• There is an established relationship between the economic activities and social processes. Changes in economy always leads to changes in society, social relationships and social philosophy. Societies progress, stagnate or regress due to the prevalent economic systems.
  • There has always been an effort and struggle to employ the best possible economic system, so that societies can prosper and people can reap maximum social benefits out of the economic progress achieved through employed economic system.
  • Supporters of a particular economic system always preach the benefits of adopting their choice of economic system. They not only declare these economic systems as tool of achieving material progress but they also highlight the social benefits which can be secured through them.
Evolution of Economic Systems


  • Socialism is a socio-economic doctrine wherein everyone enjoys equal ownership of property and natural resources. According to the socialist view, individuals do not live or work in isolation but live in cooperation with one another. The central concept of socialism is visualization of human beings as social beings united by their common humanity.
  • The ownership is usually through a democratically-elected government. It could also be a cooperative or a public corporation where everyone owns share. Society as a whole, therefore, should own or at least control property for the benefit of all its members. Furthermore, everything that people produce is in some sense a social product, and everyone who contributes to the production of a good is entitled to a share in it depending on how much they have contributed.
  • In a purely socialist society, all legal production and distribution decisions are taken by the government, and individuals rely on the state for everything from food to healthcare. The government decides the extent of output and fixes prices of goods and services. Socialists assert that shared ownership of resources and central planning provides an equal distribution of goods and services ensuring an equitable society.
History of socialism

Features of Socialism

Collective Ownership of Resources

  • In a socialist economy, means of production is owned and operated by the state in the interest of society as a whole. This is done to ensure equality of opportunity to all the citizens with regard to earning of income. This is also aimed at full and efficient utilization of the country ’s resources.

Planned Economy

  • A socialist economy is centrally planned which functions under the direction of a central planning authority. It lays down a set of guidelines outlining various objectives and targets to be achieved during the plan period.

Egalitarian Society

  • Unlike the capitalist economic system, where there are different living standards for upper, middle and lower class, a true socialist society treats everyone equally as far as economic status is concerned.

Absence of Competition and Limited Choice of Consumer Products

  • As the state has full control over production of goods and services, there is absence of competition in the market in a socialist economy. Moreover, as socialism focuses on necessities in life, there is limited choice in consumer products.

Pricing Mechanism

  • The pricing of goods and services is under the control and regulation of the centralized authority. As prices remain important in socialist nations, two types of prices prevail in this economic system – one is market prices and other is accounting prices.
    • While market prices are for consumer goods, accounting prices assists managers to take decision about production of consumer and investment goods and production method.

Ideal of Service

  • In a socialist society, the idea is to ensure common good and general welfare. The motive of service replaces the motive of profit. The state strives for production of those goods which is most needed and not those which fetches maximum revenue.
types of socialism

Different Types of Socialism

socialist philosophies

Utopian Socialism

  • Considered to be the first currents of modern socialist thought, it was used by later socialist philosophers to define early socialist scholars who created hypothetical visions of perfect egalitarian and communalist societies without actually concerning themselves with the manner in which these societies could be created or sustained.
  • They prevented all revolutionary action and wanted to attain their ends by peaceful means and small experiments. Utopian socialists sought to implement socialism by example – through the establishment of model socialist communities in which workers were treated with dignity and income distribution was more equal.
  • Robert Owen was the most prominent of the 19th century Utopians.

Revolutionary Socialism (Marxism)

  • The failure of the utopian socialism and the lack of democracy in most parts of Europe convinced some socialist scholars that revolution was the only feasible path to power. They believed that capitalists would never allow socialism to succeed.
  • Karl Marx, with his close associate Friedrich Engels introduced the world to a radical type of socialism which is called Marxism. It is an economic and social system based upon the political and economic theories of Marx and Engels.
    • They outlined their ideas in a pamphlet called “The Communist Manifesto”. In their manifesto, Marx and Engels argued that human societies have always been divided into warring classes.
      • In the past, these were the middle-class “haves” or employers, called as the bourgeoisie and the “have-nots ” or workers, called as the proletariat. While the wealthy controlled the means of producing goods, the poor performed strenuous labor under appalling working conditions.
  • Marx predicted that the workers would overthrow the owners as he believed that the capitalist system, which produced the Industrial Revolution, would eventually destroy itself. The emergence of factories would drive small workers and artisans out of business, leaving a small number of manufacturers to control all the wealth.
  • Consequently, large number of proletariats would revolt, seize the factories and mills from the capitalists, and produce what the society needed. It was believed that the society would become egalitarian as workers would share the profits, and thus, would bring about economic equality for all people. The workers would control the government in a rule of the proletariats. After a period of cooperative living and education, the state or government would wither away towards the emergence of a classless society. Marx termed this final phase pure communism.
  • According to Marx, communism is a form of complete socialism in which all means of production would be owned by the people and the private property would in effect cease to exist. All goods and services would be shared equally.
    • Exploitation and inequality would only be eliminated under communism, a system in which there would be no poverty, no crime, no money and no government.

Fabian Socialism

  • The term came into recognition after the formation of the Fabian society in Britain. Formed in 1883, the Fabian Society prescribed advancement of socialism through evolution. They preferred socialism via gradual reforms instead of revolution.
  • The Fabian Sociologists believed in representative democracy and rejected violence as a means to bring a change.
    • They worked towards bringing change in the society through negotiations, petitions and other democratic ways. Though their goals of equality were similar to the communists, they adopted a different path to achieve the goal.

Democratic Socialism

  • Democratic socialism is a political movement that seeks to propagate the ideals of socialism which is truly democratic. It supports active participation of masses, particularly workers in the management of the economy.
  • Democratic socialism closely resembles to social democracy, being identical in some accounts and differing in few. Many democratic socialists support social democracy as a road to reform of the current system, while others support more revolutionary changes in society to establish socialist goals.

Guild Socialism

  • Guild socialism worked towards abolition of the wage system and establishment of self-government in industry by the workers, through a democratic system of national guilds, which was to work simultaneously with other democratic functional organizations in the community.
  • As per Guild socialism, the industry should be managed by technical experts and not by unskilled workmen. Also, the interests of the consumer were to be taken into consideration. They advocated state ownership of industry, combined with workers’ control through delegation of authority to national guilds organized internally based on democratic principles.


  • Syndicalism is another form of socialist economy which gives prominence to the trade union organization.
  • It believes in the Marxian principle of abolition of private ownership and gives the producers a control over the economic and political affairs of the state.
  • Syndicalism is attributed to be a predominant product of workers than any other form of socialism. It is presumed that the workers will have a greater personal interest in the conduct of the plant if they own and control the industry in which they work. This way they enjoy a greater amount of freedom than that offered by the capitalistic system.


  • Vladimir Lenin (1870-1924) was a Marxist and his theoretical contributions to Marxist thought are known as Leninism, which coupled with Marxian economic theory have collectively come to be known as Marxism-Leninism.
  • He made a number of significant changes to Marx’s theories as follows:
    • Because he was unwilling to wait until Russia had fully industrialised, Lenin modified Marx’s view that revolution could only occur in the advanced capitalist nations. He asserted that nations in the early stages of capitalism were also ripe for socialist revolution; and the industrialisation process could be completed once socialism had been achieved.
    • Lenin argued that the revolutions could be staged not by the working class, but by a professional band of revolutionaries. The commitment and determination of these people would make up for the lack of a large working class in Russia. The corollary of this view was that the Communist Party would have to rule Russia dictatorial until a large working class support base could be created.

Mao Tse Tung

  • The Chinese Communist leader Mao Tse Tung further changed Marx’s theories, arguing that even pre-capitalist nations could stage socialist revolutions, by mobilising the peasantry rather than the working class.
  • Mao asserted that the capitalist stage of development could be by-passed altogether – opening the way for a series of revolutions in developing nations such as Cuba, Vietnam and North Korea.

Evolution of Socialism as a Politico-Economic System

  • Socialism emerged in response to the negative aspects associated to feudalism and capitalism. The societies where feudalism and capitalism existed were found to have high degree of socio-economic inequality.
  • The scholars started to look for an alternative model of society where there would be less rich-poor disparity. While voices were raised against feudalism prevalent in France, the ideas of socialism came in direct conflict with the industrialization taking place in Britain where exploitation of workers was common .

Inadequacies of Capitalism

  • Capitalism and industrial revolution saw a massive number of people migrating towards industrial cities in search of jobs. The workers were forced to work for long hours in unsafe and hazardous conditions. Child labour was a common practice as there was no provision of social security.
    • However, after a long struggle, trade unions were allowed to come into existence. The governments in England and other capitalist nations were forced to pass laws against oppressive practices of capitalism under the pressure of working class.
    • For example, limits were placed on the maximum number of hours for work and laws were passed against hazardous working conditions existing in factories.

Rise of Workers

  • In the French revolution (1789), workers turned out to be a major force as they organized themselves into secret societies in an attempt to overthrow Feudalism. The end of Feudalism after the French revolution gave a boost to the idea of equality. However, the French revolution was not against capitalism and it failed to provide a stable republic.
  • Though it ended the regime of Louis XVI, it did not result in an equitable society. The workers did not benefit much from French revolution as the peasants got hold of lands confiscated from the nobility and the clergy. While the Bourgeois (middle class) dominated the government, the workers felt neglected as they could not get right to vote due to minimum income criteria of the French Constitution.
  • The discontent among workers saw Jacobins into power who failed to maintain law and order as France saw violence and terror where Guillotine was used as a tool for mass slaughter for every dissenting voice. The Bourgeois regained power but the French society saw a huge gap in the ideals of French revolution and its results. The discontent led to Babeuf’s conspiracy in 1796.

Babeuf Conspiracy

  • In an attempt to build a socialist society, Babeuf attempted to overthrow the French Government. A participant of the French Revolution, Babeuf formed a secret society called as ‘Society of Equals’. The society planned an uprising but the government came to know of the plan and in May 1796, a large number of leaders including Babeuf were arrested. Consequently, Babeuf was executed in 1797.
  • Babeuf, in his manifesto, stressed the idea of equality. He said, there is no room for either rich or poor in a true society. He tried to set up the republic of equals and stated that it was necessary to make another revolution which would do away with the terrible contrasts between the rich and poor, the masters and servants.
  • Though Babeuf ’s attempt at overthrowing the government had failed, his ideas exercised an important influence on the growth of socialist movement.

Utopian Sociologists

  • There were many other philosophers and revolutionaries who helped in spreading ideas of socialism. Many Utopian Sociologists like Saint Simon, Robert Owen and Charles Fourier recognized the evils of capitalism and advocated the establishment of a socialist society in its place.
  • Saint-Simon coined the slogan, ‘from each according to his capacity, to each according to his work’. They visualized a society free from exploitation of any kind and one in which all would contribute their best and everyone would share the fruits of their hard work. However, the methods they advocated for the establishment of such a society were unrealistic and ineffective.

Auguste and Idea of Violent Revolution

  • An active participant in the Paris uprisings from 1830’s to 1871 when the third republic was established, Auguste was very popular in France. Auguste proposed the idea of revolutionary conspiracy as a tool to establish socialist society. Nearly two lakh workers gathered to pay respect during his funeral in 1871.

Communist League

  • Many organizations were established to spread socialist ideas and organize workers. One of these was the League of the Just which had members in many countries of Europe.
  • In 1847, it changed its name to the Communist League and declared as its aim, “the overthrow of the bourgeoisie, the rule of the proletariats, the abolition of the old bourgeois society which rests on the antagonism of classes, and the foundation of a new society without classes and without private property.”

Ideas of Karl Marx

  • Karl Marx, with his lifelong associate Frederick Engels authored the Communist Manifesto in 1848. The manifesto further said that the Industrial Revolution had enriched the wealthy and impoverished the poor.
    • They predicted that the workers would overthrow the owners: “The proletarians have nothing to lose but their chains. They have a world to win. Working men of all countries, unite.”
    • The Communist Manifesto also changed the slogan “from each according to his capacity, to each according to his work” to “ from each according to his capacity, to each according to his need”.
    • This was done to make the society more inclusive which would care for those who can not contribute enough in the workforce due to disability, old-age, etc .
  • In his later study, named Das Kapital (1867), he said that Karl Marx cited features of capitalism that would lead to its own downfall. The basic conflict in society is that the workers produce more value in the society than what they get in return in the form of wages. The difference is appropriated by the capitalists in the name of profits. Thus, Economic crises were inevitable under capitalism because of the discrepancy between the purchasing power of workers and total production.
    • The only solution suggested is to end the profit motive by ending private ownership which will also end the exploitation. Consequently, a classless society will be formed which will produce social goods rather than profits for a few.
  • However, Marx believed that this could be achieved by only the working class because it is the most revolutionary class in an industrialized society. Around the time the Communist Manifesto was published, revolutions broke out in almost every country in Europe.

Early Socialists

Francois Noel Babeuf

  • During the French Revolution, Francois Noel Babeuf (1760-1797) propounded a definite scheme for a socialist society and even attempted to establish it in 1796 through a coup during the French Revolution. He wanted to overthrow the Directory and replace it with an egalitarian and proto-socialist republic, inspired by Jacobian ideals.
  • He developed a plan according to which the state was to inherit all property until community of property was established. But this coup could not be succeeded and Babeuf was guillotined in 1897.

Saint Simon (1760-1825)

  • Saint Simon was an aristocrat bybirth. Like many nobles of the age, he also renounced his title during the French Revolution of 1789. His life was spent in the quest for a new source of authority and faith in an industrial age . He preached the gospel of work. According to him, ‘Man must work’.

Charles Fourier ( 1772-1837)

  • Charles Fourier was a radical French philosopher and an influential early socialist thinker. He was contemporary of prominent socialist thinkers Saint-Simon and Robert Owen. He was later associated with “utopian socialism”.
  • He considered trade to be the source of all evil. He attacked commercial civilisation and held it responsible for moral degradation of men.
  • According to him, the great sources of the evil were cutthroat competition, deceit, greed and inhumanity.

Robert Owen (1771-1858)

  • Robert Owen was a welsh social reformer and one of the founder of utopian socialism. He was not only the patron saint of English socialism but also the father of the cooperative movement. He was a pioneer in advocating factory legislation and democratic education. He was also the originator of the nursery school. As early as 1800, he started the experiment of creating a model factory at New Lanark.

Louis Auguste Blanc (1811-82)

  • Louis Blanc was the first to make use of the contemporary political machinery to achieve the ends of socialism. In 1840, he published his famous book entitled “The Organisation of Labour”.
  • He advocated a political reform which would establish the state on a democratic basis. According to him such a state then would provide social workshops – farms for agriculturists, factories for workmen and shops for tradesmen.

Pierre-Joseph Proudhon (1809-65)

  • Pierre-Joseph Proudhon is generally known as “the father of anarchism”. He was also a member of the French Constituent Assembly of 1848. He is regarded as one of the greatest critics of Karl Marx and Communism.
  • According to him, property (capitalism) is the exploitation of the weak by the strong and Communism is the exploitation of the strong by the weak.

League of the Just

  • The League of the Just was founded by German emigres in Paris in 1836. It was a splinter group from the League of Outlaws created in Paris in 1834. It was a utopian socialist and Christian communist group devoted to the ideas of Babeuf. The motto of the league was “All Men are Brothers” and its goal was “to establish kingdom of god on earth.”

Communist League

  • The Communist League was an international political party established in June 1847 in London. The organization was formed through the merger of the League of the Just and the Communist Correspondence Committee.
  • It is regarded as the first Marxist political party and it was on behalf of it that Marx and Engels wrote the famous Communist Manifesto in 1848. It was disbanded in 1852 and succeeded by the First International of 1864.

Karl Marx (1818-1883)

  • Karl Marx was born in 1818 at Trier, in the Rhineland. Marx studied at the Universities of Bonn and Berlin. He concentrated mainly on history, philosophy, jurisprudence and political economy.
    • He came under the influence of Hegel from whom he imbibed the conception of history as a developing idea and an irresistible process that cannot be deflected.
    • Since very early in life Marx became a sympathiser of the revolutionary and democratic agitations in Germany.
  • It was in Paris that Marx met with Friedrich Engels (1820-95) and two became life-long friends and co-workers. He joined the League of the Just and later its successor the Communist League. An important event of this period, which later made Marx and Engels global names, was that Marx was asked to draw a manifesto for the Communist League.
  • Karl Marx was a prolific writer. His writings are to be found in essays, tracts, correspondence and many complete works. Some of his important works are the Communist Manifesto, Das Kapital, Critique of Political Economy, The Holy Family, Value, Price and Profit , Poverty of Philosophy and the Civil War in France ( 1870-71 ).


  • After the failure of the 1848 revolutions, the socialist movement seemed to have declined. However, it was soon to rise in strength again. One of the outstanding features of the various socialist groups was their internationalist character.
  • Several organisations emphasized the idea that the cause of the working class in all countries was the same. It was these ideas of global solidarity among workers that were to remain the fundamental features of the socialist movement in the coming years.

First International (1864)

  • The formation of the International Working Men’s Association, or the First International, in 1864 is considered to be the first step towards the recognition of working class and their struggles on an international level. The first international aimed at the total ‘abolition of all class rule’.
  • The universal character of the struggle of the working class was stressed upon. During the short duration of its existence, the First International arranged aids and exercised a huge influence on workers’ movements in Europe and North America.
    • One of the finest examples of workers’ solidarity was evidenced at the time of the war between Prussia and France in 1870.

Paris Commune (1871)

  • The Franco-Prussian war in 1870 led to an end of monarchy as the third Republic was established after the seizure of power by workers in Paris. Within few weeks of the war, the French army was defeated and the French emperor Louis Bonaparte was taken prisoner. A new government, dominated by the propertied class, had come into being and had declared France a republic.
  • The government agreed to Bismarck’s terms for truce including the surrender of Paris, cession of Alsace-Lorraine and the payment of a huge war indemnity to Prussia. The workers of Paris regarded the government ’s surrender as treacherous and refused to surrender. The government, however, withdrew from Paris on 18 February 1871 and asked for German help to crush Paris. The workers of Paris captured Paris and formed an elected council which on 28 March 1871, assumed the title of the Paris Commune. It was elected by universal adult franchise and represented the workers and the lower middle classes of Paris wherein the people had the right to recall against all public servants.
  • The Paris Commune soon drowned in blood as the French government which had established its headquarters in Versailles attacked Paris with a huge army with the assistance of Germany. The attacks on Paris had begun in April and continued till May when the Commune was finally exterminated. It is estimated that more than 40000 workers were slaughtered in the streets of Paris or killed by firing squads . Many were deported and imprisoned. The French government called it the victory of order, justice and civilization.
  • The International was not a homogeneous organization and collapsed as a result of internal differences. The international suffered a split in 1872 over differences on aims and methods. Though it was finally dissolved in 1876, it played a vital role in creating awareness among the workers. In the meantime, socialist parties in many countries of Europe had begun to grow strong and after a few years they united to form another International.

Second International

  • At the time of the ‘First International ’, there did not exist well-organized socialist parties in Europe. However, in the 1870’s and the 1880’s, almost every European country had the presence of socialist parties. Some of them became very strong with lakhs of members. These socialist parties participated in national elections and in some countries they managed to have a fairly large representation in the parliament. Similarly, the strength and membership of the trade unions also increased manifolds which saw increasing instances of strikes. Socialist movement began to take roots outside Europe as Japan saw the start of socialist movement in the 1890’s. Thus though the First International had been dissolved, the movement had become a mass movement .
  • The Second International aimed to unite all socialist parties across the world and wanted to establish equality among the natives of colonies and the colonists. A Congress was held in Paris on 14 July 1889, the centenary of the French Revolution of 1789 which came to be known as the Second International.
  • The formation of the Second International set a new stage in the history of socialism by taking an important step to make the first of May every year as a day of working class unity and solidarity. The Second International also demanded limiting the maximum working hours per day at 8 hours.
  • After the second international, there was a steady increase in the rise of the socialist parties and of trade unions. The Second International condemned colonialism, committed the socialist parties to oppose the subjugation of colonial people and supported their nationalist struggles.
    • The 1904 Conference of second International was attended by Dadabhai Naoroji, an eminent Indian National leader, who pleaded the cause of India’s freedom. He was supported by the British delegates at the Congress. The second International was against war and militarization which was happening prior to the First World War.
  • Though the socialist movement did not succeed in bringing about a socialist revolution in any country in the nineteenth century, it brought about widespread awareness about the problems created by capitalism and emerged as a powerful political movement in many countries. It was to play a prominent role in the coming years all over the world, making socialism, along with democracy and nationalism, the dominating factor in the history of the world in the twentieth century.

Third International

  • The Third International was formed in 1919 after the success of Russian Revolution. It was organised by the Russian Communists and its headquarter was in Moscow.
  • It was revolutionary in character. Its objective was to accelerate the development of events towards world revolution. It was dissolved in 1943 and was replaced by the Cominform (Communist Information), 1947-56.

Socialism in Russia

Consolidation of Power by Lenin and Bolsheviks (1917-24)

  • After the provisional government was overthrown, the Constituent assembly was formed. Despite being well aware of the fact that the Bolsheviks majority was highly unlikely in the elections, Lenin made elections as an important agenda during October Revolution of 1917. Despite lack of majority support in the country, the Bolsheviks wanted to stay in power.
  • In an attempt to win the peasants support, Lenin ordered nationalization of all land including former crown estates and land belonging to the church, without compensation, so that it could be redistributed among the peasants. In the elections held in mid-November, Lenin’s worst fears were realized as the Bolsheviks came second by winning only 175 seats to Social Revolutionaries 370. Under a genuine democratic system, the Social Revolutionaries, who had an overall majority, would have formed a government under their leader. However, Lenin was determined to ensure that the Bolsheviks remain in power. After some anti-Bolshevik speeches at the first meeting of the Constituent Assembly in January 1918, Lenin ordered the Bolshevik Red Guards to disband the constituent assembly.
  • Lenin triumphed for the time being, but the opposition led to a civil war which was fought between the Bolsheviks and the Whites (Mensheviks, Social Revolutionaries, extsarist officers and any other groups which did not like what they had seen of the Bolsheviks). Britain, France, USA and Japan sent troops in support of whites in fear that Communism might spread outside Russia if the Bolsheviks come to power.
  • There was great discontent among peasants, some sections of workers and even soldiers because of poor treatment of Soviets by Bolsheviks after the October Revolution.
  • People expected that every town would have its own soviet, which would run the town’s affairs and local industry. Instead, officials, known as commissars, appointed by the government and supported by the Red Guards, threw Social Revolutionaries and Mensheviks out of the Soviet, giving Bolshevik members total control of the Soviet.
  • After an assassination attempt on Lenin in August 1918, the Red Guards started the Red Terror. Ukraine and Georgia were forced to re-unite with Russia during the civil war. Russia lost these territories under the treaty of Brest Litovsk after defeat against Germany in 1917. Also, the independence movement in Armenia and Azerbaijan were crushed during the Civil War. It was clear by 1919 that the Bolsheviks (now Communists) would survive. As the army of Whites began to suffer defeats, the interventionist foreign states lost interest and withdrew their troops from Russia.

Reasons for Bolshevik’s Victory

  • The Whites were not well-organized and lacked central leadership.
  • The Red army had more troops and possessed better armaments. Moreover, they were led by an inspired leader in the name of Trotsky.
  • Lenin was able to present the Bolsheviks fight as a battle between a nationalist government and a foreign army.
  • Lenin took decisive measures, known as war communism to control the economic resources of the state in order to save resources for fighting the war. Under war communism, all factories were nationalized, all private trades were banned and all grains were seized from the peasants to feed the troops and the Bolshevik supporters.

New Economic Policy (1921)

  • After the end of civil war (1918-20) in Russia, Lenin faced the challenging task of rebuilding Russian was economy shattered by the First World War and then by civil war. Industry was at a standstill.
  • War communism had been unpopular with the peasants as they saw no point in working hard to produce food which was taken away from them without any compensation. Their produce food was only enough for their own subsistence, which led to severe food shortages aggravated by droughts in 1920-21. Lenin was convinced that a new approach was needed to win back the support of the peasants. He put into operation what came to be known as the New Economic Policy (NEP).
Features of New Economic Policy (NEP)
  • The Policy focused on welfare of Peasants and boosting growth.
  • Peasants were now allowed to keep surplus produce after payment of a tax representing a certain proportion of the surplus. This incentivized the food production.
  • Private ownership of small scale industries and their trade were allowed. However, heavy industries like coal, steel, iron and chemicals remained under the control of the state. The power, transport and banking sectors also remained under the ambit of state.
  • The NEP allowed the introduction of capitalist measures like bonus, piece wage rates, etc.
  • Lenin brought back old managers who were removed after the 1917 revolution in an attempt to increase the efficiency of factories.
  • Private trade of surplus goods was reintroduced.
  • Foreign investment was encouraged to help develop and modernize Russian industry.
    • The New Economic Policy had a moderate success as the economy began to recover and production levels improved for most commodities. Towards the end of 1927, when NEP began to be abandoned, the ordinary Russians were probably having a better standard of living than at any time since 1914.
    • Industrial workers were being paid real wages and they had the benefits of NEP’s new social legislation i.e. an eight-hour working day, two weeks’ holiday with pay, sick and unemployment pay and healthcare. The peasants too were enjoying a higher standard of living than in 1913. However, the unemployment remained higher than before, and food shortages were still frequent.
    • Lenin died in January 1924 at the early age of 53. His work of completing the revolution by introducing a fully communist state was left unfinished. The USSR faced an uncertain future. Despite being ill for some time, Lenin could not foresee the future of Russia as his demise left Russia isolated, facing an uncertain future.

USSR under Stalin (1924-53)

  • After Lenin’s death in 1924, it was widely believed that Trotsky would take over the reins in Russia. However, a complex power struggle developed from which Stalin emerged victorious in 1929. Stalin dominated the USSR politics right through the Second World War and until his death in 1953.

Challenges Faced by Stalin

  • Although Russia saw significant recovery from the effects of the First World War, the production from heavy industry was surprisingly very low. In 1929, even France produced more coal and steel than Russia, while Germany, Britain and especially the USA were a way ahead. A rapid expansion of heavy industry was essential for Russia to deal with any adversity in the form of attacks, which he was convinced. A war was inevitable with the capitalist western powers against communist Russia. Stalin believed that Industrialization would act as an added advantage of increasing support for the government, because it was the industrial workers who were the communists’ greatest allies.
  • However, there was a serious problem in financing these industries as foreign investors were unwilling to invest in the USSR. He considered the production of food as important not only to feed the growing population but also to export surplus food in order to earn foreign capital and profits for investment in industry. The existing system of agricultural production was inefficient and thus incapable of providing such resources. Food shortages kept recurring and in 1928, there seemed to be a real danger of famine unless some drastic changes were done.

Steps Taken by Stalin

Focus on Heavy Industrialization
  • The USSR, under Stalin, focused more on industrialization through setting up of heavy industries as they invested more capital in heavy industries like coal, iron and steel while neglecting small scale industries. The neglect of small industries led to shortage of consumer goods in the USSR.
  • Some of the possible reasons for Stalin’s preference towards heavy industrialization are as under:
    • Stalin believed that the western capitalist powers would attack Russia sooner or later. He was proved correct when Germany attacked Russia in 1941.
    • Stalin believed that greater industrialization would induct more number of workers than peasants in the workforce. He considered peasants, especially, the kulaks ( wealthy peasants) as enemies of socialism.
    • Heavy industries develop basic infrastructure in the economy which acts as a stepping stone for rapid economic growth.
Introduction of Five Year Plans
  • Industrial expansion was tackled by a series of Five Year Plans. Both the first (1928-32) and the second plan (1933-37) were said to have been completed a year ahead of schedule. The third Plan (1938-42) was cut short by the USSR’s involvement in the Second World War.
  • While the first Plan concentrated on heavy industries like coal, iron, steel and machinery including tractors, the second and third five year Plans emphasized on heavy industries as well as increase in the production of consumer goods.
  • The Russians managed to do all this without any foreign investment. Investments came from exports of grains and through heavy taxation on peasants for the use of government equipment, and the ruthless reinvestments of all profits.
  • The government emphasized greatly on education through colleges and universities in a bid to provide employment to a whole new generation of skilled workers. The third plan (1938-41) which was cut short by the Second World War saw a special focus on the armament sector as Europe grew closer to a world war. The Fourth plan emphasized on the reconstruction after the war with the aid of German war reparations, in this plan, there was not much focus on creating new infrastructure. The Fifth plan (1951-55) continued its renewed focus on heavy industrialization and transportation.
  • Despite many constraints, it has to be said that the Plans were a remarkable success. The USSR overtook Britain in the production of iron and steel by 1940 and was within the reach of Germany’ s production of the same .
Collectivization of Agriculture
  • The problems of agriculture in the USSR were dealt with by the process known as ‘collectivization’. It worked on the simple principle of merging small farms and holdings belonging to the peasants to form large collective farms called as ‘Kolkhoz’ owned jointly by the peasants.
  • Stalin’s decision to collectivize was based on two basic reasons. They are as under:
    • Boost agricultural production through increasing use of mechanization on large collective farms under state’s control to ensure food security.
    • Improving agricultural efficiency in order to divert excess workers from the agricultural sector to the industrial sectors.
    • To eliminate the class of prosperous peasants (kulaks), which NEP had encouraged as he believed that they were standing in the way of progress. Stalin saw the kulaks as the enemies of communism.
  • The policy of collectivization, launched in 1929, was not voluntary and was forced on to the peasants. Those who refused were brutally suppressed. Though there was no problem in collectivizing landless labourers, but all peasants who owned any property at all, whether they were kulaks or not, remained hostile to the plan. Kulaks retaliated by slaughtering cattle and burning crops rather than allowing the state to take away their produce.
    • Peasants who refused to join collective farms were arrested and taken to labour camps, or shot dead. Over 90 per cent of all farmlands were collectivized by 1937. The mechanization of farms led to a substantial increase in production of food. The amount of grain taken by the state and the exports increased impressively.

Features of Stalin’s Rule

  • Purges were a characteristic feature of Stalin’s rule. It meant violent expulsions, exile, imprisonment or even assassination to anyone opposing Stalin or his policies. The Purges were a successful tool to eliminate growing dissent and in terrorizing the masses to become obedient towards the government policies.
  • Stalin’s rule was characterized by authoritarian socialism and a one-man rule. Stalin took the title ‘man of steel’ and promoted a cult of his personality.
  • The party’s power declined as Stalin concentrated all the powers in his hands.
  • There were restrictions on freedom of speech and expression. Writers, musicians and artists were to produce works in the glory of Soviet achievements.
  • The prisoners were made to do forced labour under a government agency named as Gulag. The Gulag acted as a primary tool of political oppression as Stalin’s opponents were kept in these camps.
  • As part of the consolidation of power, Stalin clamped down on Churches and prosecuted clergies.
  • Stalin’s rule had no tolerance towards demands of independence by members of the USSR. Azerbaijan and Armenia were forced back into USSR fold.
  • Though heavy industries grew, other sectors saw decrease in production. Shortages of food and of consumer goods were a recurring feature of Stalin’s rule.
  • Stalin’s rule had worsened ties between the USA and the USSR as both developed suspicion and distrust towards each other. Consequently, the USSR spent heavily on arms and ammunitions.
  • Stalinism could in no way be described as democratic. Stalin stated that the peaceful coexistence with the west was impossible until there was a final victory over capitalism. The new constitution of 1936, with its elections for the Supreme Soviet and its list of human rights did nothing to change the fact that Stalin was more of an autocrat. Instead of Marxism, socialism and the ‘dictatorship of the proletariat ’, there was merely Stalinism and the dictatorship of Stalin.

De-Stalinization and Khrushchev Era

  • After the death of Stalin in 1953, the situation was similar to that after Lenin’s death in 1924. There was no obvious candidate to take charge as Stalin did not allow anyone to emerge as a leader. The leading members of the Politburo, or Praesidium, as it was called, decided to share power and rule as a group with Malenkov as chairman of the Council of Ministers, Khrushchev as the party secretary , and Voroshilov as the chairman of the Praesidium. Slowly, Nikita Khrushchev began to emerge as the dominant leader. Khrushchev’s position as the dominant leader got a further boost after he delivered a landmark speech at the Twentieth Communist Party Congress in February 1956 where he strongly criticized various aspects of Stalin’s policies.
    • He condemned Stalin for encouraging the cult of his own personality instead of letting the Party to rule.
    • He divulged details about Stalin’s purges and the wrongful executions of the 1930s, and criticized his conduct of the war.
    • He claimed that socialism could be achieved in ways other than those insisted by Stalin.
  • He argued that peaceful coexistence with the west was not only possible but crucial to avoid the nuclear war. Khrushchev genuinely believed that the truth about Stalin’s crimes would have to come out sooner or later and used the opportunity cleverly for his own political motives. Molotov and Malenkov believed his speech was too drastic and would encourage unrest as they tried to force him out of office. However, as party secretary, Khrushchev, like Stalin before him, had been quietly filling key positions with his own supporters, and since he could rely on the army, it was Molotov and Malenkov who found themselves compulsorily retired in June 1957.
  • After that, Khrushchev was fully responsible for all Russian policy until the Central Committee of the party voted him out in 1964.
  • Although Russia recovered during Stalin’s last years, there were a number of serious problems. Khrushchev, being fully aware of the problems both at home and abroad , introduced significant changes as part of a general De-Stalinization policy. Some of them are as under:

Important Policies of De-Stalinization

Industrial Policy
  • The five year plans continued but for the first time, the focus was more on light industries producing consumer goods (radios, TV sets, washing machines and sewing machines) to raise the living standards of common people.
  • To ensure de-centralization and encourage efficiency, over a hundred Regional Economic Councils were set-up to organize and take decisions about their local industries. Managers were incentivized to make profits instead of just meeting quotas, and wages were paid according to the output.
  • After the initial improvement, the economic growth began to slow down, partly because the Regional Councils lacked efficiency and partly because of insufficient investment.
  • Moreover, massive cost of the armaments programme and the advanced technological and space programmes did not allow for sufficient investment in other sectors.
  • However, the achievement of Uri Gagarin, who became the first person to have manned orbit of the earth in 1961, was noteworthy.
Agricultural Policy
  • As collectivization failed to produce desired results, the government under Khrushchev looked for ways to increase food production. He initiated the Virgin Lands Scheme, which involved cultivation of huge tracts of land in Siberia and Kazakhstan for the first time.
    • Though the scheme was implemented by tens of thousands of young volunteers, it failed to have any effect because of poor land quality and the fact that dust storms led to soil erosion.
  • Khrushchev also aimed to increase yields from the collective farms and incentivized the peasants to produce more by allowing them to keep or sell crops grown on their private plots, lowering their taxes and increasing its payments for crops from the collectives. There was still too much interference in agriculture from local party officials as it remained the least efficient sector of the economy. The Russians imported grains, often from the USA and Australia.
Political, Social and Cultural Changes
  • In politics, the USSR witnessed the return of party control as the cult of personality was abandoned. Ordinary people enjoyed more liberty and a higher standard of living. Writers, for whom Khrushchev had great respect, enjoyed more freedo. Thousands of churches were closed down as Khrushchev felt that the Orthodox Church was gaining too much influence in Soviet life.
Foreign Affairs
  • Following his Twentieth Party Congress speech, Khrushchev aimed for peaceful coexistence and a thaw in the Cold War. He argued that there existed different ‘roads to socialism ’ and allowed the satellite states of Eastern Europe to follow their own methods of socialism.
  • Encouraged by his speech, Poland and Hungary tried to break free from the grip of USSR. However, the attempt was brutally crushed in Hungary showcasing Khrushchev’s tolerance limit.

Brezhnev Era (1964-82)

  • Three men, Kosygin, Brezhnev and Podgorny shared power after Nikita Khrushchev. Brezhnev established a firm control by 1977, and remained leader until his death in November 1982.
    • Most of Khrushchev ’s policies were abandoned and serious economic problems were ignored as reforms disappeared from the agenda. Being less tolerant of criticisms, anything that threatened the stability of the system or encouraged independent thinking was suppressed. It looked as if his primary concern was to keep the nomenklatura (the ruling elites and the bureaucracy) happy.
    • The Eastern bloc states were expected to obey Russian wishes and to maintain their existing structure.
    • There existed a Brezhnev doctrine according to which intervention in the internal affairs of any communist country was justified if socialism in that country came under any threat.
      • The Brezhnev doctrine was used when the USSR intervened in Afghanistan and Poland in 1979 and 1981 respectively.
      • Under the doctrine, the USSR increased the aid to Cuba and African nations like Ethiopia, Mozambique and Angola.
    • People enjoyed better lifestyles as unemployment was almost eliminated and there was a full programme of social security. However, personal freedom became more limited. For example, by 1970 it was very difficult to get any writings published which were critical of Stalin. ‘Peaceful coexistence’ was the only Khrushchev initiative which was not discontinued during the Brezhnev period.

Fall of Communist States

  • The Revolutions of 1989 were part of a revolutionary wave which began in Poland in the late 1980s. The series of revolutions in late 1980s and early 1990s saw an end to communist rule in many central and Eastern European countries. This resulted in the disintegration of the USSR in 1991.
Disintegration of USSR

Domino Effect

  • The fall of Communism in Poland in 1989 had a domino effect as other communist regimes started to fall in Eastern Europe. In August 1988, the Solidarity Trade Union organized huge anti-government strikes that forced the government to hold free elections in 1989 which witnessed the communist defeat. As communists were defeated, the revolutionary protests spread to all satellite countries of USSR .
  • Hungary saw an end to communist regime through the free elections. In East Germany, the communist government was forced to resign in 1989 as the Berlin wall, which was built in 1961, was breached. By the end of 1989, the communist governments in Czechoslovakia, Bulgaria and Romania were overthrown. As Mikhael Gorbachev wanted aid from Western Germany, he agreed on the unification of East and West Germany in 1990. The USSR itself disintegrated in December 1991.

Economic Failure of Communism in Eastern Europe and USSR

  • The economic failure played a significant role in the disintegration of USSR. Highly centralized economy in addition to many restrictions made the economy inefficient. The USSR witnessed huge shortages of consumer goods despite being one of the highest producers of steel, iron and energy.
  • As the satellite states were not allowed to trade outside the communist states, their economic growth suffered. The workers in the communist nations were living in relatively poorer conditions than their counterparts in Western Europe. The 1980s witnessed greater contacts between the people of Eastern and Western Europe and people started to blame communism and communist leaders for their miserable state. The arms race due to cold war, the space race and other conflicts had a catastrophic effect on the USSR’s economy as it disintegrated in December 1991.

Mikhail Gorbachev

  • Mikhail Gorbachev who came to power in 1985 was determined to transform and revitalize the country after many insignificant years following Khrushchev’s fall.
  • He aimed to achieve this by modernizing and streamlining the Communist Party with new policies of glasnost (openness) and perestroika (restructuring).
  • The new thinking soon made an impact on foreign affairs, as relations with China and the west improved. He also started the withdrawal of forces from Afghanistan and preferred not to intervene militarily in satellite states of USSR.
  • Gorbachev never sought to end the communism as such. All he desired was to replace the existing system with a humane and democratic socialist system. However, he sincerely believed that this could be achieved within the framework of the Marxist-Leninist one-party state. Though he succeeded in developing better international relations, his policies failed to provide quick results in the USSR which accelerated the collapse of communism and the break-up of the USSR.

Gorbachev’s New Policies

  • Glasnost: The Glasnost was used not only for rectifying past mistakes, but also for encouraging people’s active participation as well as for granting freedom and right to information. It was also to mobilize public support for his new policies. It was encouraged as long as the communist party was not criticized. This was a policy in areas of politics, human rights and cultural affairs.
    • Politics and Media: Many well-known dissidents were released from prisons, and the leaders who were in exile due to purges were allowed to return to Moscow. There was more freedom to press and media. Articles criticizing Brezhnev for overreacting against dissidents were allowed to be published. Also, important political events were allowed to be televised.
    • Culture: The heads of the Union of Soviet Film-makers and the Union of Writers were sacked to include more independent-minded leaders through elections. The ban on anti – Stalin films and novels were removed and preparations were made to publish poetic works which were critical of the system.
  • Perestroika: It was a comprehensive concept to enhance the moral and spiritual level of the society to ensure people’s participation in socio-economic transformations.
    • Economic Changes: The year 1987 was declared as the year for broad applications of new methods of economic management. Gorbachev aimed to instil the competition among Public Sector Units (PSUs) to improve their efficiency. Moreover, perestroika was used to create alternative employment opportunities so that market could share the responsibility with the state. Small scale enterprises like car and television repairs, painting and decorating and giving private tuitions were now allowed. The motives behind these reforms were to provide competition to the inefficient state services. The responsibility for quality control throughout industry as a whole was to be taken over by independent state bodies rather than factory management. The most important part of the reforms was the Law on State Enterprises which allowed the factories to take orders from customers. Also, this removed the central planners’ absolute control over production quotas, raw materials and trade.
    • Political Changes: Gorbachev took steps towards democracy within the Party. Instead of members of local soviets being appointed by the local Communist Party, they were to be directly elected by the people as there was to be a choice of candidates ( though not of parties). Elections were to be held in factories to choose managers. Radical changes in the central government took place. The congress of people ’ s deputies (2250 members ) was to elect the new Supreme Soviet which was reduced to a small size of 450 members from the earlier 1450. It was to work as a working parliament sitting more frequently for about 8 months a year.

Reasons for Disintegration of USSR

  • The USSR disintegrated due to several socio-economic and political problems that existed at the time. However, Gorbachev’s policy accelerated the disintegration process. Some of the reasons for disintegration are as under:
  • Opposition from Radicals and Conservatives:
    • As the reforms were being implemented by Gorbachev, he was criticized from both fronts. While the radicals opposed him, the liberals criticized him for not doing enough. This caused a dangerous division in the Party and made it difficult for Mikhael Gorbachev to satisfy either group. There was a huge protest demonstration in Moscow led by Yeltsin who was a popular figure, as he had cleaned up the corrupt in Moscow Communist Party organization.
    • The demonstrations would not have been allowed before Gorbachev’s time, but glasnost which encouraged people to voice their criticisms – was now in full swing, and was beginning to turn against the Communist Party.
  • Economic Reforms did not Produce Quick Results:
    • The USSR was undergoing economic troubles as the national income continued to fall, by about 15 percent , from 1990 to 1991. Some economists compared the economic crisis equivalent to the one in the USA in the early 1930s. A major cause of the undergoing economic crisis was the disastrous results of the Law on State Enterprises (1987). After this law came into practice, the wages depended on the output of factories, but since output was measured by its value in Roubles (Russian Currency), factories were tempted not to increase overall output, but to concentrate on production of more expensive consumer goods ignoring production of cheaper consumer goods. This caused shortage of consumer goods leading to inflation.
      • In July 1989, some coal miners in Siberia found that there was no soap to wash themselves with at the end of their shift. This led to the Siberian coal miners’ strike. This was the first major strike since 1917 Bolshevik revolution. They put forward forty-two detailed demands, including those of better living and working conditions, better supplies of food, a share in the profits and more local control over the mines. Gorbachev bent down and agreed to miners’ demands like giving full control of the factories to the workers. Gorbachev was quickly losing control of the reform movement which he had started, and the success of the coal miners was bound to encourage the radicals to press for even more far-reaching changes.
  • Nationalist Pressures:
    • The Soviet Union was a federal state consisting of 15 separate republics, with each having its own Parliament. The Russian republic was just one among the fifteen states, with its parliament in Moscow. Though the republics remained silent due to tight control since Stalin’s time, but the glasnost and perestroika encouraged them to voice for more autonomy and powers for their parliaments. Gorbachev himself seemed sympathetic as long as the Communist Party of the Soviet Union (CPSU) remained in overall control. However, once the reforms started, demands got out of control. This turned out to be a major reason that led to the breakup of the USSR.
  • Rivalry between Gorbachev and Yeltsin: The two prominent leaders were now bitter rivals, disagreeing on several issues.
    • Yeltsin believed that the union should be voluntary and if any republic wanted to opt out, as Lithuania did, it should be allowed to do so. Each republic should be independent but also have joint responsibilities to the Soviet Union. However, Gorbachev believed that a purely voluntary union would lead to USSR ’s disintegration.
    • Yeltsin did not trust the Communist Party and also turned against the one-party system. However, Gorbachev was trying to balance the two forces within the party.
    • On the economic front, while Yeltsin wanted a rapid changeover to a market economy, Gorbachev was cautious, realizing that Yeltsin’s plans would cause massive unemployment and high inflation.
  • Coup of August 1991: In July 1990, Yeltsin resigned from the Communist Party. As the crisis deepened in the USSR, Gorbachev held a conference with leaders of fifteen satellite states and proposed the idea of a voluntary union of 15 Soviet states.
    • A coup took place in 1991 that was encouraged by Communist Party hardliners. The people had tasted freedom by then and did not want the old-style rule of the Communist Party. Boris Yeltsin emerged as a national hero in opposing this coup. The Russian Republic, where Yeltsin won a popular election, began to shake off centralised control.
    • Power began to shift from the Soviet centre to the republics, especially in the more Europeanised part of the Soviet Union, which saw themselves as sovereign states. The Central Asian republics did not ask for independence and wanted to remain with the Soviet Federation. In December 1991, under the leadership of Yeltsin, Russia, Ukraine and Belarus, three major republics of the USSR, declared that the Soviet Union was disbanded. The Communist Party of the Soviet Union was banned. Capitalism and democracy were adopted as the bases for the post-Soviet republics.
    • The declaration on the disintegration of the USSR and the formation of the Commonwealth of Independent States (CIS) came as a surprise to the other republics, especially to the Central Asian ones. The exclusion of these republics was an issue that was quickly solved by making them founding members of the CIS. Russia was now accepted as the successor state of the Soviet Union. It inherited the Soviet seat in the UN Security Council. Russia accepted all the international treaties and commitments of the Soviet Union. It took over as the only nuclear state of the post-Soviet space and carried out some nuclear disarmament measures with the US. The old Soviet Union was thus dead and buried.

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