How did Russia go from super broke monarchy to the superpower that was the USSR?

by Loliemimie

I learned in school that the whole point of the Revolution in Russia, was because the country has gone pretty much broke because of World War II, there was no money so soldiers were basically being sent to die with no hopes of return.

Then I learned that when the USSR was put in place and in the years following, peasants and farmers were all living miserably, and many famines occurred.

I’m really confused and I don’t understand how exactly did the USSR suddenly become a superpower? Where did they find the money to provide free healthcare, housing, jobs to everyone when they didn’t have any money? How did they manage to compete with the U.S afterwards?

Tough_Guys_Wear_Pink

This is a really great question, so thank you for asking.

You are correct in understanding that, when the Bolsheviks came to power, the new USSR/former Russian Empire had some serious economic woes: despite some czarist successes in the late 19th century to modernize & industrialize the Russian economy, Russia remained primarily agricultural and most of the population was desperately poor. The Russian Empire had never enjoyed the wealth of its allies & rivals to the west, but the physical size of Russia, its cultural capital amongst the Slavs, and its immense manpower resources earned it "Great Power" status despite always being a much weaker power than the likes of France, Britain, and Germany. Czarist Russia was like a sickly but muscular alcoholic... a state with systemic weaknesses, but still capable of playing with the big boys (kind of). These same strengths & weaknesses that characterized the Russian Empire under the czars also characterized the Soviet Union and, to an extent, the modern Russian Federation.

It's first important to define what the term "superpower" means. In the 20th & 21st century sense of the term, a superpower can be approximately defined as a nation-state with the means to significantly impact global events, which engages in long-term military & political rivalries with other powerful states and alliances, and which leads its own alliance of allied states. A country can be a superpower while still suffering from significant internal weaknesses as the Soviets did. The caveat, of course, is that superpower status under these conditions may not be sustainable- as it ultimately turned out not to be, in the case of the Soviet Union.

Jumping back to the history: yes, the nation-state that the Bolsheviks seized was economically much weaker than its European neighbors. This did not change overnight, and many aspects of these longstanding weaknesses continued to vex Moscow for the duration of the Cold War and even up to the present day. The USSR made its transition from an agrarian nation to an industrialized one under Stalin during the 1930's. Stalin recognized that the USSR needed to industrialize. During this era, heavy industry meant wealth & military power. Industrialization, however, demanded significant investment in capital- things like production machinery & blast furnaces- but this required cash, and cash was in short supply.

This brings us to the cornerstone of Russian revenue generation from czarist times until today: commodity exports. In order to generate the cash required for these investments, the Soviets focused on the one resource they did have in abundance: grain. The Soviets exported an enormous amount of grain during this period in order to generate the cash needed for Stalin's industrialization plan. This endeavor became linked with the famines enduring by Soviet peasants during these years, particularly the infamous 1932-1933 famine in Ukraine known as the "Holodomor", now widely recognized as a genocide, which killed about 4 million Ukrainians. One of the primary reasons that the Ukrainians- among others- went hungry is because the demand for grain exports was set impossibly high by the Soviet central planners. This had the added benefit of also killing off millions of peasants whose conservativism & Ukrainian nationalist leanings were deeply distrusted by the Bolsheviks. Stalin's industrialization effort was largely successful, albeit at a terrible human cost. By the time that Nazi Germany invaded the USSR in 1941, Stalin's empire had developed enough industrial capacity to churn out vast quantities of simple but effective military hardware.

It was during WW2 that the USSR's status as a superpower began to coalesce. As the massive Soviet Army pushed the Germans steadily back through Eastern & Central Europe to the German heartland itself, the Soviets swallowed up those lands that they crossed: Poland, Czechoslovakia, Hungary, eastern Germany, et al, providing them a ready-made empire right in their Near Abroad. In the aftermath of WW2, the Soviets also abandoned their pre-war policy of non-intervention & avoidance of fostering revolution abroad. The newly victorious USSR instead became the standard bearer of the communist cause worldwide. By 1950 the Soviet Union not only had atomic weapons of its own, but was also staring down US troops in occupied Berlin, giving North Korea the go-ahead to invade its southern neighbor, helping Mao's forces to victory in the Chinese Civil War, and beginning to contemplate advances into America's backyard of Latin America. While the average Soviet citizen was still far poorer than the average Briton or American, the USSR had undeniably become a superpower.

So, the answer to "how did the USSR suddenly become a superpower?" is a combination of factors, namely: Stalin's industrialization plan, the geopolitical re-arrangement that followed the Soviet victory during WW2, and the atomic secrets stolen from its American wartime ally which provided the Soviets a bomb of their own. This confluence of events brought the Soviet Union the superpower status that had always eluded its czarist predecessor. This superpower status not not, however, change the fundamental reality that both the Soviet state and the Soviet people were demonstrably poorer than their Western counterparts, but Moscow did now have the military muscle & political clout to sustain direct & global confrontation with the US and its allies.

Regarding "where did they find the money to provide free healthcare, housing, jobs to everyone when they didn’t have any money?", the answer is that, in the short term, these programs were funded by export sales of commodities such as grain & fossil fuels on the global market. fossil fuels, which Russia has in abundance, became particularly critical in the last 2 decades of the USSR's existence and they continue to dominate the modern Russian economy to such an extent that the Russian Federation has been described as "a gas station that has an army". In the long term, however, the Soviet economic system was so systemically weak that it simply couldn't sustain these amenities, especially with such a high level of military spending. Nor were these services particularly good, either: rationing & shortages were widespread, the quality of healthcare & housing was poor, and many jobs were redundant or unnecessary but existed so that the USSR would maintain "100% employment". Corruption became a major problem as well, with well-connected Party members exploiting their status to enjoy lifestyles that normal citizens could not. Ultimately, the Soviet economic model was a ludicrously inefficient & bloated system kept afloat to a large extent by the hard cash earned by commodity exports.

Whereas the Soviets had been able to successfully industrialize under Stalin's pre-WW2 reign, the USSR proved hopelessly unable to ride the growing wave of the information economy that emerged in the 70's & 80's. Little progress was made in technological fields such as fiber optics & computer programming which were expanding rapidly in the West. This is partly because these fields rely heavily on innovation, a concept alien to the centrally managed Soviet model. A dictatorship in the early 20th century could succeed if enough resources were thrown into such things as producing trucks, tractors, tanks...however, this same resource-centric, "brute force" approach does not work well in building an information economy.

Even at the Soviet economy's peak in 1970, it remained 60% the size of the American economy. The Soviet economic system had always been weak, but the 1970's became known as the "Era of Stagnation" as the inefficiencies of central planning became increasingly difficult to ignore. The ever-worsening economic figures and growing public dissatisfaction with the socialist model led to the rise of Mikhail Gorbachev in the 1980's. Gorbachev, who wanted to save the Soviet system by liberalizing it, launched two policies: economic restructuring & liberalization (perestroika) and the easing of harsh restrictions on freedom of expression & access to Western media (glasnost). Economic woes continued to worsen, however, and by 1989 the USSR's per-capita income was only 43% of America's ( $8,700 vs $19,800). Glasnost ended up opening a Pandora's Box because, as the Soviet people learned through Western media just how badly off they were, the entire Soviet empire began to crumble. The ultimate fracturing & dissolution of the Soviet empire was a political event, but it was made possible by decades of underlying economic failure.

ReaperReader

Several factors. Firstly, regardless of political systems, Russia was and is a really big place. It has an abundance of land, natural resources such as oil, and people. Even back in Tsarist times, when much of the Russian population was rural and very poor,  in absolute terms there were a large number of educated people, 19th century Russia produced a lot of famous engineers, scientists and mathematicians. The Tsarist economy also was industrialising rapidly from the late 19th century onwards (Gatrell, 1982), indicating a broader base of technologial and administrative skills beyond those famous names. 

WWI was of course a massive fiscal and economic strain on the Soviet economy, as it was on all European participants. And the following Russian Revolution and Civil War was a further shock, but the civil war ended by 1923, and the end of the war was mainly focused in the Crimean. So the time period was 1914-1921 or so, less than ten years. The events were devastating, with millions dying from war, famine and associated diseases, and further millions fleeing Russia, including a large share of the educated population, but they were not long enough to wipe out the existing knowledge base. When the Soviets decided to ramp up technical training in the 1920s, they could find the teachers. 

Once peace was restored, and the Soviets ended War Communism and introduced the New Economic Policy, those existing advantages could come back into play. On top of that, Soviet policy might well have contributed, Allen (2005) argues that key growth drivers of the 1920s and 30s were shifting labour supply from rural areas to cities, and a sharp fall in fertility (due to the education of women and employment outside the home, as per Communist ideology) reducing population growth relative to other 1920s/30s developing countries. 

Russia's size and natural resources also meant it could be relatively self-sufficient: Russia did buy in foreign-made machinery and technical experts, but it didn't need to buy resources like oil, so its need for foreign currency was limited.

As for healthcare, housing and jobs, firstly, luckily some important forms of healthcare such as childhood vaccines happen to be fairly cheap to make and administer - e.g. a few minutes for a nurse to stick a needle in, versus say hours of chemotherapy or surgery. Antibiotics, once their mass manufacturing had been worked out in the 1940s and 50s, are another cheap form of healthcare. Soviet healthcare rationally focused on cheap preventative care, see this past r/askhistorians comment by u/minardi-man. Similarly, Soviet housing programmes focused on cheap-to-build apartments, see this past comment by u/Dangaard (and the rest of the thread is interesting too). Jobs: finding work for everyone isn't hard in and of itself, there's always plenty of work to do. The normal problem is paying for the work, but in Soviet Russia the main limit on consumer spending was not money but availability of the physical resources: shortages of consumer goods were common. 

As for how competitive the Soviets were with the US, I'm not a military expert, but my understanding was that this was about expectations and projections, rather than the reality of the day (leaving aside the Soviet space programme, which then comes again back to that base of skilled Russian scientists, mathematicians and engineers, plus the large size of the Soviet economy). The idea that central planning was inherently more efficient than markets was fairly widespread in the mid-20th century, particularly dieven the rapid industrialisation Soviet Russia achieved. For example, the CIA director, Allen Dulles in 1958 and 1959 warned of USSR as a challenger "if the Soviet industrial growth rate persists at 8 or 9 per cent per annum over the next decade" (Trachtenberg, 2018). And, while the CIA director did have political motives, this view also appeared in more academic circles. For example the economist Paul Samuelson, author of one of the most successful economic textbooks Economics, with 15 editions and over 4 million copies, in his fifth to eleventh editions showed a graph of the gap between the USA and the USSR's economies "narrowing and possibly even disappearing" (Skousen 1997, page 148). 

In short, Russia has and had a number of advantages in terms of its size, natural resources and a large number of educated people (though in Tsarist times that was small as a % of the population). Soviet policy also arguably helped, by pushing a shift from rural to urban areas, bringing women into employment and investing in their education. Soviet healthcare and housing focused on the forms that were relatively cheap to make and supply. Finally, concerns about Soviet competitiveness with the USA were more around what would happen if the Soviets kept growing rapidly.   

Sources

Allen, Robert, A Reassessment of the Soviet Industrial Revolution, Comparative Economic Studies, 2005, 47, (315–332).

Anton Cheremukhin, Mikhail Golosov, Sergei Guriev, Aleh Tsyvinski, Was Stalin necessary for Russia’s economic development?, 10 October 2013, https://voxeu.org/article/stalin-and-soviet-industrialisation

Gatrell, P. (1982). Industrial Expansion in Tsarist Russia, 1908-14. The Economic History Review, 35(1), new series, 99-110. doi:10.2307/2595106

Markevich, Andrei, A Regional Perspective on the Economic Development of the late Russian Empire (May 14, 2019). Available at SSRN: https://ssrn.com/abstract=2555273 or http://dx.doi.org/10.2139/ssrn.2555273

Mark Skousen, The Perseverance of Paul Samuelson's Economics, Journal of Economic Perspectives—Volume 11, Number 2—Spring 1997—Pages 137–152, https://pubs.aeaweb.org/doi/pdf/10.1257/jep.11.2.137

Marc Trachtenberg, Assessing Soviet Economic Performance During the Cold War: A Failure of Intelligence?, Vol 1, Issue 2 February 2018, https://doi.org/10.15781/T2QV3CM4W

Kid_Cornelius

/u/international_kb and /u/[deleted] have some helpful answers in this post from several years ago

panick21

I learned in school that the whole point of the Revolution in Russia, was because the country has gone pretty much broke because of World War II

First of, I assume you mistype and meant WWI.

here was no money so soldiers were basically being sent to die with no hopes of return.

I don't know about your school, but this is a highly misleading picture of Russia and the Russian state and Russian army.


So first a little bit about how the ideas about per-Revolutionary Russia formed. After the revolution, the regime took great pains to paint the worst possible picture of Imperial Russia and this opinion was widely shared in the mostly leftist intelligentsia in the West. Imperial Russia was painted as the definition of backwardness, essentially feudal, and then the great revolution came that made everything amazing.

This is a highly inaccurate picture of the events and in my answer I will give you a somewhat more realistic history of the transformation.

So, for a moment lets go back to 1910ish and look how the world looked back then. The Russian state and economy were not at all broke, in fact, the Russian economy was growing fast. They showed some of the best growth rates of countries at the time, that is a bit misleading as they start from a lower base but it is still impressive. Industrial scale agricultural export, improving infrastructure, resource extraction and refinement and more sophisticated industries coming along as well. Russia build some very advanced air-planes before WW1 for example. They were massively improving their army as well.

This was clear to people like the German General Staff, they basically realized that Russia with its population and resource base, combined with the now growing market economy would very likely be the dominant power in the future. Some thinkers in Britain even thought so far ahead as to see that only Russia had the potential to match match the US eventually.

Looking at it from that perspective, the Soviet Union is far less surprising. Russia had that potential all along and was going in that direction before WW1. This aspect is often is usually ignored in story the socialists want to tell about the Soviet Union.

Lets talk about WW1 now. Russia had to face Germany, Austria and the Ottoman empire at the same time, and this is even worse as unlike the central powers, Russia was cut of from its allies. Its army had relied on imports and its economy on exports that were now blocked by the Ottomans.

Considering this, they actually did surprisingly well. They consistently outperformed the Austrians and the Ottomans and had the same problems with the Germans the French and British were facing. The Russians mobilized their economy and resources very effectively and put a huge army into the field and by the third year of the war their internal industry was producing incredible amounts of war resources, including advanced chemical industry and much more. They were running out of money, but so was everybody.

The buildup of domestic capability during WW1, Imperial Russia, essentially made Russia into a first rate super power and had they just not collapsed, they would have emerged from WW1 as a very formidable force both military and economically on the global stage. Their failure was not a failure to build a military industry, or anything related to the military at all. Their failure was transporting sufficient food to the cities, and having an leadership and elite that was fractured.

After the revolution you had a civil war but it ended up with the now ruling socialist party, essentially in control of much of the same land and industry. While many people died, during the revolution and civil war, even more didn't die. While many factories were destroyed, even more were not. The same mines and fields were still mostly there. The Bolshevik party inherited many advantages and disadvantages Imperial Russia had.

Sometimes its assumed that Soviet Union was an instant success, it was not at all. There were many failures and its wrong to assume that as soon as you have the Soviet Union everybody get free housing and healthcare. The opposite is true, under Stalin consumption of the people was incredibly restricted to force invest as much as possible heavy industrial development, primarily for the military. You often had large families living in tiny apartments in the cities, the Soviet Union suffered from a housing shortage that was not properly addressed until decades later. Millions of farmers thought a bitter quasi civil war against the regime, it took mass execution, mass starvation, mass deportation and much more to extract the food required, that allowed to regime export that production and buy industrial tools and plans for tank factories.

In WW2 unlike in WW1 the regime was stable that allowed the Soviets to win WW2.

I’m really confused and I don’t understand how exactly did the USSR suddenly become a superpower?

As I think you can now see, Russia was a superpower in the making. WW1, Civil War and the first decade of socialist rule is what understandably held them back for a while. Thanks to incredible hardship suffered by the population and a effective leadership it managed to mobilize incredible amounts of resources that allowed it to win WW2 and emerge as a global power second only to the US.

One should also mention that even at the height of Soviet power, its economy was maybe 1/3 of the US. If you consider allies and so on, it was far, far less then that. So while there were two great powers, there was very clearly one that was dominate and one that was not.

Where did they find the money to provide free healthcare, housing, jobs to everyone when they didn’t have any money?

If you didn't have a job, well you might just be send to some gigantic infrastructure project, like White Sea–Baltic Canal. Of course millions of people were in slave labor camps.

In terms of healthcare and housing, its important not to be to romantic. The Soviet economy of 1980 is very, very, very different from the 1930 or 1950s. The things you mention are much more true in the 1980 then in 1950.

After Stalin death the Soviet leadership the relentless focus on heavy industry and military was adjusted. The focus shifted and Soviet economy started to produce more consumer products, and many projects were launched to improve things like housing and so on. The Soviets were very good at building human capital and their very strange and hard to understand economic system after many reforms produced a very impressive amount.

But even after all that, in 1988 Soviet Union was still a relatively poor country per capita and they were no longer growing fast. Sure, there were regions that were better of, and many of the middle class had housing and health care, but lets remember that there were large areas of the Soviet Union where this was much less true. The country side was still underdeveloped.

There is much more to say but I will leave it at that.

I can provide sources for all of this, but I think:

  • Stalin: Paradoxes of Power, 1878-1928

  • Stalin, Vol. II: Waiting for Hitler, 1929–1941

These books give an incredible inside perspective on the Soviet Union. In book 1 you have scene where the government is essentially a bunch of guys with tables that signs that say what department sits there, to by 1941 a gigantic machine that would fight the largest war ever and win.

Check out book list on Russia, it goes in many different directions, all relevant to your question: https://www.reddit.com/r/AskHistorians/wiki/books/europe#wiki_russia

RusticBohemian

Great answer. Thansk!