War Communism was the name given to the economic system that existed in Russia from 1918 to 1921. War Communism was introduced by Lenin to combat the economic problems brought on by the civil war in Russia. It was a combination of emergency measures and socialist dogma.
One of the first measures of War Communism was the nationalisation of land. Banks and shipping were also nationalised and foreign trade was declared a state monopoly. This was the response when Lenin realised that the Bolsheviks were simply unprepared to take over the whole economic system of Russia. Lenin stressed the importance of the workers showing discipline and a will to work hard if the revolution was to survive. There were those in the Bolshevik hierarchy who wanted factory managers removed and the workers to take over the factories for themselves but on behalf of the people. It was felt that the workers would work better if they believed they were working for a cause as opposed to a system that made some rich but many poor. The civil war had made many in the Bolsheviks even more class antagonistic, as there were many of the old guard who were fighting to destroy the Bolsheviks.
On June 28th, 1918, a decree was passed that ended all forms of private capitalism. Many large factories were taken over by the state and on November 29th, 1920, any factory/industry that employed over 10 workers was nationalised.
War Communism also took control of the distribution of food. The Food Commissariat was set up to carry out this task. All co-operatives were fused together under this Commissariat.
War Communism had six principles:
1) Production should be run by the state. Private ownership should be kept to the minimum. Private houses were to be confiscated by the state.
2) State control was to be granted over the labour of every citizen. Once a military army had served its purpose, it would become a labour army.
3) The state should produce everything in its own undertakings. The state tried to control the activities of millions of peasants.
4) Extreme centralisation was introduced. The economic life of the area controlled by the Bolsheviks was put into the hands of just a few organisations. The most important one was the Supreme Economic Council. This had the right to confiscate and requisition. The speciality of the SEC was the management of industry. Over 40 head departments (known as glavki) were set up to accomplish this. One glavki could be responsible for thousands of factories. This frequently resulted in chronic inefficiency. The Commissariat of Transport controlled the railways. The Commissariat of Agriculture controlled what the peasants did.
5) The state attempted to become the soul distributor as well as the sole producer. The Commissariats took what they needed to meet demands. The people were divided into four categories - manual workers in harmful trades, workers who performed hard physical labour, workers in light tasks/housewives and professional people. Food was distributed on a 4:3:2:1 ratio. Though the manual class was the favoured class, it still received little food. Many in the professional class simply starved. It is believed that about 0% of all food consumed came from an illegal source. On July 20th 1918, the Bolsheviks decided that all surplus food had to be surrendered to the state. This led to an increase in the supply of grain to the state. From 1917 to 1928, about ¾ million ton was collected by the state. In 1920 to 1921, this had risen to about 6 million tons. However, the policy of having to hand over surplus food caused huge resentment in the countryside, especially as Lenin had promised “all land to the people” pre-November 1917. While the peasants had the land, they had not been made aware that they would have to hand over any extra food they produced from their land. Even the extra could not meet demand. In 1933, 25 million tons of grain was collected and this only just met demand.
6) War Communism attempted to abolish money as a means of exchange. The Bolsheviks wanted to go over to a system of a natural economy in which all transactions were carried out in kind. Effectively, bartering would be introduced. By 1921, the value of the rouble had dropped massively and inflation had markedly increased. The government's revenue raising ability was chronically poor, as it had abolished most taxes. The only tax allowed was the 'Extraordinary Revolutionary Tax', which was targeted at the rich and not the workers.
War Communism was a disaster. In all areas, the economic strength of Russia fell below the 1914 level. Peasant farmers only grew for themselves, as they knew that any extra would be taken by the state. Therefore, the industrial cities were starved of food despite the introduction of the 4:3:2:1 ratio. A bad harvest could be disastrous for the countryside - and even worse for cities. Malnutrition was common, as was disease. Those in the cities believed that their only hope was to move out to the countryside and grow food for themselves. Between 1916 and 1920, the cities of northern and central Russia lost 33% of their population to the countryside. Under War Communism, the number of those working in the factories and mines dropped by 50%.
In the cities, private trade was illegal, but more people were engaged in this than at any other time in Russia's history. Large factories became paralysed through lack of fuel and skilled labour.
Small factories were in 1920 producing just 43% of their 1913 total. Large factories were producing 18% of their 1913 figure. Coal production was at 27% of its 1913 figure in 1920. With little food to nourish them, it could not be expected that the workers could work effectively. By 1920, the average worker had a productivity rate that was 44% less than the 1913 figure.
Even if anything of value could be produced, the ability to move it around Russia was limited. By the end of 1918, Russia's rail system was in chaos.
In the countryside, most land was used for the growth of food. Crops such as flax and cotton simply were not grown. Between 1913 and 1920, there was an 87% drop in the number of acres given over to cotton production. Therefore, those factories producing cotton related products were starved of the most basic commodity they needed.
How did the people react to War Communism? Within the cities, many were convinced that their leaders were right and the failings being experienced were the fault of the Whites and international capitalists. There were few strikes during War Communism - though Lenin was quick to have anyone arrested who seemed to be a potential cause of trouble. Those in Bolshevik held territory were also keen to see a Bolshevik victory in the civil war, so they were prepared to do what was necessary. The alternate - a White victory - was unthinkable.
Also the Bolshevik hierarchy could blame a lot of Russia's troubles on the Whites as they controlled the areas, which would have supplied the factories with produce. The Urals provided Petrograd and Tula with coal and iron for their factories. The Urals was completely separated from Bolshevik Russia from the spring of 1918 to November 1919. Oil fields were in the hands of the Whites. Also the Bolshevik's Red Army took up the majority of whatever supplies there were in their fight against the Whites.
No foreign country was prepared to trade with the Russia controlled by the Bolsheviks, so foreign trade ceased to exist. Between 1918 and November 1920, the Allies formally blockaded Russia.
The harshness of War Communism could be justified whilst the civil war was going on. When it had finished, there could be no such justification. There were violent rebellions in Tambov and in Siberia. The sailors in Kronstadt mutinied. Lenin faced the very real risk of an uprising of workers and peasants and he needed to show the type of approach to the problem that the tsarist regime was incapable of doing. In February 1921, Lenin had decided to do away with War Communism and replace it with a completely different system - the New Economic Policy. This was put to the 10th Party Conference in March and accepted. War Communism was swept away. During War Communism, the people had no incentive to produce as money had been abolished. They did what needed to be done because of the civil war, but once this had ended Lenin could not use it as an excuse any longer.