There are occasions, as we know, when resources are abundant, but they are expended so incompetently that the advantage is nullified. ― Joseph Stalin
After the Russian Civil War ended in October 1922, the USSR, under the leadership of Vladimir Lenin, suffered a major setback, especially on the economic front.
In order to save the Soviet economy from the extreme crisis that it was facing at that time, Lenin proposed the New Economic Policy (NEP), which was oriented towards the capitalist approach, although the state did keep its stakes in big industrial establishments.
Under the NEP, mixed economy was introduced in the Soviet Union, wherein private individuals were allowed to own smaller enterprises; however, all the major financial and commercial institutions, like banks and large industries, continued to be controlled by the government.
The partial revocation of the nationalization of industry under the NEP proved favorable to the USSR in a number of ways, such as an increase in the agricultural produce and the stabilization of small-scale and light industries.
Lenin passed away in 1924, after which the NEP was upheld by some of his supporters for few years. However, in 1928, Joseph Stalin assumed leadership of the communist regime.
He, then, focused his economic policy towards strengthening the USSR on the industrial front rather than the agricultural, as he opined that this would help the Soviet Union accumulate wealth more rapidly, and thus, make it stand strong against the aggressive capitalist forces of the West.
Stalin's solution to this was the abolishment of the NEP and the introduction of the 'Five-Year Plans for the National Economy of the Soviet Union (USSR)', the first of which was implemented in the year 1928.
Five-Year Plans Under Stalin
Stalin's main focus was to build a strong industrial base for USSR, and to make it as strong as the capitalist regimes of the West. He wanted to make USSR as financially strong as the western nations so that, if any warlike circumstances were to arise in the future, his communist regime would be able to stand strongly against the capitalists.
Under Stalin, there were essentially five five-year plans, which were implemented in the USSR. All these were formulated by the 'State Planning Committee', and were based primarily on Karl Marx's concept of 'productive force determinism' that focused on technical advancement as a basis for social change.
For the Soviet bureaucracy, successful implementation and fulfillment of the five-year plans was of utmost importance, and some of them were indeed very successfully completed much earlier than expected, whereas some of them, despite every possible effort, failed terribly.
First Five-Year Plan (1928-1933)
~ The major highlight of Stalin's first five-year plan was the policy of 'collectivization' in agriculture. The main purpose of this policy was to improve the agricultural efficiency, and also to completely eliminate the "kulaks", a class of affluent landowners, the presence of which was thought to be dangerous for the Soviet regime.
~ As per the plan, through collectivization, the state took control of all the lands held by the kulaks, and even by the smaller farmers, and clubbed all of them together to create collective farms, in which the poor peasants were made to work. It was like working cooperatively on a single piece of land, and by using the same equipment.
~ In the beginning, collectivization seemed to be implemented for elevating the position of the poor farmers; however, soon enough, the darker side of the policy was unraveled. Collectivization led to large-scale exploitation and suppression of the poorer peasants by those in power, and this became the cause of the 1932 famine that claimed millions of lives.
~ On the industrial front; however, there was a substantial growth in manpower, as more and more rural people (wanting to escape the exploitation on the collective farms) moved their bases to the industrial settlements.
~ This led to a tremendous increase in the industrial output, which brought the USSR in line with the major industrial powers of that time. Thus, Stalin's dream of making the USSR an industrial superpower began gaining impetus right from the first five-year plan.
Second Five-Year Plan (1933-1937)
~ Stalin's first five-year plan proved to be a grand success as far as industrialization was concerned. In fact, it achieved all its goals within just four years of implementing it.
~ Highly encouraged by the success of the first plan in just four years instead of five, Stalin went on with the second plan in the year 1932, although it was scheduled for implementation from 1933.
~ Heavy industry was the top priority of this plan. Owing to the huge industrial success of the first plan, Soviet Union had by now become one of the major steel producers of the world. In fact, as a steel-producing country, it was now competing neck and neck with its rival, Germany.
~ After the second plan was implemented, the communications sector made a near satisfactory progress. Even the railways became faster and also more well-connected.
~ However, it was not as grand a success as the first plan because it failed to achieve the desired production levels in the oil and coal industries. It means that the amount of wealth that was supposed to be generated after the successful completion of the plan could not be yielded. At one point there was even a threat of the second plan failing altogether.
~ In order to avoid complete failure of the plan, childcare measures were introduced throughout the USSR. These were intended to encourage more and more mothers to join the Soviet workforce, and to aid in the production of wealth.
~ By the end of the second plan a different class of middlemen, called 'tolkachi', emerged in the USSR. These were employed by the various enterprises, and their main purpose was to persuade the commissariat and get the targets of the five-year plans reduced, so that their enterprise could achieve them. This was another factor leading to failure of the plan.
Third Five-Year Plan (1938-1941)
~ Beginning from 1938, the third five-year plan could be implemented only for the initial three years. In 1941, owing to WWII, Germany attacked the Soviet Union and hence, all the attention was automatically diverted from industrial development to strengthening of the military.
~ Owing to the war, more and more resources were employed in the research and development, and production of armaments, weapons, and tanks. Moreover, a major part of money and other resources were also invested in setting up military factories towards the east of the Ural mountains.
~ It should be noted, however, that even during the first two years, when the situation was not much hostile, the third plan did not prove to be very fruitful. Rather, it failed to achieved most of its proclaimed targets of production.
~ Nevertheless, it is worth mentioning that the decade of the 1930s (the decade also includes the first and second plans), showcased a steady industrial growth.
Fourth and Fifth Five-Year Plans (1945-1955)
~ The WWII came to an end in 1945, and the USSR was virtually devastated by it. There was a large-scale loss of life and infrastructure and so, what was needed at that point was massive reconstruction of the entire nation.
~ Stalin, however, seemed to be pretty confident as he went on to promise his people that the Soviet Union would be a leading industrial superpower by the year 1960.
~ In reality, things were not that easy. The scale of destruction was enormous―as much as 40% of the urban infrastructure was devastated, 25% of the capital equipment was destroyed, there was intense shortage of manpower, and the food production had reduced substantially.
~ The year 1946 was the driest year for the USSR since 1891, as the harvest was extremely poor.
~ Due to the acute economic crisis that the USSR was in at that time, it sought monetary help from the US for the reconstruction measures that had to be undertaken. However, both of them could not land on a consensus with regards to the terms of the loan. This was one of the major factors for the Cold War that subsequently escalated between the two of them.
~ Nonetheless, the USSR did manage to get some reparations from Germany, which they utilized for reconstruction. They also made all the East European countries they had freed from the clutches of the Nazis to pay for the Soviet reconstruction. However, nothing seemed to be enough.
Stalin breathed his last on 5 March 1953. However, his idea of achieving industrial progress through the implementation of five-year plans had gained many supporters by then.
In 1956, Nikita Khrushchev, who replaced Stalin after his death, and the leaders that followed, took the responsibility of implementing the next five year plans. In total, 13 five-year plans were implemented in the USSR until 1991, the year in which the Soviet Union was dissolved.