Stalin’s methods of financing industrial expansion also had parallels in the Russian past. Both under him and the last Romanov tsars it was the peasants who, of all the population groups, paid a particularly heavy price for the government’s industrial policy. To finance economic modernization, the tsarist government relied on Russia’s traditional fiscal structures, such as the village commune, which played a crucial role in the collection of government taxes. On top of the heavy fiscal burden of direct taxes, peasants also paid for the industrialization as consumers, through high tariffs on imported goods and rising indirect taxes on consumer goods.

Similarly, under Stalin capital was forcibly squeezed out of the reluctant population, mainly the peasantry, through an arbitrary price system. But the most drastic solution of how to finance industrial expansion was found in creating on the basis of small and low-productive individual peasant farmsteads large-scale socialist collective farms. The collectivization of agriculture enabled the state to exercise direct administrative control over large collectivized farms, whose profits could be ploughed back into the construction of new industrial plants. The policy looked radical and unprecedented, yet it too, to some extent, drew upon the legacies of the past, including serfdom and the traditions of the village commune. The imposition of the collective-farm system was achieved partly due to state terror but also partly due to the vestiges of communal traditions and the egalitarian attitudes of peasants in the countryside.

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