Immediately after the Russian Revolution in 1917, the young government was not prepared to take over the industries but wanted to establish workers’ control. The factory committees were recognised as the organ of workers’ control in each individual enterprise. The employers obviously resisted workers’ control and it was met with further lockouts and sabotages. Industrial output had declined and was a fraction of what it had been in 1913 and workers were living in miserable conditions. By April 1918, 46 percent of industrial workers were unemployed. Every basic necessity from food to fuel to clothing was in short supply. In fact, between November 1917 and June 1918, many factories and mills began to be run under “workers’ self-management”.
Finally, on 28 June 1918, by an order of the Soviet Council of People’s Commissars, all mining, engineering, textile, electrical, wood, tobacco, glass, ceramics, leather, rubber, cement and transport industries worth over half a million roubles was nationalized. The immediate goal of the decree was to stop the collapse of industry and sabotage by its owners. This decree was the first in a series of nationalizations in 1918 that laid the initial foundations for a socialist economy.