Five-Year Plans for the National Economy of the Soviet Union
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The Five-Year Plans for the National Economy of the Soviet Union (USSR) (Russian: пятилетка, Pyatiletka) were a series of nation-wide centralized economic plans in the Soviet Union. The plans were developed by a state planning committee based on the Theory of Productive Forces that was part of the general guidelines of the Communist Party for economic development. Fulfilling the plan became the watchword of Soviet bureaucracy. (See Overview of the Soviet economic planning process) The same method of planning was also adopted by most other communist states, including the People's Republic of China. In addition, several capitalist states have emulated the concept of central planning, though in the context of a market economy, by setting integrated economic goals for a finite period of time. Thus are found "Seven-year Plans" and "Twelve-Year Plans". Nazi Germany emulated the practice in its Four Year Plan designed to bring Germany to war-readiness.
Several five-year plans did not take up the full period of time assigned to them: some were successfully completed earlier than expected, while others failed and were abandoned. Altogether, there were thirteen five-year plans. The initial five-year plans were created to serve in the rapid industrialization of the Soviet Union, and thus placed a major focus on heavy industry. The first one was accepted in 1928, for the period from 1929 to 1933, and completed one year early. The last Five-Year Plan was for the period from 1991 to 1995 and was not completed, as the Soviet Union was dissolved in 1991.
Joseph 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. In 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 with the production surplus to their needs being bought by the state (on the state's terms), the peasants cut production; whereupon food was requisitioned. Money gradually came to be replaced by barter and a system of coupons.
The NEP took over from the failed attempts of 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, as he usually did in the early days, 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.
Each five-year plan dealt with all aspects of development: capital goods (those used to produce other goods, like coal, iron, 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. Because meeting the goals of the five-year plans had top priority as a measure of progress toward a communist utopia, official lying about productivity became part of the economic system. The attempt to turn an illiterate peasant society into an advanced industrial economy in a single decade brought intense suffering, but hardship was tolerated because, as one worker put it, Soviet workers believed in the need for "constant struggle, struggle, and struggle" to achieve a Communist society. 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." (Hunt 845)
First Plan, 1928–1933 
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During this period, Stalin pursued the policy of "collectivization" in agriculture to facilitate the process of rapid industrialization; this involved the creation of collective farms in which peasants worked cooperatively on the same land with the same equipment. This was intended to improve the efficiency of agriculture and eliminate the "kulak" class of landowners, which was deemed hostile to the Soviet regime, while improving the position of poor peasants. The disruption and repression associated with collectivization was a primary cause of the famine of 1932, which resulted in millions of deaths.
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.
Second Plan, 1933–1937 
Because of the successes made by the first plan, Stalin 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.
The government's heavy handed[neutrality is disputed] running of the country continued and the agriculture revival was rather unsuccessful because almost all of the farmers had already been evicted, imprisoned or murdered as the political persecutions shifted into high gear, starting the era of The Great Purge. The Second Five-Year Plan was the start of the deterioration in the standard of living because the focus of "planners' preferences" replaced consumer preferences in the country's economy, with the move to focus on military goods and heavy industry, the economy suffered. This resulted in a much lower quality and quantity of available consumer goods.
Third Plan, 1938–1941 
The Third Five-Year Plan ran for only 3 years, up to 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 proved to be even more of a disappointment in terms of proclaimed production goals. Even so, the value of these goals and of the coordination of an entire economy's development of central planning was seemingly impressive: a reported 12% to 13% rate of annual industrial growth attained in the Soviet Union during the 1930s has few parallels in the economic history of other countries. Since Russia's economy had always lagged behind the rest of Europe, these increases came from a very low baseline. Additionally, this high rate of reported growth was continued after World War II, as much devastation needed to be repaired, and continued into the early fifties, after which it gradually declined.
Fourth and Fifth Plan, 1945–1955 
Stalin in 1945 promised that the USSR would be the leading industrial power by 1960.
Much of 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, but perhaps 20 million in all 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 labour shortage due to the enormous number of Soviet casualties in the war. 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 Comecon (Council for Mutual Economic Aid) 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.
By 1947, food rationing had ended, but agricultural production was barely above the 1940 level by 1952. However, industrial production in 1952 was nearly double the 1941 level.
Sixth Plan, 1956–1960 
Another Plan to improve industry was carried out in 1956 by Nikita Khrushchev, following Stalin's death in 1953. Some of Khrushchev's policies included nationalization, the Virgin Lands Campaign, creation of a minimum wage alongside overall wage reform and the production of consumer goods which raised the living standards of the Soviet people in return.
Seventh Plan, 1959–1965 
Unlike other planning periods, it was a 7-year plan (semiletka), approved by the 21st Congress of the Communist Party of the Soviet Union in 1959. It was the reconsideration of the 6th pyatiletka. This period was marked with a significant economic growth of the Soviet Union.
Eighth Plan, 1966–1970 
The Eighth Plan led to the amount of grain exported being doubled.
Ninth Plan, 1971–1975 
Some 14 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.
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 (1971–75). The bulk of this grain was sold by the West; in 1985, for example, 94 percent of Soviet grain imports were from the nonsocialist world, with the United States 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, the acceleration of economic development (quickly forgotten in favor of a more vague motto perestroika) ended among a profound economic crisis in virtually all areas of Soviet economy and drop in production.
Thirteenth Plan, 1991 
This plan, which would have run until 1995, only lasted about one year due to the dissolution of the Soviet Union in 1991.
Information technology 
State planning of the economy required processing large amounts of statistical data. The Soviet State had nationalized the Odhner calculator factory in St Petersburg 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.
See also 
- Five-year plan (disambiguation) for similar plans in other countries
- Soviet calendar
- Eastern Bloc economies
- Analysis of Soviet-type economic planning
- Lynn Hunt et al., The Making of the West, Peoples and Cultures: A Concise History (Since 1340), 3rd ed., vol. 2 (Boston: Bedford/St. Martins, 2010), 831-832.
- A Computer Perspective, by the office of Charles & Ray Eames, Edited by Glen Fleck, produced by Robert Staples, Introduction by I. Bernard Cohen, Harvard University Press, Cambridge, MA, 1973, pgs 64, 96-97
- Before the computer by James W. Cortada, p142, who cites James Connolly, History of Computing in Europe, IBM World Trade Corporation 1967
- U.S. Ambassador Joseph E. Davies intercedes for IBM during Stalin's Great Purge, website by Hugo S. Cunningham, accessed 2010 9 16, which cites Joseph E. Davies, Mission to Moscow, New York: Simon and Schuster, 1941.
- Schmadel, Lutz D. (2003). Dictionary of Minor Planet Names (5th ed.). New York: Springer Verlag. p. 172. ISBN 3-540-00238-3.