Stalin and planning

Louis N Proyect lnp3 at
Fri Aug 9 18:13:50 MDT 1996

On Sat, 10 Aug 1996, hariette spierings wrote:

> Funny how that Satrap was able to sustain himself in power and defeat the
> Hitlerite "accounting and control" machinery!

Louis: I have no interest in debating the Moscow trials, as I have already
pointed out. My comments on Stalin were drawn from research I did earlier
in the year preparing a reply to list member Chris Sciabbara, author of
books on Hayek and Ayn Rand. The full text is on the Marxism archive. This
is a germane section:

I maintain that Stalin's policies have nothing to do with planning.

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 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

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 them 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.

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