Five-year plans for the national economy of the Soviet Union

The five-year plans for the development of the national economy of the Union of Soviet Socialist Republics (USSR) (Russian: Пятиле́тние пла́ны разви́тия наро́дного хозя́йства СССР, Pjatiletnije plany razvitiya narodnogo khozyaystva SSSR) consisted of a series of nationwide centralized economic plans in the Soviet Union, beginning in the late 1920s.

The Soviet state planning committee Gosplan developed these plans, which were then submitted for approval to the Politburo.

Most other socialist states, including the People's Republic of China, adopted a similar method of planning.

Background

Stalin inherited and upheld the New Economic Policy (NEP) from Vladimir Lenin. In 1921, Lenin had persuaded the 10th Party Congress to approve the NEP as a replacement for the War communism that had been set up during the Russian Civil War.

Under War communism, the state had assumed control of all means of production, exchange and communication. All land had been declared nationalized by the Decree on Land, finalized in the 1922 Land Code, which also set collectivization as the long-term goal. Although the peasants had been allowed to work the land they held, the production surplus was bought by the state (on the state's terms), the peasants cut production; whereupon food was requisitioned.

When the war ended, the NEP took over from War Communism. During this time, the state had controlled all large enterprises (i.e. factories, mines, railways) as well as enterprises of medium size, but small private enterprises, employing fewer than 20 people, were allowed. The requisitioning of farm produce was replaced by a tax system (a fixed proportion of the crop), and the peasants were free to sell their surplus (at a state-regulated price) - although they were encouraged to join state farms (Sovkhozes, set up on land expropriated from nobles after the 1917 revolution), in which they worked for a fixed wage like workers in a factory. Money came back into use, with new bank notes being issued and backed by gold.

The NEP had been Lenin's response to a crisis. In 1920, industrial production had been 13% and agricultural production 20% of the 1913 figures. Between February 21 and March 17, 1921, the sailors in Kronstadt had mutinied. In addition, the Russian Civil War, which had been the main reason for the introduction of War communism, had virtually been won; and so controls could be relaxed.

In the 1920s, there was a great debate between Bukharin, Tomsky and Rykov on the one hand, and Trotsky, Zinoviev and Kamenev on the other. The former group considered that the NEP provided sufficient state control of the economy and sufficiently rapid development, while the latter argued in favour of more rapid development and greater state control, taking the view, among other things, that profits should be shared among all people, and not just among a privileged few. In 1925, at the 14th Party Congress, Stalin stayed in the background but sided with the Bukharin group. However, later, in 1927, he changed sides, supporting those in favour of a new course, with greater state control.

Plans

Each five-year plan dealt with all aspects of development: capital goods (those used to produce other goods, like factories and machinery), consumer goods (e.g. chairs, carpets, and irons), agriculture, transportation, communications, health, education, and welfare. However, the emphasis varied from plan to plan, although generally the emphasis was on power (electricity), capital goods, and agriculture. There were base and optimum targets. Efforts were made, especially in the third plan, to move industry eastward to make it safer from attack during World War II. Soviet planners declared a need for "constant struggle, struggle, and struggle" to achieve communism. These five-year plans outlined programs for huge increases in the output of industrial goods. Stalin warned that without an end to economic backwardness "the advanced countries...will crush us."

First plan, 1928–1932

From 1928 to 1940, the number of Soviet workers in industry, construction, and transport grew from 4.6 million to 12.6 million and factory output soared. Stalin's first five-year plan helped make the USSR a leading industrial nation.

During this period, the first purges were initiated targeting many people working for Gosplan. These included Vladimir Bazarov, the 1931 Menshevik Trial (centered around Vladimir Groman).

Stalin announced the start of the first five-year plan for industrialization on October 1, 1928, and it lasted until December 31, 1932. Stalin described it as a new revolution from above. When this plan began, the USSR was fifth in industrialization, and with the first five-year plan moved up to second, with only the United States in first.

This plan met industrial targets in less time than originally predicted. The production goals were increased by a reported 50% during the initial deliberation of industrial targets. Much of the emphasis was placed on heavy industry. Approximately 86% of all industrial investments during this time went directly to heavy industry. Officially, the first five-year plan for industry was fulfilled to the extent of 93.7% in just four years and three months. The means of production in regards to heavy industry exceeded the quota, registering 103.4%. The light, or consumer goods, industry reached up to 84.9% of its assigned quota. However, quality was sacrificed in order to achieve quantity, and production results generated wildly varied items. Consequently, rationing was implemented to solve chronic food and supply shortages.

Propaganda used before, during and after the first five-year plan compared industry to battle. This was highly successful. They used terms such as "fronts," "campaigns," and "breakthroughs". The posters and flyers used to promote and advertise the plan were also reminiscent of wartime propaganda. A popular military metaphor emerged from the economic success of the first five-year plan: "There are no fortresses Bolsheviks cannot storm."

The first five-year plan was not just about economics. This plan was a revolution that intended to transform all aspects of society. The way of life for the majority of the people changed drastically during this revolutionary time. The plan was also referred to as the "Great Turn". Individual peasant farming gave way to a more efficient system of collective farming, the kolkhozes.

While economics were a major part of this plan, preparation for the upcoming war also affected all of the major parts of the five-year plan. The war effort really picked up in 1933 when Adolf Hitler came to power in Germany. The stress this caused on internal security and control in the five-year plan is difficult to document.

A major event during the first Five Year-Plan was the famine of 1931–33.

Second plan, 1933–1937

Because of the successes made by the first plan, the Politburo did not hesitate with going ahead with the second five-year plan in 1932, although the official start-date for the plan was 1933. The second five-year plan gave heavy industry top priority, putting the Soviet Union not far behind Germany as one of the major steel-producing countries of the world. Further improvements were made in communications, especially railways, which became faster and more reliable. As was the case with the other five-year plans, the second was not as successful, failing to reach the recommended production levels in such areas as the coal and oil industries. The second plan employed incentives as well as punishments and the targets were eased as a reward for the first plan being finished ahead of schedule in only four years. With the introduction of childcare, mothers were encouraged to work to aid in the plan's success. By 1937 the tolkachi emerged occupying a key position mediating between the enterprises and the commissariat.

Third plan, 1938–1941

The third five-year plan ran for only 3½ years, up to June 1941, when Germany invaded the Soviet Union during the Second World War. As war approached, more resources were put into developing armaments, tanks and weapons, as well as constructing additional military factories east of the Ural mountains.

The first two years of the third five-year plan were under target of the expected production goals. Still, a reported 12% to 13% rate of annual industrial growth was attained in the Soviet Union during the 1930s. The plan had intended to focus on consumer goods. The Soviet Union mainly contributed resources to the development of weapons, and constructed additional military factories as needed. By 1952, industrial production was nearly double the 1941 level ("Five-Year Plans"). Stalin's Five-Year Plans helped transform the Soviet Union from an untrained society of peasants to an advanced industrial economy.

Fourth and fifth plans, 1945–1955

Stalin in 1945 promised that the USSR would be the leading industrial power by 1960.

The USSR at this stage had been devastated by the war. Officially, 98,000 collective farms had been ransacked and ruined, with the loss of 137,000 tractors, 49,000 combine harvesters, 7 million horses, 17 million cattle, 20 million pigs, 27 million sheep; 25% of all capital equipment had been destroyed in 35,000 plants and factories; 6 million buildings, including 40,000 hospitals, in 70,666 villages and 4,710 towns (40% urban housing) were destroyed, leaving 25 million homeless; about 40% of railway tracks had been destroyed; officially 7.5 million servicemen died, plus 6 million civilians, up to 20 million in all that died. In 1945, mining and metallurgy were at 40% of the 1940 levels, electric power was down to 52%, pig-iron 26% and steel 45%; food production was 60% of the 1940 level. After Poland, the USSR had been the hardest hit by the war. Reconstruction was impeded by a chronic labor shortage due to the enormous number of Soviet casualties in the war (between 20 and 30 million). Moreover, 1946 was the driest year since 1891, and the harvest was poor.

The USA and USSR were unable to agree on the terms of a US loan to aid reconstruction, and this was a contributing factor in the rapid escalation of the Cold War. However, the USSR did gain reparations from Germany, and made Eastern European countries make payments in return for the Soviets having liberated them from the Nazis. In 1949, the Council for Mutual Economic Assistance (Comecon) was set up, linking the Eastern bloc countries economically. One-third of the fourth plan's capital expenditure was spent on Ukraine, which was important agriculturally and industrially, and which had been one of the areas most devastated by war.

Sixth plan, 1956–1958

The Sixth Five-Year Plan was launched in 1956 during a period of dual leadership under Nikita Khrushchev and Nikolai Bulganin, but it was abandoned after two years due to over-optimistic targets.

Seventh plan, 1959–1965

Unlike other planning periods, 1959 saw the announcement of a seven-year plan (semiletka), approved by the 21st Congress of the Communist Party of the Soviet Union in 1959. This was merged into a Seventh Five-Year Plan in 1961, which was launched with the slogan "catch up and overtake the USA by 1970." The plan saw a slight shift away from heavy industry into chemicals, consumer goods, and natural resources.

The plan also intended to establish 18 new institutes by working with the Ukrainian Academy of Sciences.

Eighth plan, 1966–1970

The eighth plan led to the amount of grain exported being doubled.

Ninth plan, 1971–1975

About 14.5 million tonnes of grain were imported by the USSR. Détente and improving relations between the Soviet Union and the United States allowed for more trade. The plan's focus was primarily on increasing the amount of consumer goods in the economy so as to improve Soviet standards of living. While failing at that objective it managed to significantly improve Soviet computer technology.

Tenth plan, 1976–1981

Leonid Brezhnev declared the slogan "Plan of quality and efficiency" for this period.

Eleventh plan, 1981–1985

During the eleventh five-year plan, the country imported some 42 million tons of grain annually, almost twice as much as during the tenth five-year plan and three times as much as during the ninth five-year plan (1971–1975). The bulk of this grain was sold by the West; in 1985, for example, 94% of Soviet grain imports were from the non-socialist world, with the United States of America selling 14.1 million tons. However, total Soviet export to the West was always almost as high as import: for example, in 1984 total export to the West was 21.3 billion rubles, while total import was 19.6 billion rubles.

Twelfth plan, 1986–1990

The last, 12th plan started with the slogan of uskoreniye (acceleration), the acceleration of economic development (quickly forgotten in favor of a more vague motto perestroika) ended with the profound economic crisis in virtually all areas of Soviet economy and a drop in production due to the reintroduction of capitalistic mechanics in the Soviet Union under Gorbachev. This marked the first recession in the history of the Soviet Union.

The 1987 Law on State Enterprise and the follow-up decrees about khozraschyot and self-financing in various areas of the Soviet economy were aimed at decentralization under the impulsion of Gorbachev as the precursor to the entire illegal dissolution of the USSR.

Information technology

State planning of the economy required processing large amounts of statistical data. The Soviet State had nationalized the Odhner arithmometer factory in Leningrad after the revolution. The state began renting tabulating equipment later on. By 1929, it was a very large user of statistical machines, on the scale of the US or Germany. The State Bank had tabulating machines in 14 branches. Other users included the Central Statistical Bureau, the Soviet Commissariat of Finance, Soviet Commissariat of Inspection, Soviet Commissariat of Foreign Trade, the Grain Trust, Soviet Railways, Russian Ford, Russian Buick, the Karkov tractor factory, and the Tula Armament Works. IBM also did a good deal of business with the Soviet State in the 1930s, including supplying punch cards to the Stalin Automobile Plant.