The Soviet Economy

by Mike Flintoff   |   0 Comments  |   85 Views    |   0/5 Rating   |   Print This Article
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Jun 2nd, 2012
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The loss of 20 million people and the destruction in west Russia meant a heavy task of reconstruction. In spite of these difficulties, economic progress was rapid after 1945, with coal output doubling and steel, oil and electricity output almost trebling in seven years. By 1950, asserts Alec Nove, the U.S.S.R. had a stronger industrial structure than before the war. But the Russians failed in their primary objective, that of catching up the United States, which Khrushchev said would be achieved by 1970, Russia’s G.N.P. being only half that of the United States.

Stalin’s economic system after 1945 was a war economy imposed in peacetime with tight controls and a channeling of resources to heavy industry. Though a welcome improvement in real wages took place after 1947, the standard of living remained among the lowest in Europe with an intolerable housing shortage caused by disgraceful neglect of the problem. Public affluence was a contrast to private squalor. Enormous power stations were established in Stalingrad, the Volga-Don Canal was built and many targets set down in a new Five-Year Plan started in 1946 were reached. At the same time, the average Russian family still lived in one room, had little food and very drab clothing.

Agriculture had been neglected to provide labour and capital for heavy industry and after Stalin’s death in 1953 it became a priority, with Khrushchev having a special interest in its advance. Virgin lands in western Siberia were cultivated, higher prices were paid to collective farms and farmers were given more freedom to wOrk their private plots. After a disastrous grain harvest in 1953 of only 82 million tons, the new policies combined with good weather to produce a record harvest of 170 million tons in 1967.

Improvements in livestock were less impressive. Khrushchev himself pressed for an increase in the size of collectives by amalgamation of farms. The real purpose for this was political; the formation of even larger units, in agriculture would strengthen the Party’s control over the peasantry.

The pressures on Soviet leaders were considerable after Stalin. They felt obliged to make an attempt to improve living standards and the construction of new houses doubled between 1955 and 1958; but at the same time they still wished to make a forced march to a mature industrial economy while keeping up with the military and space programmes of the United States. Thus the Soviet government was drawn into attempting to do too much in too many directions at the same time. Defence spending rose by one third in the years 1959 to 1963 and in consequence the targets of the Seven-Year Plan begun in 1959 were not reached in agriculture and some industries, though key industries like steel made considerable progress.

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