Scissors Crisis

The scissors crisis (Russian: Ножницы цен, Nozhnitsy tsen ) was an economic problem in the early history of the Soviet Union, in which there was a striking difference in price between agricultural and industrial goods.

Term

Named after the Auseinderklaffen of blades scissors (statement of Trotsky ), the prices of industrial products rose ever, while that of agricultural goods fell progressively. The climax of this development had been increased as the prices for industrial products by 176 % compared to 1913 in October 1923, while the agricultural products had fallen by 11%.

Cause and control

Reasons for this development was the rapid recovery of agricultural production after the famine and the 1921-1922 civil war, while the production of industrial goods has been slow going again, there first had to be rebuilt the destroyed infrastructure. The events since 1914 ( World War, Civil War, occupation, terrorism, epidemics, Hüngersnöte ... ), industrial production had decreased to 1920 to one-eighth. Furthermore, the wartime centralization, militarization and monopolization of the economy had to be loosened or counteracted, as now moved more to the overall social needs rather than the purely military in focus. The problem was exacerbated by the policy of the Soviet government continued, as she held the bread prices at an artificial low point to prevent a future famine.

Even Lenin's New Economic Policy (NEP ) was initially the crisis is not overcome, because farmers did not sell due to the slow industrialization their yields on the market, but even consumed, because they already have not industrial products with the sale proceeds can buy. Many farmers were hesitant before they brought their grain to the cities. This not only threatened the food supply of the cities, but also the strategic alliance in the heart of the political system - the worker- peasant alliance ( smychka ).

End of 1923, drastic measures have been taken to reverse the rise in industrial prices. Price controls were introduced and lay off workers in order to reduce production costs. To obtain loans, was difficult to force companies to sell their stocks. At the same time an international trade organization was founded, the first time allowed the industry to sell their products directly to the villages. Through these and other actions by the government, such as consistent rationalization and pushing back the influence of retailers by establishment of consumer cooperatives, the problem could be to get a grip.

In April 1924, the agricultural price index reached the value of 92 and that of the industry 131 (base year 1913, respectively ).