1938-1941 - Third 5-Year Plan
The Third Five-Year Plan, begun in 1938, produced poorer results because of a sudden shift of emphasis to armaments production in response to the worsening international climate. All in all, however, the Soviet economy had become industrialized by the end of the 1930s. Agriculture, which had been exploited to finance the industrialization drive, continued to show poor returns throughout the decade.
The Third Five-Year Plan (1938-41) projected further rapid industrial growth. The Third Five-Year Plan, begun in 1938, produced poorer results because of a sudden shift of emphasis to armaments production in response to the worsening international climate. All in all, however, the Soviet economy had become industrialized by the end of the 1930s. The government soon altered the plan, however, in an attempt to meet the growing danger of war, devoting increasing amounts of resources to armaments. When the country went to war with Finland (1939-40), serious disruptions occurred in the Soviet transportation system. Nonetheless, during these years the economy benefited from the absorption of Estonia, Latvia, Lithuania, Bessarabia, and the eastern part of Poland and from the growing trade with Germany that resulted from the 1939 Nazi-Soviet Nonaggression Pact.
The Communist Party and the Soviet government saw the approaching threat of war and took measures to strengthen the state's defense capability. During the years of the first five-year plans, the Communist Party, in following the instructions of V.I.Lenin that a war must be prepared for "over a long period of time, seriously, starting from an economic upswing in the nation" worked to more rapidly surmount its technical and economic backwardness inherited from Tsarist Russia. The industrialization of the country, the collectivization of agriculture and the cultural revolution played an enormous role in strengthening the Soviet state's economic and defense might.
As a result of the measures taken, Soviet national income over the period from 1928 through 1940 increased by more than 5-fold, electric power production rose by 9.7-fold, coal mining by 4.7-fold, steel casting by more than 4-fold, oil output by 2.7-fold, while machine products increased by 20-fold.
A characteristic feature in Soviet economic development during the prewar years was that military production developed at a higher pace than industry as a whole. Thus, while during the years of the Second Five-Year Plan, all industrial product increased by 2.2-fold, defense products rose by 3.9-fold. The average annual production of airplanes and tanks in 1935-1937 rose by over 4-fold in comparison with 1930-1931, for artillery pieces it was 2.6-fold and for rifles by almost 2.3-fold.
In line with the greater immediate threat of attack by Nazi Germany on the Soviet Union, measures were taken to increase the state food reserves and major strategic materials. Just from January 1939 through January 1941, the state reserves and mobilization supplies were increased by 5-fold for iron, 2-fold for rolled product, more than 2-fold for copper and 2.2-fold for zinc. The Politburo of the VKP(b) [Ail-Union Communist Party (Bolshevik)] Central Committee at this time adopted a number of decrees to broaden military production, including: "On the Production of T-34 Tanks in 1940," "On the Reconstruction of Existing Aircraft Plants and the Construction of New Ones" and others.
Time was of the essence. In the West the flames of World War II had already broken out. Their glow was approaching the frontiers of the USSR. The nation, in straining every muscle, strengthened its economic and defense might. In just 3 years of the Third Five-Year Plan, 3,000 new large industrial enterprises were built, including: metallurgical and copper smelting, oil refineries and automotive plants as well as pulp-paper combines and building materials plants. Tank, aviation and artillery plants as well as plants producing ammunition went into operation.
As a result of the successful fulfillment of the plans of the prewar five-year plans, the economic and defense might of the nation increased immeasurably. The Soviet Union emerged in first place in Europe and second in the world for the volume of machine building products, for tractor production, oil production, for the volume of railroad shipments, and second place in Europe for the production of electric power, steel, iron and aluminum. The nation established its own aviation, tank and artillery industries.
The defense industry developed particularly intensely during the 3 prewar years with the production level in this sector rising by more than 4-fold. However, it was impossible to fully carry out the complex military-economic tasks confronting the nation from the threat of the initiating of a war by the Nazi bloc against the world's first socialist state. History had left too little time for the Soviet people to prepare to repel aggression. Nevertheless, the measures undertaken by the Communist Party and the Soviet government to strengthen national defense made it possible to significantly shorten the time for switching the nation's economy to a war footing.
Resolution XVIII of the party conference held in February 1941, less than 4 months before the start of the war, noted: "The pace of output growth in the defense industrial commissariats in 1940 were significantly higher than the rate of production growth the whole industry ... As a result of successful development of new technology and the defense industry growth significantly improved the technical equipment of the Red Army and the Navy with the latest kinds and types of modern weapons."
But in the pre-war period, designers and production workers did not fulfill basic requirements fully, citing in their defense the unreality of the deadlines given them. Although in some cases the deadlines were set by their consent, the rush introduces new elements led to disruption of the work. In the end, there were failures, delays or failure to meet the tactical and technical requirements (TTT), for which the leaders and workers of the factory, commissariats and designers were responsible.
Stalin once at the end of one of the meetings said the following: "Designers always leave a reserve for themselves, they do not show the full opportunities available; it is necessary to squeeze more out of them." This was true. But the difficulty was the fact that the reserves were "held back" the designers, not identified during the technical discussions, and on "intuition", and in many cases wishful thinking.
The defense industry was working with a lot of shortcomings and deficiencies in organizational, economic, technical guidance at all levels of management. One of the main reasons for this was the high staff "turnover", especially of the administrative and technical staff. Unfair mass dismissal of skilled industrial workers and military-technical departments in the central administration and in the periphery caused considerable damage to the defense industry and armed forces deployed during the work on the upgrading of the Red Army. In the defense industry the consequences of this were mitigated by the fact that maintained continuity: as a rule, the newly nominated leaders and specialists had previously worked in the same system and under the leadership of the same people.
The attack by Nazi Germany on the USSR forced the Soviet people to shift from peaceful labor to waging a holy war to defend their motherland. During its very first days the Communist Party worked out a program for mobilizing all the forces to defeat the Nazi invaders. It was based upon the immortal ideas of V. I. Lenin on the defense of the socialist fatherland. The party was guided by the leader's instructions that once things had reached the point of a war, everything should be subordinate to the war and the slightest hesitation on this score cannot be tolerated. For this reason, as during the years of the Civil War, Lenin's slogan "Everything for the Front, Everything for Victory!" became the determinant in organizing the entire Soviet economy.
After the German invasion of 1941, damage to the economy in both human and material terms was devastating. The regime virtually abandoned the Third Five-Year Plan as it sought to mobilize human and material resources for the war effort. During the Great Patriotic War, an increasing proportion of products and materials were allocated centrally, and Gosplan took over more of the balancing and allocation plans. Wartime economic plans did not officially replace the traditional planning process but were simply superimposed as needed to cover activities and goods essential to the war effort.
Industry was diverted and displaced by the Great Patriotic War, and many enterprises moved permanently eastward, into or beyond the Ural Mountains. Postwar recovery was rapid as a result of the massive application of manpower and funds.
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