Under party guidance, the State Planning Committee (Gosudarstvennyi planovyi komitet - Gosplan) was primarily responsible for creating and monitoring five-year plans and annual plans. The name was changed from State Planning Commission in 1948, but the acronym was retained. The Five-Year Plan was a comprehensive plan that set the economic goals for a five-year period. Once the Soviet regime stipulated the plan figures, all levels of the economy, from individual enterprises to the national level, were obligated to meet those goals. At the end of the 1920s, a dramatic new phase in economic development began when Stalin decided to carry out a program of intensive socialist construction.
Marxism supplied no basis for Stalin's model of a planned economy, although the centralized economic controls of the war communism years seemingly furnished a Leninist precedent. Nonetheless, between 1927 and 1929 the State Planning Commission worked out the First Five-Year Plan for intensive economic growth. After the First Five-Year Plan, planning was completely centralized in the all-union ministries.
In day-to-day operations, this system consistently delayed interministry cooperation in such matters as equipment delivery and construction planning.
Economic planning, according to Marxist-Leninist doctrine, was a form of economic management by the state, indispensable both during the transition from capitalism to socialism and in a socialist society. Soviet economic theorists maintained that planning was based on a profound knowledge and application of objective socialist economic laws and that it was independent of the personal will and desires of individuals. The most general of these laws, commonly referred to as the basic law of socialism, defined the aim of economic production as the fullest satisfaction of the constantly rising material and cultural requirements of the population, using advanced technology to achieve continued growth and improvement of production. Centralized planning was presented by its proponents as the conscious application of economic laws to benefit the people through effective use of all natural resources and productive forces.
The regime established production targets and prices and allocated resources, codifying these decisions in a comprehensive plan or set of plans. Using CPSU directives concerning major economic goals, planning authorities formulated short-term and long-term plans for meeting specific targets in virtually all spheres of economic activity. These production plans were supplemented by comprehensive plans for the supply of materials, equipment, labor, and finances to the producing sector; for the procurement of agricultural products by the government; and for the distribution of food and manufactured products to the population. Economic plans had the force of law. Traditionally, they had been worked out down to the level of the individual economic enterprise, where they were reflected in a set of output goals and performance indicators that management was expected to maintain.
The five-year plan provided continuity and direction by integrating the yearly plans into a longer time frame. Although the five-year plan was duly enacted into law, it contained a series of guidelines rather than a set of direct orders. Periods covered by the five-year plans coincided with those covered by the party congresses. At each congress, the party leadership presented the targets for the next five-year plan. Thus each plan had the approval of the most authoritative body of the country's leading political institution.
As the nation's chief planning organ, Gosplan was responsible for incorporating science and technology programs into the national economic plan. It worked with GKNT and the Academy of Sciences to plan the introduction of research and development results into the economy, to determine the overall volume of needed capital investment, and to decide funding levels for science and technology programs, material supplies, training, and wages. Within Gosplan, the Unified Science and Technology Department was the primary unit engaged in science and technology planning. It was aided by advisory councils and commissions organized in key economic sectors.
Gosplan, made up of a large number of councils, commissions, governmental officials, and specialists, was assisted by the State Committee for Statistics (Gosudarstvennyi komitet po statistikoi--Goskomstat). It took plans developed by the city councils, republic legislatures, and regional conferences and incorporated them into a master plan for the nation. It also supervised the operation of all the plans. Gosplan combined the broad economic goals set forth by the Council of Ministers with data supplied by lower administrative levels regarding the current state of the economy in order to work out, through trial and error, a set of control figures. The plan stipulated the major aspects of economic activity in each economic sector and in each republic or region of the country. Gosplan was also responsible for ensuring a correct balance among the different branches of the economy, speeding the growth of the national income, and raising the level of efficiency in production.
The method used by Gosplan to achieve internally consistent plans, both in a sectoral and in a regional context, was called the system of material balances. No clear exposition of this method had been published. The system essentially consisted of preparing balance sheets in which available material, labor, and financial resources were listed as assets and plan requirements as liabilities. The task of planners was to balance resources and requirements to ensure that the necessary inputs were provided for the planned output. To reduce this task to manageable proportions, central authorities specified detailed output goals, investment projects, and supply plans for only key branches of the economy. The rest of the plan was developed only to the extent needed to ensure achievement of the main goals.
Among operational organizations participating in the planning process, a major role belonged to the State Committee for Material and Technical Supply. This agency shared with Gosplan the controls over the allocation of essential materials and equipment. Other operational agencies included the State Committee for Construction, which played an important part in industrial investment planning and housing construction; the State Committee for Labor and Social Problems; and the State Committee for Science and Technology, which prepared proposals for the introduction of new technology. Finally, the Academy of Sciences helped to develop a scientific basis for optimal planning and accounting methods.
When the control figures had been established by Gosplan, economic ministries drafted plans within their jurisdictions and directed the planning by subordinate enterprises. The control figures were sent in disaggregated form downward through the planning hierarchy to production and industrial associations (various groupings of related enterprises) or the territorial production complex for progressively more detailed elaboration. Individual enterprises at the base of the planning pyramid were called upon to develop the most detailed plans covering all aspects of their operations. In agriculture, individual collective farms and state farms worked under the supervision of local party committees. The role of the farms in planning, however, was more circumscribed.
At this point, as the individual enterprise formulated its detailed draft production plans, the flow of information was reversed. Rank-and-file workers as well as managers could participate in the planning process on the enterprise level; according to Soviet reports, approximately 110 million citizens took part in discussions of the draft guidelines for the 1986-90 period and long-term planning for the 1986-2000 period. The draft plans of the enterprises were sent back up through the planning hierarchy for review, adjustment, and integration. This process entailed intensive bargaining, with top authorities pressing for maximum and, at times, unrealizable targets and enterprises seeking assignments that they could reasonably expect to fulfill or even overfulfill. Ultimate review and revision of the draft plans by Gosplan and approval of a final all-union plan by the Council of Ministers, the CPSU, and the Supreme Soviet were followed by another downward flow of information, this time with amended and approved plans containing specific targets for each economic entity to the level of the enterprise.
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