Stalin, planning and the libertarian critique

Louis N Proyect lnp3 at columbia.edu
Fri Sep 29 08:53:09 MDT 1995


Louis Proyect:

As part of his ongoing crusade against socialism, Chris Sciabarra
blames the economic woes of the former Soviet Union on "planning."
Stalin and his clique of rulers did not "plan" the Soviet economy. They
had no use for engineers, statisticians or economists. When Peter
Palchinsky, the subject of Loren Graham's essential "Ghost of the
Executed Engineer", objected to Stalin's capriciousness, the tyrant had
him executed. Stalin's industrialization policies were identical to his
approach to Soviet military defense: irrational, stupid and self-
destructive.

Let us put Stalin's policies into context. In the mid 1920's Bukharin
and Stalin were allied against the Left Opposition, which included
Trotsky, Kamenev and Zinoviev. Bukharin and Stalin were for
tolerating the growth of capitalist agriculture. The Left Opposition
favored rapid industrialization, a planned economy and steep taxation
on Kulaks, the wealthy peasants, in order to finance the state sector.
Stalin and Bukharin triumphed and plowed ahead with their rightist
policies. However, in the late 1920's, the rich peasants began to resist
the Soviet government by withholding grain. Stalin grew alarmed, and
lurched wildly to the left. He declared war on the Kulaks and
appropriated many of the superficial features of the program of the
Left Opposition.

In a few short years, everybody figured out that Stalin was making a
mockery of the platform of the Left Opposition on all fronts. The area,
of course, that concerns us in this article is the planned economy. Did
Stalin favor a planned economy? History tells us otherwise.

The Soviet government announced the first five year plan in 1928.
Stalin loyalists, like Krzhizanovksy and Strumlin, who headed
Gosplan, the minister of planning, worried about the excess rigidity of
this plan. They noted that the success of the plan was based on 4
factors: 1) five good consecutive crops, 2) more external trade and help
than in 1928, 3) a "sharp improvement" in overall economic
indicators, and 4) a smaller ration than before of military expenditures
in the state's total expenditures.

How could anybody predict five consecutive good crops in the USSR?
The plan assumed the most optimistic conditions and nobody had a
contingency plan to allow for failure of any of the necessary
conditions.

Bazarov, another Stalin loyalist in Gosplan, pointed to another area of
risk: the lack of political cadres. He warned the Gosplan presidium in
1929, "If you plan simultaneously a series of undertakings on such a
gigantic scale without knowing in advance the organizational forms,
without having cadres and without knowing what they should be
taught, then you get a chaos guaranteed in advance; difficulties will
arise which will not only slow down the execution of the five-year
plan, which will take seven if not ten years to achieve, but results even
worse may occur; here such a blatantly squandering of means could
happen which would discredit the whole idea of industrialization."

Strumlin admitted that the planners preferred to "stand for higher
tempos rather than sit in prison for lower ones." Strumlin and
Krzhizanovksy had been expressing doubts about the plan for some
time and Stalin removed these acolytes from Gosplan in 1930.

In order for the planners, who were operating under terrible political
pressure, to make sense of the plan, they had to play all kinds of
games. They had to falsify productivity and yield goals in order to
allow the input and output portions of the plan to balance. V.V.
Kuibyshev, another high-level planner and one of Stalin's proteges,
confessed in a letter to his wife how he had finessed the industrial plan
he had developing. "Here is what worried me yesterday and today; I
am unable to tie up the balance, and as I cannot go for contracting the
capital outlays--contracting the tempo--there will be no other way but
to take upon myself an almost unmanageable task in the realm of
lowering costs."

Eventually Kuibyshev swallowed any doubts he may have had and
began cooking the books in such a way as to make the five-year plan,
risky as it was, totally unrealizable.

Real life proved how senseless the plan was. Kuibyshev had recklessly
predicted that costs would go down, meanwhile they went up: although
the plan allocated 22 billion rubles for industry, transportation and
building, the Soviets spent 41.6 billion. The money in circulation,
which planners limited to a growth of only 1.25 billion rubles,
consequently grew to 5.7 billion in 1933.

Now we get to the real problem for those who speak about "planning"
during this period. As madcap and as utopian as the original plan was,
Stalin tossed it into the garbage can immediately after the planners
submitted it to him. He commanded new goals in 1929-30 that
disregarded any economic criteria. For example, instead of a goal of
producing 10 million tons of pig iron in 1933, the Soviets now
targeted 17 million.  All this scientific "planning" was taking place
when a bloody war against the Kulaks was turning the Russian
countryside into chaos. Molotov declared that to talk about a 5-year
plan during this period was "nonsense."

Stalin told Gosplan to forget about coming up with a new plan that
made sense. The main driving force now was speed. The slogan
"tempos decide everything" became policy. The overwhelming
majority of Gosplan, hand-picked by Stalin, viewed the new policy
with shock. Molotov said this was too bad, and cleaned house in the
old Gosplan with "all of its old-fashioned planners" as he delicately
put it.

When Stalin turned the whole nation into a work camp in order to
meet these unrealistic goals, he expanded the  police force in order
that they may function as work gang bosses. Scientific planning
declined and command mechanisms took their place. As the command
mechanisms grew, so grew the administrative apparatus to implement
them. The more bottlenecks that showed up, the greater the need for
bureaucrats to step in and pull levers. This is the explanation of the
monstrous bureaucratic apparatus in the former Soviet Union, not
scientific planning.

**********

When I functioned as east coast coordinator of Tecnica, I helped to
recruit many of the volunteers who went to Nicaragua and provided
technical assistance to the Sandinista revolution. These volunteers
worked at a time when mercenary armies were attacking Nicaragua
from both north and south, funded and organized by the United States.

The United States in a single year spends more money on blue jeans
than there is in the entire gross national product of Nicaragua. Despite
Nicaragua's poverty, this revolutionary society was able to make great
gains in literacy, health, nutrition and agricultural growth.

Tecnica volunteers helped Nicaragua with some key projects:

1) A volunteer helped replace the old-fashioned type-setting
equipment at Barricada International with desktop publishing. This
allowed the newspaper to put out copy every single day without fail.

2) Volunteers worked closely with the late Ben Linder on his rural
electrification in northern Nicaragua. One of them, Jamie Lewontin,
son of Harvard scientist Richard Lewontin, was key to completing the
project after Ben's untimely death.

3) A volunteer converted currency-conversion procedures in the
Central Bank from tedious, time-consuming manual methods to one
based on Lotus123 running on a single desktop computer. The dozen
or so college-educated Nicaraguans who worked in this section now
could do more important work.

Tecnica as an organization reported to Carl Oquist, the chief
economist reporting to President Daniel Ortega. Oquist was an
American economist who had lived in Nicaragua since the early 70's
and had sunk deep roots in Nicaraguan society. Oquist was exactly the
type of person Stalin would have jailed or murdered.

For those who are considering the feasibility of socialism, it is about
time to start looking at newer experiments like Nicaragua or Cuba. To
talk about the USSR in the 1930's and planning in the same breath
does violence to history and cheapens language to an extreme and
Orwellian degree.

**********

When I was a teenager in the late 1950's, I used to go over to Dead
Man's Canyon with my friends to smoke Lucky Strikes and discuss
politics, religion and philosophy. We, the children of grocers, truck-
drivers, electricians and plumbers, always came to the same
conclusion. Socialism was not feasible because the United
States was just too big and too complicated for it to work. We could
never manage it; the economy was beyond our control.

Over in places like Greenwich, Connecticut, the children of ruling-
class families who were on their way to Groton and Yale had an
entirely different concept and expectation. Not only did they see
American society and economics as manageable, they were the ones
who were going to do it. They were correct. They took their old-school
ties with them into Chase Manhattan, Exxon, General Motors, IBM,
etc. and built links with their chums in government from the same ivy-
league colleges and country-clubs. This class of people regards politics
and economics as an insider's game. They manipulate the system in
order to enrich themselves and impoverish the poor fools who smoked
Lucky Strikes and convinced themselves that socialism was just too
complicated to accomplish.

Libertarianism targets not the ruling-class, but the working-class.
Libertarianism preaches that we need a society of rugged individuals.
Libertarians urge the working-class, which needs to unite itself to
make any significant gains, to fend for itself as atomized households
and individuals. Meanwhile, the ruling-class winks its eye at the
libertarian philosophers. They know full well that the only way to get
ahead is to rig the rules of the game in their own favor. Capitalism is
basically a system that requires exploitation of the many by the few
and you need all sorts of ideological con-games going on to take
people's mind off their oppression. Libertarianism is getting more and
more popular in this respect.

I do not expect people like Chris Sciabarra to change his mind on
questions like this. I do hope that "market socialists" who are afraid of
planning and who lurk on this list might begin to rethink some of
these questions. Planning should not be a dirty word in our vocabulary.
We should say that we favor it and intend to put it into practice when
we have finished expropriating the capitalist class. Nothing else will
do.

(Details on Stalin and planning come from chapter 5 entitled "The
Disappearance of Planning in the Plan" in Moshe Lewin's new book
"Russia USSR Russia" [The New Press, New York, 1995]. This book
is as important in understanding the former Soviet Union as anything
written by Isaac Deutscher or E.H. Carr)


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