Five-Year Plan

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Russian economic planning had its roots in the late nineteenth century when tsarist explorers and engineers systematically found and evaluated the rich resources scattered all around the empire. Major deposits of iron and coal, as well as other minerals, were well documented when the Bolsheviks turned their attention to economic development. Initial attention focused on several centers in south Russia and eastern Ukraine, which were to be rapidly enlarged. Electric power was the glamorous new industry, and both Vladimir Lenin and Josef Stalin stressed it as a symbol of progress.

By 1927 the planners had prepared a huge three-volume Five-Year Plan, consisting of some seventeen hundred pages of description and optimistic projection. By 1928 Stalin had won control of the Communist Party from Leon Trotsky and other rivals, enabling him to launch Russia on a fateful new path.

The First Five-Year Plan (FYP) laid out hundreds of projects for construction, but the Party concentrated on heavy industry and national defense. In Germany Adolf Hitler was already calling for more "living room." In a famous 1931 speech Stalin warned that the USSR only had ten years in which to prepare against invasion (and he was right).

The First Five-Year Plan was cut short as planning gave way to confusion. A Second Five-Year Plan was issued in one volume in 1934, already behind schedule. The planners were learning that one-year plans were more effective for managing the economy, leaving the five-year plans to serve as propaganda documents, especially effective abroad where the Great Depression seemed to signal the collapse of capitalism.

The Third Five-Year Plan had limited circulation, and the Fourth was only a pamphlet, issued as a special edition of the party newspaper, Pravda.

The Nazi invasion, starting June 22, 1941, required hasty improvisation, using previously prepared central and eastern bases to replace those quickly overrun by well-equipped German forces. The Nazis almost captured Moscow in December 1941.

After Soviet forces rallied, wartime planners organized hasty output increases, drawing on newly trained survivors of Stalin's drastic purges. Russian planners worked uneasily with U.S. and British officials as the long-delayed second front was opened, and abundant Lend-Lease supplies arrived.

After the war, improvisation gave way to Stalin's grim 1946 Five-Year Plan, which held the Soviet people to semi-starvation rations while he rebuilt heavy industry and challenged the United States in building an atomic bomb.

Fortunately for the Soviet people and the world, Stalin died in March 1953, and by 1957 Nikita Khrushchev was able to give Soviet planners a more humane agenda. The next Five-Year Plan was actually a seven-year plan with ambitious targets for higher living standards. Soviet welfare did improve markedly. However, Khrushchev was diverted by his efforts to control Berlin and by his ill-fated Cuban missile adventure. The Party leadership was furious, but instead of having him executed, they allowed him to retire.

This brilliant leader's successors were a dull lot. The planners returned to previous five-year plan procedures, which mainly cranked up previous targets by applying a range of percentage increases. Growth rates steadily declined.

In 1985 the energetic Mikhail Gorbachev looked for help from Soviet planners, but the planners were outweighed by the great bureaucracies running the system. In a final spasm, the last Five-Year Plan set overambitious targets like those of the first such endeavor.

Other Russians contributed greatly by creating new tools for economic management, especially Leonid Kontorovich, who invented linear programming; Wassily Leontief, who invented input-output analysis; and Tigran Khachaturov, who provided skillful political protection for several hundred talented economists as they improved Russian economics. These men rose above the barriers of the Russian planning system and thus deserve worldwide respect.

Bibliography

Bergson, Abram. (1964). The Economics of Soviet Planning. New Haven, CT: Yale University Press.

Gregory, Paul R., and Stuart, Robert C. (1990). Soviet Economic Structure and Performance, 4th ed. New York: Harper & Row.

Hunter, Holland, and Szyrmer, Janusz M. (1992). Faulty Foundations. Princeton, NJ: Princeton University Press.

—HOLLAND HUNTER