History of the Soviet Union

5

The New Economic Policy and its Political Dilemmas

Even as the delegates to the Tenth Party Congress were voting for tight party discipline and the violent repression of the Kronstadt revolt, they also approved a radical change in economic policy, this time towards greater freedom. This was the abolition of grain requisitioning and its replacement by a tax in kind set at a much lower level than the compulsory deliveries. This measure was being tried out in Tambov and had been announced in Petrograd: it was conceived as a way of taking the sting out of popular discontent without making political concessions.

The abandonment of requisitioning had, however, profound economic consequences. Since the tax was both lower and more predictable than the requisitions had been, it gave the peasant an incentive once again to maximize the productivity of his plot of land, secure in the knowledge that whatever surplus he achieved could be sold for profit on the market. This meant, of course, that the government had to restore freedom of private trade. Since, moreover, peasants could not be expected to trade unless there was something to buy with the proceeds, it was obviously important to generate at least a reasonable supply of consumer goods. In practice, the easiest way to do this was to abolish the state monopoly of small- and medium-scale manufacture, retail trade and services.

This was in fact what the government did during 1921, while keeping heavy industry, banking and foreign trade in the hands of the state. Taken together, these measures became known as the New Economic Policy (NEP). In the urban markets the results were apparent immediately. When a hero of the novelist Andrei Platonov returned to his native town in 1921:

At first he thought the Whites must be in town. At the station was a café where they were selling white rolls without ration cards or queuing.... In the shop he came across all the normal equipment of trade, once seen in his long forgotten youth: counters under glass, shelves along the walls, proper scales instead of steelyards, courteous assistants instead of supply officials, a lively crowd of purchasers, and stocks of food which breathed an air of well-being.

Although some private trade recovered remarkably quickly, in general the economy was still in deep crisis. Years of war, conscription and food requisitioning had devastated agriculture, particularly in the most fertile regions. On top of this, the Volga basin experienced drought in 1920 and 1921. Unprotected by any reserves, peasant households faced two very poor harvests in succession. The result was famine on a scale that the government simply could not meet. For the one and only time, it allowed direct foreign aid inside Soviet Russia. An international relief committee was formed, which included prominent Russian non-Communists (who were all arrested once the emergency was over). But in spite of its efforts, probably about 5 million people died.

Industry, too, was in a desperate state. In the major branches of manufacture, output in 1921 was a fifth or less of the 1913 level: in the case of iron and steel it was actually below 5 per cent. The number of workers employed to generate this output did not fall below 40 per cent of the 1913 level, and here lay one of the major problems of the new era. For these underemployed workers were soon joined by a flood of new job-seekers, heading in from the countryside as soon as there was any prospect of a job, and also by millions of former soldiers demobilized from the Red Army. They joined the labour market at the very time when industrial concerns were having to adjust to the new conditions. Whether they were nationalized or private firms made no difference: henceforth there were to be no direct state subsidies. That meant the expenditure for fuel, raw materials, wages and further investment had to be met out of sales revenue. Firms had to balance their books, or they could well go out of business. This was a reality which workers, party and trade unions had to recognize.

The industrial recovery thus started on a very shaky basis. Initially this led to an imbalance in the terms of trade with agriculture. In spite of the famine, the ploughing and sowing of underused fields proved to be a much faster process than the re-equipment of damaged and dilapidated factories. By the summer of 1923 the shortage of industrial products in relation to agricultural ones had reached such a pitch that the ratio of industrial to agricultural prices stood at more than three times its 1913 level. What this meant in practice was that peasants who sold their produce on the market were not thereby raising enough revenue to buy the industrial goods they wanted. The danger was that repeated experiences of this kind would induce them to cut back their sowings–as they had done during the civil war–and food shortages would resume. Industrial products would then remain unsold, to everyone’s mutual disadvantage. Although the fact was not immediately recognized, this ‘scissors crisis’ (as it was called in reference to the divergent parabolas of industrial and agricultural prices) proved to pose a fundamental threat to NEP. The disputes generated by it formed the first stage in the long-term debate on the economic development strategy of the Soviet government (see below, pages 136–40).

Another result of the uncertain industrial recovery was that the workers, who were theoretically the inheritors of the new society, in practice found it very difficult to understand their place within it. The large reserve of unemployed ensured that their wages remained low: in 1925, Sokolnikov, people’s commissar for finance, admitted that the pay of miners, metal workers and engine drivers was still lower than it had been before 1914. This in turn meant that workers’ housing and nourishment was often inadequate. The factory committee of a cement works in Smolensk reported, for example, in 1929: ‘Every day there are many complaints about apartments: many workers have families of six and seven people, and live in one room.... [We] have about 500 applications from workers who do not have apartments.’ Food supplies, though far better than before 1922, fluctuated and so prices were unstable: again from Smolensk it was reported that wheat flour doubled in price and rye flour trebled between the end of 1926 and early 1929. ‘Workers are being inadequately supplied by consumers’ cooperatives [run by the soviets to cushion the workers from the worst effects of price fluctuation] … , and as a result, private traders virtually occupy a dominant position in the market.’ It is understandable that workers consequently felt resentment about the peasants, who charged them such high prices, and about the specialists and officials, who were paid so much better. How was this possible in a society allegedly ‘moving towards socialism’ under the ‘dictatorship of the proletariat’?

The structure of industrial enterprises was also a disappointment to workers who recalled the heady days of October. All remnants of ‘workers’ control’ had now finally disappeared. Factory administration was once more hierarchical, with clearly identifiable individual managers in charge (sometimes drawn from pre-revolutionary managerial staff, for their expertise and experience), while technical specialists and foremen enjoyed unambiguous authority over the ordinary operatives. Since efficiency and productivity were paramount, some enterprises (though not enough for Lenin) were experimenting with ‘Taylorite’ schemes for time-and-motion rationalization and conveyor-belt mass production. Lenin had once regarded such schemes as the quintessence of capitalist exploitation, but now favoured them for the higher output they generated. As a further incentive, most workers were paid on a piece-rate system, which tied their income directly to productivity.

Before 1917 the workers would have expected the trade union or indeed the party to act on their behalf. But both these organizations were now explicitly part of the state economic mechanism, and hence tended only to support workers in conflict with private employers. In 1925 the trade union newspaper Trud (Labour) itself complained that unions seemed to be ‘occupied in dismissing and fining workers, instead of defending their interests’. The mood on the shop floor seems to have been volatile (though research on worker attitudes in this period is still embryonic), and quite a lot of labour disputes and strikes did break out, typically over housing, supplies, late or inadequate pay, or conflicts with specific administrators. The unions hardly ever supported the workers in such disputes.

Although further research on this needs to be done, there appears to be no link between industrial protests and any of the opposition groups within the party. Most workers, in fact, seem to have regarded the party as ‘them’, a part of the structure of authority with which they had to deal. Political and production meetings were shunned as ‘boring’, unless they dealt with something of immediate interest to the workman, such as pay or housing. Some workers, of course, looked on the party as a way to get on in life, seeking training, promotion, and ultimately perhaps escape from the shop floor. Party workers, for their part, often complained that the workers were ‘contaminated by bourgeois tendencies’ and ‘petty bourgeois individualism’.

Mutual relationships between the party and the class they claimed to represent were, in fact, by the late 1920s, rather cool. For a ‘working-class’ party about to embark on a major industrialization programme, that was a discouraging, not to say dangerous, situation.

Relations with the peasants were even worse. In the peasantry the Bolsheviks faced the only social class which had survived the revolution in substantially its previous form. Indeed revolution and civil war had actually strengthened the more traditional and underproductive aspects of Russian agriculture. The landowners, who had by and large used more modern equipment and methods and who had provided much of the pre-1914 grain surplus, had been expropriated, and their estates had mostly been divided up among the peasants. The ‘Stolypin’ peasants likewise had their enclosed plots of land taken away from them, and they were either expelled from the village or reabsorbed into the mir. Enclosed holdings were once again divided up into strips and often made subject to periodic redistribution; modern crop rotations were abandoned where they did not fit the communal pattern. The mir, in short, achieved a dominance in Russian rural life which it had never known before. This was a direct consequence of the Bolsheviks having adopted the Socialist Revolutionary programme in 1917, but that did not mean to say it was welcome to them now.

Landholdings, even among peasants themselves, had also tended to get smaller since 1917, in spite of the new awards of land. The problem was that millions of unemployed and hungry workers had streamed out of the towns, looking to resettle on the land, and many of them were awarded communal strips, where they still had claims. The revolution also seems to have intensified strains and disputes within peasant households, which provoked younger family members to break away and claim holdings of their own. As a result of all these new awards, the total number of family holdings rose from 17–18 million in 1917 to 23 million in 1924 and 25 million in 1927. The average size of each holding naturally fell also, in spite of the annexations from landowners, church and state in 1917, as did the proportion of the crop from each holding which was sold on the market rather than used for subsistence.

For the government the implications of this fragmentation of holdings, and of the reversion to primitive techniques were very alarming. As they began to conceive ambitious industrial projects, they needed more food to be both produced and sold. Yet their own policies aggravated the situation. The better-off and more productive peasants were usually taxed more heavily and felt themselves to be under stronger political pressure than their poorer colleagues. They always suspected, moreover, that the policies of 1918–21 might return.

These factors are reflected in the agricultural production figures, especially for grain, the most vital crop for the regime. It is true that output recovered rapidly from the catastrophic levels of 1920–1, but it never quite returned to pre-war levels. Compared with 81.6 million tonnes in 1913 (admittedly an unusually good year), grain output never exceeded 76.8 million tonnes in 1926, and fell off thereafter. Livestock production did reach pre-war levels in 1926, but declined subsequently. And there were some 14 million extra mouths to feed: in 1914, grain production had been 584 kg. per head of the population, in 1928–9 it was only 484 kg., while the government was planning for an enormous growth in the number of industrial workers, who would not produce food but would certainly need to consume it. Furthermore, of the amount produced, somewhat less was being marketed than in 1914–though Stalin exaggerated this factor in order to produce the impression that grain was deliberately being hoarded on a large scale. In fact, since official grain prices remained low, many peasants preferred to turn their grain into samogon (unlicensed liquor), or even not to grow it at all.

Of course it had never been the Bolsheviks’ intention to let Russian agriculture stagnate in small and primitively cultivated holdings. They had always envisaged large farms, collectively owned and mechanized. Their 1917 Land Decree had been a tactical diversion from this strategy, and they intended now to return to the main highway. In the last years of his life Lenin on the whole thought that this ‘collectivization’ of agriculture should take place gradually, with the party encouraging the creation of model collectives whose high productivity and prosperity would in time persuade the rest of the peasantry to join them.

A certain number of collective farms did already exist, some of which had started during the civil war, with party encouragement and help. Broadly speaking, these were of three types: (i) the kommuna, in which all property was held in common, sometimes with communal living quarters and childrearing; (ii) the artel in which each household owned its own dwelling and small plot of land, together with such tools as were needed to cultivate it, but all other land and resources were shared; (iii) the TOZ, or ‘association for common cultivation’, in which some or all of the fields were cultivated collectively. The last category might be barely distinguishable from the traditional village community, with its custom of pomochi, or mutual aid at busy times of year. It is no surprise, then, to find that the majority of collectives were of the TOZ variety, and there is evidence to show that some of them at least were ordinary village communes relabelled to draw the tax advantages of ‘collective’ status.

In addition, there were some state farms (sovkhozy), in which the labourers were paid a regular wage, like industrial workers. Even taken together, however, all state and collective farms accounted in 1927 for less than 2 per cent of cultivated land. It is significant, though, that their share of marketed produce was much higher: about 7.5 per cent in 1927. In view of this, one might have expected that the party would have begun a programme of ‘collectivization’ much earlier. In fact, however, the party was remarkably dilatory during most of the 1920s about pursuing its own official policy.

In part this was because of the weakness of the village soviets. In theory the soviets were supposed to take over local administration, leaving the peasant mir (renamed ‘land society’) to cope with questions of land tenure and cultivation. In practice, however, the mir continued to collect local taxes and to perform administrative functions, as before the revolution. A study published by Izvestiya in 1927 showed that the mir, not the soviet, was still the basic unit of local government in most villages, and that this was creating problems in the relations with the next tier above, the volost soviet.

Nor was the party any more successful than the soviets in rooting itself in the countryside. The Communists were townspeople by mentality and inclination, and most of them regarded village life with indifference or distaste. It is true that the revolution and civil war did bring an influx of rural members into the party, mostly Red Army soldiers. Yet these were often the first to be expelled in purges against the corrupt or insufficiently active, and in any case they constituted a negligible proportion of the rural population. The 1922 party census reported that party members formed a mere 0.13 per cent of the villages’ inhabitants, and many of these were teachers, doctors, agronomists and officials of volost soviets. By 1928 this proportion had only doubled: out of an estimated rural population of 120 million, about 300,000 (0.25 per cent) were Communists, and of that number only some 170,000 were actual peasants.

By and large, the weakness of the party meant domination of the village by the traditional notables. While all adults, including women, enjoyed a vote for the soviet, the commune was, by custom, a gathering of the heads of household, almost invariably male. Younger men, women and the landless were usually excluded. This meant that, in spite of the equalizing tendencies of the revolution, a degree of stratification soon reappeared in the villages. Indeed, it had never entirely disappeared. Since the commune had usually controlled the process of redistribution in 1917–18, the village notables had typically tried to ensure that some elements of greater wealth–whether in the form of acreage, livestock, or tools–remained in their own hands, or with the families whom they trusted. The former landless were better off than before, but they never became the equals of their ‘betters’.

This stratification is greatly emphasized in the Soviet studies of the subject, both contemporary and subsequent. They divide peasants into so-called ‘kulaks’ (‘fists’ or moneylenders, by nineteenth-century usage, but a term now loosely applied to better-off peasants), middle peasants, poor peasants and landless labourers. The definitions of these terms fluctuated, and they were used by the party on the whole for political rather than scientific purposes. Their use was intended to suggest that class war was brewing in the countryside between the richer and poorer strata. However, Teodor Shanin’s examination of the Soviet data tends to invalidate this hypothesis. He shows that the incomes of kulak households were only marginally higher than those of the ‘middle peasants’: they might own two horses, hire labour at busy times of year and have more produce left over for the market, but they were in no sense a separate, capitalist stratum. As for the ‘poor peasants’, while clearly a real category, their poverty was typically due to circumstances that were temporary–illness, natural disaster, military service of the breadwinner, shortage of working hands. ‘The chance of a hard core of poor peasants showing lasting cohesion and ability for political action emerging was very limited, therefore.’ Nevertheless, this was the layer which the party was to try once more to organize, from 1927, in the form of ‘committees of poor peasants’.

Nor is there much evidence of systematic conflict between different classes of rural dwellers. What Soviet sources call ‘kulak outrages’ usually turn out, when one can look more closely at the sources, to have involved more than just the wealthier peasants, and often the whole village. It would be much closer to the truth, in fact, to say that the great dividing line was not that between classes of the peasantry, but that between peasants and the rest of society, in particular anything that smelt of the towns. Gorky, writing of his conversations with peasants in 1922, reports that they felt ‘suspicious and distrustful … not of the clergy, not of authority, but simply of the town as a complex organization of cunning people who live on the labour and grain of the countryside and make many things useless to the peasant whom they strive in every way to deceive, and skilfully do so.’ There was much in recent peasant experience to substantiate this view. Since 1914 the town had called up the peasant’s sons to fight in a war for aims quite irrelevant to the village, it had requisitioned his horse for the cavalry, it had taxed him extra and offered him derisory sums for his grain; then, after a paltry land allotment in 1917, it had called up his sons yet again and also extorted his produce by force, paying him nothing for it. Quite often, furthermore, the town had closed down his church, sometimes destroying it in the process, and arrested his village priest.

The peasants’ distrust, in fact, was wholly understandable, indeed rational. And although they found the products of the town useful, most peasants were still at a sufficiently primitive economic level to be able to fall back on their own resources if they had to. It was very convenient to buy candles, kerosene, matches, nails and vodka in the town, but if really up against it, a peasant could devise his own substitutes for most of these things, and cottage industry was still lively enough to satisfy many of the needs which in more ‘advanced’ societies are supplied from the town. If they found market conditions not to their liking, in other words, peasants could react, not by working harder and trying to make more money, but by withdrawing from the market altogether. That had been demonstrated in 1918–21, and the threat of a repeat performance always hung over Bolshevik calculations.