Council of Labor and Defense
The Council of Labor and Defense (Russian: Совет труда и обороны, Sovet Truda i Oborony, Latin acronym: STO), first established as the Council of Workers' and Peasants' Defense in November 1918, was an agency responsible for the central management of the economy and production of military materiel in the Russian Socialist Federative Soviet Republic and in its successor state, the Soviet Union. During the Russian Civil War of 1917-1922 the council served as an emergency "national economic cabinet", issuing emergency decrees in an effort to sustain industrial production for the Red Army amidst economic collapse.
The Council, a commission of the Council of People's Commissars, included among its executive body such top-ranking Bolshevik leaders as V. I. Lenin, Leon Trotsky, and Joseph Stalin, who oversaw a burgeoning professional apparatus. Following the end of the Civil War the council was renamed and its economic planning and regulatory roles expanded to encompass the entire country. As the first central economic planning authority in Soviet Russia, the Council of Labor and Defense served as the institutional precursor to the better-known Soviet planning authority of later years, Gosplan, launched in August 1923 as a subcommittee of STO.
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The Russian Revolution of 1917 concluded in the fall with the October Revolution, organized and achieved through the direction of V.I. Lenin's radical Bolshevik faction of the Russian Social Democratic Labor Party. With the country already decimated and disorganized by three brutal years of the First World War, the fledgling socialist state struggled to hang on and survive civil war, a multinational foreign military intervention, and the collapse of the economy, including the broad depopulation of major cities and the onset of hyperinflation.
The revolutionary government faced the dual tasks of economic organization and the marshaling of material resources on behalf of its Red Army. A new body known as the Supreme Council of National Economy (Latin acronym of the Cyrillic: VSNKh, commonly sounded out as "Vesenkha") was established on December 15, 1917 as the first governmental entity for the coordination of state finance and economic production and distribution in the Russian Socialist Federative Soviet Republic (RSFSR). Vesenkha was attached to the de facto cabinet of the RSFSR, the Council of People's Commissars, and formally answered to that body.
As the Vesenkha bureaucracy developed, it began to generate specialized departments from itself, entities known as glavki, each responsible for the operation of a specific economic sector. These subordinate entities were known by descriptive syllabic abbreviations, such as for example, Tsentrotextil' for the central department in charge of textile production, and Glavneft and Glavles for the central departments in charge of oil and timber, respectively. These organizations frequently corresponded to economic syndicates established prior to the war and taken over by the pre-revolutionary Tsarist government as part of its coordination of the economy for its own war effort. The personnel employed in these glavki were often the same individuals who served in a similar capacity under the old regime.
Although there were fewer than 500 nationalized companies prior to June 1918, by the end of that month the intensification of the Civil War and worsening economic situation led to adoption of a decree nationalizing all factories of the nation. Goods of all kinds vanished from the marketplace and rationing was extended. Unable to receive fair value for their surplus grain from the state grain-purchasing monopoly, peasants withheld their production from the official market, causing a parallel black market to emerge. The state's prodrazverstka, involving the systemic use of force against the peasantry in order to requisition grain further deepened the crisis. This new centralized and coercive economy, brought about by economic collapse and the exigencies of civil war is remembered to economic historians as Military Communism.
In the absence of a viable market economy, the Soviet state needed a mechanism for the coordination of production and distribution to serve the direct needs of the military. On November 30, 1918 the All-Russian Central Executive Committee (executive authority of the Congress of Soviets) created a bureaucratic entity designed for this purpose, initially called the Council of Workers' and Peasants' Defense. This bureau was presented with the task of gathering and disbursing resources needed for the war effort.
The Council of Workers' and Peasants' Defense was originally conceived as an emergency body dedicated solely to the mobilization of Russia's resources for the fighting of the civil war. Lenin himself was named as chairman, Leon Trotsky sat as the People's Commissar of War, Leonid Krassin as head of the extraordinary commission of supply, and Joseph Stalin as the representative of the All-Russian Executive Committee.
The organization quickly emerged as what historian Alec Nove has called the "effective economic cabinet" of the nation, with the power to issue legally binding decrees. For the duration of the civil war, running up to early 1921, the Council of Workers' and Peasants' Defense existed as an ad hoc basis, issuing its decrees on the basis that a national emergency existed and largely unconcerned with long-term planning processes. The council instead concentrated upon day-to-day exigencies related to the life or death military campaign.
As was the case with the parallel government planning organization Vesenkha and its glavki, the Council of Workers' and Peasants' Defense had a set of specialized subcommittees dedicated to specific aspects of the military industries. In many cases the two organizations attempted to extend their own influence and agendas within the same industries. Productive industry remained in crisis as authorities threw ma