From Agriculture to Industry: The Soviet Union Between 1929 and 1940Essay Preview: From Agriculture to Industry: The Soviet Union Between 1929 and 1940Report this essayName: Tim GoudsmidCourse: SSC 112Date: 11-11-2005Words: 2794From Agriculture to Industry: The Soviet Union between 1929 and 1940“We are fifty or a hundred years behind the advanced countries. We must make good this distance in ten years. Either we do it, or they crush us.” Ð- Josef Stalin, 1931
IntroductionFor a large part of the Russian population, the Communist Revolution did not start until 1929. This was the year in which the collectivization of agriculture began and the year in which the Soviet industrialization process started to accelerate rapidly. The ensuing period led to a lot of death and social suffering, but also to extensive industrial growth. It transformed the Soviet Union from backward agricultural society into a superpower.
During the 1920s the Soviet leaders began to fear that another World War might break out. They knew that the Soviet Union could not compete with western countries, if the industrialization would fail. The future existence of the Soviet Union depended solely on its ability to industrialize. This is why in 1928 Stalin announced what is perhaps the most ambitious and costly plan for industrialization ever created by man.
The outcome of the Second World War and the position the Soviet Union had afterwards show that the Soviet Union had become a competing and industrialized nation. This stands in sharp contrast with the achievements of Russia under Tsarist rule and the industrialization during the New Economic Policy. While both of these periods generated substantial economic growth, a real industrial revolution did not take of until the introduction of Stalinist policy in 1928. This leads to the question why Stalinist policies were an economical success. In order to study why Stalinist policies were successful, it is necessary to first take the previous failure to industrialize into account. The most radical and effective changes made by the Stalinist government were in the agricultural and industrial sector, which will be discussed subsequently. The huge social costs of Stalinism are only assessed on points that are relevant to the industrialization process.
Imperial Russia and the Soviet Union before 1928When comparing the pre industrial situation in Tsarist Russia and Western Europe, one immediately sees how backward Russia was. While proto industrial societies began to emerge in Western Europe, Russia remained a feudal society. Russia lacked industrial prerequisites, like large sums of money owned by private investors and entrepreneurs and a surplus of labor force, available for industries . Because of this lack of prerequisites, no industrial revolution took place in 19th century Russia. Drawbacks of this situation became painfully apparent when the Russian Empire started to lose wars against industrialized nations .
The Russian Tsars wanted to modernize their empire, in order to make it more competitive and to improve Russias military power. This led to a number of innovations in the agricultural sector (e.g. abolishment of serfdom). However, the prerequisites for an industrial revolution were severely lacking. Most of the wealth was in the hands of the aristocratic elite and was used for the consumption of luxury goods. These elite had little to gain from industrializing, as investments in agriculture were more profitable. For the aristocrats, investing in industries also meant the risk of losing their position, due to the rise of entrepreneurs and the Egel effect. The unwillingness of the elite to embrace industry meant that money to invest and industrial entrepreneurship had to be found abroad. As Gerschenkron explains, when a country lacks industrial prerequisites, the government has to substitute for them.
Imperial Russia also lacked a large consumer market, as most of the inhabitants were uneducated peasants, living on the edge of subsistence. Education, science and knowledge in general were on a lower level than in Western Europe. So not only capital and entrepreneurship, but also knowledge had to be imported from industrial countries. This was of course far more costly and less efficient than domestic development would have been. Nonetheless, the benefits of industrializing had become so great that it was deemed necessary by the Tsars to substitute for the lacking industrial prerequisites.
In the period from 1850 to 1910 Russia managed to create substantial economic growth. This growth came mostly from agricultural reforms and rising grain prices. The state subsidized and protected light industry and was not competitive contributed little to the rise in GDP . Large scale industrialization did not take place under the rule of the Tsars.
In the revolution of 1917 the Bolsheviks took over control of the country. The first years of their rule were chaotic, because of civil war and internal conflicts in the communist party. The new leaders were confused and divided, because Marx theory contained little information about the workings of a post-revolutionary communist state. This first period of ÐWar Communism was replaced by the New Economic Policy in 1922. The NEP was a cross between a communist and a capitalist system. All large scale factories were loosely controlled by the state, while peasants were allowed their own land and access to markets . Government also invested more in both primary and secondary education and in infrastructural projects. The NEP was criticized from the start by Communist Party ideologists, because the system was not purely communist. It also proved to be most beneficial to large landowners, which were traditionally seen as class-enemies .
Under NEP, peasants had an incentive to work harder, because they could profit from the surpluses, which led to a great increase in agricultural production. The surpluses were partially consumed and partially extracted by the government, which used them to invest in heavy industry. Despite these investments, the industry was still largely outdated and inefficient, and could not keep up with the fast growth of agriculture. This difference in growth destabilized the economy. The countryside became overpopulated while no migration to the cities took place. Under the NEP, the Soviet Union attained substantial economic growth . However, like during the Imperial period this growth came mainly from agriculture. Large scale industrialization did not take place. If the Soviet Union wanted to industrialize, radical changes were needed to substitute for the lacking industrial prerequisites.
The USSR’s Great Transformation and Its Decline
The following is a comprehensive and detailed account of how the Soviet Union fell precipitously under the NEP. During the NEP, the population doubled from 1.5 million in 1925 to 4.4 million in the 1960s. The economy grew from a surplus of 100 million to 50 million (18 percent in 1960). Subsequently in the 1970’s, inflation slowed, the prices of agricultural goods and services increased in the hope of creating a surplus for the new Russian Federation in the 1980s.
In 1997, under the new NEP, agricultural production in the Soviet Union grew by an expected 2.4 percent, including the production of consumer products. However, a severe drop in prices and higher inflation led to massive decline in the total quantity of food produced in the Soviet Union. The Soviet Union’s consumption of consumer goods fell by 20 percent, with food products produced in excess of 20 percent of the value of the national income.
Economists have taken a closer look at the NEP’s success and have concluded that the USSR suffered a massive fall under the NEP and will eventually implode. But the key factor is that the situation of the Soviet Union during this period of rapid economic growth has stabilized, and the Soviet Union became economically independent and productive in the mid-1980s.
The USSR’s Great Transformation
The USSR is now under increasing political and economic pressures, as governments under successive presidents have sought to reestablish the rule of the People’s Republic of China until the late 1990s. On April 23, 1993 Moscow decreed that Chinese officials should be free of political and economic responsibilities and be subject to the same rights and responsibilities as people of other countries. At this time the Chinese Foreign Ministry expressed the hope that the return of the CPC to power would also mean that Chinese people would be able to make real democratic choices on a free, regional basis. During the 1990s, the Chinese government gave the impression that the CPC had been successfully reconstituted. However, China’s leadership remained focused on economic growth—as did many people in its own national society.
In 1998, the Soviet Union and its European neighbors established a free-market system that ensured that the private ownership of the state was not privatized and that public enterprises were able to produce surplus products for the government. The policy and procedures were very different and the Soviet Union eventually fell into recession and became the world’s largest exporter of agricultural goods at a value approximately half the size of the Soviet bloc. On July 23, 1993, the IMF reported that the economy had grown by 2.5 percent during the first five years of the NEP. China in 2005, the EU in 2007 and the U.S. in 2008 averaged 3 percent annual growth.
In addition, the USSR has a relatively stable economy, with inflation under 2 percent. This is compared to China’s 3 percent annual growth and the average annual growth of the Soviet economy over the same period of time. Therefore, when the USSR fell, it did so in an economic manner without any major changes at all.
To explain this, I can cite data of Soviet state expenditures and investment over three decades of historical time. For example, China’s economic boom was initiated in 1991 and was followed by a number of severe periods of weak growth in 2008 to 2011. In both years they experienced stagnation, but they also experienced some growth in the first year of the economic transition, which produced significant progress of the USSR with the fall of the Soviet Union.
On July 24, 1997,