At the behest of Vladimir Lenin, war communism, which was introduced during the civil war and sought to achieve full state ownership and operation of the economy immediately, was abandoned as unwieldy, unworkable, and premature. It was replaced by the NEP, under which state industry was divided into two categories: the commanding heights and a decentralized sector. The former industries, which included fuel, metallurgy, the war industries, transportation, banking, and foreign trade, remained under direct supervision of the government in the form of the Supreme Council of the National Economy (VSNKh). These industries continued as part of the central budget and were subject to centralized allocations of supplies and outputs.
The decentralized industries, consisting mainly of firms serving ordinary consumers, were encouraged to form into trusts. VSNKh created sixteen new departments, which replaced the fifty or so glavki, to supervise the largest and most important trusts. About a quarter of the trusts, mainly involved in light industry, were supervised at the decentralized level of the sovnarkhozy. By mid-1923 there were 478 trusts composed of 3,561 enterprises and employing about 75 percent of the total industrial workforce. Subsequently, many trusts were amalgamated into even larger units, known as syndicates.
The consolidation of industries into trusts and of trusts into syndicates was obviously intended to make control and coordination of the economy simpler and more effective. These large-scale organizations posed certain problems, especially when their managers sought to use the monopoly power they provided against consumers or other sectors of the economy. The Soviet trust disappeared with the beginning of rapid industrialization and the five-year plan era of the 1930s.
See also: committee for the management of the national economy; new economic policy
Maurice Dobb. (1948). Soviet Economic Development since 1917. New York: International Publishers.
Gregory, Paul R., and Robert C. Stuart, Soviet Economic Structure and Performance, 4th ed. New York: Harper-Collins.
James R. Millar