Furious Fridays

The price of free is freedom: Taking a look at Lenin’s reign of terror

Today we’re going to run through the very first implementation of Communism on a mass scale. Our last few Furious Friday episodes are a lead up to this. If you didn’t catch those episodes, it’s not the end of the world but if you did manage to have a listen it will provide a bit of context to this episode. Russia – 1917 under Vladimir Lenin & the Bolsheviks (Spoiler alert! It didn’t end well!) Firstly, it’s important to understand Russian History, pre-1917, as a prelude to the events that occurred.
  1. 1861 – Tsar Alexander II passes the Emancipation Edict, ending serfdom in Russia
    • Alexander II was a pretty good guy (as far as leaders through history go)
      • Sold Alaska to the USA 1867 for $200m in today’s dollars.
      • Favoured an economic system similar to that in other European countries;
        • Capitalism and free trade.
        • Promote development and to encourage the ownership of private property, free competition, entrepreneurship, and hired labour
      • Most Serfs were free (a third of the Russian population)
        • They had rights (marriage, ownership of property, freedom)
        • 80% of the population were peasants, substance farmers. Peasants were to receive land from landlords (though they had to pay for this eventually with money, or working it off through labour obligations)
        • Landlords were paid 75% from the government upfront, and the peasants paid it off over time. This was abolished later on, so the full payments never really came through to the land owners.
  1. Changing the system so significantly is a very complex problem to solve. However, by all metrics it seemed to be working well as far as increasing the prosperity of the population.
    • The land ownership changed hands significantly
    • Previously there were the Gentry class – A social class whose land ownership provided their incomes (Mr Darcy from Pride and Prejudice).
    • Land ownership by the Gentry class fell from 80% to 50% as the mobility of wealth under a freer society increased.
    • Serf land ownership rose – 5% to 20%
  2. Substantial rise in the amount of production of grain
    • Surprise, surprise! When people are allowed to keep what they produce, and are incentivized, there is an increase in goods produced.
    • Rise in the number of hired laborers
    • Rise in technology needs – machinery
  3. Remember: This was set up to be a free market economy – Efficiencies started to happen!
    • Those who were more entrepreneurial could do more than just farm land as well
  4. 1890s – Industrial development
    • A large increase in the size of the urban middle classand of the working class. This saw the emergence of the Kulaks, who were essentially the wealthy peasants
    • By this time the second generation were entering adulthood. There was a 35% chance that their parents had been slaves.
      • This gave rise to a more dynamic political atmosphere – the one downside of freedom
      • Previously there was no hope of rising up, peasants were peasants. But, with freedom comes choice, and with choice comes wealth…
        • You either chose to own something/keep what you earn, chose to work where you want
      • Inequality is created. But this is then used as a tool to mobilise the masses – to create an equal outcome – where everything was utopia and everyone has the same amount of wealth
  5. During this period is when Vladimir Lenin was born – 1870 to be exact
    • Wealthy middle-class family. His father was a serf who was freed, did well and became wealthy
    • I’ll skip forward through Lenin’s life to 1917 when things pick back up –
      • Spent most of time between being expelled from University, exiled in Siberia, then living in Munich, Geneva and London, or holidaying in French or Italian Villas
  6. WW1 was going on around this time
    • Unrest is growing. The First Revolution: Disaffected soldiers from the city’s garrison joined bread rioters and industrial strikers on the streets.
    • More and more troops deserted the front lines and with loyal troops away at the front things fell into chaos, leading to the overthrow of the Tsar. In all, over 1,300 people were killed during the protests of February 1917
    • Didn’t solve the fight for power
  Enter, The Bolsheviks – A second revolution
  1. Bolsheviks – majority faction of the Russian Social Democratic Party, which seized power in the October revolution of 1917
  2. Lenin came back to Russia in October 1917 – From Finland (wasn’t even there until the end)
  1918 – Russian Soviet Federated Socialist Republic Lenin gets to work on the new Government
  1. The first was a Decree on Land, which declared that the landed estates of the aristocracy and the Orthodox Church should be nationalised and redistributed to peasants by local governments.
  2. Decree on the Press that closed many opposition media outlets deemed counter-revolutionary
  3. The courts were replaced by a two-tier system: Revolutionary Tribunals to deal with counter-revolutionary crimes, and People’s Courts to deal with civil and other criminal offences. They were instructed to ignore pre-existing laws, and base their rulings on the Sovnarkom decrees and a “socialist sense of justice”
  4. Decree limiting work for everyone in Russia to 8 hours per day.
  5. Issued the Decree on Popular Education that stipulated that the government would guarantee free, secular education for all children in Russia
  6. Embracing the equality of the sexes, laws were introduced that helped to emancipate women, by giving them economic autonomy from their husbands and removing restrictions on divorce
  7. Decree on Workers’ Control, which called on the workers of each enterprise to establish an elected committee to monitor their enterprise’s management (gangs of workers controlling the company they were working for)
  8. Issued an order requisitioning the country’s gold, and nationalised the banks, which Lenin saw as a major step toward socialism
  9. Nationalised foreign trade, establishing a state monopoly on imports and exports
  10. It decreed nationalisation of public utilities, railways, engineering, textiles, metallurgy, and mining, although often these were state-owned in name only
  1918 – Many cities in western Russia faced chronic food shortages and famine. What happens to a controlled economy?
  1. Price controls, for one. Things that are price pegged below cost fall into shortage
  2. To supplement – A booming “black market” supplemented the official state-sanctioned economy
    • Lenin called on speculators, black marketeers and looters to be shot. (So, the food shortage gets worse)
    • Lenin blamed this on the Kulaks – wealthier peasants (his father’s class) – allegedly ‘hoarded the grain’
  3. Armed detachments were ordered to be established to confiscate grain from Kulaks for distribution in the cities
  4. Resulted in vast social disorder and violence – armed detachments clashed with peasant groups – Roaming gangs
  5. Bolsheviks’ Red Terror policy – a system of repression – sometimes described as an attempt to eliminate the entire bourgeoisie – 50,000 to 140,000 range of those who died (mass murder)
  Mass murder doesn’t look good, plus there needs to be workers
  1. 1919 – Establishment of concentration camps, later the government agency, Gulag.
  2. Aleksandr Solzhenitsyn (Gulag Archipelago)… we’ll come back to this in the next episode.
  3. By the end of 1920, 84 camps, 50,000 prisoners; 1923, 315 camps, 70,000 inmates.
  4. This was the early days for these slave labour From July 1922, all intellectuals deemed to be opposing the Bolshevik government were exiled to inhospitable regions or deported from Russia altogether; Lenin personally scrutinised the lists of those to be dealt with in this manner. In May 1922, Lenin issued a decree calling for the execution of anti-Bolshevik priests, causing between 14,000 and 20,000 deaths
  5. Common pattern – Anyone who has differing opinions or offer alternative hierarchy of beliefs
In 1920, the government brought in universal labour conscription, ensuring that all citizens aged between 16 and 50 had to work. This is in a time when life expectancy was around 35 years old
  1. WW1 – Diseases and famine – most people didn’t know anything but work and a short life
  2. Infighting within – few civil rebellions which were quickly crushed by the Red Army
By 1921 – Lenin got sick and went to the Gorki Mansion to spend his final years. In Lenin’s absence, Stalin had begun consolidating his power both by appointing his supporters to prominent positions. 1922 – Stalin took over: Formation of the Union of Soviet Socialist Republics – USSR That was the short summary of the life and policies of Lenin. From 1918 -1922, a body count of 3,284,000 (not including the 6.2m killed in the civil wars in this time). We’ll leave it here for now, next week we can run through the later part of the USSR where things really ramp up under Stalin The price of free is freedom – A government that provide equality and free everything has complete control over everything Thanks for listening!

Cover your butt! A closer look at diversification

Episode 6 Not all returns are created equal; diversification (and over diversification), correlation and covering your butt Welcome to Finance & Fury! I’m sure that everyone’s heard the saying, “playing it safe” before. And in any game, it’s generally a good idea....

Debt recycling & leverage

Say What Wednesdays Debt Recycling & Leverage Welcome to Finance & Fury, the 'Say What Wednesdays' editions! Today’s question comes from Dale: “My question refers to a point you and Jayden made a few times about recycling debt or using good, specifically using...

The Government’s war on cash and personal freedom continues with the introduction of the Currency (Restrictions) Bill 2019!

Welcome to Finance and Fury In today's episode, I thought it was important to cover Currency Bill - Might have seen in the news – headlines about the $10k transaction – Currency (Restrictions on the Use of Cash) Bill 2019 – what we are talking about – had first round...

Nailing Business Cashflow Forecasts, whether you’re established, looking to expand, you’re a start up or a business in trouble

Hi Guys and welcome to Finance and Fury’s ‘Say What Wednesday’ Episode. Today we’re joined again by Nick. Our question today comes from Justin who asks, “Our building company recently went through issues with its cashflow, so as directors we halved our wages to help…I...

Furious Fridays: When $1 could buy you a pair of patent leather shoes – Is it true that all fiat currencies eventually become worthless?

Furious Fridays When $1 could buy you a pair of patent leather shoes: Is it true that all fiat currencies eventually become worthless? In today’s Furious Friday episode, we’ll be running through the historical life cycle of fiat currencies. This episode is thanks to...

Risky business; why fortune favours the brave (and smart!) and why volatility isn’t necessarily a bad thing

Episode 5 Risky business; why fortune favours the brave (and smart!) and why volatility isn’t necessarily a bad thing Today on Finance & Fury, we’re talking about …risky business! Why take risk at all when investing? There must be a reason some people are willing...

Why do we look to be in a Property Bubble?

Welcome to Finance and Fury, the Furious Friday edition. Today we have a pretty good episode! (I find this interesting at least, so I hope you do too) – We’re talking about the Australia Property market, specifically the property bubble. How monetary policy has...

Furious Fridays: Is minimum wage such a good thing after all?

Furious Friday Is minimum wage such a good thing after all? Welcome to Finance and Fury! The main aim of our Furious Friday editions is to clear up misconceptions. We’ve been seeing a lot of news stories lately about companies underpaying staff – 7-Eleven, hospitality...

Say What Wednesdays: Want to know how to make the most of your money? Find and forge your own path

Say What Wednesdays Want to know how to make the most of your money? Find and forge your own path Today’s episode is just a quick one. I’ll be going over a couple of questions I have had over the past few weeks about the personal finance course we’re launching. Plus,...

The skinny on spare change investment apps and building wealth when you’re earning $25,000 or less a year.

Say What Wednesday The skinny on spare change investment apps and building wealth when you’re earning $25,000 or less a year. Welcome to Say What Wednesdays – Where we answer your personal finance questions each week. Two questions this week from Chris: No 1 what are...

Pin It on Pinterest

Share This