In Tsarist Russia, as in the other combatant nations, the war greatly enhanced the role of the state. The state regulatory agencies were headed by a Special Council for Defence, which assigned military orders to industry. This was supported by more specific agencies such as the Metals Committee, which controlled the distribution of metals and fixed their prices. A Special Council for Food Supply attempted to set maximum prices; and the Provisional Government which came to power after the February revolution established a state grain monopoly. These instruments for controlling the economy varied considerably in their effectiveness and efficiency. But after October 1917 the Bolshevik or Soviet government was able to take over much of this planning apparatus and adapt it to its needs.

The Bolsheviks came to power with far-reaching objectives. Following Marx, they believed that the October revolution was the first victory of a world proletarian (working class) revolution which would transfer factories, the land and other means of production into social ownership by the state, local authorities or co-operatives. A planned economy directly controlled by the community would replace the market; money, the medium for market exchange, would cease to exist. In the first, ‘socialist’, phase of postrevolutionary development the social product would be distributed according to the quantity and quality of the work done by each individual. Later, the abundance of production achieved by the planned economy would enable the transition to the higher phase of ‘communism’, in which production would be distributed according to needs. Classes, the state and all national barriers would disappear.