The Nationalisation of Industry, 1917 (Edexcel A Level History): Revision Note

Timeline & Summary

• This note will examine the reasons why Lenin nationalised industry in his first year of power

• Lenin nationalised industry to bring the economy under Bolshevik control

  • This went against what the workers wanted

• Early decrees in 1917–18 transferred ownership of banks, land, and key industries from private hands to the state

• Nationalisation was presented as part of the move toward socialism but also reflected the Bolsheviks’ need to consolidate power

Why did Lenin nationalise industry?

Ideological reasons

• Lenin did not believe that the Russian economy in 1917 was advanced or stable enough to move directly into communism

• Instead, he developed the idea of 'state capitalism'

  • This was a transitional phase in which the state would control and manage key parts of the economy

  • Lenin argued this was necessary because Russia was a backward country compared to the West

  • Lenin believed from this, the Bolsheviks could build the foundations for socialism in the future

• Karl Marx had been vague on how a communist economy should function in practice

  • He offered little guidance beyond predicting the eventual ending of private property

Political reasons

• Nationalisation was not popular with the workers in 1917–18

  • Many preferred workers’ control

    • This is where factory committees directly managed production

    • Lenin briefly allowed this system

• However, he decided that the workers lacked the expertise to run industry efficiently

  • Instead, he insisted that centralised state control was necessary

    • This secured Bolshevik rule

    • This also removed power from industrialists and the bourgeoisie, who hated the Bolsheviks

Practical reasons

• Russia’s economy in 1917 was collapsing due to;

  • The First World War

  • Food and goods shortages

  • Inflation

  • Falling production

• Nationalisation gave the state power to coordinate production and distribution in order to meet urgent needs

• By centralising industry, the Bolsheviks could attempt to stabilise the economy and prevent further issues

Key decrees on nationalisation

Decree on Land (November 1917)

• Abolished private ownership of land

• Land was seized from landlords, the Church, and the Tsar’s family and redistributed to the peasants

Decree on Workers’ Control (November 1917)

• Gave factory committees the right to supervise management

  • Workers could set their own:

    • Production targets

    • Working hours

    • Pay

    • Rules

Creation of Vesenkha (December 1917)

• The Supreme Council of the National Economy (Vesenkha) was established to oversee the economy

• Vesenkha:

  • Coordinated production

  • Set targets

  • Brought order to the chaotic economy

• It symbolised the move from decentralised workers’ control to central state planning

Decree on Nationalisation (June 1918)

• Declared that all large-scale industry would come under state control

• Industries included:

  • Banks

  • Railways

  • Shipping

  • Heavy industry

• These industries were important to the Bolsheviks during the Civil War

• Smaller businesses were also gradually nationalised over time

• This marked the end of workers’ control

• It laid the foundations for a command economy, where the state directed all major economic decisions