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The Scissor Crisis
Finance Commissar Grigori Sokolnikov
The first major issue the new Soviet leadership had to deal with at the beginning of 1928 was the ongoing scissor crisis, in which price of industrial goods have reached sky-high levels. While prices of agricultural goods collapsed: leading to a situation in which peasants are no longer willing to sell their grain to the party as they would be unable to purchase desired industrial goods from the cities anyway. The lack of grain deliveries to urban areas is bringing specter of civil war era famines.
The man with a real material solution to this was the newly returned Sokolnikov. An old Bolshevik and an economic technocrat, he held borderline heretical position that economic planning was folly, and that Market Socialist Economy needs to be implemented if the Soviet Union was to prosper and develop. Sokolnikov recognized that the root cause of the scissor crisis was the relative low productivity of Soviet industry owing to the lack of advanced technology and capital which meant there wasn't enough consumer goods produced to sell to the peasantry in exchange for grain. The only way to resolve this was to seek out foreign investments, after all, did not Lenin say "They [the capitalists] will supply us materials and technical equipment which we lack, will restore our military industry necessary for our future attacks against our suppliers."?
Sokolnikov was lucky to find a patron in premier A.I Rykov. Rykov, a politically talented and charming man, had the chops for convincing General Secretary Molotov as well as other Stalinists in the Central committee of the necessity of foreign investments in the Soviet Union [1], often over drinking sessions. Infamously, in one report to the Central Committee, Rykov proclaimed: "The capitalists will sell us the rope we will use to hang them!" [2]. Normalizing economic relations with Germany and other western countries soon became a leading priority for the party. Sokolnikov was able to find two key allies: the young Trade Comissar Anastas Mikoyan [3] and Foreign Comissar Georgy Chicherin [4] in finding sources of foreign capital for the Soviet Union.
However, the actual act of normalizing relations between the birthplace of the global worker's revolution and the heart of the industrial capitalist states would prove difficult...
-Sheila Fitzpatrick, A History of the Soviet Union (2003), Cambridge University Press.
[1] Stalin approved of the same thing in 1928, though he often sabotaged his own projects such as by opening negotiations with Germany for loans and then immediately arresting German engineers in the USSR.
[2] There is no evidence Lenin ever actually said this, here Rykov coins the phrase
[3] Mikoyan otl "worshiped Stalin because he was young", with Stalin dead, he transferred his adoration to the charismatic Rykov instead
[4] Another supporter of attracting foreign investment for the USSR otl
Finance Commissar Grigori Sokolnikov
The first major issue the new Soviet leadership had to deal with at the beginning of 1928 was the ongoing scissor crisis, in which price of industrial goods have reached sky-high levels. While prices of agricultural goods collapsed: leading to a situation in which peasants are no longer willing to sell their grain to the party as they would be unable to purchase desired industrial goods from the cities anyway. The lack of grain deliveries to urban areas is bringing specter of civil war era famines.
The man with a real material solution to this was the newly returned Sokolnikov. An old Bolshevik and an economic technocrat, he held borderline heretical position that economic planning was folly, and that Market Socialist Economy needs to be implemented if the Soviet Union was to prosper and develop. Sokolnikov recognized that the root cause of the scissor crisis was the relative low productivity of Soviet industry owing to the lack of advanced technology and capital which meant there wasn't enough consumer goods produced to sell to the peasantry in exchange for grain. The only way to resolve this was to seek out foreign investments, after all, did not Lenin say "They [the capitalists] will supply us materials and technical equipment which we lack, will restore our military industry necessary for our future attacks against our suppliers."?
Sokolnikov was lucky to find a patron in premier A.I Rykov. Rykov, a politically talented and charming man, had the chops for convincing General Secretary Molotov as well as other Stalinists in the Central committee of the necessity of foreign investments in the Soviet Union [1], often over drinking sessions. Infamously, in one report to the Central Committee, Rykov proclaimed: "The capitalists will sell us the rope we will use to hang them!" [2]. Normalizing economic relations with Germany and other western countries soon became a leading priority for the party. Sokolnikov was able to find two key allies: the young Trade Comissar Anastas Mikoyan [3] and Foreign Comissar Georgy Chicherin [4] in finding sources of foreign capital for the Soviet Union.
However, the actual act of normalizing relations between the birthplace of the global worker's revolution and the heart of the industrial capitalist states would prove difficult...
-Sheila Fitzpatrick, A History of the Soviet Union (2003), Cambridge University Press.
[1] Stalin approved of the same thing in 1928, though he often sabotaged his own projects such as by opening negotiations with Germany for loans and then immediately arresting German engineers in the USSR.
[2] There is no evidence Lenin ever actually said this, here Rykov coins the phrase
[3] Mikoyan otl "worshiped Stalin because he was young", with Stalin dead, he transferred his adoration to the charismatic Rykov instead
[4] Another supporter of attracting foreign investment for the USSR otl
- RousseauX
- Word Count: 470