THE SYSTEM BEFORE 1928

The Bolshevik leaders, when they seized power, had only the vaguest conception of how to run the economy. Conceiving the Russian Revolution to be an integral part of a great European or world cataclysm, Lenin devoted his energies and his talents primarily to the vastly difficult task of seizing and retaining power. Already in December 1917 the ‘Supreme Council of the National Economy’, usually known by its Russian abbreviation, VSNKh or Vesenkha, was set up to run the state sector. But any ideas on the normal functioning of the economy were quickly swept aside by the desperate emergency of civil war and economic chaos. In the period known as ‘war communism’, the government suppressed all private enterprise in industry and trade, and sought to compel peasants to deliver surpluses against increasingly valueless paper roubles. Many Bolshevik intellectuals believed that they were making a direct leap into socialism. But the system of war communism could not survive the civil war emergency that was its only possible justification. Reluctantly, Lenin and the Party in 1921 adopted a ‘New Economic Policy’ (NEP), again permitted private enterprise in industry and trade, and allowed the peasants to dispose of their produce freely after payment of a tax in kind.

Throughout the NEP period, the Supreme Council of the National Economy directed the operations of the state sector of industry, working through its own industrial and functional subdivisions, and also through republican and provincial economic sovnarkhozy (councils).