Reincarnated as Nikolai II

Chapter 159 Promises Must Be Kept: Pacta sunt servanda (13)

The Soviet Union, as a communist state, lacked developed capital and private investment. Among the three elements of industry - production, distribution, and consumption - it lacked distribution and consumption.

Then how did this country, with practically nothing, manage to become the world's leading industrial nation in the 1920s?

First, investment - in other words, capital.

While in other countries, wealthy men in suits would naturally establish companies, develop technology, hire workers, and pioneer markets, then generate profits to pay taxes to the national treasury.

The poor Soviet Union's solution was simple.

They abolished private property and markets in rural areas, and the government set low prices for agricultural products, investing the profits generated from the distribution process into manufacturing.

Simply put, since it was an agricultural country, they squeezed the farmers.

Although they did make the farmers independent, there was a reason why millions died of starvation every year.

Industrial expansion.

While Western companies experienced organic industrial growth through a self-reinforcing cycle of profit generation and reinvestment, the Soviet Union took a radically different approach. In the West, as companies pioneered new markets and products, their profits allowed them to invest in research, better equipment, and expanded production capacity. This in turn led to improved products, wider distribution, and greater market penetration - generating even more profits that could be reinvested. This virtuous cycle created sustainable, market-driven industrial expansion over many decades.

The Soviet Union, lacking market mechanisms and private enterprise, could not harness this natural process of profit-driven growth and reinvestment. Instead, the Communist state pursued a dramatically different path: rapid, forced industrialization through central planning. Between 1925 and 1930, the Soviet leadership under Stalin implemented an unprecedented program of complete industrial and agricultural collectivization. This involved the state seizing control of all major industries, from steel mills to farming collectives, and directing their operations through rigid five-year plans.

This country simply and conveniently industrialized and collectivized everything from agriculture to heavy industry in the five years between 1925 and 1930.

Yes, despite destroying the mir system by their own hands, the Soviets applied this mir system to industry.

Collective farms.

Collective mines.

Collective factories.

Collective construction.

..

.

Well, they probably followed the mir-style labor since it perfectly matched the system required by communism.

I suppose to the Soviets, land was just a means of production like factories.

While this was an unimaginable oppression and madness in Western society where free markets existed for both labor and capital, it had its advantages.

Discover hidden tales at My Virtual Library Empire

The development I wanted from the start was one thing.

"First, we'll start with government consumption in areas like the military, but ultimately make the people consume. In other words, the most important task is moving the market entity from the state to the people."

The Nazi-style heavy industry growth.

Using South Korea's development method this time would be premature for the empire.

In other words, it won't be simply resolved by establishing legal grounds like the Six Nurture Laws and providing loans.

After all, South Korea was fast because it was a latecomer who studied numerous leading cases before following, not a pioneer.

However, despite insufficient private investment due to the Great Depression.

Despite inadequate markets and low consumption.

The Nazis succeeded in industrial development in a short period rivaling the Soviet Union.

I believe the starting point was when the Nazis changed one law as soon as they took power.

1933, Act of the Formation of Compulsory Cartels.

Want to create a cartel where only a few take everything?

Want to maximize profits through monopolistic positions because you're so greedy?

Fine. The state will help.

We'll privatize state industries and put them in your mouth, and even stuff the funds gained from privatization back in your mouth.

However.

"From now on, all monopoly position companies and cartels will be treated as public corporations."

"The resistance in that process..."

"If they resist, we'll just find another owner. If they don't like state intervention, they should rise up through free competition."

They'll have to choose.

Whether to maintain their monopoly position at the top while receiving state interference, or to come back down freely to compete.