Question

In: Economics

Discuss fully Stalin’s efforts to stimulate Soviet industrial and agricultural production through his five year plans...

Discuss fully Stalin’s efforts to stimulate Soviet industrial and agricultural production through his five year plans and policy of collectivization. Be sure to explain the goal, implementation, and overall impact of each policy.

Solutions

Expert Solution

The first 5-year plan was introduced in 1928 to essentially do just that: modernize agriculture and industry. It's introduction came as a reversal of Lenin's New Economic Policy (NEP) which included elements of capitalism for small enterprises.

Lenin's idea was that NEP was “one step backward to take two steps forward later,” building on the Marxist idea that socialism must first be built on capitalism. Lenin thought NEP would be in effect for at least 20 years. The NEP was particularly good for the agricultural development but a little less so for heavy industry.

While the 1920s saw growth and a return to 1914 output levels by 1928, there formed a situation where agricultural goods were produced at faster rates than industrial goods. The consequence was higher industrial product prices, and lower food prices. To get around those low prices, the peasants kept on to their surpluses and sold them for higher prices on a kind of black market, which in effect became much higher when the goods arrived in the cities. Naturally the Communist Party decided to terminate these activities on the black market.

Thus Stalin established the first five-year plan to collectivize agriculture, banning private farming in favor of state-owned agriculture, particularly its surpluses. This was thought to be a positive idea (1) to deal with the black market and lower grain prices in the towns, (2) to introduce communism in the countryside, which was left capitalist by Capitalism by default on the average farm scale, (3) to increase agricultural production as a centrally organized strategy was considered to be more effective, (4) to use farm surpluses to bring money into heavy industry, education, etc

Such results were met with mixed feedback. Essentially the peasants were not as eager as Stalin had initially expected to give up their food. To save his scheme, troops had to forcibly take grain from the peasants, execute many in the process and block entire regions of Ukraine and Kazakhstan so nothing could get in or out without permission from the government. The consequence of this was famine that killed between 7–14 million people in those regions. Then agricultural production decreased. However, with all the grain taken from the peasants, the U.S.S.R. has been able to move this towards its industrialization target, and this segment of the economy has seen rapid growth indeed..


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