Andrew rothstein

MAN AND PLAN IN SOVIET ECONOMY

by

ANDREW ROTHSTEIN

Lecturer in Soviet Institutions at the School of Slavonic and East European Studies, University of London

FIRST PUBLISHED LONDON IN 1948

CONTENTS

	Preface	Page iv
I	Planning Amid Difficulties	1
	1. Two Views of Socialist Economy	1
	2. External Relations and Plans, 1920-32	4
	3. Planning in the Hitler Period, 1933-41	9
	4. The War and After	13
	5. The Problem of Devastation	16
II	Resources for Soviet Planning and Managerial Initiative	23
	1. The Basis of Soviet Planning	23
	2. Accumulation in Soviet Economy	27
	3. Costs, Profits and Factory Management	31
	4. Control by Bank and Budget	35
III	The Workers' Effort in Soviet Planning	41
	1. Subbotniks and Reconstruction	41
	2. Production Conferences	46
	3. The Shock Brigades	51
	4. Unity in Multiformity, 1929-33	56
	5. Stakhanovites in Peace and War, 1935-45	62
	6. Post-war Socialist Emulation	67
IV	Collective Farms and the Individual	76
	1. Collective Farming in Soviet Economy	76
	2. The Transformation of Agriculture	82
	3. Individual Initiative in Co-operative Husbandry	88
	4. The Legacy of War	94
	5. Socialist Emulation in the Countryside	99
V	Trade in the System of Soviet Planning	106
	1. The Development of Soviet Trade	106
	2. Wholesale, Retail and Prices Organisation	111
	3. Post-war Problems	115
VI	Industrialisation in Central Asia	122
	1. The Economic Past of Soviet Asia	122
	2. After the Five Year Plans	126
	3. War-time Industrial Advance	129
	4. Problems and Prospects	134
	Afterword	139
	Index	143

PREFACE

This book was written when the deeper truths about the Soviet Union, to which the eyes of many millions were opened for a short while during the war against Nazi Germany, were being temporarily obscured again by the passion of controversy about the settlement of Europe after the war.

Experience throughout the thirty years’ existence of the Soviet Union, however, suggests that study of the permanent features of the Soviet economy and polity, as they are, is a better guide to Soviet policy, and therefore to European peace and prosperity, than passion or prejudice.

The pages which follow are offered with that in mind.

There is no single thesis which this book attempts to sustain. In the first chapter it dwells on the intimate connection for the U.S.S.R. between planning and foreign policy. In the next four chapters it goes on to show the role of the individual in the Soviet economy before and after the second World War. The sixth chapter deals with the immensely important war-time changes in Soviet Central Asia, both economic and social. An Afterword ventures to challenge, in the light of the facts presented earlier, some recent misrepresentations of the Soviet method of planning.

Anyone entering this field of study is bound to be aware of the great expanses already cultivated in it, particularly by Mr. Dobb in his masterly history of Soviet economic development since 1917, by the Webbs in their volumes on Soviet Communism, by Mr. Baykov in his compendium of Soviet economic legislation and statistics, and by Mr. Burns in his study of Russia's productive system. All these valuable works touch upon some of the questions treated in this book, but perhaps in less detail than the present writer has felt it desirable to devote.

Those who are looking for yet another of the many demonstrations that a Socialist system cannot work, and that the Soviet regime must inevitably collapse, will not find it here. Nor would this book give satisfaction to those (if they existed) who believed the U.S.S.R. to be an earthly paradise.

The revolution of November, 1917, took place in Russia because, among other reasons, it was the “ weakest link ” among the greater Powers. This meant that when the Soviet peoples began building a Socialist society they encountered, and are still encountering, many difficulties —both material and in the mind of man—such as are not solved in a hurry.

It is a mistake to think that they can be; but events have shown that it is even more of a mistake, and pregnant with more tragic consequences for the world, to see nothing but difficulties in the U.S.S.R., and to jump to the hasty conclusion that they are insurmountable.

One of the main purposes of this book, in fact, is to show how some of them are being surmounted, in the belief that better understanding of the strength as well as of the difficulties of the Soviet economic system may in the long run serve the interests of the British people.

*****

For the convenience of the reader, most references have been given throughout the book in footnotes, titles of books, pamphlets or journals being given in English or Russian, according to the language in which they are printed. When a work was published in English in the U.S.S.R., this is indicated in the footnote; in other cases it may be assumed to have been published in Great Britain.

My thanks are due to Miss H. M. Weston for her invaluable help in typing a manuscript which called for a critical as well as an accurate eye.

CHAPTER I

PLANNING AMID DIFFICULTIES

1. Two Views of Socialist Economy

Soviet economy has been a subject of controversy among economists of other countries ever since 1917; that was natural, since the Soviet State was based upon the overthrow of private property in the means of production — an institution which is assumed to exist by the majority of theoretical writers on political economy. Controversy reached its most acute stage, however, when the Soviet Union began the national planning of its economic life in 1929. That, too, was natural. For such planning implied that a good deal of preliminary foundation work had been successfully carried out, particularly in repairing the immense damage done to the feeble economic organism of Russia by over six years of war from 1914 to 1920, without large-scale assistance from the institutions of capitalist society.

Many writers took their stand firmly upon the proposition that it wasn’t true, that Soviet economy didn’t work and couldn’t plan. Those who are fond of literary curiosities will find an amusing collection of them in Stalin’s report of January, 1933, on the results of the first Five Year Plan.¹ How firmly this view was held could be illustrated by the fact that in 1936—i.e., well on into the second Five Year Plan—the University of Manchester published a booklet for its department of economics² stating boldly that “a system of planned economy has never been attempted in U.S.S.R. since the repeal of Communism in 1921”. The most distinguished upholder of this view, however, was Lord Keynes. As long ago as 1925, when the Soviet Government published its Control Figures of National Economy—the first tentative approach to the later Five Year Plan—he was writing, in his Short View of Russia: “On the economic side, I cannot perceive that Russian Communism has made any contribution to our economic problems of intellectual interest or scientific value”. In 1934, he added sarcastically that the subtle, almost irresistible attraction of Communism was “as a means of making the economic situation worse”.³

The majority of economic writers, at any rate after the beginning of the second Five Year Plan in 1933, were less adamant: planning in the U.S.S.R. may work, they said, but that is because the individual there has lost all economic freedom. The State decides what he is to buy and what he is to work at. There is no scope left for personal choice. Planning leads to autocracy, declared the U.S. National Association of Manufacturers in its Platform for American Industry (December, 1935): “Private ownership and control of the facilities of production, distribution and living are recognised as essential to the preservation of individual liberty and progress”. Not all academic economists were as frank as this, but substantially their attitude was the same. “So far as the trade unions are concerned, the fiat of the employer is more absolute in Russia than in any capitalist country,” wrote Mr. Geoffrey Crowther (editor of The Economist), in his Economics for Democrats (1939). Soviet economy was “totalitarian”: it implied “the worst oppression committed in the name of Socialism”: the individual in Soviet economy becomes “a mere means, to be used by authority” in the service of abstractions like “social welfare” or “the good of the community”, explained Professor Hayek, in his Road to Serfdom (1944). For the achievement of their economic ends, the Soviet leaders used their powers “against the natural opposition of individuals”, said Sir William Beveridge in Full Employment in a Free Society (1944).

Much more could be quoted in the same sense, from these and other eminent economists. Suppression of initiative and individual enterprise, bureaucratic tyranny, regimentation, enslavement of the individual, soulless control by the State, man a mere cog in a huge impersonal machine—such were the typical verdicts passed upon the economic planning of the U.S.S.R. by its critics.