Thursday, 1 March 2012

Vladimir Lenin and the New Economic Policy

Lenin’s New Economic Policy – a Necessary Retreat from War Communism


In this article, we look at one of Vladimir Lenin’s more controversial decisions - the decision to permit a limited capitalist oriented economic system after the Russian Civil War ended.

We will also examine some related questions:

a)  What impact did Lenin’s decision have on the Soviet economy?
b)  Why was the New Economic Policy abandoned after only a few short years?

Origins of the New Economic Policy

The New Economic Policy, proposed by Vladimir Lenin, replaced the unpopular “War Communism” of the Civil War period (1917-1921).  During the period of “War Communism” the Russian economy was characterized by rigid socialist dogma, State control of property and centralized economic planning. 

As the Civil War entered its final months in the winter of 1920, economic and social conditions continued to deteriorate.  Poor harvests created widespread famine, resulting in millions of deaths.  These severe food shortages were acerbated by the resistance of peasants to the mandatory large quotas of food that had to be surrendered to the central government. 

In addition to the crisis in agriculture, there were general strikes in several cities as urban workers reacted to reduced bread rations, as well as the mutiny of sailors at the Kronstadt naval base.  In the midst of this unrest and high levels of unemployment, with Lenin’s blessing the Tenth Party Congress (March 1921) adopted the New Economic Policy (NEP). 

Key Features of NEP

The forceful expropriation of their crops was one of the major grievances of Russian peasants.  Instead of expropriating their grain, the New Economic Policy introduced a “payment in kind.”
  • Based upon their income and the number of dependents in a family, the State levied a reasonable tax on the farmer.  After this tax was paid, the peasant was free to sell the remainder of his produce privately to generate income.  By 1923 – 1924, the “tax in kind” was replaced by a cash payment.
  •  Outside of agriculture, the New Economic Policy created greater freedom in terms of trade within the Soviet Union.  Prices were no longer set by government fiat, although the State did maintain a monopoly in some commodities (e.g., tobacco).  On the labour front, trade union membership was no longer mandatory and workers were free to seek any type of employment.
  • In 1921, the Soviet government decided to relinquish its ownership of most small and medium sized businesses, allowing them to be owned privately. Larger industrial enterprises as well as banks and railways remained state-controlled as did foreign trade.
Successes under NEP

Under the New Economic Policy, the Soviet government was able to balance its budget relatively quickly (1923 - 1924).  This was the result of new excise taxes as well as corporate and personal taxes on income and property.  The government also re-introduced the previous government monopoly of vodka sales, reduced spending on education and introduced school fees.  All of the above measures contributed significantly to the stabilization of the new Soviet currency (chervonets).

All of the measures introduced as part of NEP were very successful in restoring Russian agricultural production to its pre-World War I level. However, there were still some persistent weaknesses in Russia’s ability to produce food.  While the breakup of the larger commercial sized farms did result in more peasants having access to farmland, these smaller holdings were less efficient.  Access to more efficient farming equipment also remained a problem as the high cost of machinery worked against the implementation of more efficient farming methods.  As a consequence, overall food production continued to lag behind.  By 1927, many members of Russia’s Communist Party became convinced that some additional administrative measures would be needed in addition to the market based incentives already in place.

In the case of industrial activity, production did return to pre-World War I levels by 1926 - 1927.  However, larger scale industrial enterprises continued to face significant problems.  It was very difficult to keep these businesses in operation as critical supplies of fuel and materials remained largely unavailable.  Foreign companies were very reluctant to extend supplies or credit to the new regime, after the Bolsheviks had defaulted on all Tsarist bonds and had confiscated foreign owned businesses.

Beginning in early 1928, the Communist Party leadership started implementing more coercive measures to increase food production, reverting to the forced confiscations that had characterized the period of “War Communism”.  From this point forward, Lenin’s New Economic Policy was effectively dead.  

Under Joseph Stalin, the new priorities were rapid industrialization, military preparedness and the collectivization of agriculture.  These goals required far more capital than could be accumulated through the voluntary individual savings of a predominately agrarian economy.


Lenin’s New Economic Policy was a success, particularly in dealing with the food problem.  It is also clear that the Soviet Union needed a “breathing space”, an opportunity to rebuild and recover from the turmoil of the previous several years and the significant damage inflicted on the Russian economy.  While Lenin felt that the New Economic Policy would exist in the Soviet Union for a long time to come, it was defunct four years after his death as Stalin planned a new course for Russia.

It would have been interesting to see how the Soviet Union developed, had the New Economic Policy endured for an extended period of time.  While Lenin’s successor eventually succeeded in developing Russia’s industrial base, this victory was achieved at a very high cost.

Wednesday, 1 February 2012

The July Plot

July 1944 Plot to Assassinate Hitler

Who were the July 20th Conspirators?

The conspirators came from different segments of German society. However, the key conspirators would come from the Wehrmacht (German Army), German Military Intelligence (Abwehr) or the German Foreign Office.

By the middle of 1943, Lieutenant Colonel Claus von Stauffenberg, a veteran of the African campaign, emerged as the driving force behind the next attempt to remove Hitler.

What Were Their Motivations?

•    Hatred of Nazi excesses.

•    Desire for a more favourable peace treaty with the Western Allies.

•    At all costs, avoid a Soviet occupation of Germany.

•    Deteriorating military situation - By July 1944, the Allies clearly had the upper hand. The conspirators realized that the time for action had arrived.

•    Gestapo - The conspirators realized that the Gestapo was closing in on them rapidly.  If they did not act quickly, they may not get another chance.

The Attempted Coup

On July 20th, Lieutenant Colonel Claus von Stauffenberg placed a bomb under a conference room table at Hitler’s Headquarters in Rastenburg, East Prussia.

Stauffenberg then left the room to take a telephone call.  After he was gone, the bomb exploded.  He believed but did not confirm that Hitler was dead.

He left by plane for Berlin.

Events in Berlin

The coup quickly collapsed after Hitler’s survival is confirmed.


Stauffenberg and his accomplices are quickly arrested and executed.

A total of some 7,000 people are placed under arrest; almost 5,000 are executed.  

If Stauffenberg Had Succeeded, Would It Have Made a Difference?

There is no definitive answer to this question.

•    Even if it had succeeded, simply eliminating Hitler may not have been enough to destroy National Socialism.

•    While they were many army officers who hated Hitler and Nazism, they were also conflicted about violating their personal oath of allegiance.

•    The Allies insisted on Germany’s unconditional surrender.  It is doubtful that the leadership of the German Army would support such a step.

Friday, 27 January 2012

Germany and the Outbreak of World War I

Did Germany Cause World War I?

War Guilt

One of the most controversial terms of the Versailles Treaty was the “War Guilt” Clause (Article 231).
Under this particular Article, Germany and her Allies were forced to accept total responsibility:

a)   for causing World War I

b)   for the damages inflicted upon Allied nations as the result of German aggression
While the victorious Allies determined that German actions were solely responsible for causing World War I, this explanation ignores other contributing factors.

Assassination of Archduke Franz Ferdinand

The assassination of Austria’s Archduke Franz Ferdinand on June 28, 1914
 did not have to lead to war.

However, Austria was determined to keep Serbia within the Austro-Hungarian Empire and quell any nationalist fervour in the Balkans.

She decided to punish Serbia for the assassination.

The Alliance System
Russia then decided to support its ally Serbia in its dispute with Austria-Hungary.

Once Russia entered this dispute, the existing system of European alliances made it very difficult to keep the Serbian issue from escalating into a much larger conflict.

After Russia entered the conflict its ally, France, is drawn into the conflict because of its alliance with Russia.

Great Britain then became involved through its Entente with France.

Austria and Germany

Austria did not expect Russia to go to war over Serbia. It did, however,
seek German military assistance in the event Russia honored its alliance with Serbia.

Austria’s misreading of Russian intentions was compounded by the warlike posture taken by Germany.

Instead of counseling a negotiated and peaceful approach, Germany declared her steadfast support for Austria and encouraged her ally to take an aggressive approach towards Serbia.


  •                  Given the elaborate alliance system that existed in 1914, it is not surprising that the regional conflict in the Balkans became the spark for a much wider war. 
  •                  The alliance system was, however, not the only factor that led to war.
  •                  Germany bears some responsibility for not restraining the actions of her ally Austria.
  •                  In fact, Germany’s encouragement of Austria’s harsh approach to Serbia made a wider European conflict much more likely.  
  •                  At the same time, Austrian foreign policy was reckless in not seriously considering the possibility that Russia would come to Serbia’s aid.

Sunday, 1 January 2012

Political Career of Kurt Schuschnigg, Chancellor of Austria

Political Career of Kurt Schuschnigg, Chancellor of Austria

Early Years

Joined Austria’s right-wing Christian Social Party and elected to Austria’s Parliament in 1927, becomes Minister of Justice in the Dollfuss government in 1932. 

Becomes Chancellor

In July 1934, Austria’s National Socialist (Nazi) Party attempts to overthrow the Dollfuss government in a coup.  While the coup is crushed by Schuschnigg, Engelbert Dollfuss is murdered by Austrian Nazis.

The Austrian Nazis captured by Schuschnigg are executed.  German pressure against Austria subsides after Mussolini threatens to go to war to defend Austrian independence. 

Political Philosophy

Under Schuschnigg, Austria continues to follow the Corporatist model of Fascism followed by Italy, where the state is organized via professional corporations or guilds.

Nazi Pressures on Austria

Schuschnigg is determined to maintain Austrian independence.  While Italy and Hungary act as counterweights to Germany, Schuschnigg finds himself in a weak position and tries to appease Hitler. 

In 1936, under pressure from Hitler, Schuschnigg releases imprisoned Nazis and agrees to allow Nazis into his cabinet.  
In February 1938, Hitler forces Schuschnigg to accept Arthur Seyss-Inquart, a well known Austrian Nazi, as his Minister of Public Security.
Schuschnigg announces a plebiscite on Austrian independence.  Under pressure from Hitler, the plebiscite is cancelled and Seyss-Inquart becomes Chancellor.

Life after Politics

After World War II, Schuschnigg resettled in the United States where he taught political science at St. Louis University (1948 – 1967).  He died in his native Austria in 1977. 

Schuschnigg’s Place in History

Unlike so many other statesmen in 1930s Europe, Schuschnigg was very much in the anti-Hitler faction and recognized the serious threat that National Socialism posed to his country and all of Europe.
Schuschnigg’s government showed considerable tolerance towards Jews, an attitude that was uncommon in a large part of Europe.

Tuesday, 27 December 2011

The Kapp Putsch

The Kapp Putsch

Who was Responsible for the Putsch?

The Putsch bears the name of Wolfgang Kapp, a right-wing journalist and Prussian civil servant.

The real force behind this attempted coup d’├ętat was General Walther von Luttwitz, district commander for the German Army (Reichswehr) in Berlin.

What Did the Conspirators Want to Accomplish?

The Kapp Putsch occurred in March, 1920 and represented an attempt by disaffected rightists to overthrow the Weimar Republic.  

Its immediate cause was the Weimar Government’s decision to disband two Freikorps (Free Corps) brigades in accordance with the terms of the Versailles Treaty.

The Treaty restricted the German Army to only 100,000 men.  However, with the inclusion of the Free Corps paramilitary units, it was above the prescribed limit (some estimate the Army`s strength as high as 400,000).

Events of March 13th – March 17th

General Walther Luttwitz, commander of the German Army (Reichswehr) in Berlin, Luttwitz ordered the Erhardt Brigade (a Freikorps unit) to march on Berlin and topple the government of President Frederick Ebert. 

Wolfgang Kapp, the nominal leader of the Putsch, became the new Chancellor. The Ebert government fled from Berlin to Dresden and then Stuttgart.
Why Did the Kapp Putsch Fail?

The Kapp conspirators were not expecting the Ebert Government to call for a general strike. This tactic was very effective and denied them control over the people.

Their inability to rule was compounded by the refusal of civil servants to follow the new government`s directives.


Both Kapp and General Luttwitz fled Berlin on March 17th when their attempted coup had clearly failed.

The Kapp Putsch, although brief, exposed some disturbing realities: 
  • The Reichswehr`s officer corps, for the most part, had not joined the   attempted coup, but also failed to come to the legitimate government`s aid.
  • The Kapp Putsch shed a harsh light on the Ebert government, showing that it could not enforce its will, even in Berlin.  It remained vulnerable to anyone challenging its authority.
  • In any future crisis, Germany`s national government would lack a very important tool for ensuring its survival. 

Austrian Fascism


The Rise and Fall of Austrian Fascism


Austria’s home grown fascism began developing in the early 1930s.

Based upon an emergency law (Wartime Economy Authority Law) enacted during the First World War and never repealed, Chancellor Engelbert Dollfuss established authoritarian rule in March 1933 in the face of parliamentary paralysis.  

The Chancellor quickly abolishes both Parliament and freedom of the press.
Dollfuss eliminates multi-party system in Austria. 

Austrian fascism rejects both the Marxist class struggle of Communism as well as liberal and capitalistic concepts.

Similarities to National Socialism

Like their counterparts in Germany, Austria’s Fascists were strongly opposed to the political parties of the Left (i.e., Social Democrats).

Austrian Fascism was also characterized by one party rule (the Fatherland Front) and reliance on a paramilitary organization (the Heimwehr).

Differences with National Socialism

Austria provided a temporary safe haven for Jews fleeing Nazi Germany.
Austria did not tolerate right-wing extremists; in June 1933 the government banned Austria’s National Socialist Party (Nazis).

Relations with Italy

Mussolini threatened to go to war with Germany if Hitler attempted to militarily support a Nazi coup following the assassination of Chancellor Dollfuss (1934).

Italian support for Austria begins to erode as Italian aggression in Ethiopia leads to increased diplomatic isolation. 

Italy’s relationship with Nazi Germany becomes warmer with the two countries signing a treaty of friendship in 1936.

Demise of Independent Austria  

Hitler’s bloodless takeover of Austria represented another missed opportunity to stop Nazi aggression. 

While Britain remained committed to its policy of appeasement for a while longer, many came to belief that Hitler could now only be stopped through war.