How Did Stalin Transform Russia’s Economy? | History Hit

How Did Stalin Transform Russia’s Economy?

A 1930 propaganda poster targeting collectivization.

By the early 20th century, Russia’s economy was stagnating. Centuries of Romanov rule and a reluctance to modernise meant Russia’s economy was largely pre-industrial, revolving around agriculture. As wages failed to increase, living conditions remained dire and rigid class structures prevented millions from owning land: economic hardship was one of the key motivations which led Russians to join the 1917 revolution.

After 1917, Russia’s new leaders had plenty of ideas about radically reforming Russia’s economy in a very short period of time. Lenin’s mass electrification project utterly transformed Russia in the early 1920s and signalled the start of radical economic change in the country.

As Russia entered the 1930s, its path towards economic modernisation was steered by Joseph Stalin, the General Secretary of the Communist Party. Through a series of ‘Five Year Plans’ and at a huge human cost, he transformed Russia into a 20th-century powerhouse, putting the country once again at the forefront of global politics. Here’s how Stalin transformed Russia’s economy.

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Under the tsars

Russia had long been an autocracy, subject to absolute rule by the tsar. Bound by a strict social hierarchy, serfs (peasants of feudal Russian) had been owned by their masters, forced to work the lands and receiving nothing in return. Serfdom had been abolished in 1861, but many Russians continued to live in conditions which were little better.

The economy was predominantly agricultural, with limited heavy industry. The introduction of railways in the mid 19th century, and their expansion right up until 1915, looked promising, but ultimately they did little to transform or change the economy.

After the outbreak of World War One in 1914, the limited nature of Russia’s economy became all too apparent. With millions conscripted to fight, there were massive food shortages as no one could work the land. The railways were slow, meaning food took long periods of time to reach the starving cities. Russia did not experience the wartime economic boost to industry other, more developed countries felt. Conditions became increasingly dire for many people.

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Lenin and the revolution

The Bolsheviks, leaders of the 1917 Russian Revolution, promised the people of Russia equality, opportunity and better living conditions. But Lenin was not a miracle worker. Russia was engulfed in civil war for several more years, and things would get worse before they got better.

However, the advent of electrification across Russia made the development of heavy industry possible and transformed the lives of millions of people. Eschewing capitalism, the state assumed control of the means of production, exchange and communication, with the aim of completing the process of collectivisation in the near future.

However, ‘War Communism’ and ‘New Economic Policy’ (NEP) were not truly communist in nature: they both involved a certain degree of capitalism and pandering to the free market. For many, they did not go far enough and Lenin found himself clashing with those who wanted more radical reform.

Stalin’s first Five Year Plan

Joseph Stalin seized power in 1924 following Lenin’s death, and announced the advent of his first Five Year Plan in 1928. The idea was to transform the new Soviet Russia into a major industrial powerhouse in a virtually unprecedented period of time. To do this, he would need to implement large-scale social and cultural reforms too.

Newly collectivised farms, controlled by the state, transformed the lifestyle and existence of peasant farmers: as a result, peasants resisted the reforms much of the time. The programme also saw the infamous ‘dekulakisation‘ of the countryside, where kulaks (land-owning peasants) were dubbed class enemies and rounded up to be arrested, deported or executed at the hands of the state.

A parade in the Soviet Union under the banners “We will liquidate the kulaks as a class” and “All to the struggle against the wreckers of agriculture”. Sometime between 1929 and 1934.

Image Credit: Courtesy of Lewis H. Siegelbaum and Andrej K. Sokolov / GNU Free Documentation Licence via Wikimedia Commons.

However, whilst the collectivised farming system proved to be more productive in the long run (farms were required to sell their grain to the state at a fixed price), its immediate consequences were dire. Famine began to stalk the land: millions died during the plan, and millions more found themselves snapped up to jobs in the fast-developing industrial sector. Those peasants still farming often tried to squirrel away grain for their own use rather than reporting it and handing it over to the state as they should have done.

The first Five Year Plan could be considered a success in that, according to Soviet statistics at least, it met its targets: Stalin’s major propaganda campaigns had seen industrial output increase exponentially. The widespread famine and starvation had claimed the lives of millions, but at least in Stalin’s eyes, this was a price worth paying for Russia to become the second most industrialised nation in the world.

Subsequent Five Year Plans

Five Year Plans became a standard feature of Soviet economic development and before 1940, they proved relatively successful. Throughout the 1930s, as it became clear war was on the horizon, heavy industry was built up further. Benefitting from natural resources like coal, iron ore, natural gas and gold, the Soviet Union became one of the world’s largest exporters of these commodities.

Russia’s biggest tractor factory, Chelyabinsk, in the late 1930s.

Image Credit: Public Domain via Wikimedia Commons.

Railways were improved and expanded, and the introduction of childcare freed more women up to do their patriotic duty and contribute to the economy. Incentives were offered for meeting quotas and targets, and punishments were an ongoing threat for those who failed in their mission. Everyone was expected to pull their weight, and for the most part, they did.

By the time the Soviet Union entered World War Two, it was an advanced industrial economy. In under 20 years, Stalin had utterly transformed the essence of the nation, albeit at the high cost of famine, conflict and social upheaval.

The devastation of war

For all of the advancements of the 1920s and 1930s, World War Two ruined much of Russia’s economic progress. The Red Army suffered the loss of millions of soldiers and millions more died of hunger or disease. Farms, livestock and equipment had been ravaged by the advances of the German army, 25 million people had been made homeless and around 40% of the railways had been destroyed.

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The high casualties meant that there was a labour shortage after the war, and despite being one of the victorious powers, the Soviet Union struggled to negotiate terms for a loan for Soviet reconstruction. This, in part, was driven by American fears over the potential power and ability of the Soviet Union should they return to the levels of industrial output they were reached pre-war.

Despite receiving reparations from Germany and other Eastern European countries, and then subsequently linking these countries to the Soviet Union economically through Comecon, Stalin never returned the dynamism and record-breaking achievements of the 1930s Russian economy to the Soviet Union.

Tags: Joseph Stalin

Sarah Roller