Socialism and the Soviet Union

Published: September 2020 Updated July 2021
Draft Topic for our ‘Transformation, a Manifesto for Democratic Socialism’

The Soviet Socialist Revolution of 1917 was a breakthrough that inspired countless millions. But soon backwardness, isolation and strategic mistakes caused it to degenerate into a bureaucratic and ruthless dictatorship. Despite this, planning and public ownership brought the Soviet Union to the front rank of nations. Yet, its inability to overcome its flaws ultimately caused its dramatic collapse.

The socialist insurrection in October 1917 that created the basis for the Soviet Union was a genuinely popular revolution. Not an unrepresentative coup as critics of the revolution often maintain. The new Soviet government was a two-party coalition made up of parties that had the support of a large majority of the working population. As such it was a partnership led by the Bolsheviks, the revolutionary wing of the social democrats, representing most Russian workers; with the Left Socialist Revolutionaries, who had majority support among the peasants. Along with their supporters in the intelligentsia and sections of the middle class, the new government expressed the wishes of a decisive mass of the Russian people.

Russia’s October was also a democratic revolution. The revolutionary forces first had to win an elected majority in the Soviets which were the only democratic organs in the country. Then they had to persuade the military regiments in the capital to freely vote to follow the orders of the Soviet Military Revolutionary Committee rather than the military high command. These two steps formed the democratic basis for the transfer of power to the first workers and peasants government in history.

The policies of the new government – land to the peasants, withdrawal from the War, food for the workers, a new Constituent Assembly – all had overwhelming support among the Russian population.

Problems for the New Revolution
From the outset, the revolution faced a myriad of problems. First and foremost, Russia was a backward, overwhelmingly agricultural country. Not the advanced industrial nation that Marx had envisaged in which to build a new socialist society. Capitalism had not been overthrown in its ripest rampart. Instead, as Lenin put it, it had broken at its weakest link.

Moreover, Russia was a country that had faced three years of a devastating war with Germany and Austro-Hungary. A war that had killed 2.5 million Russian soldiers and civilians. And left the economy in a very weakened state.

Last but not least, despite the best efforts of its participants to spark off a series of socialist revolutions in the more advanced countries, the October Revolution was to end up isolated and on its own. The result was that Russia was faced with the very difficult task of building a socialist society in a backward society and encircled by a hostile capitalist world.

In addition to these severe objective difficulties that the new Soviet government faced, it soon went on to make major subjective mistakes that made its problems that much worse.

Constituent Assembly Elections
A major miscalculation was the decision of the new Soviet government to hold elections for the Constituent Assembly within weeks of the Revolution. Instead of delaying them until the following summer. The masses of the population had not yet had a chance to really know about, never mind evaluate the new revolution. Soviets were still being formed across the country. The new government had had no chance to explain itself or to campaign for their policies among the people.

Worst of all was the confusion caused by the recent split in the peasant-oriented Socialist Revolutionary Party (the SRs), Russia’s most popular party. This Party had split on the eve of the October Revolution over issues dear to the heart of the peasantry. The Left wing of the Party, the Left SRs, supported an end to Russia’s participation in the Great War, and through this an end to the death and injuries of the mainly peasant soldiers. This would mean a return home of the soldiers to their families and fields. This was what the peasants urgently desired. However, the Right SRs supported the continuation of the War irrespective of the continued suffering this would entail.

Of longer term significance was the issue of the ownership of the land. The Left SRs supported the immediate distribution of land to the peasants. This was something the peasants had been longing for over centuries. Yet, the Right SRs opposed this demand arguing for a gradual redistribution which meant that land would still remain in the hands of the aristocrats and the rich for the foreseeable future.

When the elections for the Constituent Assembly took place in November, a majority of the peasants voted for the Socialist Revolutionaries thinking that they were electing the people who had just given them the land and ended the War. But in fact, the farmers had unknowingly cast their votes for candidates from the Right of the SR Party who had been selected by the Party leadership before and during the split in its ranks. These were candidates who directly opposed the peasantry’s interests and demands. As we can see from the chart below, despite the premature nature of the elections, the Socialist Revolutionaries and the Bolsheviks won a 65% majority in the new Assembly. We can also see from the pitifully low level of support for the opponents of the Revolution in the shape of the capitalist Cadets and the reformist socialist Mensheviks (just over 8% combined), there was a big potential majority of Russian people behind the new Soviet Government. But instead, the premature elections had ended up with a Constituent Assembly majority that represented the exact opposite of what most of the population wanted.

Accordingly, when the Constituent Assembly gathered in January 1918, instead of supporting the Revolution and devising a new democratic constitution which protected the people’s rights, it voted to oppose the revolution. This left the Soviet government with no alternative but to close down the Assembly. Yet, this made the new government look completely anti-democratic – holding an election for an Assembly and then shutting it down because it didn’t like the outcome!

This was like manna from heaven for the reactionaries and gave them a great propaganda victory. The suppressed Constituent Assembly majority formed the basis for all the political parties outside the government, who normally were deeply divided, to form a united front against the revolution and its government. And to launch a united civil war against it.

Simultaneously, it helped the capitalist governments abroad to better justify their support and encouragement of the military revolt of the opposition. To this end they supplied troops and training officers, along with massive quantities of weaponry and financial aid. “Within a year Britain, the USA, France and Japan organised an international counter-revolution against the Bolsheviks. This White Terror claimed millions of Russian lives whereas the October 1917 Revolution claimed only hundreds. Of course, these massacres are hidden from history by the imperialists and their apologists in order to maintain the myth that it is revolutions rather than counter-revolutions that provoke mass murder and even genocide.” 1

War Communism
Russia’s horrific Civil War lasted for three years with up to 12 million perishing, the large majority of them civilians. This brutalised the Revolution, forcing the use of all kinds of ‘special measures’ and undermining the very democracy that had achieved the Revolution in the first place. One of these mistaken measures was the introduction of ‘War Communism’.

In order to feed and finance the new Red Army that was being brilliantly created from scratch by Trotsky, the Bolsheviks forcibly requisitioned food from the peasants, abolished money and paid workers in kind. The results were disastrous. Industrial production further declined to one-fifth of the prewar level, and real income per capita dropped by 60 percent. The workers had no choice but to accept this. But the peasants now having control of the land and their own means of production simply refused to cooperate. They stopped ploughing, hid their grain and slaughtered their animals for their own consumption. The inevitable result was agricultural crisis. And in due course a famine in which several millions starved to death.

Socialist Network activist and authority on China, Jonathan Clyne, here describes how War Communism developed illusions among the Communists: “During the Civil War the factory owners fled and factories were left unattended. Peasants were not prepared to sell their produce for affordable prices. Out of this mess, the Bolsheviks created an economic system. The state stepped in and took over all industry employing more than ten people. Food was extracted by violence from peasants and private housing was taken over to house people displaced. Money ceased to function and was replaced by barter. This became known as War Communism. There was a daily improvisation to get hold of what was necessary to win the war. There was no planning. Yet, an illusion spread within the Bolshevik Party that War Communism meant Russia was jumping straight to socialism. After the war, a “retreat” was sounded. It was not a retreat from socialism, but from hubris, unless one considers socialism an economy where people starve and the output of large-scale industry is 14 percent of its previous already low level.2

Accompanying these measures of war communism was the nationalisation of almost all business and trade. However, “E.H. Carr describes the nationalisations that took place as either ‘spontaneous’ or ‘punitive’, not part of the rolling out of a plan for an ideal society.3  The truth was that the Bolsheviks had won power with no plans for how to build a socialist society in Russia. In the first place, they had not expected revolution to break out so soon. Just a month before the 1917 February Revolution which brought down the Tsarist regime, Lenin, in exile in Switzerland, spoke to his comrades declaring “We of the older generation may not live to see the decisive battles of this coming revolution.” 4 Yet, less than a year later, Lenin and the Bolsheviks were in power.

Moreover, the Bolsheviks did not consider backward Russia as the rational place for socialism to be built. Rather, they looked to the countries of Germany, France, Britain and America for its creation. Russia’s main role being to help spark off a revolution in these advanced economies.

However, in the midst of the sacrifice and excitement of the Civil War many communists got carried away. Inspired by the victories of the Red Army, much of the Bolshevik Party began to believe that through forced collectivisation of agriculture and coerced direction of labour they could somehow jump rapidly from a peasant-based economy to an advanced industrial society. But they were up against the same reality facing capitalism in its early period. When it had to go through the stage of agricultural capitalism before moving on to industrial capitalism. The Soviet Union, despite being run by socialists, couldn’t leap over this process.

The other problem with the War Communism approach was that the masses were simply not willing to accept the sacrifices and compulsion involved. When the Civil War finally came to an end in 1921 the victorious Bolsheviks ironically found themselves very unpopular both among the workers and the peasants. Strikes broke out across the USSR and peasant uprisings occurred in some areas. The best known of these protests being the Krondstadt Rebellion.

New Economic Policy (NEP)
In light of the widespread discontent, Lenin recognised the need to step back. He persuaded a reluctant Communist Party Congress in 1921 to accept a New Economic Policy (NEP). Under the NEP the Bolsheviks replaced arbitrary grain requisitions with a tax in kind. And allowed the peasants free use of the state-owned land as long as it was cultivated. Lenin’s original intention was to limit the reform to barter between farmers and the state in the local areas. But by the autumn normal buying and selling had swept across the country. As a welcome result, the food crisis quickly eased.

The government also reintroduced money and allowed private ownership and capitalistic practices in the   retail trade and light industry. While the state retained control of banking, foreign trade, transportation and heavy industry. This was a mixed economy where 100 million peasants on 25 million small holdings were allowed to sell their produce in markets and a multiplicity of small private businesses free to operate. Side by side with this, the government continued to control the ‘commanding heights’ of the economy with state industries employing 85% of the urban workforce. Furthermore, the state leased factories to cooperatives, as well as to foreign capitalists which it was encouraging to bring in capital and technology. And participate in the Soviet economy.

At first, Lenin accepted that the NEP was a “retreat” and a “turning back toward capitalism”. But he and Nicolai Bukharin, who was to become the chief theoretician of the NEP, soon began to see it as an obligatory policy for a socialist government in a largely agricultural country. As the best way of combining socialist and capitalist economic forms in the transition to a fully socialist society.

In addition, they came to understand that such a society could only move forward by forming a long-term alliance between the workers and the peasants. As Lenin put it: “in our Soviet Republic the social order is based on the collaboration of two classes: the workers and the peasants.” A “split” between these classes, Lenin concluded, “would be fatal.” 5

This was also one of the aims of Karl Marx and Friedrick Engels who had written in ‘The German Ideology’, their first work together, that “The abolition of the antagonism between town and country is one of the first conditions of communal life.”

However, this was a major change for the Bolsheviks who had seen the peasants only as a temporary ally. Helping to make the revolution in order to gain the land. But as a potential enemy as they sought to grow their farms and develop a capitalist agriculture.

In order to avoid this danger Lenin and Bukharin developed a cooperative strategy to bring the farmers together. And link them to the socialist state. These cooperatives would combine the peasants together for the purchase of seeds, animals and equipment; for the marketing of their produce; and for negotiating credit from the state banks. The farming cooperatives meant that advances would be shared collectively rather than individual farmers doing better than others. Or buying out the less successful ones. Thus, the cooperatives would help to prevent a rich class of farmers emerging.

Lenin’s new approach was also based on a voluntary approach to economic management in place of the coercion involved in the previous period of War Communism. Unfortunately, he did not combine this more democratic approach with an appreciation of the danger that was rapidly threatening the internal life of his own Party. And through its one-Party rule that of the whole of Soviet society.

The Decline of Democracy in the Party & the State
The problem of democracy emerged within months of the governing role of soviets being enshrined in the 1918 constitution. The other socialist parties made attempts to violently overthrow the soviet government and so were banned from standing in elections within the soviets. This had the effect of introducing one-party rule in the USSR. And unintentionally of emasculating the soviets. After all, if everything was now decided by the Party what role did the soviets have? This naturally focused the question of democracy solely on the Bolsheviks. But in the desperate years of the Civil War democracy started to crumble in the Party. And bureaucracy soon grew up to replace it.

This was soon reflected in the emergence of opposition factions inside the Bolshevik party which protested against this process. First off were the Democratic Centralists which formed in 1919 to organise against the increasing centralism and decreasing democracy in the running of the Party. Then the Workers Opposition in early 1921 emerged to campaign on similar issues. Tragically, the main leaders of the Communist Party turned a deaf ear to these complaints which foretold of the coming degeneration of the Party into dictatorial rule.

As the Civil War drew to a close and strikes and protests grew across the country, factional divisions broke out in the leadership of the Party. To avoid these splits deepening into unbridgeable division, factions were banned at the 1921 Communist Party Congress. This was initially thought of as a temporary measure to hold the country and the revolution together at a moment of severe danger. But Lenin in response to a question from one of the Congress delegates declared it to be a permanent ban. This turned out to be a serious mistake – the ban on factions became a crucial noose around the neck of internal democracy in the Party. Stalin, in particular, utilised this ban in the coming internal battles to justify disciplinary measures.

In the same period, Lenin unwittingly proposed that Stalin become General Secretary and also be put in charge of other key administrative posts.

Finally, the 1921 Congress saw the emergence of slates in the election of the Central Committee. Previously elected on the basis of individual performance, the new slate system potentially allowed the existing leadership to decisively influence who was elected to future Central Committees.

Taking full advantage of all three of these developments, Stalin began a ruthless and stealthy bid to take over the Party. Within a year, he had already placed his supporters as officials across the Party.

Lenin, the undisputed leader of the party and the government, quickly began to sense Stalin’s growing power behind the scenes. And to identify the coarse and brutal aspects in his character that made him a danger to the future of the Party. He sought to form alliances against Stalin. But, fortunately for Stalin, Lenin suffered a series of strokes that progressively reduced his abilities until his death at the beginning of 1924.

Trotsky, still leader of the Red Army and the second most important leader of the Party, also began to be alarmed by the bureaucratisation of the Party. And unlike in earlier years, from 1923 onwards he started to openly campaign against it. But he, like most of the Party, underestimated Stalin who they saw as a second-rate organiser. A key turning point came soon after Lenin’s death. On the eve of the following Congress Trotsky and the other leaders agreed in the name of maintaining party unity to suppress Lenin’s Last Testament calling for Stalin’s removal as General Secretary. This was effectively their last chance to stop Stalin’s rise to absolute power. But they were not to know it until five years later.

Divisions over the Economy
After Lenin’s death, a series of major factional struggles developed within the Party. One central issue was the future of the Soviet economy. In Lenin’s absence, Bukharin became the leading defender of the NEP which had achieved great success in its initial period. Both peasants and workers were eating better. Rations had been replaced with real wages which now rose to higher than prewar levels. Working hours had decreased from ten hours a day to eight. Access to welfare benefits, free medical care and education were starting to become available.

But there were many problems too. Emigration from the countryside to the towns was creating widespread urban unemployment and a lack of housing. The operation of private enterprise was leading to growing inequality, profiteering and corruption. Some ‘red partisans’ had even become Soviet millionaires. In the cities there was widespread prostitution, gambling and drug trafficking.

Some workers started to label the NEP as the “New Exploitation of the Proletariat”. All of this led to resentment among many Communist Party members who saw this as a betrayal of the Revolution.

Moreover, fears began to grow of a potential capitalist threat from the richer peasants. And from the ‘Nepmen’, as the industrialists, middlemen and speculators came to be known.

Trotsky’s Left Opposition voiced these fears in their material. Their chief economic theorist, Preobrazhensky, developed his “primitive socialist accumulation” theory, which taking lessons from the early period of capitalist accumulation, argued for the rapid expansion of state industrial capital by squeezing the peasantry through taxation and higher prices for their industrial products. Thus, the Left Opposition proposed that the Soviet Union should launch an industrialisation “offensive” as part of a ‘Five Year Plan’. The latter proposal made a lot of sense. One of the major problems of the NEP period was the lack of planning. A government central planning institute, Gosplan, was set up for this purpose. But it was mainly staffed by Menshevik economists who produced some interesting planning concepts but had little clout. And were generally ignored. 

Actually, no-one in the Communist Party leadership, whatever their faction, disputed the need to industrialise. Rather, they strongly disagreed over at what speed it should be carried out. And how it should be paid for. Bukharin, in particular, differed with Preobrazhensky and the Left Opposition arguing that industrialisation could not be carried out at the expense of the peasantry who would simply refuse to cooperate as they had in the earlier War Communism period. That, given the dominance of agriculture in the Soviet Union, the proletariat “is compelled, in building socialism, to carry the peasantry with it.6

Bukharin further argued that the threat of a restoration of capitalism was unreal given the small number of wealthy farmers, a fact that was later proved to be correct. He called for balanced growth and a slower tempo than the Left. He insisted that in a largely agricultural country industrial growth should spring first from the countryside generated by the demands of the farmers for implements and household products. That the processing of agricultural products and demand for more complex producer goods such as tractors would naturally lead to the development of light industry and then to heavy industry.

But events seemed to support the ‘super-industrialisers’, as the Left Opposition became known. Shortfalls in grain collection caused by artificially low state prices caused severe shortages in the cities in what became known as ‘the scissors crisis’. In response, Bukharin moved towards some of Preobrazhensky’s positions. He came to see that a Five Year Planning system was required along with more investment in heavy industry. Plus, he started to accept the Left’s argument for the development of voluntary collective farms. “Commonly the conflict between Preobrazhensky and Bukharin during the Soviet Industrialisation Debate is presented as being about the pace of industrialisation or being for or against the peasants or for or against the market. However, these are simplifications. Both believed that socialism meant the law of value would be abolished and replaced by the planning principle. And both believed that would have to wait until the Soviet Union was much more advanced, but that some planning could be commenced nevertheless. Both wanted to maintain the alliance between the working class and the peasants. There were different opinions about the pace of industrialisation, but that did not lead to a great rift. By the end of the debate Bukharin came round to the view that industrialisation did have to be speeded up.” 7

Stalin removes all opposition
During this debate over the future of the soviet economy, Stalin was busy building up his forces and taking steps to destroy all opposition within the Party. From a position in the centre of the Party, Stalin first allied with the Right against the Left Opposition. Utilising the ban on factions and the majority he had built up in the Central Committee, he accused Trotsky and his supporters of breaking party discipline. He organised Trotsky’s removal first from the leadership of the Party and then from the Soviet Union itself. With Trotsky out of the way, he turned on Zinoviev and Kamenev who were removed from their leading positions and forced to recant. Having removed all threats from the Left, Stalin felt strong enough to turn on Bukharin and his supporters. This left him in undisputed control of the party.

As Bukharin’s biographer concluded: “Part of the tragedy of the old Bolsheviks lay here: for seven years they fought among themselves over principles, while an intriguer gradually acquired the power to destroy them all.8

Even Trotsky missed what was really happening and for a time saw Bukharin as the main threat. “Rykov had said at the Central Committee that ‘the Trotskyists regarded it as their main task to prevent a victory of the right wing’. Trotsky replied that this was indeed the Opposition’s main task.9

For years Trosky spoke of “the ‘danger from the right’ and to warn the party against the defenders of the kulak and the Thermidorians. He had been prepared to form a ‘united front’ with Stalin against Bukharin.” 10 Then when Bukharin began to put out feelers to the Left Opposition, Trotsky rejected the offer of an alliance: “With Stalin against Bukharin? Yes. With Bukharin against Stalin? Never!” 11

Bukharin, of course, being on the inside of the Party leadership, understood the threat to the Party that Stalin represented far better than Trotsky did. As he communicated to Trotsky, he had discovered that “The differences between us and Stalin are infinitely more serious than our former differences with you.12

Stalin Turns to the Left
The continuing crises of grain deliveries became the occasion for Stalin to take a dramatic turn to the left. In doing so he adopted much of the Left Opposition’s economic programme but in an extreme and brutal form. He pushed through a new line ending the NEP and launching a war against the peasantry. He adopted the Five Year Plan but based on ridiculously over-ambitious targets for the industrialisation of the country.

In November 1927, Joseph Stalin launched his “revolution from above” by setting two extraordinary goals for Soviet domestic policy: rapid industrialization and collectivization of agriculture. His aims were to erase all traces of the capitalism that had entered under the New Economic Policy and to transform the Soviet Union as quickly as possible, without regard to cost, into an industrialized and completely socialist state.

Stalin’s First Five-Year Plan, adopted by the party in 1928, called for rapid industrialization of the economy, with an emphasis on heavy industry. It set goals that were unrealistic – a 250 percent increase in overall industrial development and a 330 percent expansion in heavy industry alone. All industry and services were nationalized, managers were given predetermined output quotas by central planners, and trade unions were converted into mechanisms for increasing worker productivity. Many new industrial centers were developed, particularly in the Ural Mountains, and thousands of new plants were built throughout the country. But because Stalin insisted on unrealistic production targets, serious problems soon arose. With the greatest share of investment put into heavy industry, widespread shortages of consumer goods occurred.13

Sections of the Left Opposition including Preobrazhensky welcomed Stalin’s new policy and actually moved over into his camp. This further alarmed and weakened Bukharin’s position. In a secret visit to Kamenev, Bukharin hastened to warn others in the opposition against joining forces with Stalin: “He is an unprincipled intriguer, who subordinates everything to his thirst for power… He will kill us all. He is another Genghis Khan and will strangle us.14 Tragically, this forecast turned out to be uncannily accurate. But no-one listened to Bukharin’s warnings and dismissed them as the bleatings of a defeated opportunist.

Collectivisation of the Peasants
Stalin also announced a new policy: a programme of compulsory agricultural collectivization that would force the peasants from their 25 million farms into 250,000 collective farms owned by the state. It was effectively a return to War Communism but on an even larger and more permanent scale.

The peasantry responded in the only way they knew: hiding their grain and other food supplies. But communist cadres were mobilised to search the countryside and seize these stocks. The peasants also went on to slaughter their own livestock to prevent them being requisitioned by the collective farms. By 1934, half of the country’s 33 million horses had disappeared, along with 70 million cattle, 26 million pigs, and two-thirds of its 146 million sheep and goats. Twenty-five years later, livestock herds had still not recovered.

In the process of collectivisation Stalin identified the richer peasants, the so-called Kulaks, as a major threat to be eliminated. The only problem was the number of kulaks had been grossly overestimated and the threat they were supposed to represent was virtually non-existent. Party units were sent out across the country in a fruitless task ‘to find the kulak’. But, finding virtually none, officials resorted to expelling millions of the country’s most industrious peasants from the land, often into the labour camps of the Gulag. Ultimately leading to the terminal decline of the Soviet agricultural sector.

As for the collective farms, for many years they turned out to be a pathetic failure run by unqualified managers. Few even had tractors to replace the horses the peasantry had destroyed, so ploughing often ended up having to be done by humans alone.

The inevitable outcome was widespread famine, with between 4.6 million – 8.5 million people dying of starvation or disease between 1930 and 1933.

Industrialisation and the Five Year Plans
There can be no question that the Five Year Plans and the drive for the industrialisation of the Soviet Union brought impressive results. These compared very favourably to the Western capitalist economies which were going through the years of the Great Depression. A key aspect of the breakneck industrialisation in the Five Year Plans was that government investment rose from 8% per year during the earlier New Economic Policy period to the much higher level of 20%. As a result, industrial output in the First Five Year Plan increased by a massive 118%. The Second Five Year Plan, begun in 1933, yielded impressive albeit slower growth. Then a Third Plan was cut short by the invasion of the Soviet Union by Germany in the Second World War.

But this rapid economic expansion came at great cost. And not just for the peasants. In the cities workers lost all rights. Real wages dropped by up to half. Working hours were greatly lengthened. Rationing and queues became commonplace with consumer goods and services non-existent. Housing space fell dramatically and consumption of meat declined by two thirds.

Worse still, many of the big construction projects for power stations, dams etc. were carried out by slave labour from a massively expanded system of labour camps, many of whose inhabitants were worked to death. Millions of camp inmates, condemned for decades as ‘enemies of the state’, were used to fell the forests and mine raw materials in the freezing and remote areas of Northern Russia.

Part of the reason for the extremity of the measures adopted by Stalin from 1928 onwards was a fear of war. Stalin and some other elements in the Party expected invasion from the Western powers. This fear intensified with the coming to power of Hitler. However, a more rational and sound economic plan would surely have increased the USSR’s power and its potential ability to defend itself.

Stalin’s Great Purge
Not surprisingly, Stalin’s brutal economic measures and the suffering they were causing among the workers and the peasants meant that his rule was becoming increasingly unpopular. He constantly feared revolts from within his own Party. To prevent this, he began to eliminate his rivals and organise the arrest of communist activists from the end of 1934. This reached a peak in the years from 1936-8 when millions were arrested, tortured and shot. Show trials were organised of the ex-leaders of the Party in which they were forced to confess to ridiculous crimes in order to save their families. By the time that an agent of Stalin assassinated Trotsky in Mexico in 1940, only Stalin was left alive from the Bolshevik leadership who had made the Revolution.

Even the Red Army leaders, the most experienced and able military leaders in Europe, were caught up in the purge and executed. This greatly helped Hitler’s war against the Soviet Union in 1941.

Second World War
Other serious mistakes were made by Stalin in the run up to Nazi Germany’s invasion of the Soviet Union. Firstly, in the Stalin-Hitler Pact in 1939 which greatly helped the Germans in their drive to conquer Europe and strengthen their forces for the Soviet invasion. Part of the pact involved the USSR supplying the Nazis with massive quantities of oil and minerals much of which was then used to prepare for their invasion of Soviet territory. This incredible situation was then made worse by Stalin’s refusal to accept the mountain of intelligence he was receiving from all sides about Hitler’s invasion plans. Even giving him the exact date of the invasion. This partly explains why the Soviet Union was so unprepared for the German attack and how the German forces were able to make such spectacular gains in the first days of the invasion, including destroying the more numerous Red Air Force while it was still on the ground. 

But despite these handicaps, the Soviet system proved able to hold back the German forces. And then drive back the mighty nazi war machine which by now had the economy of most of Europe behind it. Hitler had relied on the Soviet Union collapsing like a pack of cards under the hammer of the German attack. In the only recording of Hitler’s normal voice he can be heard complaining of their surprise at the Soviet’s quality and amount of military equipment. And its ability to keep renewing it in vast amounts.

In particular, the power of the planned economy meant that soviet industry was able to be relocated beyond the reach of enemy air attack. And rapidly built up to match and then overcome the German armaments.  In time, the Red Army was able to drive the German invaders all the way back to Berlin. And in the process to occupy the eastern half of Europe. Once there, they imposed a system of state ownership and planning along with the stalinist system of repression and control.

Post War Recovery
Despite the devastation of the War and its 25 million Soviet victims, the post-war period in the Soviet Union was one of successful industrial reconstruction. The 1946 Five Year Plan led to an increase in industrial production by 73%. With pre-war industrial capacity being equalled by 1948. This achievement was considerably assisted by the $4 billion in reparations received in terms of industrial machinery, railway stock etc. from Germany. As well as by the large-scale transfer of factory equipment from East Germany and some of the other Eastern European countries occupied by the Red Army. Not to be forgotten was the contribution of slave labour: the two million German and Japanese captured soldiers, and the eight million Soviet prisoners in Stalin’s brutal labour camps.

However, hopes of the population for higher living standards in the early post-war period were disappointed. The focus of production of the 1930s resumed. Thus, the switch from arms production for the war effort back to civilian production was mainly to heavy industry, taking up 88% of the budget, rather than to light industry and consumer products.

The same problem held back agriculture. The War had devastated and depopulated the countryside with 1945 agriculture only at 60% of prewar levels. Now back in peacetime the collective farm system was still incapable of properly feeding the population. A famine killing one and a half million broke out in 1946-47 affecting large areas of the Ukraine, Moldavia and Southern Russia. In response, the Soviet government launched ‘The Great Plan for the Transformation of Nature’ which was aimed at building massive irrigation and canal schemes, rerouting of major rivers etc. These schemes lasted for many years and consumed vast amounts of manpower, material and money. All without overcoming the underlying shortcomings and inefficiencies of the Soviet collective agricultural system.

After Stalin’s death in 1953 there was a general relaxation in the strict collective rules. Citizens were allowed to farm gardens and small plots of land. Amazingly, such small-scale farming ended up supplying half of the country’s milk, meat and vegetables.

Planning Takes USSR Forward
Notwithstanding the above problems, the advantages of planning and public ownership succeeded in expanding the Soviet economy at a fast rate. In the 50 years from the First World War up to 1963, Soviet industrial output multiplied more than 52 times over. In contrast, over the same period, industrial output in the US grew just six times. While in Britain it barely doubled. In 1917, Russia had been at the same economic level as India. By the 1960s, it had risen to become a global industrial and military superpower. Second only to America.  By 1975, the USSR had a quarter of the world’s scientific personnel and 4.7 million engineers.

All this was reflected in a massive increase in general living standards with many public utilities and services including health and education, provided free and at a good standard. University education was available for a far greater proportion of the population than anywhere in the capitalist world.

After the great housing shortage of the early decades, the post-war period saw a massive programme of apartment building with very cheap and stable rents – rent on average amounted to only 1 percent of the family budget. Other basic items were equally inexpensive. With the average monthly salary of an engineer being 140–160 rubles, a loaf of bread was only 15 kopeks, and a tram ticket just 20.

Likewise, the long hours and intensity of work of the earlier years, gave way to a much easier pace of life. By the mid-1970s the number of days off per year was 128–130, almost double the figure of ten years earlier.

But in the 1970s, economic growth began to slow. Central planning had clearly worked reasonably well when the main task was to produce a relatively small number of key products in large quantities. However, as the economy became more complex, planning from above became less effective. As Jonathan Clyne explains: “Soviet central planning was best at achieving a few selected clear goals. It was effective at raising resources and channelling large investments in the chosen direction, for instance towards winning a major war or putting a man in space. Yet, there were major problems with Soviet central planning. In the beginning, labour productivity spurted because modern machines and factories were bought or copied from the West. After that, the amount produced per worker grew only slowly and then stagnated. Instead of catching up with the West, the Soviet Union fell further behind after the mid-1960s… Furthermore, a whole sector of the economy was missing. The variety and quantity of consumer goods was small. With few exceptions, to maintain central control, production had to take place in giant facilities.” 15

The technological advances in the USA that were achieved in the military and aerospace sectors were allowed to be accessed by American companies. And resulted in many product and technological spinoffs. But in the Soviet Union this did not happen, partly because of obsessive secrecy. Plus, the more general problem of a lack of diffusion of Soviet research into many aspects of technology or consumer products.

Eastern Europe
The experience of Soviet rule in the countries of Eastern Europe taken over by the Red Army in the last two years of the Second World War was very mixed. For one thing, they were weighed down by having to pay compensation to the Soviet Union along with the transfer of factory equipment and so on to the USSR.

Another problem was the extremely rapid urbanisation that took place in the postwar period. This naturally led to acute overcrowding. “Cities became massive building sites, resulting in the reconstruction of some war-torn buildings but also the construction of drab dilapidated system-built apartment blocks. Urban living standards plummeted because resources were tied up in huge long-term building projects, while industrialization forced millions of former peasants to live in hut camps or grim apartment blocks close to massive polluting industrial complexes.16

At the same time, as part of the process of stalinising the Eastern European countries, there were purges of political and intellectual figures who opposed the new regimes. In this repressive and difficult economic climate it was not surprising that there should be outbreaks of protest. Thus, in 1953 there were mass disturbances in East Germany and Czechoslovakia. And then in 1956 in Poland. These outbreaks were temporarily resolved through concessions. However, this was not to be the case in Hungary where a much more serious revolt broke out in 1956. This was only put down by the entry of Soviet tanks and military forces.

The Soviet dominated countries of Eastern Europe were expected to follow the soviet economic model with an emphasis on heavy industry over light industry. On producer goods over consumer and service sectors. This often led to consumer products being of lower quality and in insufficient supply. Thus, the infamous shortages and queues outside shops that were a common feature of the state-owned countries. For larger consumer items such as cars, production was never enough to meet demand. For example, in 1987, thirty years after the popular East German-produced Trabant car was first launched, the waiting list was still ten years long. And up to fifteen years for the Soviet Lada and Czechoslovakian Škoda cars.

This situation inevitably led to the emergence of black and grey markets to which citizens turned to purchase difficult-to-obtain commodities. It also encouraged widespread corruption at all levels. In some cases, planning decisions and the official rules that implemented them resulted in the popularity of strange products. For example, broken light bulbs became valuable on the black market because a broken light bulb was required to be submitted before a new light bulb would be issued.

Another major problem in the newly imposed planning system, was that there was no logical division of labour between the countries in the Eastern Bloc with each trying to produce its own iron and steel industry and so on. In many cases this entailed expensively importing raw materials and semi-finished materials from other Comecon countries. Moreover, the monopoly position of each state-owned company meant that if there were any production problems there were no alternative suppliers for factories further down the supply chain, causing serious delays in related industries.

Other downsides to the planning process in the Soviet Bloc significantly reduced its prospects of successful exports to the world market. For example, the emphasis on quantity rather than quality in the five year plans often made Soviet Bloc products unattractive. On price, high costs which boosted the ‘value’ of production on which wage increases were based, made exports more expensive than necessary.

Despite all of these problems, the power of planning yielded high growth rates in the Eastern Bloc in the 1950s and 1960s. As a result, per capita growth within the Eastern Bloc increased by two and a half times that of the European average.

Not only that, the experience of planning varied considerably between the various countries of Eastern Bloc. In some countries there was significant experimentation with elements of market socialism. This was especially the case in Hungary which after the trauma of the Hungarian Revolution of 1956 was under particular pressure to improve living standards. As historian Jonathan Bean points out:

Hungarian market socialism had somewhat more success. During the 1960s, Hungarian economists revived the NEP concept of a mixed economy, and the government responded by introducing its “New Economic Mechanism.” The Hungarians replaced central planning with exchanges between producers and consumers. Planners set broad targets and granted enterprises greater autonomy. The state increased investment in agriculture and encouraged the development of private plots. Hungarian planners tried to overcome the pricing problem by basing their producer prices on the world market. The reforms produced some favorable results. Agricultural exports increased, and the consumer goods sector was more competitive than in other socialist countries.17

In Czechoslovakia efforts at planning the economy were less successful. Unlike the other Eastern Bloc countries, Czechoslovakia had a relatively modern economy which responded less well to the crude methods employed elsewhere in the soviet bloc. From 1963 on some marxist intellectuals began to voice differences to the official line. This evolved into a gathering demand for relaxation of censorship and freedom of expression within the official channels. By 1967 the new mood had reached the top of the ruling Party and a new reformist First Secretary, Alexander Dubček, was appointed to lead the country in January 1968. This sparked off what became known as the ‘Prague Spring. However, this was not a movement against socialist government but for a more democratic version of it – ‘socialism with a human face’ as it was called. An Action Programme was launched in April which declared “Socialism cannot mean only liberation of the working people from the domination of exploiting class relations, but must make more provisions for a fuller life of the personality than any bourgeois democracy.” The programme proposed freedom of the press and the introduction of elements of market socialism.

However, the Soviet Union’s leadership saw all these developments as a threat. And despite entering into a series of negotiations with the new Czechoslovakian leadership, the Kremlin decided to resort to force to end the experiment. Accordingly, in late August 1968 the USSR mobilised the Warsaw Pact forces and invaded the country with 2000 tanks and half a million troops.

Bureaucratic Control Begins to Take its Toll
The initial rapid economic successes of the early decades began to peter out in the 1970s. In both Eastern Europe and the Sovet Union economic growth slowed significantly.

The absence of any democratic control by the population over the planning process resulted in many serious defects. “At the economic level this type of planning displays systemic inefficiency, biased information flows, absence of adequate feedback mechanisms, low priority to consumer and user wants, private attempts to by-pass the formal system and official attempts to enforce it.” 18

As a result of the top-down nature of the economic system, most soviet bloc workers were alienated. And cared little about the quality of what they produced or about improving production. Often, their incentive was to work as little as possible in their official jobs. And use the time and energy they had left over to function in the informal sector. 

Another major problem in the bureaucratically planned system was a lack of innovation. As we have shown the Soviet Union had the most scientists of any country on earth. This reflected its emphasis on higher education in science and engineering. As a result, great basic science was done which was utilised in heavy industry, military technology and space. But these scientific developments were rarely applied to light industry and consumer products. And this was reflected in the failure of the Soviet Bloc to produce attractive products for the world consumer market.

Compare this to the experience of Japan. In the 1970s Japan was spending 2.5% of its GDP on research and development compared to the Soviet Union’s 4 per cent. Yet Japan innovated and grew much faster because this funding was spread across a wider variety of economic sectors. Crucially, the Soviet Union did not have organisations through which to commercialize the technologies developed by the state. Moreover, Japan had strong user–producer linkages which produced popular hi-tech products. Japan also encouraged innovation with incentives provided to management and the workforce of companies, rather than mainly focusing as the USSR did on bureaucratically-run scientific academies.

In state socialist economies, there was little incentive to make anything new for consumers. Indeed, innovation inevitably involved disruption of production and taking risks on the success of new products. Such a prospect did not appeal to the managers of state enterprises who tended to be highly conservative, given to conformity and risk-avoidance. In contrast, the capitalists in the West were driven to invent new products to defeat their rivals and drive up profits.

Normally, competition on the world market would have acted as a discipline on the Soviet Bloc economies forcing them to innovate. But the low level of Soviet Bloc (Comecon) participation in world markets became an increasing disadvantage.

The Oil Boom Followed by Stagnation and Collapse
When the oil price rose dramatically in the 1970s because of the action of the oil-rich nations in the Middle East organised in OPEC, the Soviet Union with its huge oil reserves benefited tremendously. However, the massive income this yielded for the USSR was a double-edged sword. As in many other oil producing states, the big flow of oil revenue covered up growing problems. In particular, it masked a slowing down in the rest of the economy.

Moreover, while the oil revenue greatly helped in earning foreign currency, this disguised the increasing disadvantages of not participating in the fast-growing world market. The other downside was that the USSR became too overdependent on its oil. When in the 1980s OPEC released its controls and the price fell due to the world economic slump, this exposed the fundamental weaknesses of the Soviet economy.

The decade of the 1980s saw the Soviet economy stagnate. The reasons for this were manifold. Quite apart from the fall in oil revenues, the rise in military spending in response to the provocations of the US meant that the USSR ended up spending 40% of its annual budget on defence. This of course included the disastrous and costly war in Afghanistan which had begun after Soviet Forces had entered the country at the end of 1979.

Meanwhile, the agricultural sector in the Soviet Union was never sorted out, with the Soviet Union having to import larger and larger amounts of grain.

However, even more deeply ingrained flaws in the Soviet system were at work. “All sections of society are affected, ‘the indolence of the bureaucrat corresponds to the lack of interest of the worker and the dissatisfaction of the specialist’. The political leadership, what Bahro calls the politbureaucracy, commands; lower levels in the bureaucracy passively receive commands from superiors and actively issue them to subordinates; workers and citizens are commanded. The problem of motivation is normally discussed at the level of the bureaucracy, particularly of enterprise management. Risk-avoidance, resistance to innovation, transmission of biased information, accumulation of hidden reserves, conformism towards superiors, arbitrariness towards subordinates, indolence, inefficiency, corruption – all are widely accepted… as deep-seated characteristics of bureaucratic behaviour in the statist countries.” 19

The underlying problem was the lack of participatory democracy throughout the Soviet economic system. Instead of giving all the agents of production – the workforce, customers, suppliers etc.- a role in decision-making, “The party decided on behalf of the masses and the party leadership decided on behalf of the party. This was so in relation to society-wide decisions and also in relation to decisions at the level of individual enterprises and workplaces. The principle of one person management, the absence of independent trade unions, the reality of ultimate control by the party leadership at each level, meant that workers had virtually no say in the decisions affecting them.” 20 The same problem of exclusion from decision-making also applied to Soviet consumers, service users and other sectors of society.

As one socialist theorist sympathetic to the Soviet system in the 1980s concluded: “Having been the means for rapid primitive accumulation and forced industrialization during the Stalin period, the administrative command planning system and absence of political and economic democracy have become fetters… that the existing social organization in the Soviet Union, in particular the lack of openness and democracy, has for some time been preventing the efficient functioning of the Soviet economy and holding back its further development.” 21

All the while, rampant bribery and corruption had spread throughout society. Even the ruling caste of officials was rapidly losing confidence in their own system and beginning to look to the West as a superior alternative. The reforming government of Gorbachev that took office in 1985 tried to open up the system with a policy of ‘Glasnost’ (openness) which enhanced freedom of speech and the press. And to implement ‘Perestroika’ (restructuring) of economic decision-making. This included steps towards some elements of the old New Economic Policy of the 1920s. But Gorbachev was paralyzed by indecision and constantly reversed decisions. In truth, Glasnost and Perestroika represented an attempt at ‘revolution from above’. As such it was a contradictory attempt to move away from “the monolithic political system and the suffocating dominance of the party/state22 while using the very institutions that were at the heart of the problem.

Gorbachev himself posed the issue at the heart of Perestroika: “Restructuring itself is possible only through democracy and due to democracy. It is only this way that it is possible to give scope to socialism’s most powerful creative force – free labour and free thought in a free country.” 23

The problem was that there was no clear idea of what democracy would mean for the Soviet Union. Introducing the Western version of democracy could only mean a counter-revolution and the restoration of a capitalist economic system. While a move forward to a fuller, more participatory form of democracy was not even conceived of, never mind put on the agenda. 

Capitalist Restoration
From 1989 onwards the states in Eastern Europe that formed the Soviet Bloc began to break away.  Finally, in 1991 following a failed coup the Soviet Union itself began to rapidly unravel. Various national parts of the Union declared independence leaving behind a smaller Russian Federation.

Then began a rapid economic transformation of Russia into a capitalist state. Once the soviet planning network which had coordinated the economy was removed, what occurred was not the spontaneous self-organisation of the economy promised by the neo-liberal advisers, but a domino process of collapse. One industry after another closed down along the supply chain. An industrial system that had been designed to work as an integrated whole across the various soviet countries, was split up by national barriers and ceased to operate.

Accompanying the dismantling of central planning came the wholesale privatisation of state industries. This was carried out on such a scale and so rapidly that there was no class of citizens wealthy enough to buy up state companies by legal means. Thus, the best pickings of the economy passed into the hands of ex-soviet officials and a new layer of gangsters.

Instead of delivering the promised land, this process impoverished the country. From having been the world’s second superpower, Russia was reduced to the status of a minor bankrupt economy with a huge decline in industrial production and in living standards. Even life expectancy fell, with the population actually declining by nearly six million. Drug use, homelessness and suicides increased dramatically. And economic growth did not begin to return to Soviet-era levels for nearly fifteen years.

With the benefit of hindsight, especially that of the spectacular performance of the Chinese economy afterMao’s death (see ‘China’s New Economic Policy’ ), we can now see the wisdom of Lenin and Bukharin’s New Economic Policy. This combined with the planning and industrialisation elements of the Left Opposition’s platform, would have been a sound foundation for the USSR’s development at the end of the 1920s onwards. In a largely agricultural society, socialists needed to focus first on agriculture in order to solve the food problem for the farmers and the urban population. From this first step, rising productivity in the countryside and the resulting surplus could have been used to develop light and then heavy industry in an organic and balanced way.

Integral to such a policy would have been for the workers and peasants to move forward together in a cooperative alliance. And to be empowered so that they could play a decision-making role in their workplaces and in the economy as a whole. Tragically, Stalin chose the opposite path of coercion; a “revolution from above” as he put it at the time. And this created a top-down, repressive system that was to distort the whole subsequent development of Soviet society. Thus, the collapse of the Soviet Union was never an inevitable process. Rather, it was one that had been prepared many decades earlier. And never repaired in time.

Regrettably, the Soviet Union evolved into a bureaucratic, inefficient and undemocratic machine that in the end was incapable of meeting the economic, social and political needs of the population. Nor was it capable of competing with capitalism on an international scale. This became increasingly plain for the Soviet people to see despite all the attempts to conceal it.

Clearly, there was a need to democratise the whole system by actively involving its population in the running of society. By involving its workers, customers, service users and so on in the administration of its economy and services. Such a democratic socialist model could have ended the alienation of the citizens and dramatically improved the efficiency of the system. But such a viable model was never developed by the critics of the stalinist system. Or offered as an alternative to the peoples of the Soviet Union and Eastern Europe. Thus, all the citizens of the Soviet Bloc could see was the alternative model of capitalism which at least appeared to be more efficient and offered higher living standards. Naturally, they chose this alternative when the opportunity arose. But this choice ended up delivering them into a far weaker and insecure society dominated by oligarchs and gangsters.

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1.‘Defending Planning’ by Brian Green 1999
2.’Transition to Socialism 4.0′ by Jonathan Clyne, pp.90-93
3.Pat Divine offers a utopia – Highlight Loc. 72-76 Friday, June 28
4.’Lecture on the 1905 Revolution’ by V.I.Lenin 22 January, 1917, source online:
5.Full quote: “Of course, in our Soviet Republic, the social order is based on the collaboration of two classes: the workers and peasants, in which the “Nepmen”, i.e., the bourgeoisie, are now permitted to participate on certain terms. If serious class disagreements arise between these classes, a split will be inevitable. But the grounds for such a split are not inevitable in our social system, and it is the principal tasks of our Central Committee and Central Control Commission, as well as of our party as a whole, to watch very closely over such circumstances as may cause a split, and to forestall them, for in the final analysis the fate of our Republic will depend on whether the peasant masses will stand by the working class, loyal to their alliance, or whether they will permit the “Nepmen”, i.e., the new bourgeoisie, to drive a wedge between them and the working class, to split them off from the working class. The more clearly we see this alternative, the more clearly all our workers and peasants understand it, the greater are the chances that we shall avoid a split which would be fatal for the Soviet Republic.” January 23, 1923, Recommendation to the Twelth party Congress, Ref: Lenin’s Collected Works, 2nd English Edition, Progress Publishers, Moscow, 1965, Vol 33, p.481-86
6.Full quote: “The proletariat after its victory must get along with the peasantry no matter what, for it is the majority of the population with great economic and social weight… It is necessary, accordingly, to understand that the proletariat has no choice here; it is compelled, in building socialism, to get the peasantry behind it; it must learn how to accomplish this, for without this its regime will not last.” ‘The Theory of Permanent Revolution’ by Nikolai Bukharin, December 13, 1924,
7.’Transition to Socialism 4.0′ by Jonathan Clyne, pp.90-93
8.’Bukharin and the Bolshevik Revolution: A Political Biography, 1888-1938′ by Stephen F. Cohen p.157
9. ‘The Prophet Unarmed: Trotsky, 1921-1929’ by Isaac Deutscher, p.360
10.Full quote: “Meantime, however, Trotsky was confronted with an unexpected turn of events. For years he had not ceased to speak of the ‘danger from the right’ and to warn the party against the defenders of the kulak and the Thermidorians. He had been prepared to form a ‘united front’ with Stalin against Bukharin. But it was Bukharin who implored the Left Opposition to make common cause against Stalin, their common enemy and oppressor. When Stalin whispered in terror: “He will strangle us…” (‘The Prophet Unarmed: Trotsky, 1921-1929’ by Isaac Deutscher, p.375)
11.’The Prophet Unarmed: Trotsky, 1921-1929′ by Isaac Deutscher, p.264
12.Full quote: “Bukharin went to see Kamenev in order to try to prevent what he saw as a fatal mistake; he did not want the friends of Zinoviev and of Trotsky to make an alliance with Stalin at any price; “The differences between us and Stalin are infinitely more serious than our former differences with you.” Moreover, it was not a question of ideas, because Stalin did not have any: “He changes his theories to meet his need to get rid of someone at this or that moment.” (‘The History of the Bolshevik Party (CP) of the USSR’ by Pierre Broué,
13.Source: Revelations from the Russian Archives: Internal Workings of the Soviet Union, Library of Congress,
14.’The History of the Bolshevik Party (CP) of the USSR’ by Pierre Broué,
15.’Transition to Socialism 4.0′ by Jonathan Clyne, pp.44-46
17.’Nikolai Bukharin and the New Economic Policy. A Middle Way?’ by Jonathan J. Bean
18.‘Democracy and Economic Planning’ by Pat Devine, Polity Press 1988, p.12
19.‘Democracy and Economic Planning’ by Pat Devine, Polity Press 1988, Kindle Highlight Loc. 1335-45
20.‘Democracy and Economic Planning’ by Pat Devine, Polity Press 1988, Kindle highlight Loc. 2254-58
21.‘Democracy and Economic Planning’ by Pat Devine, Polity Press 1988, Kindle highlight Loc. 2171-90
22.‘Democracy and Economic Planning’ by Pat Devine, Polity Press 1988, Kindle highlight Loc. 4753-65
23.Gorbachev 1987, p. 24

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