Supreme Soviet of the National Economy, Superior Soviet of the People's Economy, (Высший совет народного хозяйства, ВСНХ, ''Vysshiy sovet narodnogo khozyaystva'', VSNKh) was the superior state institution for management of the

economy An economy is an area of the Production (economics), production, Distribution (economics), distribution and trade, as well as Consumption (economics), consumption of Goods (economics), goods and Service (economics), services. In general, it is ...

of the

RSFSR The Russian Soviet Federative Socialist Republic (Russian SFSR or RSFSR), previously known as the Russian Socialist Federative Soviet Republic and the Russian Soviet Republic, and unofficially as Soviet Russia,Declaration of Rights of the labo ...

and later of the

Soviet Union The Union of Soviet Socialist Republics. (USSR), commonly known as the Soviet Union, was a List of former transcontinental countries#Since 1700, transcontinental country that spanned much of Eurasia from 1922 until Dissolution of the Soviet ...

. There were two institutions with this name, at different times, 1917–1932 and 1963–1965.

1917–1932

The VSNKh of the first period was the supreme organ of the management of the economy, mainly of the industry.

Foundation

The VSNKh was launched on December 5, 1917, through a decree of the Council of People's Commissars (Sovnarkom) and All-Russian Central Executive Committee of Soviets of the Russian Socialist Federative Soviet Republic.Alec Nove, ''An Economic History of the USSR.'' New Edition. London: Penguin Books, 1989; pg. 42. Its stated purpose was to "plan for the organization of the economic life of the country and the financial resources of the government". It was subordinated to the Sovnarkom. The recently established All-Russian Council for Workers' Control was dissolved into the new organisation. It had rights of confiscation and expropriation. The first chairman was Valerian Osinsky and with Bukharin, Georgy Oppokov (Lomov), Milyutin, Sokolnikov, and Vasili Schmidt also appointed to the council.

Reorganisation

After the creation of the

in 1923 it was transformed into the joint all-Union and republican People's Commissariat. In 1932, it was reorganized into three People's Commissariats: of heavy industry, light industry and forestry. In each of the union republics of the Soviet Union, subordinate organisations existed. These were referred to as ''ВСНХ'' followed by their union republic acronym. (for example ''ВСНХ БССР'' (VSNKh BSSR) for the Belarusian SSR). The all-union council could be referred to as ''ВСНХ СССР'' (VSNKh SSSR). The republican VSNKhs had control over small scale, minor industries which used local materials and supplied local markets and which were referred to as "enterprises of republican subordination". Large scale industrial enterprises ("enterprises of union subordination") were controlled by one of the industrial sector departments of the all-union VSNKh.

Organisational structure

Within the VSNKh, departments were split into two types.

Functional sector departments

Departments within the functional sector dealt with decisions relating to

finance Finance refers to monetary resources and to the study and Academic discipline, discipline of money, currency, assets and Liability (financial accounting), liabilities. As a subject of study, is a field of Business administration, Business Admin ...

, planning, economic policy, and research and development.

Industrial sector departments

Departments of this type were created by decree in 1926 and consisted of "chief departments", known as ''glavki'' (''glavnye upravlenija''). Heads of all the departments in this sector formed the council of the all-union ''VSNKh'' together with representatives from the union republics.

Heads of the VSNKh

* Valerian Osinsky (1917–1918) * Alexei Rykov (1918–1920) * Felix Dzerzhinsky (1924–1926) * Valerian Kuibyshev (1926–1930) * Sergo Ordzhonikidze (1930–1932)

1963–1965

Vesenkha was reestablished by Nikita Khrushchev when he introduced decentralization of the management of industry by means of

sovnarkhoz Sovnarkhoz (, ''sovet narodnogo khozyaystva'', "Council of National Economy"), usually translated as Regional Economic Soviet, was an organization of the Soviet Union The Union of Soviet Socialist Republics. (USSR), commonly known as the Sov ...

es. It was subordinated to the Council of Ministers of the USSR and managed industry and construction. Sovnarkhozes were introduced by Nikita Khrushchev in July 1957 in an attempt to combat the centralization and departmentalism of ministries. The USSR was initially divided into 105 economic regions, with sovharknozes being operational and planning management. Simultaneously, a large number of ministries were shut down.