Shortcomings of Command Planning and Agriculture
-As soon as we deal with an organized national economy, all basic'"problems"of political economy, such as price, value, profit, etc., simply disappear..., for here the economy is regulated not by the blind forces of the market and competition but by the consciously implemented plan. -Nicolai Bukharin
Command economy in the Soviet Union was established during the 1920s and '30s in the struggle to industrialize the U.S.S.R. When the Bolsheviks took over the Russian Empire in 1917, they had no clear notion as to how an economy should be run. No guidance was to be found in the writings of Karl Marx other than the assertion that a socialist society would operate the economy for the common good. They interpreted that it was needed to create organs of economic administration to replace the market system of capitalism. In the future Communist society there would be no money, no profit motive. No wages would be necessary to stimulate effort "from each according to his ability, to each according to his needs." 1
Amid confusion and a civil war, gradually a 'command economy' was established. In this system, subordinate units of the economy operated in accordance with administrative instructions, and the sole effective criterion of management decision became conformity to plan, to the instructions issued by the central administrative planning organs, such as the Gosplan, central board that supervised various aspects of the planned economy of the Soviet Union by translating into specific national plans the general economic objectives outlined by the Communist Party and the government.3
Economic development was done in five-year plans and concentrated on heavy industry and quantitative goals such as tons of metal, millions of square meters of cloth, millions of rubles' worth of construction or of furniture.
Quality was often sacrificed in order to fulfill the plan in quantitative terms; planned targets expressed in tons, for example, encouraged excessive weight in the product concerned, while targets expressed in rubles discouraged economy and rewarded the use of expensive materials. Plan-fulfillment as a dominant criterion of success encouraged management to conceal their productive potential so as to get an 'easy' plan, while fears of supply shortages encouraged hoarding.2
If your local store, did indeed, have products like flour or sugar, your bought them by the kilogram. The appearance of a simple necessity such as toilet paper would spread through the neighborhood instantly and soon there would be a huge line of people buying 30 rolls of toilet paper at once because you never knew when the store would have toilet paper again
Agricultural planning in the Soviet Union was particularly wasteful. With priority given to industrialization, agriculture was essentially treated as a source of cheap food and materials for the cities. The peasants were expropriated into huge collective farms, kolkhozy. The entire system was primarily designed to ensure deliveries of produce at low prices, and the planners and administrators concentrated on procurements, while production plans were seldom, if ever fulfilled.
After the death of Stalin, Nikita Khrushchev in the late 50s and early 60s, introduced a substantial change of policy, with greatly improved prices and a major investment program designed to restore agriculture. But the main problem lay in the whole organization or lack of it in the Soviet Union. Different Ministries would be responsible for different aspects of agricultural productivity, from Ministry of Transportation to the Ministry of Soil Science. And frequently co-ordination of action and information would simply not take place between the organs responsible for development and implementation of plans.
Despite increased government investments and higher farm prices, output still rose slowly and costs rose quickly, necessitating very large subsidies. Peasant incomes rose somewhat, but incentives to work on the large state and collective farms were ineffective, and millions of townspeople had to be mobilized annually to help with the harvest. Primary targets were students, who were volunteered to help build the brighter communist tomorrow.
Education in general was free and students received stipends every month for cost of living expenses, however, they could also be kicked out of university under any reason presented by a professor or your local, friendly Komsomol leader. If you didn't go to pick potatoes or harvest crops, you were simply kicked out of the university. Plus, propaganda was one thing done perfectly in the Soviet Union and students actually wanted to go and help their fellows citizens with the "Great Socialist Dream" that according to propaganda posters included gathering of cabbage.
Lilia Vladimirovna Roussak was a student during the 60s at the Moscow State University and she recalls how excited the students were to go and help with the harvest. But she says that they ended up simply driving the gathered grain to the Volga river and dumping it out because they simply did not have enough holding and processing facilities.
One of the Communist Party's more brilliant ideas was to send large numbers of recent graduates to the so-called "Middle Strip" zone of the Soviet Union to develop agriculture. The only thing that the planners did not account for was that the quality of soil in the region just happened to be extremely poor and the climate dry.
In 1987, proposals were adopted that would allow the leasing of land to families over and above the small plots permitted before.4 With the break-up of the Soviet Union in 1991, more and more land is in private hands and collective farms were offered for sale to the farm workers but reform is slow, not only in the economic system of Russia in general but also in people's thoughts and attitudes. And unfortunately, the same problems of poor infrastructure and organization plague the new owners.
1. "Economic Growth and Planning: Economic Planning in Communist countries" Britannica Online
2. "Economic Growth and Planning: Economic Planning in Communist countries" Britannica Online
3. "Gosplan" Britannica Online http://www.eb.com:180/cgi-bin/g?DocF=micro/241/12.html
4."Economic Growth and Planning: Economic Planning in Communist countries" Britannica Online