1928-1933 - First 5-Year Plan

Under Stalin, the First Five-Year Plan began in 1928. This planning system brought spectacular industrial growth, especially in capital investment. More important, it laid the foundation for centralized industrial planning, which continued into the late 1980s. Heavy industry received much greater investment than light industry throughout the Stalin period. Although occasional plans emphasized consumer goods more strongly, considerations of national security usually militated against such changes. 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 (Gosplan) worked out the First Five-Year Plan for intensive economic growth; Stalin began to implement this plan -- his "revolution from above" -- in 1928.

For the Bolshevik Party, which came to power in October 1917, the problem of war and peace were important not only in terms of security interests and independence of the country, but a decision on the possibility of establishing a socialist and communist society - without private property, without classes without state, without commodity-money relations and market.

In one country, even as great as Russia, these issues seemed intractable; It needed support from the "victorious socialist revolutions" at least in some industrialized countries. Out of the contradiction between the content of an international communist doctrine and limited its practical implementation could be only one - a new world war, as the basic premise of anarchy, civil wars and revolutions.

In December 1927 took place XV Congress of the CPSU (b) in Moscow, which approved the holding of the Political Bureau of the Central Committee of the CPSU(b) work to prepare the country for defense. The statement of People's Commissar for Military and Naval Affairs Voroshilov identified the following priorities for the party in this direction:

"The five-year economic plan must proceed from the inevitability of an armed attack on the Soviet Union and, consequently, of the need for a measure of organization of material resources such defense of the Soviet Union, which would provide the victorious resistance to the combined forces of our potential adversaries. ... Construction of the Armed Forces (the worker-peasant Red Army, navy and air force) should proceed from the need to raise the technical and combat their power to the level of first-class European armies."

On 20 December 1928 the Council of Labor and Defense, at its administrative meeting approved the mobilization of the military department developed the industry plan, calculated in case of war. But the Supreme Economic Council had not coped with this task, inter alia, due to the fact that the USSR State Planning Committee has not developed the corresponding material balances. According to the Chief of Staff of the Red Army B.M.Shaposhnikova, "Gosplan systematically exaggerating the possibility of planning for the war, trying to plan in terms of very specific details such general economic processes that can be foreseen only in the most basic terms"

The Politburo of the CPSU(b) approved the application extremely intense mobilization of the Military Office of the arms and military equipment items in the first two and the last two years of the first Five-Year Plan, that is a kind of "control figures" of Soviet industry in the Soviet Union in case of entry into the war. Stalin's group finally, in terms of organization, drew up a victory over the "right", by securing for one of the most important arms of government - the preparation of the country for defense.

Stalin's First Five-Year Plan, adopted by the party in 1928, called for rapid industrialization of the economy, with an emphasis on heavy industry. The First Five-Year Plan 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.

It set goals that were unrealistic -- a 250 percent increase in overall industrial development and a 330 percent expansion in heavy industry alone. All industry and services were nationalized, managers were given predetermined output quotas by central planners, and trade unions were converted into mechanisms for increasing worker productivity. Many new industrial centers were developed, particularly in the Ural Mountains, and thousands of new plants were built throughout the country. But because Stalin insisted on unrealistic production targets, serious problems soon arose. With the greatest share of investment put into heavy industry, widespread shortages of consumer goods occurred.

The First Five-Year Plan called for transforming Soviet agriculture from predominantly individual farms into a system of large state collective farms. 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 Communist regime believed that collectivization would improve agricultural productivity and would produce grain reserves sufficiently large to feed the growing urban labor force. The anticipated surplus was to pay for industrialization. Collectivization was further expected to free many peasants for industrial work in the cities and to enable the party to extend its political dominance over the remaining peasantry. 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 plan the planned rates of consumption.

Summing up the first Five-Year Plan, Comrade Stalin in his report of January 7, 1933 at the joint plenum of the CC and CCC, CPSU (b) said:

• We did not have the steel industry, the basis of the country's industrialization. We now have it.
• We did not have a tractor industry. We now have it.
• We did not have the automotive industry. We now have it.
• We did not have the machine tool. We now have it.
• We did not have a serious and modern chemical industry. We now have it.
• We had no real and serious industry for the production of modern agricultural machinery. We now have it.
• We did not have the aircraft industry. We now have it.
• In terms of production of electric power we were last on the list. Now we rank among the first.
• In terms of coal and the production of petroleum products, we were in last place. Now we rank among the first.
• We had only one single coal and metallurgical base - in the Ukraine, with which we are struggling to cope. We have ensured that not only in improving this base, but have created a new coal and metallurgical base - in the East, is the pride of our country.
• We had only one single textile industry base - in the north of our country. We have ensured that we will have in the near future, two new base of textile industry - in Central Asia and Western Siberia.
• And we have not only created these new huge industry, but we created them on a scale and in such dimensions that eclipse the scale and dimensions of European industry.

"Pravda" 10-17 January 1933