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How Planned was the Soviet Economy Between 1924 and 1939?

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Introduction

How Planned was the Soviet Economy Between 1924 and 1939? As Marxists claim that capitalism is 'anarchic, planless, inefficient and wastes human and natural resources', what with the modern advances made by Russia in such a short space of time, one would assume that the Soviet economy between 1924 and 1939 was meticulously planned and controlled. However, many facts would beg to differ and instead suggest the contrary. It is true that institutes of planning existed in Russia in the period concerned. As of July 1922, VSNKh operated its control over industry by "methods of a production-planning character". The institution was responsible for the drafting of production and disposal plans amongst other things. Another institution in existence was Gosplan which was known as the state general-planning commission. Set up in February 1921, Gosplan was to "work out a single general state economic plan and means of implementing it." However, although such institutions were in place, there was no evidence of a thoroughly worked out production and allocation programme; there was no "command economy." Gosplan did not produce plans in the sense of orders from which one could act upon, but produced "control figures" which were in part a prediction and in part a guide for strategic investment decisions. ...read more.

Middle

However, far from being planned, it was a panic measure resulting from domestic and foreign problems. In 1926, a General Strike took place abroad, in Britain. As part of the government's action against the strikes, the Russian oar company was raided in London under the pretence that the Russians were using their trading network to encourage a revolution in the city. Diplomatic relations were broken off with Russia following the Arcos raid and as war usually follows such an action, the Russians feared a military strike from Britain. We now know that Britain would not have declared war on Russia and that her actions were more for the sake of propaganda in her own country. However, at the time the Russians did not know this and feared that with her backward army and weak agricultural economy, Russia would fall once under attack. A massive shortfall in grain deliveries to the state formed the basis of the domestic problems experienced by the regime at the time. Although agriculture was in the private sector the state controlled the price of the grain and agricultural produce. In an effort to reduce the cost of industrialization the state deliberately kept the price of grain very low; so low that the peasants preferred to hoard their food (to create a shortage) ...read more.

Conclusion

During rapid industrialization a real threat to the regime was posed by the Kulaks, as one would be told by Russian propaganda of the time. The creation of a modern state involved economically ridding itself of the 'backward' peasantry who formed approximately 80 per cent of the population. The state showed a chilling ability to plan to get rid of the peasantry by pretending to liquidate the kulaks as a class and replacing them with workers. In truth, liquidation of the kulaks and collectivisation was destroying the peasantry as a whole, with the kulaks being used as an excuse. With reference to agriculture, the government failed to predict the horror that would emerge with forced collectivisation. For hundreds of years Russia had been an exporter of grain, however, ever since forced collectivisation she has been an importer of grain. She has never recovered. The Second Five Year Plan was a little more thought out, less ambitious and possibly more fruitful. The targets, being a little more realistic were better met. However, it is also claimed that the Second Plan was probably more successful as it set about clearing up the mess made by the First Plan. "The First Five Year Plan...landed the country in such chaos that it took at least two years to straighten things out." ...read more.

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