This essay is a survey of the socialist system that presided in the Soviet Union during the
reign of Joseph Stalin prior to the Second World War (1928 – 1939). To provide context,
a brief introduction to socialism in general, its roots, Joseph Stalin, and the state of the
Soviet Socialist system at his tenure will be included to enable further understanding of
the efforts of Stalin and the particular Socialist System he built. The main topics will be
categorized in separate discussions, which will follow the mould of the three fundamental
economic questions: What goods to produce? How to produce these goods? How are
these goods to be distributed? Another important factor in understanding the Soviet
Socialist system is the effect of the Soviet political economy on the socio-psychology of
its population. Through this analysis the effectiveness of the Stalinist Socialist System in
Russia will become apparent and will be criticized accordingly.
With the rise of social and economic inequality came the dream of a
perfect society that would return mankind to the state of equality that had
been lost. We call this movement utopianism, which can be defined as a
literary movement concerning the building of perfect societies, or actual
attempts to form such societies. (2002, Busky, Pg. 2)
Utopianism can be divided into two halves a socialist half and a non-socialist half. The
father of modern socialism is Karl Marx and his most important piece of literary work
was The Communist Manifesto. This is the ‘bible’ for all Marxian’s, and puts forward the
limitations of capitalism, and materialism, but focuses largely on class struggles
throughout history, as well as prediction of the eventual fall of capitalism. Stalin’s
Socialist system in particular was a meld of old Bolshevik ideals and Marxian principles.
Many of the Marxian principles would later be abandoned in the late 1930’s as many unegalitarian policies were implemented: “Actually as far is the Soviet Union is concerned,
socialism in the original Marxian sense has long been dead. Joseph Stalin killed it.”
(Daniels, 1991, Pg. 121)
In 1924 the Soviet Union was under a New Economic Program [NEP], a policy of Soviet
Dictator Vladimir Lenin. Following the death of Lenin in 1924 Stalin rose to power and
in 1928 implemented mass industrialization programs, shifting from a heavily
agricultural based economy, in the first of three five year plans. Stalin as well reversed
the many liberal social policies of Lenin.
The central themes and features of the Stalinist model of socialism are
often said to have been a reanimated version of the civil war policies,
representing a radical “break” with the policies of the NEP, as coercion,
terror and the overwhelming application of state power over society and
the economic sector replaced the relative calm and pluralism of the NEP.
(Sandle, 1999, Pg. 199)
The Stalinist system was a watershed in Soviet history implementing changes that would
go on to become the very basis of Soviet Socialism: “The particular features of the
Stalinist model emerged out of a complex and shifting socio-political atmosphere. The
factional struggles within the party saw Stalin adopt a stance that combined rapid
industrialization, collectivization, and class war.” (Sandle, 1999, Pg. 226)
To answer the three fundamental economic questions it is first necessary to look at the
political and economic nature of the Stalinist model. The Soviet Socialist system under
Stalin was a dictatorship strongly focused on a central planning authority and the
redistributive process. Redistribution economies characterized by a political centre that
controls the movement of goods and services, as well as the production and the
distribution of these goods. The ideal behind a central planning authority is to instil a
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logical and methodical framework where economic decisions can be made objectively,
thus circumventing any spontaneity and irrationality of markets.
However Stalin’s
Socialist Russia was planned: “on an ad hoc basis, using commands and instructions sent
down from the centre, having the status of law. This administrative system produced its
own brand of irrationality.” (Sandle, 1999, Pg. 227) Further Karl Polanyi says: “The
redistributive pattern in the economy of the state sphere had many ramifications, as we
have seen. In its day-to-day aspect, however, livelihood was embedded in state-free
institutions of neighbourhood kinship, and worship, all of which were local.” (Polanyi,
1966, Pg. 60) This is not true in the case of Socialist Russia under Stalin, whose
dictatorship was the hub of all institutions, thus deviating from the conventional
redistributive pattern described by Polanyi and Rotstein in Reciprocity Mutual Aid and
Co-Operation. Stalin “was guided by no higher vision than his personal glory and his
vindictiveness toward past rivals and suspected enemies.” (Daniels, 1991, Pg. 224) It
was Stalin’s intent to create a stable authoritarian apparatus for which he could author in
his own image an industrious national power that could be rivalled by none; not even the
industrial might of the western capitalists.
Right from its very inception, the Soviet planning process was shaped by
the need for speed, and for massive progress in a few key areas. This
politicized context brushed aside questions of balance, equilibrium,
rational calculations and precise information flows. (Sandle, 1999, Pg.
228)
The decision making process addressing the fundamental question of “what will be
produced?” was left up to a central planning authority. Socialism under Stalin was based
on ambitious technological and industrial progress. Stalin longed to abandon a strongly
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agriculturally based economy and what he called “Russian Backwardness.” His efforts
however did not begin with an: “entirely undeveloped society, but rather from a midpoint at which industrial progress under tsarism had been stopped by world war and
revolution.” (Daniels, 1991, Pg. 128) The first of Stalin’s five year plans (1928-32)
focused exclusively on the rapid growth of the industrial sector; the second of the five
year plans (1932-37) focused intently on the use and adaptation of technological
processes; the third of the five year plans (1938-41) was to focus again on massive
industrial transformations, however it was interrupted by the Second World War, shifting
concern to national defence. The major policies outlined by Stalin were as follows:
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An economy resting on administrative approaches;
A centrally organized, state directed economy;
A preference for large-scale projects;
Prioritization of heavy industry;
Removal of the last residue of workers’ control and imposition of one man
management;
Orientation to quantity of quality;
Emphasis upon haste;
Strict labour discipline and subordination of the trade union to the state;
Central location of all materials and capital goods;
State control of retail trade
Centrally fixed prices for all consumer good, and for produce acquired from the
rural sector;
Quasi-market elements remained, in the collective farm sector and in the labour
sphere; (Sandle, 1999, Pg. 233)
The planning of the Stalinist model evolved from conflict between the two main central
planning agencies: The Gosplan and The Vesenkha. The ideals of the Gosplan were
moderate, whereas The Vesenkha’s maximalist views were more consistent with the
radical reforms of the times.
The Central Committee and the council of People’s
Commissars governed the soviet planning process.
They would draw up general
guidelines and targets to be achieved for the entire economy. The role of the Gosplan
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was to resolve the differences of the general guidelines and the realities of what the lower
levels of the bureaucratic hierarchy reported to be possible.
Gosplan would draw up a balance sheet in quantitative terms: a general
5YP and a more specific annual plan. The commissariats for each branch
of industry then drew up a plan for each enterprise, broken down into
annual and monthly targets. The factory director received a quota to be
fulfilled. This was an obligatory directive. Within the political
atmosphere of intensified class war and suspicion of moderation, fulfilling
the quota became an incantation for factory managers. (Sandle, 1999, Pg
228)
The Vesenkha on the other hand functioned as the supreme economic council and vied to
wrestle away the power from trade syndicates and industrial trusts which they had
accumulated up until 1928. In the late 1930’s industrial functionalism was restored by
the soviet central planning elites by stripping trade syndicates of the ability to affect
production, and the splitting up of industrial trusts. In what was an attempt to create a
new leaner efficient bureaucratic power ended up with the new central power being
overwhelmingly bombarded with requests and orders. The centralized power swelled
enormously with bureaucratization and all hopes of a systematic planning were lost. This
movement of sub-ordination of trade syndicates and industrial trusts produced many time
lags which eventually led to the recreation of the virtually the same system of syndicates
and trusts.
The process of deciding “how the goods will be produced?” was also affected by the
central planning authority. In fact the production process would be the very limbs or
tentacles of the central planning authority. In the first, of the five year plans, the Stalinist
regime embarked on a vast program of industrialization and farm collectivization. Goods
were produced as economically and rapidly as possible.
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To Stalin, quantity was
paramount not quality.
Stalin implemented ‘full employment’ and instituted labour
discipline policies in order to achieve this goal. The Soviet concept of full employment is
not based on the traditional wage-price ratio or any notions of market equilibrium or any
concept of natural unemployment all part of neo-classical economic models. “The Soviet
concept of full employment starts with a citizen’s right and duty to work.” (Lane, 1986,
Pg. 69)
This entailed all citizens, woman, men, and criminals.
Kolkhozy [farm
collectivization] and Sovkhozy [state farming] were introduced in 1929 changing the land
tenure system, and ending an era of “Russian backwardness” where the peasants freely
worked a small piece of land which they themselves owned. “The state declared war on
the peasantry.” (Sandle, 1999, Pg. 234)
These new collective and state run farms
embraced the use of tractors and other forms of technology in order to increase output in
accordance to Stalin’s mandate, and teams of people flooded to the countryside in search
of work. Resistors of Stalinist doctrine were either killed to be displayed for all to see as
the ultimate penalty paid for resistance, or sent to labour camps. “The Kulaks or middle
peasants, who resisted the taking of their property when a system of state farms was
established in 1929, were deported wholesale to labour camps.” (Busky, 2002, Pg. 186)
This policy had two effects. First it displaced ownership of land and peasants wealth to
the state. Secondly it packed labour camps with any would be resistors; labour was a
fundamental necessity for rapid industrialization. “The main forms of forced labour,
however, were the corrective labour colonies.”
(Lane, 1986, Pg. 58)
The NKVD
supplied entire labour forces for the work done in these institutions.
Labour
specialization was extremely tight under Stalin in fact it was so specialized that many
entire states in the USSR would have only one production function.
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The distribution of goods and wealth under Lenin had been consistent and egalitarian,
across the board; even the political elite were subject to the same salary as unskilled
workers. However, with Stalin in power new policies differentiating wages for skilled
and unskilled labourers came into effect; as well salary caps for the political elite became
obsolete. Clearly ‘some men were more equal than others.’ Political elites, managers,
and military officials were favoured by many other benefits. The importance of theses
benefits is clear: “They represented an attempt on the part of the authorities to ensure the
survival of elite-lifestyles in a consumer deficit economy.” (Matthews, 1978, Pg.36)
Political elites under Stalin were beneficiaries of the ‘party packet’ system. Party packets
delivered monthly were sealed envelopes containing money up too one hundred percent
of the receiving elites formal salary. In such a deficit system it was necessary to appease,
to particular individuals of merit with accessibility to the goods and the services; which
were otherwise scarce. Kremlin and academic rations were devised as well as other
restricted forms of distribution allowing prominent figures the ability to receive sufficient
supply of goods and or services. In the case of non-elites it was not uncommon for
household savings to increase far beyond the desired levels, as there were no consumer
outlets where they could spend disposable incomes on improving the quality of life.
Prices being fixed by the central power did not allow for any sort of market mechanism to
make adjustments; thus soviet paper [rubble] was worthless to those without special
privilege.
Workers in non-preferential positions essentially received only what was
allotted to them.
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The social effects of Stalin’s economic goals were many as his policy reforms geared
toward mass industrialization infringed on many of the social liberties of the workers.
Stalinism put an end to the social and cultural liberty that had followed
the revolution.
Experimental free schools were replaced by a
hierarchical, competitive-based educational system. Modern art was
denounced, and only “socialist realism” glorifying the worker and state
was permitted. In music, Western jazz was deemed decadent. Abortion
was again made illegal, and divorce while not banned, was made difficult
again. (2002, Busky, Pg. 187)
The outlawing of abortion and other family reforms acted as guarantor, insuring a strong
working population, which in turn would help facilitate the mass industrialization
process. Restrictions on art and music [Socialist realism] would strengthen the ideals put
forward by Stalin creating an ideologically mono-centric [Socialist] system for which all
would live under. Deviation from Stalinist doctrine was futile. While these policies
blatantly infringed on the Soviet workers: “Stalinist construction made the Soviets less
important then the organization of the state.” (Busky, 2002) Social status and career
positioning was dependant on youth involvement and a personality fit. The three main
social organizations Komsomol, the Profsoyuz and the Party attracted dedicated youth
who were ready to take charge and get ahead in a highly competitive society. Future
members of the elite apparatchik [member of government organization] found themselves
networking at an early age in childhood with extensive involvement in youth activism.
Upward occupational mobility was dependant on one thing the social skills of the
individual. One could not get ahead with out learning their role through exposure to their
elders in the field, later on these same contacts and friends would become the key to
promotion, children learned the right words “the proper words … yes to all requests.
They need not actually do what they have promised to do.” (Klugman, 1989, Pg. 24)
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With out this polishing which started with youth involvement and networking as early as
kindergarten success would not be possible. Later on involvement with the Komsomol
[young communist league for students] would spell certain success and recognition often
leading to an entry-level position. The Profsoyuz [Russian trade union] “tended to attract
army personnel, athletes, and in general a rough and ready group. The path leading to the
party however required much more self control, faith in the system at least in the sense
that one can not negotiate a quid pro quo in the party.” (Klugman, 1989, Pg. 25)
Diligence in youth was not always the only possibility for success. Problematic youth
sometimes had a competitive advantage as they developed in depth relationships with the
authorities and in particular the KGB and their informers. If a troubled youth showed
respect and co-operation for the right individuals they: “would get more leeway about
the rules.”
(Klugman, 1989, Pg. 25) These troubled individuals would develop a life
long network of contacts, and eventually becoming bound to them if behaviour would not
improve. It was not uncommon for these individuals to end up in law enforcement, or
being recruited directly to the KGB.
In conclusion the Stalinist Socialist system presiding in Russia from 1928 - 1939 had
many inherent faults based on the systems implementation, and was largely ineffective as
a whole. In terms of “what goods will be produced?” it is discovered that the soviet
Production and Operations Management system, the political centeredness of the Stalinist
Socialist System, and the decision making process were ineffective at meeting the
demands of such a vast economy. The Russian System was too bulky, inadaptable, and
laden with time lags, (recognition, processing, and implementation) to govern resources
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of such a large populace efficiently. In regards to “how were these goods produced?” it
is apparent that the soviet production technique put far too great an importance on haste
and quantity over quality. Collectivization and industrialization under Stalin led to the
use of brute force and terrorization of the people in order to keep on schedule, and still
ran a deficit economy. The ‘redistribution of goods and wealth’ reveals a class based
system un-Marxian in all its endeavours that favoured the elite and left the workers
without means to enjoy a reasonable quality of life. Such a system failed to make goods
available so that consumers could fully enjoy their disposable incomes, and due to fixed
prices the soviet economy was not able to capture any consumer surplus that nonpreferred consumers would have been willing to pay for scarce goods. The social effects
of Stalinism are reverberating throughout the world today. Stalin created a country where
the people were secondary to the state, creating competitive and experimental social
policies and institutions scaring his own people for all of time. Conformity led to one
brand of soviet man focused only on necessity, stripped away of other fundamental rights
such as protection and sustenance.
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