and then the Russian Civil War that followed. As such, the Communist Party needed an economic policy that would revive the USSR’s economy. Both Lenin, and his successor Stalin, would pursue contrasting economic policies during the 1920s into the 1930s.
Originally, War Communism had been pursued by the Bolshevik Party. However, this economic policy did little to enhance the Russian economy. In fact, the policy actually enhanced economic decline in some respects. As such, it became clear that the policy could not be continued with and so was abandoned by the Bolsheviks in the early 1920s.
In its place, Lenin advocated a new economic policy, otherwise called NEP. NEP was a move away from Communism in favor of introducing freer markets and a degree of privatization. Overall, Lenin referred to it as ‘state capitalism’ and NEP was really a more mixed economy.
However, the policy led to disagreements within the Bolshevik Party. Trotsky for one did not entirely support the policy. Overall, it did not fit easily with party ideology, however the policy was still pursued at Lenin’s insistence.
NEP soon helped to revive the USSR’s economy. This was especially the case in relation to agriculture, as the amount of grain produced rose to almost pre-war levels. For industry, rail roads expanded and coal exports also greatly increased by 1925. As such, there was something of an economic revival into the mid ’20s.
1925 marked a turning point as Lenin passed. The hero of the revolution was succeed by a less celebrated successor, that of Stalin. Stalin was initially a supporter of the NEP, and the policy continued up until 1928.
However, the USSR still remained a long way behind the west economically. This was particularly the case in relation to industry. As such, to industrialize the USSR and expand their industry, Stalin abandoned NEP in favor of the five year plans which were more of a command economy. The five year plan aimed to close the gap on the west, and set some very ambitious targets to be reached by 1933.
Overall, the plan was successful and met a good number of the targets. Industrial output in iron, steel, coal, and oil all greatly increased during the five year plan. As such, the USSR’s heavy industry advanced greatly, although the plans did little to enhance agriculture.
Given the relative success of the first five year plan, a second then began in 1933. The emphasis of this plan put military goods and heavy industry first. Overall, steel output further increased and railways became more efficient. However, not all the targets of the plan were met.
As such, the economic policies of Lenin and Stalin had gone a long way to expanding the USSR’s heavy industry. While the two economic policies were of some contrast, the USSR’s industrial output increased rapidly in the 1920s and ’30s. However, while NEP enhanced farming efficiency, Stalin’s economic policies were a backlash to agriculture which resulted in famines during the 1930s.
Written by Matthew Adams
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