Stalin and the Soviet Union's First Five Year Plan
Even though there is no formal date representing the commencement of the Stalin era, many reference the beginning of this era with the inauguration of the Soviet Union's First Five Year Plan in April of 1929. This 1,000 page plan was the first of its kind, it proposed rapid industrial and economic growth for the former Soviet Union. This economic program was not one governed by rational thought, rather it was a series of gigantic mobilization campaigns aimed at pushing the nation ahead to economic superiority.
Economists developed two serious options for the plan; a "minimum" plan and an "optimum" plan. Even though most Soviet Union economic experts felt that the minimum versions projected increases were advantageous, the central committee and Stalin adopted the optimum version. The optimum plan called for quantum leaps in economic production, industrial production, heavy industry, consumer goods and agriculture. "The investment program which formed the backbone of the Five Year Plan was an ambitious one"(Dobb, pp.235).
The goals of Stalin's economic program were not entirely realistic. Instead of taking the available resources, organizing them as efficiently as possible and striving for reachable goals; it was a series of titanic mobility campaigns; usually uncoordinated and sometimes harmful to each other. The first Five Year Plan was a movement aimed at pushing the nation ahead economically at a reckless speed with no regard for the possible implications. Stalin spoke these words in November 1929, "we are advancing, full steam ahead along the path of industrialization to Socialism, leaving behind the age-long Russian backwardness"(Dobb, pp. 245).
The optimal versions goals were extravagant. They intended to achieve a "110 percent increase in industrial productivity, a 30 percent drop in fuel consumption, and a 50 percent drop in construction costs"'(Dobb, pp. 262). Among these expectations they expected optimal weather, optimal production, high prices for Russia's agricultural exports and low defense spending. Their expectations were not met. Problems formed after the first year of the plan, the only year that reached anticipated production increases. Desperate to transform Soviet Russia into an economic superpower, Stalin and his politburo reacted not by lowering expectations of the plan; but by increasing the goals of the plan.
The reason for Stalin's insistence on these impossible goals is unclear. One logical explanation is that the Soviet Union had been lagging behind the West economically for too long. Stalin felt an urgency to transform the former Soviet Union into a proletariat society with an industrial base sufficient enough to support a socialist way of life. Stalin committed to achieving these goals regardless of how great the costs were. The costs proved to be burdensome to the peasants during the collectivization of the farms and to many economic sectors during the industrialization drive.
Beginning in 1929 peasants were removed from their homes and forced into collective farms. This collectivization affected an enormous amount of Russian people. The actual implementation of this project, though pre-meditated, was not planned carefully. The lack of planning lead to increased chaos and brutality which in turn made collectivization an extreme economic catastrophe. Stalin's collectivization campaign resulted in the 1929 harvest to be less than the 1928 harvest. There were severe shortages of grain, sugar beets, and hemp. To make matters worse, peasants refused to sell what they produced to the states because prices were so low. The peasants destroyed crops, tools and animals rather than give them up to the state. Overall, production in agriculture dropped by 20 percent and did not reach pre-collectivization levels until after World War II.
The industrial drive of the Five Year Plan made the conditions in the Soviet Union more severe. "The rate of investment in heavy industry was considerably increased over the original estimates mainly at the expense of investment in the light industry"(Dobb, pp. 255). Due to the extreme investment increase in heavy industry many small scale handicraft production sectors and the private sector of agriculture suffered dramatically. New heavy industrial projects had swollen the labor force more than was expected and additional workers had to be hired. Consequently these workers burdened the agricultural sector because they had to be fed. Consumer goods production was pruned in favor of heavy industry. While some consumer goods industries continued to do well most did not. They took a back seat to heavy industrialization. This is turn caused a major imbalance with in the industrial economy of the Soviet Union.
Despite initial success, the First Five Year Plan was not as successful as the economic leaders of the former Soviet Union had anticipated. Most of the failure of the plan was due to haphazard planning and from Stalin and the economic advisors setting unrealistic goals for economic performance in the Soviet Union. A more successful plan would have called for the organization of what resources were available, and the efficient allocation of these resources in the hopes of attaining realistic economic performance. Unfortunately that is not what happened. It took the Soviet Union decades to make up for the lost revenues from agriculture due to collectivization. Agriculture was treated as a means to an end and because of this it was on the verge of total collapse. Even though the plan did achieve its primary objective in industry; the construction of heavy industry; it prospered at the expense of the other economic sectors of industry. Had the economy of the Soviet Union been built up with rational expectations it is possible that today the Soviet Union would have remained to be one of the great economic powers of the world. Instead of needing assistance from the rest of the world-maybe the Soviet Union would be able to compete with the Western world.
And throw into the balance the chance of being arrested, shot, or exiled to Siberia after the end of NEP, and it does look like a golden age.
The Industrialization of Russia and Latvia
In the month of November 1927, Joseph Stalin launched his "revolution from above", by setting two extraordinary goals for Soviet domestic policy: rapid industrialization and collectivization of agriculture. His aims were to erase all traces of the capitalism that had entered under the New Economic Policy and to transform the Soviet Union as quickly as possible, without regard to cost, into an industrialized and completely socialist state, avowing 'to catch up with and overtake America'.
Between 1929 and 1941, when Hitler cast aside his nonaggression pact with Stalin and launched a surprise attack on the Soviet Union, industrialization grew with astonishing speed. Industrial production grew at an average annual rate of 16 percent within the first two Five-Year Plans (McKay, 11), so that total output in industry was approximately four times that in 1928.
Between the 30 years of 1928 to 1950, the Soviet Union moved up from fifth place to second in terms of total industrial production (Feiwel, 42). However due to exceedingly rapid industrial growth great unevenness arose.
In some areas, progress has been astonishing, while in others, there has been very little growth, or none at all, yet in some, retrogression has occurred. Heavy industry - the more important sector in that planners saw that it would provide the basis for producing further means of production - grew far more rapidly than light and consumer industry. Also, the steel industry -Stalin's obsession - increased 500 percent in the decade from 1928 to 1937, while cotton textiles for consumers increased only about 25 percent (McKay, 12).
Stalin's industrial drive was accompanied by a complete and tragic transformation of the Russian peasantry, involving a radical change in their regular mode of life. They were forced to give up their land and animals and become members of collective farms. This was very unpopular among the peasants, and with little wonder it is, that progress in agriculture lagged far behind that in industry. Fluctuating rather widely because of climatic conditions and the intensity of attacks on the peasantry, the all-important output of grain increased hardly at all between 1928 and 1938.
Collectivization had a certain crude logic to it, but was an integral part of the industrialization process. Although agricultural output remained low, total food supplied by the now collectivized peasantry rose substantially. And whereas under NEP peasants could sell their grain for the best price, they were now required to sell a much greater amount to the state at low prices. The state then sold bread to the population at much higher prices, thereby assuring urban workers of food and gaining large sums for further investment.
Three important factors to Soviet industrialization were 1) the skills with which the Soviets borrowed and adopted from the advanced Western technology, 2) the country's vast natural resources, and 3) the underemployed manpower of the villages. Also stressed for the Soviet experience was the extremely high proportion of national income that went into investment, as opposed to current consumption. Investment in the socialized industry jumped six-fold from 1928 to 1932, and remained very high thereafter (McKay, 13).
More than one-third of what was being produced was being used back into ever more factories and equipment, while all consumption accounted for two-thirds of what was being produced.
Also, close centralized controls, with political coercion and terror, over the physical 'surplus' of agriculture and over the 'reserve army' of the rural underemployed, implemented primarily through the collective farms; assignments of physical targets to producers from the lowly worker up to the minister; and, inducing the fulfillment of the targets by administrative pressure, propaganda, and especially by means of an elaborate system of material incentives have added greatly to the industry process.
Rapid industrialization and the collectivization of agriculture did not result in any sharp improvement in the standard of living of the Soviet masses. It set goals that were unrealistic - a 250 percent increase in overall industrial development and a 330 percent expansion in heavy industry alone (web pages) . All industry and services were nationalized, managers were given predetermined output quotas by central planners, and trade unions were converted into mechanisms for increasing worker productivity. Many new industrial centers were developed and thousands of new plants were built throughout the country.
Though the ordinary workers and peasants gained the most meager of improvements there is one remarkable aspect to the process. This is the way in which industrial growth increased the resources at the command of the state and particularly, the military in times of war. Between 1928 and 1952, it is estimated that the funds which the state could appropriate for its uses increased almost nine times, while funds earmarked for expenditure in the armed forces alone increased about twenty-six times (McKay, 15). It would be fair to say that the Soviet pattern of industrialization has served the state well, but the people poorly.
Much of the same actions and consequences took place in Latvians industrialization. In the mid 1950's, the beginning of Stalin's plans took place. Big Soviet style industrial enterprises were built, and workers from other republics were sent to Latvia to work. The historically formed cultures were doomed to extinction and a new uniform Soviet culture was envisaged. After Kruschev's lead, the economy started to deteriorate in that of the Brezhnev regime, and it became obvious that the planned economy was inefficient.
The building of new, gigantic plants accelerated and more and more workers from the other republics were sent over once again. One of the reasons behind this was the creation of interdependence of the Soviet republics. The industrial plants mainly processed raw materials imported from other Soviet republics, with the help of the imported work force. Also, many culturally important places in Latvia were destroyed during this period, but disregarding all the decay, the Latvians still followed their cultural traditions, and followed industrialization much as it happened in Russia.