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Economic Developments

Reasons for the Great Turn:

1927 – key factors – pushing regime towards shift in policy:
Serious weaknesses – industrial management – more efficiency –to increase production – to improve quality of industrial good. Problems of industry & agriculture – closely intertwined. Both peasants & urban agriculture – facing harsh economic conditions – including shortages, unemployment – low living standards/

Drive towards industrialisation – perceived to be going too slowly. By 1927 – NEP – falling – produce the growth that many leading communists had expected – they wanted to increase USSR’s military strength & develop self-sufficiency – less reliant on foreign imports. Huge crisis – grain procurement – winter – 1927-1928   amount of grain purchased by government was 25% down – previous year’s total. Grin prices – low & peasant produces – concentrating on other goods for which they could obtain higher wages. Party officials – sent a stream of complains to Moscow- blaming the peasants for hoarding grain while they hoped for higher official prices. Party was impatient – to revert true to communist ideology. To move towards true socialism – essential to develop industry & not have state dependent on procuring grain. Attitudes to economic policy – changing. Having previously –end of NEP – now ready to be mor radical – this may have been due to economic circumstances pushed him to look for new solutions or because he now felt secure enough in power to push through the policies had always wanted.

Revolution of policy:

1925 – 14th party congress – called for the transformation of our country from an agrarian into an industrial one, capable by its own efforts of producing the necessary means’

1926 – The NEP – maintained although concerns were raised as mire investment was needed to drive industry forwards.

Dec 1927 – At 15th party congress – announcement of the end of the NEP & beginning of 1st 5-year plan for rapid industrialisation known as the great turn.

The impact of the great turn:
1928-29 – began an economic & social revolution. Both its success & failures – have massive & lasting impact on Soviet economy on the lives of the people, both in industrial towns & cities and in the countryside. The new shift in policy also had a major impact on debates and power struggles within the Party. During 1928 & 1929 – clash of opinion between Stalin & Bukharin intensified & relations between the 2 former allies broke down completely. The NEP – over – era of rapid industrialisation was beginning.

 COLLECTIVISATION (1927-):

  • Introduced due to failures of NEP to obtain enough grain
  • Communists didn’t like or trust peasants – party of workers
    • Wanted to control and use them to benefit the economy
  • Needed to destroy kulaks
    • In local congress elections – Communists never did well
      • Usually valuable village counterparts e.g. kulaks/teachers elected
      • Simply because peasants respected and valued these people – did not care about Communist ideology
      • Seen by Communists as a conspiracy against them
    • Only 23 million out of 150 million peasants are Communist
      • ‘Held economy hostage’ in NEP- 1923 scissors crisis

FIRST FIVE YEAR PLAN (1928-1932/33)

  • AIMS: create socialism in one country, *prevent invasion, control USSR, beat capitalism, crush other leadership contenders (Bukharin), prove himself in leadership contest, achieve self-sufficiency, show off to other capitalist countries
  • FOCUS – Heavy industry e.g., coal, iron, oil, metals, energy
    • Weaponry – protect the USSR
  • Show pieces
  • Magnitogorsk – magnetic mountain
    • Full of iron ore – steel plant there
    • Workforce (ex-peasants) had few skills
  • Dnieper Dam – HEP
    • 1932, produce electricity, largest in Europe
  • White Sea Canal – White–Baltic
    • Forced labour
      • 12,000 out of 126,000 died
    • Depth = only 3.5m – not big enough for most vessels
  • Moscow Metro
    • 1935
    • First metro, only 11km and 13 stations
  • Successes:
    • Production increased but did not reach ambitious targets
      • Coal increased from 35.4 to 64.3 million tons (target = 75)
    • 1,500 industries
    • New areas of country opened up – iron works in Magnitogorsk
      • Pop increased from less than 100 to 100,000s
    • Dnieper Dam = HEP
    • 200,000 more people into higher education
  • Failures:
    • 1932-33 famine
    • Targets = too ambitious
      • Chemicals targets unfulfilled
    • Over-focus on heavy industry
      • Few consumer goods
    • Money diverted to collectivisation
    • Inefficiencies, bottlenecks

 

  • First FYP – Target manias
    • Competition between Gosplan and Vesenkha – targets increasingly made higher
    • ‘Optimum’ targets chosen e.g., coal 75 million tons
  • Planning
    • Based on socialist fantasy than rational planning
    • Plan = more of a propaganda device
    • Detailed planning was absent
    • Gov gave broad directives to local officials and managers – who had to work out methods to obtain them
  • Magnitogorsk
    • Raw materials in high demand
      • Firms requested more than they required – short on arrival (stolen)
    • Significant amounts of pig iron were unusable – metal-starved firms had to use it
  • Problems with high targets
    • Economic strain – materials in short supply, competition between firms
    • Powerful commissars made sure their pet projects got resources
    • Shock brigades into key industries – produce a lot
      • Left other areas in short supply
    • Bribery and corruption – illegal deals, hijacking lorries/trains
    • Bottlenecks – shortage of materials, bad transport
      • Railways couldn’t cope, planners didn’t invest enough in transport
    • Led to under/overproduction and wastage (excess, low quality output)
  • Why weren’t problems reported?
    • Did not want to be accused of sabotage
    • Mar 1928 – Shakhty coal mine – 5 executed in show trial
      • Aim = intimidate people
    • Who was blamed for problems? What happened to them? Why was this stopped?
      • Bourgeois specialists – pre-1917 managers – survived NEP due to ability
        • Now seen as saboteurs – deliberately causing problems
        • Imprisoned, show trials – convenient scapegoat
      • Wanted proletariat in key positions
      • 1931 – offensive stopped – losing key, valuable personnel
    • Which areas of the economy suffered?
      • Consumer goods, textiles, small-scale enterprises and workshops
      • Reasons – Nepmen, raw materials could not be supplied to them
        • No room for small-scale operations in large, centralised system
      • Why was the 2nd plan scaled back?
        • 1st plan = overambitious
          • Speed of industrialisation was too fast – party leaders acknowledged this
        • Severe shortages, transport issues, lack of skilled workers, slower rate of growth for certain industries
      • What improvements in organisation occurred?
        • People’s Commissariats – specific targets
        • Estimates of costs, labour, prices etc.
        • Investment into railways – more freight
        • New training schemes – increase amount of skilled workers
        • Shortages continued but not as much as 1st FYP
      • How did the 1st FYP help the 2nd FYP?
        • Schemes started in 1st FYP – became effective
        • USSR was almost self-sufficient – less dependent on imports
      • Successes of the 2nd FYP
        • 1934-36 = three good years
          • Impressive achievements by 1937
        • More investment in consumer goods – saw suffering of workers
        • Some improvements – still had shortages
      • Third FYP
        • Econ slowdown
        • Iron and steel stopped growing, general increase in industrial
        • Fuel shortages – oil failed to meet targets
        • Resources diverted to armaments, shortages elsewhere
      • What is to blame for the problems with the 3rd FYP?
        • Alec Nove – purges of valuable personnel

 

How did workers fare under plans?

  • Workers were enthusiastic, moving towards better society
    • Sacrifices now = better later
    • Approved of attack on bourgeois specialists
    • Party wanted proletarian intelligentsia – more skills, fill role of old specialists, loyal
    • Achieved to some extent
      • Higher education, living standards = better than mass of workers
    • Women – 10 million began work esp. medicine, teaching, some labourers
      • Paid less, difficult to advance
      • g., only 4 head doctors = female, but females made up 60% of doctors
    • Peasants – ½ of labour force
      • 1930 – average coal worker moved jobs thrice a year
      • Peasants lacked skills of working e.g., timekeeping, resentful of being forced
        • Lots of absenteeism
      • Quicksand society
        • Skilled/semi-skilled workers moved jobs very often
        • Managers tried to tempt them with better benefits
      • Skills shortages
        • 1931 – less than 7% of workforce = skilled
        • Untrained workers damaged machinery, made bad quality goods and didn’t maintain
      • Party response to shortages
        • Wage differentials – 1931 – egalitarianism in wages stopped
        • Piece work = more pieces = higher wage
        • Training – BUT trainees rushed though, 2nd = fewer but better programmes
        • Tough measures, dismissal, eviction, 2nd and 3rd – labour record book, internal passports
        • Forced labour – gulag inmates