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War Communism, in the history of the Soviet Union, economic policy applied by the Bolsheviks during the period of the Russian Civil War (1918–20). More exactly, the policy of War Communism lasted from June 1918 to March 1921. The policy’s chief features were the expropriation of private business and the nationalization of industry throughout Soviet Russia and the forced requisition of surplus grain and other food products from the peasantry by the state.
Inflation drives up the cost of everyday goods, affecting what you pay for items both large and small.
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These measures negatively affected both agricultural and industrial production. With no incentives to grow surplus grain (since it would just be confiscated), the peasants’ production of it and other crops plummeted, with the result that starvation came to threaten many city dwellers. In the cities, a large and untrained bureaucracy was hastily created to supervise the newly centralized, state-owned economy, with the result that labour productivity and industrial output plummeted. By 1921 industrial production had dropped to one-fifth of its prewar levels (i.e., in 1913), and the real wages of urban workers had declined by an estimated two-thirds in just three years. Uncontrolled inflation rendered paper currency worthless, and so the government had to resort to the exchange and distribution of goods and services without the use of money.
By early 1921 public discontent with the state of the economy had spread from the countryside to the cities, resulting in numerous strikes and protests that culminated in March of that year in the Kronshtadt Rebellion. In response, the Bolsheviks had to adopt the New Economic Policy and thus temporarily abandon their attempts to achieve a socialist economic system by government decree.
