In a public enterprise economy, the government has the power to nationalize any or all industries which can lead to devastating consequences. One the countries famous for doing this was the Soviet Union. Joseph Stalin, the then dictator of the Soviet Union instituted two domestic policies that would eliminate any capitalism in Russia. He would institute rapid industrialization and the collectivization of agriculture.This would be known as the Five Year Plan. Stalin wanted to change all private owned farms into state owned farms as he thought this would improve agricultural productivity. This grain was then expected to feed all the urban workers and any surplus would pay for programs and factories related to industrialization. He would put down a certain quota that the farmers needed to reach by a certain amount of time. However the farmers were not allowed to take grain away from what they were growing for the state until they met the quota. This led to a massive famine of 1932-33 in the Ukraine in which millions died. At first the peasants resisted the idea of collective farms and so Stalin purged the land of any that opposed it. In 1929, Stalin needed to finance his industrialization plans so he raised the quotas of grain in the Ukraine by forty percent. By raising the quotas so high, the farmers would not be able to produce enough food to feed themselves and as it was illegal for them to take any until the quotas were met. Those farmers that did not appear to be starving were suspected of hoarding grain. In the end the death toll in the Ukrained was over six million people dead. This clearly shows how when the government has the power to nationalize industries like agriculture, devastating results can occur. The Russian government was trying to progress itself forward economically at any price even the death of its citizens. This type of government presence in the economy should not be promoted due to the serious problems it can cause.
In a system that...
Please join StudyMode to read the full document