The Third Revolution
Two major drafts of the Five Year Plan were produced by Gosplan, a “minimal” draft, which took account of the possibility of unfavorable circumstances (crop failure, limited foreign trade and credit, poor quality in production, significant defense expenditures); and an “optimal” draft, which assumed there would be no unfavorable circumstances. In 1929 Stalin decided to break Russia’s economic deadlock and, jettisoning all caution, had the “optimal” draft alone adopted. The Plan, whose official starting date was set back to October, 1928, called for vast increases in industrial output, with the annual growth to range from 16 per cent in the first year (1928–29) to 21 per cent in the last (1932–33). It was assumed that the capital required for growth could be found in industrial profits and in expanded foreign trade and credits. It was also assumed that agriculture would be substantially collectivized during the period by voluntary means. The assumptions all proved false. Industrial profits did not rise as expected, foreign credits were not forthcoming, world trade contracted with the Depression, and the peasantry refused to join state or cooperative farms. To obtain direct control of agricultural production and rural labor supply, forcible collectivization was undertaken in late 1929 and was largely completed by 1934. The costs were horrendous.
KeywordsFixed Capital Socialist Sector Cooperative Farm Unfavorable Circumstance Foreign Credit
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