The Scissors Crisis is the name for an incident in early 1923 Soviet history during the New Economic Policy (NEP), when there was a widening gap ("

price scissors "Price scissors" refers to an economic phenomenon when for a certain group or sector of productive population, the overall valuation from their production for sale outside this group drops below the valuation of the demand of this group for goods ...

") between

industrial Industrial may refer to: Industry * Industrial archaeology, the study of the history of the industry * Industrial engineering, engineering dealing with the optimization of complex industrial processes or systems * Industrial city, a city dominate ...

and

agricultural Agriculture or farming is the practice of cultivating Plant, plants and livestock. Agriculture was the key development in the rise of Sedentism, sedentary human civilization, whereby farming of Domestication, domesticated species created food ...

prices. The term is now used to describe this economic circumstance in many periods of history. Like the blades of a pair of open scissors, the prices of industrial and agricultural goods diverged, reaching a peak in October 1923 where industrial prices were 276 percent of their 1913 levels, while agricultural prices were only 89 percent. The name was coined by Leon Trotsky after the scissors-shaped price/time graph. This meant that peasants' incomes fell, and it became difficult for them to buy manufactured goods. As a result, peasants began to stop selling their produce and revert to subsistence farming, leading to fears of a famine.

Causes

A similar crisis had occurred in 1916, when for example the price of

rye Rye (''Secale cereale'') is a grass grown extensively as a grain, a cover crop and a forage crop. It is a member of the wheat tribe (Triticeae) and is closely related to both wheat (''Triticum'') and barley (genus ''Hordeum''). Rye grain is u ...

rose by 47% whereas that of a pair of boots rose by 334%. The crisis happened because agricultural production had rebounded quickly from the famine of 1921–22 and the civil war. In contrast, industry took longer to recover, due to the need to rebuild

infrastructure Infrastructure is the set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function. Infrastructure is composed of public and priv ...

. Furthermore, the problem was exacerbated by the government seeking to avoid another famine by keeping the bread grain prices at artificially low levels.

Actions

By August 1923 a wave of strikes spread across Russian industrial centres, sparked off by the crisis. When dissident communist groups, such as

Workers' Truth The Workers' Truth (russian: Рабочая Правда) was a Russian socialist opposition group founded in 1921. They published a newspaper with the same name, ''Workers' Truth'', which first appeared in September 1921. The Workers' Truth con ...

and the

Workers Group of the Russian Communist Party The Workers Group of the Russian Communist Party was formed in 1923 to oppose the excessive power of bureaucrats and managers in the new soviet society and in the Communist Party. Its leading member was Gavril Myasnikov. The Workers Group defend ...

, tried to build support around these strikes, they were suppressed. Within the Communist Party, The Declaration of 46 was produced as a signed protest sent to the Central Committee of the RCP. To combat the crisis, the government reduced costs of industrial production by cutting staff, rationalizing production, controlling wages and benefits and reducing the influence of traders and middlemen (

NEPmen NEPmen (russian: Нэпманы, translit=Nepmani) were Businessperson, businesspeople in the early Soviet Union, who took advantage of the opportunities for private trade and Small business, small-scale manufacturing provided under the New Econom ...

) by expanding the network of

consumer cooperatives A consumers' co-operative is an enterprise owned by consumers and managed democratically and that aims at fulfilling the needs and aspirations of its members. Such co-operatives operate within the market system, independently of the state, as a fo ...

(such as the People's Commissariat of Trade). As a result of these actions, the imbalance started to decrease. By April 1924, the agricultural price index had reached 92 (compared to its 1913 level) and the industrial index had fallen to 131. The scissors crisis caused many problems in the long term for the NEP{{snd causing tensions seen pre-1917 revolution.

References

External links

1924: Scissors Crisis
- "

Smychka Smychka (russian: смычка) was a popular political term in Soviet Russia and Soviet Union. It can be roughly translated as "collaboration in society" "union", "alliance", "joining the ranks". The generic meaning of the noun " смычка", d ...

and the Scissors Crisis", at ''Seventeen Moments in Soviet History'', an essay by Lewis Siegelbaum 1923 in the Soviet Union Economic history of the Soviet Union Marxian economics

Causes

Actions

See also

References

External links