Malenkov - "New Course" Economic Policy
One of the great worries of the new regime was the economic situation; to improve it appeared imperative, if only to strengthen the position of the new group of men at the helm of the vast country. As the first and most impressive earnest of the Government's promise of plenty the old trading rows had been cleaned out, refurbished, stocked with the greatest agglomeration of consumer goods which had been seen in Moscow since the Revolution and reopened under the aegis of Minister of Trade Anastas Mikoyan as the State Department Store, or GUM, as it was familiarly known in Moscow from its Russian initials.
The old formula of priority of "heavy industry" and "means of production" over consumer goods had to be discarded, at least for a time; purchase of food abroad, prohibited under Stalin, became necessary. Four billion rubles ($1 billion) of food and consumers' goods were to be bought abroad, one-third of it from outside the "people's democracies." Industries controlled by the defense and aviation ministries were ordered to produce a quantity of metal bedsteads, refrigerators, and bicycles.
"The Soviet people are entitled," Malenkov stated in August, 1953, "to demand from us, and in the first place from the industries of mass consumption, goods of high quality." In general, an economic detente was considered the most important task.
The spirit of detente found expression in a new program, approved by the party's leading bodies in the summer of 1953, a few months after Stalin's death, and announced by Malenkov on August 8: all attention was to be focused on His Majesty the consumer. The inauguration of the so-called "New Course" came in the August 1953 Supreme Soviet session, and Malenkov's major policy speech at that session. Major concessions in procurements, prices, and taxation were granted to the peasantry, especially as regarded livestock raising and fruit and vegetable growing. There was to be less heavy industry and less armament, more light industry and more food; taxes levied on the peasants were to be cut. "Two or three years," said Malenkov, "are required to fulfill the program of a considerably improved standard of living."
"Two or three years" became a slogan that was repeated almost daily in the schools, in articles, and over the radio, a slogan to which Malenkov's career was closely tied. For the kolkhoz peasants Malenkov promised concessions to their "bourgeois instincts."
A significant change in the USSR's economic policy occurred during 1953 and 1954 while Malenkov was Premier. In brief, these changes consisted of a real though marginal increase in the proportion of economic resources devoted to raising agricultural production and expanding output of industrial consumer goods, and a leveling off (possibly an actual decrease), of military expenditures. At the same time, the regime planned to maintain a rapid rate of heavy industrial growth.
In late 1953, Soviet internal and foreign propaganda belabored this new emphasis on welfare of the population very heavily, shifting in 1954 to emphasis on agricultural production. Malenkov's August 1953 speech before the Supreme Soviet gave the first comprehensive survey of the program under which the output of agriculture and consumer goods was to be rapidly expanded "in the next two or three years." Voluminous public decrees were issued in September and October 1953 to implement the individual sections of the program. Other documents issued by the regime, the published versions of the Soviet annual budgets for 1953 and 1954, reveal the planned leveling or possible decrease of military expenditures, and the continuation of rapid industrial growth.
While the changes of Soviet economic policy in mid-1953 were not of large magnitude in terms of economic aggregates, and while they caused only marginal changes ia the proportion of total resources devoted to defense, heavy industry, and consumption, the direction of change was very important. The change apparently reflected a desire by the then dominant faction of the regime to devote increased efforts toward expanding the nation's basic economic and strategic potential and indicated a serious concern regarding basic economic weaknesses such as low food production and lagging productivity, which, in the future, might hinder growth of the USSR's strategic power. In 1953 and 1954, the leadership seemed to feel that these goals were more important than continuing to increase the already high production of military end items and expand the size of its armed forces.
Both Khrushchev and Malenkov's economic policies demanded more emphasis on consumer goods. Consumer goods output grew faster than would have been the case under Stalin but Malenkov's economic policies were too ambitious and paid too little. If Malenkov's economic policies had been brilliantly successful Khrushchev might not have climbed to the top of the political pole.
Another indication of Malenkov's responsibility for the consumer goods approach is the fact that he alone of the really important leaders described the program in a glowing and enthusiastic manner. Other less important leaders who used similar language were Mikoyan, Pervukhin, Saburov and Kosygin. These leaders, in their speeches, spoke of the problem in terms of great urgency and tremendous importance. None of the other top leaders, in their references to the program, exhibited this same enthusiasm for it. Khrushchev, in particular, concentrated on his own agricultural schemes as of principal and foremost importance.
Malenkov was identified as the proponent of the "light industry" program, and the "defeat" of this program was held to be an indication that he had lost out. This argument was based on the fact that Malenkov originally set forth the program in August 1953; that his own political fortunes appeared to coincide with the ups and downs of the program in Soviet propaganda; that Malenkov, the "realist," was more inclined to appreciate the importance of incentives, whereas Khrushchev had made open statements which tended to qualify the consumer goods approach, and which were later in more or less open contradiction with the earlier formulations. This point of view was given apparent confirmation by the resignation" of Malenkov in February 1955, by the revised Soviet propaganda line emphasizing the heavy industrial development, and by the changes in the 1955 budget.
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