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USSR 1st Five-Year Plan 1928-1932

In 1921 Vladimir I. Lenin called a temporary retreat from application of the ideological requirements of Marxist doctrine. His new approach, called the New Economic Policy (NEP), permitted some private enterprise, especially in agriculture, light industry, services, and internal trade, to restore prewar economic strength. The nationalization of heavy industry, transportation, foreign trade, and banking that had occurred under war communism remained in effect.

In the late 1920s, Stalin abandoned NEP in favor of centralized planning, which was modeled on a project sponsored by Lenin in the early 1920s that had greatly increased the generation of electricity. Stalin sought to rapidly transform the Soviet Union from a predominantly agricultural country into a modern industrial power. He and other leaders argued that by becoming a strong centrally planned industrial power, the country could protect itself militarily from hostile outside intervention and economically from the booms and slumps characteristic of capitalism.

The dictatorship of the Politburo, which was established after Lenin's death, whose members were not united in their views on the future of the government's economic policy, was replaced by the one-man dictatorship of Stalin. The attitude to the continuation and development of Lenin's "new economic policy", which was defended by the "right-wing communists" who were mostly in the Politburo until 1928, was replaced by the Stalinist attitude to the liquidation of the NEP, the introduction of universal forced labor and the concentration of all resources for the construction of heavy industry, which was by no means calculated to provide the population with the benefits of life. The First Five-Year Plan (1928-32) focused rather narrowly upon expansion of heavy industry and collectivization of agriculture. Stalin's decision to carry out rapid industrialization made capital intensive techniques necessary. International loans to build the economy were unavailable, both because the new government had repudiated the international debts of the tsarist regime and because industrialized countries, the potential lenders, were themselves coping with the onset of the Great Depression in the early 1930s. Stalin chose to fund the industrialization effort through internal savings and investment. He singled out the agricultural sector in particular as a source of capital accumulation.

The plan for the first five-year plan was initially drawn up in two versions: the starting one, or, more simply, the "minimum", that is, realistic, and the "optimal" - the one that the party demanded. The second plan was designed for the absolute mobilization of all forces and resources in the country. It is quite predictable that this particular version was adopted at the end of the conference - despite the fact that the leaders of the "right deviation in the CPSU (b)" NI Bukharin, Rykov, MP Tomsky - questioned its feasibility. Of course, the plan for the first five-year plan was not created from scratch: it was preceded by the already begun large-scale work on the electrification of the country - the so-called GOERLO plan, which was adopted in December 1920 at the VIII All-Russian Congress of Soviets and determined not only the development of energy, but the entire economy in the whole.

The First Five-Year Plan called for collectivization of agriculture to ensure the adequacy and dependability of food supplies for the growing industrial sector and the efficient use of agricultural labor to free labor power for the industrialization effort. The regime also expected collectivization to lead to an overall increase in agricultural production. In fact, forced collectivization resulted in much hardship for the rural population and lower productivity. By 1932 about 60 percent of peasant households had joined state farms or collective farms. During the same period, however, total agricultural output declined by 23 percent, according to official statistics. Heavy industry exceeded its targets in many areas during the plan period. But other industries, such as chemicals, textiles, and housing and consumer goods and services, performed poorly. Consumption per person dropped, contrary to the planned rates of consumption. The program of "socialist industrialization" was supplemented by a plan for the reconstruction of the national economy: changing production techniques, developing energy, transferring advanced American and European technologies to the country's economy, rationalizing, scientific organization of labor, moving production to sources of raw materials and energy, specializing regions in accordance with their natural and social needs. At the expense of national planning, it was supposed to realize the advantages of an economy free from the anarchy and competition of capitalism.

At the beginning of industrialization, much attention was paid to the re-equipment of old industrial enterprises. But at the same time, more than 500 new plants were laid, including the Saratov and Rostov agricultural engineering plants, the Kuznetsk and Magnitogorsk metallurgical plants, the construction of the Turkestan-Siberian railway (Turksib) and the Dnieper hydroelectric power station (Dneproges) began. The development and expansion of industrial production was carried out largely at the expense of the resources of the enterprises themselves. However, purchases abroad of machinery, equipment, licenses have increased. Foreign specialists were attracted to the country for a lot of money. On the basis of the Supreme Council of the National Economy of the USSR, the people's commissariats of the heavy, light and timber industries were formed.

The extent to which the results of the first five-year plan did not correspond not only to the first versions of the five-year plan of 1927-28, but also to the officially approved draft of 1929, can be judged by the volume released in 1933 "Results of the implementation of the first five-year plan for the development of the national economy of the USSR." Of course, the statistics of this time should be treated with extreme caution: there is no doubt that they were generally falsified. At the same time, even on the basis of unreliable data, guessing what exactly and for what purpose was falsified, one can understand the meaning of the economic and social processes taking place in the USSR.

In view of the increased military danger, the USSR was forced to increase its defense program in the last year of the five-year plan to increase its defense capability. "<…>… Especially favorable conditions, which, according to the five-year plan, should have ensured the fulfillment of the optimal variant in five years, were not only absent, but moreover, instead of them we had additional difficulties. And yet the plan was fulfilled and, moreover, on time, which was a stunning surprise for the enemies of the USSR.”

The results of the GOELRO plan and the first five-year plan of the USSR amazed even science fiction writer H.G.Wells. Lenin personally acquainted the writer with the model of the country's development in 1920. Wells then decided that this was an undertaking similar to his fantasy stories. “Such electrification projects are currently underway in Holland, they are being discussed in England, and one can easily imagine that in these densely populated countries with highly developed industries, electrification will be successful, cost-effective and generally beneficial. But the implementation of such projects in Russia can only be imagined with the help of super-fantasy. In whatever magic mirror I look, I cannot see this Russia of the future, but a short man in the Kremlin has such a gift, ” - said H.G.Wells after meeting with the leader of the world proletariat.

The total number of workers and employees increased from 1928 to 1932 from 11.599 million to 22, 804 million people. (the planned figure for the five-year plan is 15.763 million people, according to Ginzburg's plan - 12.86 million). It is safe to say that, increasing the pace of industrialization, Stalin built a mobilization-type economy, the meaning of which was the creation of a military industry and, as a consequence, the largest and most efficient army. All other sectors of the economy played a subordinate role and served the heavy and military industries.

The new Soviet government was faced with a large-scale task - to turn an agrarian country into an industrial one. The First World War, the revolution and the Civil War hit the industry hard: many workers returned to the villages to agriculture - otherwise it was simply impossible to survive in a country plunged into chaos and devastation.

In order to find additional funds for the development of heavy industry, the Stalinist leadership went to a sharp increase in the sale of vodka. More recently, Stalin assured that alcohol, with the help of which tsarist Russia had a half-billion-dollar income, would not be distributed in Soviet Russia. A little later, he changed his point of view: it is naive, they say, to think that socialism can be built with white gloves. And in September 1930, he wrote directly to Molotov: “It is necessary, in my opinion, to increase (very possibly) the production of vodka. It is necessary to discard the false shame and openly and directly go to the maximum increase in the production of vodka ... ” And this was done.