Saturday, September 20th, 2014
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Market Corrections



In all revolutions there comes a moment when the high ideals of the revolutionaries crash onto the hard rocks of reality. In Russia that moment came in March 1921, when the Bolsheviks retreated from their first attempt to introduce a planned economy—by which they had thought to impose communism by decree—and let back elements of private trade to rescue their regime from popular rebellions.

Chronic shortages had built up over seven years of war, revolution, and the Civil War, especially in the austere years of the latter, between 1918 and 1920, when the Red Army had fought against the Whites, and leather-jacketed commissars had waged another war on the market.

Townsmen traveled to the countryside to barter with the peasants, who were reluctant to sell foodstuffs for paper money when there was nothing they could buy with it. They left with bags of clothes and household goods to sell or exchange in the rural markets and returned with bags of food. The railways were paralyzed by these armies of “bagmen.”

Threatened by the disintegration of the urban working class, their main social base, the Bolsheviks declared a grain monopoly and dispatched armed brigades to requisition foodstuffs from the villages. Where they found none (because there were no surpluses) they assumed that it was being hidden by the kulaks—a term they had appropriated to describe a phantom class of “capitalist” peasants. They imposed a planned economy known as War Communism, the main purpose of which was to channel all production toward the demands of the army. It abolished private trade, nationalized all largescale industry, subjected labor to military rules, and at its height in 1920 tried to replace money with a universal system of state rationing.

War Communism was the prototype of the Stalinist command economy. Both were driven by the notion that in a backward peasant country such as Russia, state coercion could be used to provide a shortcut to communism, eliminating the need for a long stage of capital accumulation through the market. By 1921, the system had enabled the Bolsheviks to win the Civil War, but it had brought the country to economic ruin and the revolution to the verge of collapse, with hungry workers on strike and widespread famine in the countryside leading to a series of peasant wars against the requisitioning.

On March 8 that year, at the Tenth Party Congress, Lenin abandoned the central plank of War Communism, introducing a tax in kind to replace the requisitioning. By allowing the peasants to sell their surplus on the free market once the tax was paid, the concession laid the groundwork for a New Economic Policy (NEP) through which the revolution would commit to “building socialism” with a mixed economy of private peasant trade, cooperatives, and state-controlled industries. Fearful that the delegates would denounce the tax as a restoration of capitalism, Lenin insisted that it was needed to quell the peasant uprisings, which were “far more dangerous than all the [Whites] put together,” and build a new alliance with the peasantry.

For Lenin the NEP was more than a temporary concession to the market in order to get the country back on its feet. It was a radical if illformulated effort to redefine the role of socialism in peasant Russia, where, largely as a result of his own party’s coup in 1917, the “bourgeois revolution” had not been completed. Only “in countries of developed capitalism” was it possible to make an “immediate transition to socialism,” he had said. Soviet Russia was thus confronted with the task of “building communism with bourgeois hands,” which for the Bolsheviks meant letting peasants create wealth through the market.

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About the Author

Orlando Figes is the author of The Crimean War and The Whisperers: Private Life in Stalin’s Russia. This essay is adapted from Revolutionary Russia, 1891-1991: A History, forthcoming from Henry Holt. He can be found on Twitter @orlandofiges and at

The brutalities of progress are called revolutions. When they are over we realize this: that the human has been roughly handled, but that it has advanced.
Victor Hugo, 1862
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