AN ECONOMY UNRAVELED: HOW COLLECTIVISM RAVAGED HUMAN AND MARKET PROGRESS IN 20th CENTURY RUSSIA


    Today, capitalism and democracy are considered as panaceas for developing countries around the world.  This is predicated on the stellar development of other countries such as the United States, that rapidly evolve into thriving, first world nations.  However, history has been punctuated with countries and nations alike that have bucked the trend and adopted alternative political apparatus.  For instance, when Russia fell under the yoke of the Bolsheviks, it was still in its nascence as a modern developing country.  At first, Lenin attempted to insert a socialist economy in order to cultivate support for Marxism through results.  However, the Russian economy became stagnant and repelled the socialistic framework.  With a flimsy Russian economy and an indefatigable initiative to propel Russia towards industrialization, Lenin decided to implement the “New Economic Plan,” which served as a counterbalance against the rest of the communist government.  This plan was able to inflate Russian trade and development, lifting many citizens out of destitution.  Lenin's N.E.P. triggered an economic rejuvenation within Russia without impinging on the rights of the citizens.  Nonetheless, this success undermined the underpinnings of Marxism, which derided capitalism and pushed for ruling by the proletariat.  When Lenin passed away in 1924, Stalin ascended the head office of the Communist regime three years later after much debate over who would navigate the Soviet Union.  He discarded Lenin's N.E.P. and supplemented it with the “Five Years Program,” which initiated a gradual acceptance of a socialistic economy.  Despite its success, it was notorious for encroaching on the rights of peasants and dehumanizing them into working slaves in labor camps known as gulags.   Although this economic trend was maintained by Stalin, it eventually broke down as a consequence of poor internal apportionment of resources and its tendency to dehumanize as well as alienate its own population.
    This essay will outline the trajectory of Russia's economic growth under Lenin and Stalin through examining N.E.P. and collectivization.  First, a brief comparison of capitalism and communism through academic discourse will be held.  Next, Lenin’s ascension after the Russian Revolution of 1917 will be briefly elaborated on.  Subsequently, a discussion of the merits of N.E.P., its underpinnings, and its overall success in the marketplace will be analyzed.  After, an overview of Stalin's rise to power and the elimination of N.E.P. will be illustrated.  Lastly, biopsy of Stalin's collectivization and rapid industrialization will be scrutinized through the mixed results it produced.
    Capitalism and socialist forms of economy have been tested by governments, nations, regimes, tyrants, democracies and dictators.  However, it is not coincidental that countries which implement capitalism often enjoy stronger trade and more efficient output.  In any economy, prices are the arbiters of resources.  They seamlessly transfer goods where they are needed based on the level of demand and quantity of supply.  Prices convey underlying information about a particular good or service:  its accessibility, competition against rivals, and the amount desired by the aggregate demand (Sowell, 14-15).  This is a prevalent and accepted trend under capitalism.
     On the other hand, a socialist economy dictates to consumers what they can buy and arbitrarily determines artificial prices, meaning that they are not reflective of market impulses.  Moreover, the market is fit to determine thousands of prices and transactions without intervention or monitoring.  One of the reasons a socialist government typically fails is that it is usually inundated with goods that need prices and must be dispensed equally throughout the country.  Also known as a command economy, nations like the Soviet Union relied on central planners to determine where goods should be transferred to and their value.  Conceivably, this leads to a misallocation of resources and can create complex situations in which certain areas of a country have an abundance of one good while other areas are in dire need of it (Sowell, 17-18).  Companies in the Soviet Union were not responsible for financial performance or efficiency, unlike under capitalism, because their livelihood was perpetuated by the government.  Managers persuaded the government on how much to give them with little or no data to support the request.  There was no reason to believe that resources were scant or had varying levels of value, since the government predetermined it.  As a consequence, there was wasteful spending and egregious errors made in calculating and apportioning resources.  
    Price controls can significantly distort the true nature of the market.  As previously stated, under capitalism prices are determined by the disembodied forces within the market.  A mainstay of socialism, however, was to levy price ceilings or floors in order to control consumerism (Sowell, 39).  As a consequence, this can engender a thriving black market, in which unfettered (and illicit) business is conducted without the constraints of the government.  Even during the early Soviet Union period, when it was illegal to sell food outside of government restrictions, these markets thrived because of the insatiable demands and higher prices offered for goods that were also sold under the government (Sowell, 52).   
    The Russian Revolution of 1917 was motivated by a poor environment, political instability, and an eclectic mix of parties vying for the helm of the nation.  However, these other parties did not possess a leader of the caliber or stamina as the Bolsheviks had in Vladimir Lenin.  Although Lenin would gain control of Russia, his rule was disrupted by a turbulent Russian Civil War between his party and the “white army” which was comprised of loyalists of ex-Tsar Nicholas II.  The Bolsheviks completely leveled their opponents in the civil war and became the undisputed rulers of Russia (MSN:Lenin).
      Due to a revolution and civil war in only the span of four years, these occurrences left the Russian economy sputtering out of control.  At the culmination of the civil war, Russia was debilitated by poor crop cultivation, which precipitated a deep famine that killed over five million Russians.  By 1921, industrial production was down by over 80% compared to 1914 production.  This was exacerbated by the mass migration of workers who left urban centers to return to their familial villages.  In effect, this shrank the industrial work base Lenin so desperately needed to feed his movement towards industrialization (Milne, 1).   Lenin refused to countenance this crisis and, with few practical alternatives, adopted the New Economic Program (N.E.P.) in 1922. 
    This was a revolutionary program for Russians, as it emboldened farmers who desired to sell their goods in the market.  At the tail-end of his regime, Lenin was able to implement N.E.P., which highlighted a temporary suspension of communism within the economy (MSN: Lenin).  Through this plan, Lenin released government controls on the private sector, conceding that the collectivization he tried to impose had failed miserably, inciting starvation and famine through the country (Fein,1).  He knew that this would impel people to work harder and increase the aggregate productivity of the country (Petrov, 1).  Lenin would pass away in 1924, leaving behind an mixed economic legacy that was enigmatic in nature.  He clearly espoused the tenets of Marxism, but had acquiesced to the will and spirit of capitalism.  However, under N.E.P. his misogynistic tendencies led him to impose famine on his own citizens.  Bolshevik leaders were stalwart in their opposition to NEP, and were very careful in selecting who would succeed Lenin’s position.
    With the advent of Stalin in 1927, the economic trajectory of Russia experienced a severe lurch towards extreme left policies. Despite Stalin’s detest for Western influence, it was the very source of the Russian state aspiration to shift towards industrialization.  This was due to embedded Western nationalism and secularism that predated Stalin and could be traced back to Peter the Great.  Furthermore, Russia possessed a hypersensitivity against modern, opulent countries that superseded her as models for the 20th century (Blackwell, 200-201).  Bukharin, the leading economic theorist of the Communist Party under Lenin, championed the preservation of N.E.P., citing its unbridled success.  He wished to denationalize more industries, persuade small-business growth, and cultivate a surplus of goods to fuel free markets (Blackwell, 218).  This was met with caustic disapproval from Stalin, who began to push for his economic model, known as “collectivization.” He usurped control of private farms and created mass state-run collective farms, where peasants worked
 for the state rather than themselves.  Under the auspices of this movement,  Stalin was able to surreptitiously regain control of the Russian people, who were economically liberated under N.E.P.  Conversely, Stalin felt this program was diametrically opposed to the tenets of Communism and betrayed the philosophy of Marx.
    In 1925, there was an excellent harvest, which further delayed any socialistic economic policies Stalin was eager to institute.  However, as an effect, prices shot up and struck fear in many Russian citizens.  Progress was being made at a glacial pace, which was too slow for the impatient Stalin.  Well-off peasants known as “kulaks” were beginning to withhold goods due to falling agriculture prices, which were indicative of a market that supplied an abundance of goods (Milne, 2).  By 1930, the entire country was nearly converted to working on these farms.  This policy dovetailed with Stalin's desire to recreate Russia's economy as an industrialized one.  He needed rapid production in order to support the country and to finance the hastened industrialization of the country as he envisioned. (Manne, 1).
    However, there was an inherent deficiency that Stalin chose to ignore.  The peasants needed an impetus or incentive to drive up their work productivity to the super-human levels Stalin desired.  Under this economic model, peasants were not rewarded for individual labor or work ethic that was superior to others.  As a result, some were unenthused by the prospect of working towards the common good, and settled for mediocrity.  Of course, Stalin attempted to combat this characteristic of the human condition by threatening workers with working in labor camps known as the “gulags,” where they would be exposed to harsh elements and brutal work schedules (Ashkinaze notes).  Stalin pushed for these unprecedented measures by arguing that, absent of these methods, Russia would regress against the international upswing in trade and commerce (Milne, 3). 
    Stalin’s move for rapid extension of the economy caused it to contract, clearly inverse to what the dictator had envisioned.  The limitations of resources in Russia, due in part to the Brest-Litovsk Treaty in which Russia renounced nearly half of coal supplies among other resources, forced him to clamp down consumer demand.  He artificially created a shortage of industrial goods to maintain control over the country and its economic structure; when it was deemed necessary, Stalin would not hesitate from curbing industrial development.  Although at first blush appearing counter-intuitive, Stalin made many speeches about becoming wealthy as well as the inherent injustice within the economic inequalities between the rich and poor.  This contradiction made his economic policies disjointed and ambiguous (Blackwell, 221; 223).
    According to the relative output under collectivization however, there were mixed results.  In 1928, there were 73.7 millions of tons of grain cultivated in Russia.  However, although grain reaches its apex in 1930 by reaching 83.5 millions of tons, it shrinks back to 75.0 million by 1935.  Even worse, cattle stood at 70.5 million, but recoiled back to a paltry 49.3 million by 1935 (Ashkinaze notes).  Clearly, Stalin had underestimated the inner-mechanisms of collectivization as well as the preference of the peasantry.  Many rebelled by slaughtering their own animals in an attempt to impinge on the success of the program that had robbed them of their civil rights and liberties (Milne, 3-4).  Regardless, Stalin celebrated his economic triumphs in 1934 at the Congress of Victors (Manne, 2).  However, his failure in apportioning resources under his micromanaged plan of collectivism disengaged much of the peasantry and ignited instability.
    Arguably, Stalin may not have been aware of how prosperous Russia really was.  In nearly every agricultural and economic category in 1934, output was generated significantly below the thresholds of 1928.  Academics and historians have devoted a great deal of their energies as to whether or not these “reports” created by central planners were accurate, as many manipulated numbers in order to preserve their jobs and lives (Ashkinaze notes).  Moreover, hallmarks of Russia such as limited productivity and low levels of income from the peasants remained as firmly implanted obstacles in Stalin’s path.  Employing a closed society, Stalin unlike Lenin would not try to secure foreign investment in order to speed up or finance industrialization (Blackwell, 225).
    A more sadistic form of shoring up allegiance towards working for the common good was in 1933 when Stalin fostered a manual “famine” in order to bend the masses towards his malicious will.  Consequently, over five million peasants were decimated because of the ubiquitous famine (Manne, 2).  Millions would fall out of favor with Stalin, believing that he inadvertently (or willfully) was behind the famine.  
    By 1937, collectivization had reached its apex, and its implications reverberated throughout society.  Excessive taxes and quotas were levied on peasants with private possessions used as collateral against those who could not meet the demands of central planners.  Stalin would shift attention towards defense, and with that alienate millions of Russian citizens, who had hoped for increased accessibility for consumer goods.  Instead, Stalin’s vision for a militarized Russia trumped concerns over the welfare of citizens.  Rationing cards had been phased out among the 80% of the Russian population who did not directly work for Stalin, forcing them to become more self-sufficient under a regime whose core belief was in caring for the social welfare of everyone.  Fear was used as a political weapon against his own constituents, impelling them to work harder in whatever vocation they were placed in with threats of being imprisoned in a Gulag reinforced daily.  Education was diluted and became a shell of its former, robust self.  Schools which fell under the yoke of Stalin were completely reconfigured to fit his work scheme.  There was a de-emphasis placed on academic education, which was supplanted by Russian nationalism and technical skills that would be useful on farms (McCauley, 44-47).  The labor market lost nearly 20% of workers to Stalin's industrialization, impugning the progress of collectivization even further (Blackwell, 345). 
        During the purges of 1928 through 1939, Stalin’s misanthropic tendencies were exposed for all of the Soviet Union to see.  His selection of traitors followed no pattern but his own misplaced paranoia.  An outgrowth of his sheer madness and contempt for any opposition manifested through purge trials, in which he used manipulated courts to destroy those who opposed him or appeared to threaten his status.  These purge trials claimed 401 out of 456 colonels, 10 out of 10 army commanders and all 16 senior army commanders of the Communist Party (Walker, 1).  In total, the purge trials, which waxed for a decade, killed over 9 million people and sent 10 million more to camps where rural purges were carried out.  He even decimated fellow Bolshevik leaders such as Nikolai Bukharin and Lev Kamenev  (Keller, 1).  Stalin cultivated an image of unbridled rage, as his handpicked murders instilled fear into Russians (Bartlett, 1).  He alienated his people through confusion, too, as he revealed very little about himself and the government, disorienting his opposition and even supporters.  Russians feared that even attempting to reconcile contradictions or any flaw within the political orthodoxy of Stalinism would result in imminent and swift death.  Stalin was interested in creating rivalries among his officials, dehumanizing them as pawns in his game of human chess.  It was his method of learning about his officials and exposing weaknesses.  He reveled in his ability to control the lives of the people around him (McCauley, 91).
    During the 1940s, the growth of the USSR was slowed by World War II, though it would emerge as the rival super power to the United States.  However, consumers in Russia would not enjoy an improved quality of life until after the death of Stalin in 1953 (Blackwell, 343).  During much of Stalin's leadership, there was an imbalance between industrial and agricultural development.  An emphasis was placed on performance of industrial raw materials rather than consumer goods, foods and clothing, which eventually led to severe shortages at the expense of citizens (Blackwell, 347).
    Stalin's unshakable predilection for rapid industrialization led to poor apportioning of resources.  His tyrannical reign, characterized by the Purge Trials and other sadistic occurrences within his own faction, dehumanized and de-emphasized the individual.  Russians who lived under his oppressive yoke worked in his collectivized farms, spurred by the fatal consequences if they did not loyally obey his orders.  This was a complete departure from the policies of N.E.P., which recognized individual peasants for their entrepreneurship, varied abilities and work ethic.  Stalin unraveled the progress made by N.E.P. in order to enjoy progress under his own policies.  Although the USSR would rise as a formidable aggressor against the United States, it suffered internally as it was the sole arbiter of resources.  The Soviet Union was sure to maintain its infrastructure, industry and technology, even if its own people were not properly cared for.  Stalinism was a permutation of Communism, though it was clearly a mechanism through which Stalin could attain ultimate control of the Soviet Union.  His economic policies were structured to reinforce suppression and stimulate industrial growth contemporaneously.  It is intriguing to consider if Stalin may have been able to bring the Soviet Union to international prominence if it had stayed under the free market policy of N.E.P.  With the intrusion of government out of the way, peasants who wished to improve their quality of life would have had the freedom to pursue that and other dreams.  During the Cold War, the United States, to a degree, was able to flourish against its rival because it supported a free market and individual liberties.  Stalin may have enjoyed more success and praise under this auspicious model.
   

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