76

p Soviet society has passed through various historical stages in its development, and each of them has been marked by definite progress in the system of state economic planning. A long path has been traversed from the first annual plans for individual industries to comprehensive programmes interlocking all sectors of the economy.

p The first plans of individual industries were drawn up as early as May-June 1918, and were examined by the First All-Russia Congress of Economic Councils. In the exceptionally difficult conditions of foreign military intervention and 77 Civil War, the state allocated food, fuel and major materials on the basis of centralisation. In that period Lenin regarded the mobilisation of all economic resources for defeating internal and international counter-revolution as a paramount task of planning.

p With the transition to peaceful socialist construction the state plan for the electrification of Russia (known as the GOELRO plan) became the basis of all economic activity. Drawn up on Lenin’s initiative in 1920 and approved by the Eighth Congress of Soviets, it was designed for 10-15 years. It was the first long-term economic plan in the world on the scale of an entire country. Electrification was the core of the plan. Under a decree of the Council of People’s Commissars, signed by Lenin, a State Planning Commission (GOSPLAN) was set up at the Council of Labour and Defence on February 22, 1921, to ensure the planned development of the economy.

p The first plans concentrated attention on the all-round development of the socialist sector, the consolidation and extension of social property, the reform of peasant farming on socialist lines, and the restriction, ousting and eventual elimination of the capitalist elements. Centralised capital investment, channelling of material resources and various other economic measures, including the regulation of wholesale prices and taxes, were widely used for strengthening the state sector.

p Since 1928 the economic life of the Soviet Union has been directed by five-year plans. Despite the overall unity of aims, each plan has had its distinctive features stemming from the objective conditions and the immediate tasks of social development.

p Under the First Five-Year Plan (1928-32) the economic resources were concentrated on industrialisation and the creation of conditions for the socialist reconstruction of agriculture. A broad programme for the technical reconstruction of all sectors of the economy was carried out in accordance with the principal tasks of the Second Five-Year Plan (1933-37), which greatly reinforced the country’s defence potential.

p The foundations of socialist society were built in the Soviet Union as a result of fulfilling the First Five-Year Plan and the building of socialism was in the main 78 completed as a result of the Second Five-Year Plan. By that time the socialist system had triumphed in all spheres of the Soviet economy. Socialist ownership of the means of production had taken firm root and become the unshakable foundation of the new system. A powerful industry had been built up and had ousted private industry. Collectivisation had resulted in the development of large-scale mechanised agriculture; all trade was concentrated in the hands of socialist society and co-operatives; crises, poverty and unemployment had disappeared and exploitation of man by man had been abolished forever. An intelligentsia had been developed from among the workers and peasants. The advance of the Soviet economy during this period was exceptionally rapid. In twelve pre-war years (1929-40) industrial output in the USSR increased 6.5 times and such sectors as the steel, engineering, chemical and power industries developed even faster. The priority growth of these industries made it possible to eliminate the country’s economic backwardness and on the eve of the Second World War the USSR held first place in Europe and second place in the world for industrial output.

p During the Great Patriotic War of 1941-45, the socialist planned economy was subjected to a crucial test and passed it brilliantly. Planning was highly instrumental in the smooth functioning of the war-time economy. After the war, the five-year plans helped to ensure the successful rehabilitation and the further advance of the economy and culture. Socialism had triumphed completely and finally in the USSR.

p Throughout the history of planning, centralised planned guidance has been a key question in the theory and practice of socialist construction. The Communist Party and the Soviet state are always guided by Lenin’s precept that “communism demands and presupposes the greatest centralisation of large-scale production throughout the country".  [78•1  This principle, of course, has never signified that all questions must be decided by the centre, while the localities have merely to carry out these decisions. In the practice of planning, centralised state guidance is closely combined with the maximum constructive activity by the people as a whole. 79 That is why the single economic plan of the USSR sets only the main trends, the major parameters and assignments for a limited nomenclature. Ministries and Union Republics specify the targets of the state plan and they are further concretised by industrial associations and enterprises.

p The Communist Party regards planning as one of the forms of participation by the masses in managing social production. This is expressed in the active discussion by the people of the directives for five-year plans, in socialist competition for the pre-schedule fulfilment of state plans, in the mass movements for greater labour productivity, better use of equipment, saving of raw and other materials, introduction of new equipment, improvement in the quality of goods, early commissioning of capacities, and so on. The enthusiasm of the Soviet people and their labour effort facilitate the early fulfilment of plans and make possible a vast expansion in the scale of social production.

p Soviet people have now fulfilled the Eighth Five-Year National Economic Development Plan (1966-70). During this five-year period economic growth rates were accelerated and the real incomes of the population rose as compared with the preceding five years; national economic proportions were improved, specifically between industry and agriculture and between the output of means of production and that of consumer goods. Substantial progress was made in implementing major social measures, including levelling up the living standards of the rural and urban population. The Eighth Five-Year Plan signified a further advance of Soviet society towards communism and the strengthening of the country’s economic and defence potential.

The following data (see Table 1 on p. 80) attest to the successful fulfilment of the main targets of the Eighth FiveYear Plan. Improvement of the people’s living standard is also seen in the consistent solution of the housing problem. Not so long ago, under the Fifth Five-Year Plan (1951-55) over 3,000 million rubles were spent on housing construction annually, while in 1970 the figure exceeded 13,000 million rubles. Altogether in the last 15 years (1956-70) more than 145,000 million rubles were spent on housing construction by all sources of financing (in comparable prices) and about 34 million flats were built to which over 126 million people moved.

80 Table 1 (per cent) 1961-65, increase during this period 1966-70, increase during this period Envisaged in the Directives of the 23rd CPSU Congress Actual National income .......... 32 51 58 36 12 47 34 19 19.7 38-41 47-50 49-52 43-46 25 37 40 30 20 41.0 50.0 51.0 49.0 21.0 38.0 48.0 33.0 26.0 Industrial output .... ... Group A (output of means of production) .............. Group B (output of consumer goods) Gross output of agriculture ..... Goods carriage by all types of transport ............... Retail trade ...... Real incomes . . Average monthly wage .......

p Relying on the Leninist doctrine of planning, on a profound analysis of the prospects of social development, the Communist Party of the Soviet Union aims to build up the most advanced economy in the world. This purpose is also served by the economic reform which was introduced in 1966. It has put to the fore the tasks of further enhancing the efficiency of production, economising inputs of living and materialised labour and increasing the return of capital investments and fixed assets.

p The reform has raised the level of economic performance of the enterprises, and this has helped to increase their accumulations and to reach the major targets of the Eighth Five-Year Plan. Most enterprises that have adopted the new system of planning and stimulation have achieved a faster turnover of goods which the economy needs and have been able to make better use of fixed productive and circulating assets. Under the Eighth Five-Year Plan the new system of planning and economic stimulation became the main method of management in nearly all sectors of the economy. Today, the industrial enterprises working in the new way 81 contribute more than 93 per cent of the production and sale of goods and more than 95 per cent of the profit. The new system has been introduced on all the railways, in maritime and river shipping lines, motor transport and civil aviation. Over 8,000 state farms of the Ministry of Agriculture, about 80 per cent of the service establishments and almost 250 large construction organisations have been transferred to full cost accounting. The implementation and results of the economic reform show that the economic policy charted by the Party has fully justified itself and created potentialities for successfully coping with the tasks of the Ninth FiveYear Plan.

p Raising the efficiency of the national economy is directly linked with further improvement in the structure of social production. The main thing here is to develop the power and chemical industries, engineering, particularly instrument-making, radio electronics and also a number of other sectors which have a bearing on the growth and technological progress in all sectors of the economy, on the volume of capital investments, improvement in the use of manpower, the productivity of labour and the volume of output.

p Optimal adjustment of growth rates in these sectors and industry as a whole, and structuring of the fuel and power, engineering, chemical, steel and non-ferrous metals industries are central economic problems. In ten years the share of the chemical industry in total industrial output has increased by 40 per cent, that of the electric power industry almost by 30 per cent, and that of engineering and metalworking by 40 per cent. Progressive types of fuel—oil and gas—accounted for 60 per cent of the total output in 1970 as against 51 per cent in 1965. Such a considerable growth in these sectors has accelerated the pace of technological progress.

p The efficiency of the national economy is also enhanced by maximum specialisation of production, especially in engineering where it is one of the main ways for reducing inputs, improving the quality of output and raising labour productivity. Alongside specialisation, in a number of sectors (the chemical, oil-extracting, timber and non-ferrous metals industries) rational integration of production is developing on the basis of a more comprehensive use of raw material 82 and power and the utilisation of wastes and by- products.

p The policy of high efficiency demands a swift and stable development of agriculture. The measures taken in the last five years to strengthen the material and technical basis of agriculture and raise the role of economic incentives have made it possible to increase the production of grain, raw cotton, sugar-beet, potatoes, meat and milk and increase the growth rate of gross agricultural output. The average annual production of grain in 1966-70 amounted to 167.5 million tons as compared with 130.3 million tons in 1961-65. The gross raw cotton crop exceeded the level of the preceding five years by 22 per cent; sugar-beet by 37 per cent and sunflower seed by 26 per cent. The average annual production of meat, milk and eggs increased by 24 per cent, and wool by 10 per cent.

p Fulfilment of the agricultural programme demanded a basic change in the distribution of the national income and material resources in favour of agriculture. Capital investments in agriculture are growing faster than in any other part of the economy. The countryside is much better supplied with high-performance machinery and mineral fertiliser. Deliveries of tractors to collective and state farms in the last five years rose by 34.3 per cent as compared with the preceding five-year period, agricultural machinery by 38 per cent and lorries by 70 per cent. Deliveries of mineral fertiliser in 1970 increased by nearly 19 million tons, or 69 per cent, as compared with 1965. The electrification of agriculture was further developed, and was intensified on the basis of chemicalisation, comprehensive mechanisation and land improvement. All this has helped to increase the profitability of both collective and state farms.

p The expansion and improvement of the productive apparatus in all sectors of material production made it possible to achieve the main social and economic targets of the Eighth Five-Year Plan. The average annual growth rate of the national income used for consumption and accumulation was 7.1 per cent, that of industrial output 8.5 per cent, of goods carriage by all types of transport 6.7 per cent, and of retail trade 8.2 per cent. During this period per capita real incomes rose on the average by 5.9 per cent annually. All this shows that in the last five years the Soviet economy 83 has been forging ahead. Its constructive forces have revealed themselves even more fully during these years, enabling it to attain high production efficiency.

p Today the Soviet economy consists of a highly developed industry equipped with the latest machinery, large-scale socialist agriculture, a gigantic building sector based on industrial methods, a technically modern transport service and communication system, thousands of scientific and cultural institutions and many millions of skilled workers, collective farmers and the intelligentsia.

In a little more than half a century, of which about 20 years were taken up by wars and subsequent economic rehabilitation, the Soviet land has been turned into one of the world’s biggest industrial powers. The following data give an idea of the major results of Soviet development:

Table 2 1940 as compared with 191,’i, times 1965 as compared witli 1913, times 1970 as compared with 1913, times National income . . ... 5.3 32 44.7 Gross industrial output 7.7 61 89.8 Cross agricultural output ...... 1.4 2.5 3.0 Goods carriage by all types of trans- port ............... 3.9 22 30 Number of factory and office work- ers employed in the economy . . . 2.6 6.0 7.0 Labour productivity in industry . . 3.8 14.0 18.5 Labour productivity in agriculture . 1.9 4.0 5.2 Heal incomes of workers in industry and construction, taking into ac- count the abolition of unemploy- ment and reduction of the work- ing day (per employed person) . . 2.7 6.4 7.6 Real incomes of the working peasants (per person) 2.3 7.8 12.0

A huge productive apparatus has been built up in the USSR. At the end of 1970 the value of fixed assets totalled 737,000 million rubles, including fixed productive assets of 461,000 million rubles. In Soviet times about 42,000 large 84 industrial enterprises have been built and commissioned. All sectors of the national economy now have a modern industrial material and technical basis. The Soviet Union possesses a developed and diversified economy and has attained a high level of the production of major types of goods.

Table 3 Tnil of measurement 19’iU 19UO 1905 1970 Electric power million kwh 48,300 292,000 507, OtO 740,000 Oil million tons 31.1 148 243 353 Natural gas . . million cu m 3,400 45,000 128,000 198,000 Coal million tons 165.9 540 578 624 Steel .... 18.3 65 91 116 Rolled stock „ 11.4 44 62 81 Mineral fertil- isers .... “ 3.2 14 31 55 Resins and plastics . . thousand Ions 10.9 312 803 1,672 Chemical fibres “ 11.1 211 407 623 Automobiles thousands 145.4 524 616 916 Tractors . . . “ 31.6 239 355 459 Timber hauled million cu m 117.9 369.5 378.2 384 Cellulose . . . thousand tons 529 2,282 3,234 5,110 Paper .... ,, 812 2,334 3,231 4,185 Cement .... million tons 5.7 46 72 95 Fabrics, all kinds . . . million sq in 3,300 6,636 7,498 8,851 Leather foot- wear .... million pairs 211 419 486 676 Meat thousand tons 1,501 4,406 5,245 7,140 Butter .... 22G 725 1,066 960 Whole-milk products . . million tons 1.3 8.3 11.7 19.5 Granulated sugar (from sugar-beet) . thousand tons 2,165 5,266 8,924 8,141 TV sets . . . thousands 0.3 1,726 3,655 6,681 Wireless sets . “ 160 4,165 5,160 7,811 Refrigerators . “ 3.5 529 1,675 4,140 85

p These and other data again reveal the advantages of the Soviet planned economy which develops at rates much higher than those of the economies of capitalist countries. In 1951-70, the average annual growth rate of industrial output amounted to 10.1 per cent in the USSR, while in the United States it was 4.1 per cent, in Britain 3.0 per cent and in France 5.9 per cent. In recent years the Soviet Union has surpassed the United States for the absolute annual increase in the production of a number of important goods.

p High growth rates of industry are characteristic of all the socialist countries belonging to the Council for Mutual Economic Assistance, their industrial production in 1970 being almost 6.8 times greater than in 1950. They are striving to make the best use of the possibilities of the socialist international division of labour by co-ordinating their economic plans. The CMEA countries have now entered upon a new stage in their co-operation. They have undertaken to implement a Comprehensive Programme for further deepening and improving co-operation and developing socialist economic integration, which is to be carried out by stages over 15-20 years. This programme was approved by the 25th Session of the Council for Mutual Economic Assistance held in Bucharest in July 1971.

p The deepening and improvement of economic, scientific and technical collaboration and the development of socialist economic integration are a process regulated by the Communist and Workers’ Parties and the governments of the CMEA countries consciously and according to plan, a process of socialist international division of labour, of drawing together the national economies and shaping them into a modern highly efficient structure, of gradual bringing together and evening out their economic development levels, of developing deep-going and stable ties in the main sectors of the economy, science and technology, and of extending and strengthening their international market on this basis.

p The Comprehensive Programme gives a concrete timetable for introducing measures of collaboration designed to solve the most important economic problems, specifically such problems as providing the national economies with fuel and raw materials and high-performance equipment and also satisfying the needs of the population in manufactured goods and foodstuffs.

86

p Implementation of the Comprehensive Programme helps to consolidate the economies of the CMEA countries, brings them into close interaction and raises the economic potential of the entire socialist community.

Lenin’s principles of planning have been developed in Communist Party documents and Soviet Government decisions. Sweeping economic plans are being drawn up and carried out under the leadership of the Party. This unprecedented progress has become possible only thanks to the planned operation of the economy, which has enabled the country to concentrate the available resources in decisive sectors. Socialism has been built in the USSR. Now the material and technical basis of communism is being laid. This is how Lenin’s ideas of creating a powerful socialist economy are being translated into reality.