Introduction: Before the Revolution
1. The Birth of Modern Russia
2. The Exchange Between Town and Village and the Structure of Industry
3. The War Years
Part I: Between February and October
4. Class Conflicts and Class Cooperations
5. The Threatening Catastrophe
6. The Problems of the Revolution and the Political Parties
Part II: War Communism
7. The New State Apparatus
8. Riding the Whirlwind
9. The Economic Chaos and the Planned Economy of War Communism
Part III: The Early NEP
10. The Contents of the New Economic Policy
11. An Outline of Economic Developments, 1921-1924
12. The Soviet Power and the Tendencies of Social Growth
Part IV: Perfection and Self-Destruction of the NEP
13. Growth and Limits of the Productive Forces
14. Between the Classes
15. At the Cross Ways
Part V: The Period of Reconstruction
16. The Background of the Piatiletka
17. The Reorganisation of Agriculture
18. The Reconstruction of Industry
19. Above the Classes
Part VI: The Termination of Reconstruction
20. The Soviet Power and the Peasants
21. Industry During the Second Five-Year Plan
22. The Differentiation of the Working Class
23. From the ‘Realisation of Socialism’ to the Moscow Trials
Part VII: Between Yesterday and Tomorrow
24. The Last Three Years
25. Soviet Union, 1941
26. The Soviet Union and the World
For more than twenty years, and particularly since the great depression, Soviet Russia was a promise to some, a challenge to many, and a symbol to all. Today it is, at the best, a riddle. A riddle hardly to those who have always asserted, however wrongly, that Fascism and Bolshevism are only two names for one and the same thing; but it is a riddle to all those who have sympathised with the ideals of the Soviets and with their efforts to realise them in a world where political idealism had become almost synonymous with political impotence.
This sympathy had been sorely tried, though never completely forfeited, by a series of bewildering events. Yet it was only the invaluable service rendered by the Russian government, during a highly critical period, to aggressive Fascism—the mortal enemy not only of progress and democracy, but especially of the ideals for which the Soviet Union professes to stand—which has conclusively proved that Soviet Russia is not what she asserts to be. Even if the motives of Soviet support for Nazi Germany are most charitably explained, this result of Soviet policy would be alone sufficient to warrant a rejection of the claim that Russia can be regarded as the ‘country of Socialism’ .
This statement has been contested long before the Nazi-Soviet pact. Ex-Communists of various shades, disillusioned foreign sympathisers, newspaper correspondents and escaped political prisoners have tried for many years to disprove it. But their attacks were sometimes obviously inspired by partisan feeling and personal resentment, frequently they cancelled one another out and they never seriously shook the widespread conviction that the Soviets were, after all, on the right way to overcome their difficulties. In particular, the often excellent reports of the Moscow correspondents of the great papers were much more favourable to the Soviet government during the years from 1934 to 1939 than ever before; and visitors of all kinds, amongst them experts in various fields, in dozens of books corroborated by their own experiences many official assertions.
The same contradiction between fairly creditable claims of great achievements and incontestable evidence of grave failures can be found even in official reports and in the speeches of the various Soviet leaders. With all their array of figures and their proclamation of epoch-making successes they leave behind them the same vague feeling of dissatisfaction as a study of unofficial literature; the impression remains that there is still something different and very important in the background.
This book attempts to discover the reality behind the highly-coloured surface. It is not a ‘secret history’ in the sense that it reveals hidden facts and the personal motives of the Soviet leaders; it is not a history at all in the sense of a collection of facts for their own sake, but an historical analysis of the social forces which between themselves have shaped Russia’ s destiny since 1917. Thus it is with facts and actions that this book is mainly concerned, and wherever it deals with theories it does not examine so much their intrinsic value as their agreement with the facts and with the actions of their creators and supporters.
This point is of great importance, for the central problem of Soviet Russia is the transformation of a movement inspired by great ideals into the narrow-minded, self-centred and short-sighted regime of today. This great and tragic change can be adequately measured by the conflict between the facts, as far as they can be ascertained, and the claims and theoretical assertions of the Communists, and it can be adequately explained by a detailed examination of the actions of the Communists themselves.
Thus it is impossible to understand Soviet Russia without incisive criticism; but this criticism must start not from the aims and ideals of the observer but from those of the Communists. He may be well aware of the great value of liberty and democracy and the dangers of their suppression. But liberty and democracy are possible only in certain conditions which were conspicuous by their absence at the time of the Soviet revolution. To blame the facts for their disagreement with the opinions of the critic may flatter his prejudices, but facts are stubborn opponents, and no amount of declamation can explain them away.
If the method applied in this book leaves little room for dramatic condemnations and rhetorical apologiae, it ought to show the working of the real forces behind the scenes of politics and propaganda. It cannot pretend to an exact knowledge of the motives and intentions of Stalin and Molotov, but it can show the needs to which their actions respond. As the present leaders of the Soviet Union are above all practical politicians and only very mediocre thinkers, this method should provide at least as safe a guide to the understanding of Soviet policy as speculations about ‘Stalin’ s real plans’ .
Whether the following analysis is a convincing solution of the ‘riddle’ of Russia cannot be decided in the preface. But it may be permitted to point out two limitations which had to be accepted from the outset. Soviet Russia is still Russia; the influence of Russian history on modern conditions is both obvious and profound, and many descriptions of the Soviet Union suffer from their authors’ ignorance of old Russia. As the main purpose of this book is not descriptive, the historical introduction could be reduced to a short and necessarily simplified sketch of the most important social facts and tendencies which is neither intended, nor can it serve, as a history of some of the most fateful decades of Russian development. Likewise it has not been attempted to follow the history and theories of the Bolsheviks from their beginnings up to the revolution of 1917; the literature on this subject is ample and almost exhaustive.
By concentrating on the main problem—the transformation of the ruling party under the impact of powerful social forces, and the reaction of this process on social development—many finer threads contributing to the texture of history had to be arbitrarily broken. To use a different picture, this book is not a complete social history, but only its anatomy. Yet it has been said that a surgeon without anatomy is like a mole—he fumbles in the dark and leaves mounds behind him. This may be more than a clever witticism, when applied to statesmen and politicians.
Chapter I: The Birth of Modern Russia
Soviet Russia was not built according to abstract principles, but developed on the basis of Russian social and economic conditions. After a revolution of unprecedented vehemence, many pre-revolutionary problems reappeared in new guise and had to be solved by the new regime. It was much easier to denounce the weakness and corruption of the Tsarist regime, and even to overthrow it, than to get rid of this ‘inheritance’ .
In Western Europe the modern capitalist system developed slowly, and the sufferings of its victims, terrible though they may have been, were distributed over many generations, thereby losing the greatest part of their revolutionary momentum. The remnants of ‘antediluvian’ social organisations were systematically and thoroughly suppressed by the forces of the new order, but the pace of this process was, as a rule, slow enough to enable the victims (or their children) to adapt themselves to the new situation.
Russian capitalism, on the other hand, was imported from abroad in a highly-developed form. It had not, as in Japan, to force its way into the country by the use of warships and naval guns, but was attracted by the ruling powers themselves with large promises and even larger profits. Tsarism, one of the dominant voices in the dissonant European Concert, was at a serious disadvantage as compared to its most important imperialist rivals whose wealth and industry increased by leaps and bounds, while Russia remained a backward peasant country. This backwardness was, however, incurable as long as Russia’ s social organisation was based on feudalism which prevented the growth of modern trade and industry. The crushing defeat of Tsarism in the Crimean War (1853-56) made big internal changes imperative and inaugurated the period of reform which created the conditions necessary for the transformation of feudal Russia into a modern country.
Russian history between 1861, the year of the so-called liberation of the peasants, and 1917, the year of social revolution, was shaped by the conflicts between the growing forces of modern society and the still semi-feudal basis on which they developed.
I: The Weakness of Russian Capital
Russia was up to the world war predominantly an agricultural country, and the town population amounted to only a little more than 13 per cent of the whole. Before the growth of capitalism the towns of Russia were not so much centres of production as centres of consumption. Many country towns retained this character up to the revolution, but since the last decades of the nineteenth century some industrial centres of a new type developed.
Capitalism was imported into Russia on the high level of organisation and technique attained in Western and Central Europe and in the United States during the last third of the nineteenth century. Its progress started at once with the construction of well-designed and excellently equipped modern plants, many of them of giant size. Russian factories were frequently larger and more up-to-date than the average plants in England and France, or even in Germany.
Under Tsar Alexander II (the ‘Liberator’ ) Russia, with the exception of some districts in oppressed Poland, disposed neither of a modern industrial system nor of industrial entrepreneurs. Thus not only machinery, technical processes and raw materials, but also capital and capitalists had to be imported from abroad. The amount of foreign capital invested in prewar Russia was easily the highest in Europe, and one of the highest in the world. During the five decades between the liberation of the serfs and the outbreak of the Great War of 1914 the worst children’ s complaints of Russian industry were overcome, and a growing industrial and commercial middle class was formed by native merchants and manufacturers with more than a sprinkling of foreign bankers, commercial managers and technicians. But this bourgeoisie still remained numerically weak, socially dependent and politically impotent against the feudal aristocracy and the Tsarist state.
The industrial workers, on the other hand, remained for a long time a social hybrid class maintaining very close relations to the village. It differed markedly from the industrial working class of Great Britain or Germany, where the labour movement had wrung substantial concessions from the employers, and a great part of the Russian workers lived considerably below the poverty line. Neither the wages of the industrial workers nor the earnings of the poor peasants sufficed to keep them and their families the whole year round; they had to combine agricultural and industrial work in order to eke out their scanty living. But the hard lessons which these peasant-workers were daily taught by the misery of their existence were, for once, not in vain. Their intolerable living conditions induced them to energetic actions of protest and defence. The suppression of a free labour movement by the Tsarist state led them on to political mass strikes and revolutionary risings, however desperate and hopeless the struggle might have seemed at first. Thus it was in backward Russia that the doctrines of modern Socialism found the most favourable soil for their propagation and in time their boldest application.
II: The Transformation of the Village
Almost 87 per cent of the Russian peoples lived in villages. An approximate description of their social composition may be seen in the conditions of land tenure according to the census of 1905: 
|Number of farms||Total area of land (in dessiatines)||Average area per farm (in dessiatines)|
|Poor peasants||10 500 000||75 000 000||7.0|
|Middle peasants||1 000 000||15 000 000||15.0|
|Bourgeois and capital farms||1 500 000||70 000 000||46.7|
|Estates||30 000||70 000 000||2333.0|
Only 30.8 per cent of the peasants cultivated more than four dessiatines (about 10 acres) of land, and only 23.5 per cent owned more than one horse. 
Both before and after the liberation of the serfs misery was endemic in the Russian village. The liberation itself was an expensive luxury for the peasants. They lost not only part of the soil which their forefathers had tilled for centuries, but for more than forty years they also paid large sums as compensation to the landowners. Meanwhile taxes were rising without interruption, for the muzhik was largely responsible for the upkeep of the bureaucracy and the service of the towering public debt.
The home market of this agricultural country was largely based on the exchange of foodstuffs and raw materials by the peasants for manufactured goods. But the existence of a landowning aristocracy and a rapacious bureaucracy severely restricted the scope of this exchange. The peasants had to sell a large part of their produce in order to pay taxes to the state and rent and interest to the landlords who spent their income either abroad or for imported luxury goods—in any case outside the sphere of Russian industry. The peasants who could be counted upon as customers for the cheap mass products of Russian industry, frequently remained without sufficient funds to buy them. Thus the liberated peasantry did not come into full contact with the progressive industrialist, but above all with the most reactionary and pernicious exponents of money economy: the usurer who advanced the money required for the payment of taxes and rent, and the trader who bought up agricultural market produce at ruinous prices.
The upper stratum of the village was very thin. The village usurer or kulak (fist) was a familiar figure in every village, and round him grew up a small minority of comparatively well-to-do peasants which destroyed the old unity of the village community, the Mir . The social importance of the kulaks was, however, much greater than their numerical strength. They extended their farms by renting or buying land from the landlords, they used better tools and implements than the other peasants, they possessed some horses and several head of cattle, and employed some ruined peasants as labourers.
The average peasants or middle peasants were numerically the strongest element in the village, and comprised about two-thirds of the population. They usually possessed one horse and worked with mediaeval implements and without hired labour according to those primitive methods which kept Russian agriculture on the lowest level of productivity in Europe, although it could boast of some of the best land in the world. They had a few head of cattle, sheep or pigs, and just enough money to pay their taxes and to buy a few manufactured necessities.
At the bottom of the social structure of the village stood the poor peasants with little or no land; this group was the recruiting ground for farm labourers, domestic servants and industrial workers, whose number was, however, also increased by the younger and more enterprising sons of the middle peasantry.
After the breakdown of the first Russian revolution (1905) this decomposition of the originally homogeneous village community was deliberately furthered by the government. The agrarian reform of Stolypin intended to create a well-satisfied agrarian middle class which was expected to defend the Tsarist regime against the spectre of an agrarian revolution. The Mir was to be gradually abolished and prosperous peasants were encouraged to consolidate their farms and to concentrate on their own interests. But war and revolution destroyed the chances of this policy before it could have any appreciable results. Thus it only served to intensify the existing social tension within the village, and contributed to the violence of the final struggle between the peasants and the beneficiaries of agrarian privilege.
One of the most important contributions of industrial capitalism proper to the decomposition of the village was its effect on peasant handicraft which played a great part in many regions of the country. These peasant-handicraftsmen (kustari ) were largely dependent on their industrial income, and were either ruined downright by the competition of cheap mass products and compelled to become manual wage-earners in the newly-established large-scale factories, or they were at the mercy of the capitalist merchant who did not even pay them a fair wage for their labour.
In the social pyramid of prewar Russia, the peasants did not form a ‘lower middle-class’ above the workers. Actually the Russian peasants cannot be compared to the French peasant-farmer of the nineteenth and twentieth centuries, but only to the French peasants of 1789, although they were free from personal fetters. But this freedom was in many cases only the prelude to utter ruin. There existed a large number of peasants whose tiny households, very often deprived of cattle and implements, could not keep them and their families from starvation. They trod the countless roads of ‘Little Mother Russia’ until finally most of them found their way into the growing towns as workers in industry, transport and domestic occupations. During the summer they returned to their villages and helped to bring in the harvest. In time of depression they were compelled by the authorities to go back to the country, or they went voluntarily in order to avoid starvation. The most backward elements of the town workers, they were the intellectual leaders of the poorer peasants and helped to spread revolutionary slogans in districts which seemed to be completely out of the reach of Socialist propagandists. The social pressure produced by this mobile poverty was prevented from exerting itself only by the heavy counter-pressure of the Tsarist state.
III: Capital and Tsarism
Capitalism attacked not only the basis of Russia’ s semi-feudal social system, but also its top. The Russian country gentleman became a town-dweller, and the economic ruin of the aristocracy was accelerated through the rivalry in extravagance between the landowners and the rich merchants. Their estates were heavily mortgaged, and the banks were not less interested in the size and safety of their revenues than the aristocratic recipients themselves. Not only the landlords but also their moneylenders were haunted by the spectre of agrarian revolution which would ruin creditors and debtors alike.
Industry itself depended much more on the state than it did in Western Europe, and Western capitalists, though despising the submissiveness of the Russian bourgeoisie to Tsarism, did not despise the phenomenally large profits of Russian industry.
Last but not least, Tsarism, although by no means a political servant of capital, was the sole serious adversary of its most dangerous enemy, the industrial workers.
On the other side, the Tsarist state was far from satisfactory for the bourgeoisie as an administrative mechanism. It was not ruled by Big Business, but by the aristocracy and protected, above all, the interests of the landowners, the officers of the Tsarist army, and the bureaucracy. The bourgeoisie had but little political influence, and it had to pay for that little with heavy bribes. Apart from that, Tsarist bureaucracy was inefficient, slow and greedy. The Russian army and navy were the domain of high aristocrats, and during the Russo-Japanese War (1904-05) they were even worse directed and supplied than fifty years earlier during the Crimean War. At home and abroad, the radical reform of the Tsarist state was the fundamental condition of the free and unfettered development of Russian capitalism.
This explains the vacillating and, on the face of it, incomprehensible attitude of capital towards the Tsarist regime. It was not strong enough to compel Tsarism by its own pressure to accept the minimum demands necessary for its free growth, but it was unwilling to lead a violent revolution of the masses against the Tsarist regime. The most responsible leaders of the capitalist middle class understood that only the working class would gather the fruits of determined political action.
Whereas the bourgeoisie remained socially weak and politically impotent, the working class was much more active, energetic and powerful than would have followed from its numbers, for immediately before the war there were scarcely three million of workers engaged in Russian industry, mining and transport. (Only 15.1 per cent of the active population were engaged in manufacture, mining, trade, commerce, traffic and communications.)  Compelled by their hard living conditions, incited by convinced Socialist propagandists who understood that the downfall of Tsarism would be, at the same time, the end of capitalism, they waged a determined struggle against this political bulwark of exploitation and oppression.
The bourgeoisie was allied to the Tsarist regime by important material interests, but it became the political prisoner of reaction by its justified fear of social revolution. Although hampered in every way by the backwardness and inefficiency of Tsarism, it did not dare to fight it because it was its strongest protection against the attack by the workers.
The fundamental fact dominating Russia’ s social development since the middle of the nineteenth century was the destruction of the primitive balance of feudal society by modern capitalism. But the capitalist system, though strong enough to destroy the roots of Tsarism, was unable to establish its own regime in Russia. The decomposition of the village together with the powerfully developing labour movement combined to make its position untenable once the time-honoured obstacle of Tsarism had disappeared.
The final impulse which brought about this memorable historical event was the entanglement of Tsarist Russia in the Great War of 1914-18. All reasonable observers of prewar Russia were convinced that war would be but the prelude for revolution. The barricades receiving M Poincaré, the French President, on his state visit to St Petersburg in July 1914, expressed not only the terrible internal conflict lacerating the Empire of the Tsars but they also indicated the power which was finally to overcome it.
Chapter II: The Exchange Between Town and Village and the
Structure of Industry
Trade and market were of less importance in prewar Russia than in more advanced countries. The peasants were only just beginning to participate in the general division of labour, and still satisfied almost all their needs by their own and their families’ labour—as far as they were able to satisfy them at all. They needed the market above all in order to get the ready money required for rent and taxes, and only then could they think of buying manufactured goods for their own consumption. Whereas the economic existence of the towns depended on the supply of a sufficient quantity of foodstuffs and raw materials, the peasants did not want so much to enlarge the scope of their trade as to change its character by the abolition of their one-sided payments.
The general problem may be illustrated by the conditions of the grain trade, which was of paramount importance for Russia’ s economic system. The larger part of the grain harvest was, of course, consumed in the country as foodstuff and fodder, stored for seed purposes or as a reserve, and the remainder was sold on the market.  >[?
|Grain Production 1913|
|Gross (million poods)||Market (million poods)|
|Estates||600 (12%)||281.6 (21.6%)|
|Kulaks||1900 (38%)||650 (50.0%)|
|Middle and Small Peasants||2500 (50)||369 (28.4%)|
|Total||5000 (100%)||1300.6 (100%)|
About one-quarter of the gross production of grain left the villages and was sent to the towns. This quantity was sufficient to feed the town population, the army, the urban cattle—and the vodka distilleries, and almost one-half of it (about 600 million pood or 10 million tons) was exported. Similar conditions prevailed in most of the other markets of agricultural produce.
The total value of agricultural production in 1913 was roughly 11 600 million roubles.  In view of the fact that grain was the standard food of the peasants, the share of market production in general was certainly higher than in the case of grain, probably not less than one-third of the total, or at least 3900 million roubles. The share of the large estates in this total was certainly lower than in the case of grain, say one-fifth, or about 800 million roubles, leaving at least 3100 million roubles worth of agricultural produce marketed by the peasants.
This sum was not equally divided among the different social classes in the village. The kulaks, though infinitely fewer in number, sold twice as much grain as the smaller peasants. Much more important, however, was the different use made by the different agrarian classes of the proceeds of their sales.
The landlords could spend a large part of their gross income as net revenue—at least as far as they had not anticipated it by borrowing and had to pay mortgage interests to the banks.
The peasantry as a whole received in 1913, the best year of prewar agriculture, about 3100 million roubles. Yet in 1912 its total purchases of manufactured goods amounted only to 2000 million roubles,  leaving a gap of roughly 1100 million roubles. To this has to be added the value of peasant handicraft production which in 1913 was estimated at not less than 250 million roubles. The Russian peasantry as a whole did not manage to increase its capital, although a small minority of kulaks may have effected some savings. What happened to this very considerable amount?
Above all, the peasants had to pay about 400 million roubles in rent to their past and present landlords,  and the rest was hardly sufficient to permit the payment of taxes and of interest to the land bank. Among the public revenue during 1913 direct taxes were responsible for 273 million roubles only; indirect taxes, customs and excise, on the other hand, brought in not less than 939 million roubles, and the vodka monopoly, that pillar and symbol of Russian backwardness, 899 million roubles! 
The relics of feudalism artificially reduced the purchasing power of the countryside. In spite of that the peasant market was very considerable in its size. Russia, as a whole consumed in 1912 industrial goods to the tune of 6750 million roubles; amongst these were imported goods valued at 1140 million roubles, which almost certainly were not consumed by the peasants. The value of manufactured goods produced by Russian industry may have amounted to 5600 million roubles, and the peasants bought not less than 45 per cent of all the goods sold to individual customers. 
From the very beginning Russian industry had two very large customers, the state and the peasants. In the course of industrial development, the towns gained a more important position as consumers, but Russian industry did not cater very much for the use of the upper classes. The state with its armament needs and its railways gave a strong impetus to the growth of coal mining and the metal industry. Consumption goods industries, on the other hand, grew primarily with the growth of the internal market, that is, the decomposition of the village. They produced cheap mass consumption goods for the peasants who paid heavily for these blessings of modern civilisation. In particular, in the Moscow region developed a very considerable cotton industry producing the coarser grades of cotton goods in large quantities, whereas finer fashion goods for urban consumption came mostly from abroad. Metal industry furnished cheap hardware, simple agricultural implements, and much too little agricultural machinery. The provision industry gave the countryside the small amounts of sugar and salt which the peasants were able to buy; and the vodka monopoly sold them 40 per cent spirits which were paid for not only by the last kopecks the peasants could muster, but also with their health and their chances of intellectual development.
Only one important trade has been neglected in this survey, viz, the oil industry. The discovery of large oil deposits in the extreme south of the Tsarist Empire greatly accelerated the industrialisation of the country, and since the last decades of the nineteenth century oil was an important and very valuable export product.
On the eve of the war, Russian industry was, in spite of its modern equipment and its huge plants, economically and technically still in a semi-colonial state. The trades working for the state and the requirements of the peasant masses were certainly more or less developed—but machinery could be obtained and maintained only by continuous imports from abroad. The capital goods industries in general, and machine construction in particular, were only poorly developed. Textile industry employed four times as many workers as this most important branch of modern industry. At the same time, the exploitation of the rich natural resources of the country was rendered extremely difficult by the backwardness of the transport system. The weakness of Russia’ s industrial structure was one of the primary reasons for the quick crumbling of Tsarism during the war and the success of the revolutionary movement. On the other hand, it was one of the most fateful legacies by which the dead Tsarist Empire burdened its revolutionary successor.
The economic structure of Russian industry was even less satisfactory than its technical composition. It was financed primarily by foreign capital, and only a small part of its profits could be used directly for the financing of new enterprises and the expansion of the existing plants. The bulk of its profits was handed over to foreign investors, and frequently definitely lost to Russian national economy. Thus the growth of Russian industry was artificially slowed up and its dependence on international capital perpetuated. A large part of Russia’ s export proceeds was required for the payment of purely financial debts—interest of the Tsarist foreign debt, industrial debentures, dividends and profits—and no corresponding commodity values entered the country. This economic dependence of Russian industry on international capital had grave consequences for the development of Soviet Russia. The life of the Russian people was subordinated to the interests of foreign capitalists, and even the one-sided repudiation of her financial obligations did not free Russia from the permanent effects of this dependence.
Chapter III: The War Years
The Great War was not only a political watershed but also a social factor of first-rate importance. It increased the pressure on the Russian peasantry, and, at the same time, enabled it in the course of time to gain an active influence on political development. Since time immemorial the guiding principle of Russian strategy had been the lavish use and abuse of human lives. The successes of this military technique declined, however, with the growing importance of technical and industrial factors in modern warfare. The Russian army consisted of the same element as the Russian people—peasants with a small minority of industrial workers. The longer the war lasted, the higher towered the numbers of conscripts, of wounded, and of dead.
Not only the peasants in uniform, however, but also the peasants in the field and in their miserable izbas felt the increasing burden of the war. In spite of the low intensity of agricultural labour, the lack of millions of young and strong men must have been felt very strongly. The peasants were even less able to do without millions of horses which were requisitioned by the army. At the same time, the demand for foodstuffs increased abruptly for the soldiers had to be fed considerably better than the peasants. Rising prices certainly stimulated the production of those farms which were able to produce for the market, but the total sown area decreased appreciably owing to territorial losses and the shortage of labour.
The concentration of industry on the needs of the war reduced the quantity of manufactured goods available for the exchange between town and country. The peasants had certainly more money than before, but less, and more expensive, goods to buy. Even here the kulaks monopolised the advantages of the situation and exchanged their foodstuffs for unheard-of luxuries, whereas the poor peasants had to buy their bread in the open market at rising prices.
One of the most important symptoms of the corruption and inefficiency of the Tsarist bureaucrats was their treatment of the grain problem. In the year 1916 the lack of sufficient grain reserves was already a problem of great urgency, and hunger demonstrations occurred in the towns. In February 1917, the bakers’ shops in the working-class Vyborg district of Petrograd were plundered by demonstrating housewives and the ensuing skirmishes between workers and police were the prelude to the great strikes and demonstrations which ended only after the overthrow of the Tsarist regime.
This great and unexpected result of a movement which started only as a series of hunger riots was made possible by the complete disorganisation of urban economy and political administration during the war. The two most complicated parts of the modern economic system are the mechanism of transport and that of finance; after some years of war efforts, both were in a shocking state of disintegration. War eliminates all the ‘automatic’ safeguards of capitalist economy. The price level and the rate of discount of the Central Bank lose their importance for economic operations when the borrower is compelled to get the money regardless of the rate of interest, when the buyer is ready to pay any price. The enormous pressure of war expenditure threatened to overthrow the currency and pushed prices up to unheard-of heights. The situation of the railways became at the same time completely hopeless and was already getting out of control. The demands of the army on the transport system increased without interruption, but industry was unable to produce new locomotives, wagons and rails; the situation was temporarily patched up by drastic reductions of private traffic which severely aggravated the economic problems of the hinterland. Finance and transport were threatened by complete collapse, and this economic catastrophe overshadowed the daily life of the population.
On the other side, war was a source of huge profits for Russian capital. Industrial production, stimulated by the needs of the army, was still on the upgrade, although important industrial areas were lost to Germany. 
|Index of Industrial Production|
While the employers were enjoying their war boom and strongly criticised the inefficient war administration of Tsarism, the economic position of the workers, which had been very unfavourable even before the outbreak of the war, deteriorated from month to month. In the beginning of the war, the best elements of the Russian working class had at once been sent to the front as notorious trouble-makers. At the same time they were, however, the best and most highly-skilled workmen of Russian industry, and war economy suffered by these measures at least as much as war policy may have benefited. The average qualification of the industrial workers fell appreciably, women had to take the places of men, and lack of training and ability was balanced by longer hours and more intensive exploitation.
Finally, the level of real wages could not be maintained on the low prewar basis. Money wages were certainly raised, but prices rose much quicker; undisguised inflation was threatening and this fact was in itself enough to push prices up in advance of wages. The concentration of industrial production on war needs (and the loss of the Polish textile industry) reduced the quantity of available consumption goods, the growing food shortage impaired the standard of nutrition and physical and moral demands on the working classes increased from month to month.
Thus internal conflicts were intensified by the war, while the Tsarist regime was greatly weakened by the crushing defeats of its armies. The workers and the peasants were faced by the choice between increasing war misery and the seemingly desperate attempt of a revolution. The bourgeoisie was defrauded of the results of its ‘war efforts’ by the incapable leadership of the Tsarist army and administration. The decaying nobility, split by diverging interests and German gold, blinded with the blindness of perishing classes, enjoyed the court intrigues and the piquant stories of Rasputin’ s reign. But in spite of all, it was a genuine surprise for everybody when the event occurred which had been predicted so often. An energetic movement of the Petrograd workers, the leaders of the Russian working class, broke the ring of steel which suppressed the forces and compressed the contradictions of Russia’ s social development—Tsarism was overthrown.
1. A Gayster, ‘The Planning and Development of Agriculture in the Soviet Union’, World Social Economic Planning (The Hague, 1931), p 384.
2. A Yugoff, Economic Trends in Soviet Russia (London, 1930), p 109.
3. HP Kennard (ed), The Russian Year Book for 1914 (London, 1914), p 62.
4. Yugoff, Economic Trends , p 129; 1 pood = about 36.1 lb.
5. The Soviet Union Looks Ahead: The Five-Year Plan of Economic Reconstruction (London, 1930), p 10.
6. P Malevsky-Malevitch (ed), Russia USSR: A Complete Handbook (New York, 1933), p 361.
7. SU Information Bureau, The Soviet Union (Washington, 1929), p 65.
8. Malevsky-Malevitch, Russia USSR , p 498.
9. Ibid, p 361.
10. The Soviet Union Looks Ahead , p 10.