Economy of the USSR during the Great Patriotic War

The Economy of the USSR during the Great Patriotic War (1941–1945)

Introduction

The economy of the Soviet Union during the Great Patriotic War (1941–1945) underwent a dramatic transformation, turning into a mobilization war economy. Despite catastrophic losses at the initial stage of the war, the USSR managed to restore production, transfer industry to a war footing, and provide the front with the necessary resources. One of the key factors in the victory over Nazi Germany was the state’s ability to centrally manage the economy, redistribute resources, and finance military needs.

I. General Features of the USSR Economy during Wartime

1. Centralized Planning The dominant model of centralized planning was strengthened. The State Defense Committee (GKO), created on June 30, 1941, concentrated all power in its hands, including economic power. People’s Commissariats (analogous to ministries) exercised direct management of industries.

2. Mobilization of resources More than 1,500 large enterprises were evacuated to the east — to the Volga region, Siberia, the Urals, and Central Asia. They were restored and launched in the shortest possible time. The military industry reached its peak productivity already in 1942–43.

3. Military priority in the economy The production of consumer goods was sharply reduced. Priority was given to weapons, ammunition, transport, and the construction of defense facilities.

II. Financing the economy

1. The state budget and its structure Military expenditures reached more than 50% of the budget (according to various estimates, up to 60–70% in peak years). The budget was in deficit, but the deficit was covered by domestic sources.

2. Domestic loans and war bonds The USSR actively used the practice of forced government loans. Citizens signed up for war bonds, often on orders from above, with virtually no opportunity to refuse.

3. Labor as a form of financing Labor mobilization (including forced labor) replaced monetary relations in a number of cases.

III. Currency and monetary relations

1. Stability of the ruble and money circulation The ruble maintained nominal stability due to administrative control over prices and trade turnover, but its purchasing power was falling.

2. Rationing system Since 1941, a rationing system for distributing food and essential goods was introduced. Monetary relations in this area were almost absent.

3. Inflation and the shadow market Despite strict control, inflation manifested itself in rising prices in collective farm markets and the «black market».

IV. Foreign economic aspects

1. Lend-lease Aid from the USA and Great Britain played a significant role. The USSR received food, machinery, medicines, and equipment.

2. Trade with allies and neutral countries Limited trade was conducted with Iran, Sweden, Turkey and other countries within the framework of exchange.

Conclusion

The economy of the USSR during World War II demonstrated a high degree of adaptability. The mobilization model made it possible to provide the front and the rear with everything necessary. Despite the sharp decline in living standards and the deformation of the monetary system, this model ensured victory and became the basis for post-war recovery.