Stalin's Economic Policies

Industrialisation and the Five-Year Plan

To achieve the level of industrialisation that Stalin wanted, he needed to create a planned economy for the USSR. This meant that the state would decide production goals and the methods through which those goals would be achieved.

The State Planning Committee (known as Gosplan) created the First Five-Year Plan in 1928, which set out an extremely ambitious plan for the Soviet economy from 1929 to 1933. The Plan set out the following agenda:

• Targets were set for every industry, divided between regions, towns and individual factories. The targets established were incredibly ambitious.
• Workers were strictly regulated - absenteeism and lateness were punished, and wages could be deducted if workers didn't meet their targets.
• The plan focused on heavy industry - building new hydroelectric dams and power stations and improving the production of coal, oil, steel, and gas.
• Agriculture was collectivised to increase and control agricultural output to feed workers and to export more grain. This would provide income to support industrialisation plans.

In 1932, Stalin declared that the First Five-Year Plan had been a success and achieved all its goals a year earlier than planned - but how accurate was that statement? Well, the First Five-Year Plan certainly had its successes - production in electricity trebled, while coal and iron output doubled. Soviet engineering developed in line with industry demands, and thousands of people moved into cities to join the industrial workforce.

Fig. 1. - A commemorative stamp for the First Five Year Plan, depicting a man and woman working together in industry

The USSR would continue with these economic plans until the collapse of the Soviet Union in 1991, as the First-Five Year plan had proved so successful. Throughout Stalin's tenure as leader, the focus of these plans remained broadly the same, with industrialisation and collectivisation as the main policies.

Stalin's Economic and Social Policies

Of course, the restructuring of the economy to improve industrialisation also had a big impact on how people lived their lives. Education changed significantly as hundreds of new schools were built to improve literacy rates and encourage a more skilled labour force. These schools' lessons mainly focused on engineering and mechanical skills, in line with the desire for industrialisation under the First Five-Year Plan.

Fig. 2 - This propaganda poster advocates how literacy rates increase through collectivisation, with the quote "join the ranks of fighters for literacy"

Due to the push for industrialisation, towns and cities expanded, with some springing up around the newly built factories. Transportation also became a key focus for industrialisation to ensure that materials, food, and workers could be transported easily.

Stalin and Collectivisation Policy

The other central policy of the First Five-Year Plan was the collectivisation of agriculture. This involved stopping the individual farms that had created the Kulak class and making peasants work in large collective farms, known as kolkhoz. This policy was implemented firstly to reduce the economic power of the Kulaks. Soviet officials also thought it would increase grain yields, a goal of the Five-Year Plan.

Fig. 3 - A photo of an old Kolkhoz

However, collectivisation had significant drawbacks. The peasants had no choice and were forced to join these collective farms. In particular, many Kulaks objected to it, even going as far as slaughtering their livestock and destroying their machinery, so the government could not seize them. The systems of collectivisation also meant that the government could requisition as much grain as they wanted to support industrial workers in the cities, often not leaving enough for the rural working peasants themselves.

Impact of Collectivisation

While it did have some successes, Collectivisation had a severe negative impact on the people in the Soviet Union. Here is an overview of how the Collectivisation policy was detrimental:

• Many peasants resisted the change through passive resistance. They slaughtered animals and destroyed machinery so the state could not use it, leading to shortages even before the kolkhozy were set up.
• Those who worked in collective farms were managed very carefully. Eventually, it became impossible for workers to leave their region without a government permit.
• The Kulaks, a whole class of people, were targeted and attacked by the state as Stalin wanted them eradicated. They lost their livelihoods and, in some cases, their lives.
• Priority for food was given to those working in the cities. Combined with the reluctance of peasants to work efficiently in the kolkhoz, the Soviet Union experienced a famine from 1931-34, in which an estimated 6-9 million people died of hunger.
• The lack of food was used to enact a genocide via starvation in USSR-controlled Ukraine, known as Holodomor. Of the 6-9 million who died in the famine, an estimated 3.9 million were Ukrainian.

Impact of Stalin's Economic Policies

Stalin's Economic Policies had both big successes and terrible failures. Let's look at how the Soviet economy and people were helped or hindered by Stalin's policies.

Success of Stalin's Economic Policies

Early successes were seen with Stalin's First Five-Year Plan.

• The First Five-Year Plan certainly helped to put Russia on the path to becoming a fully industrialised nation on par with the West.
• Under the First Five-Year Plan, steel output increased by one-third, iron and coal output doubled, and electricity production tripled.
• Rapid industrialisation was crucial for the USSR to defend itself during World War Two. It is unlikely that the Soviet Union would have been able to resist the German invasion in 1941 without the industrialisation from Stalin's economic policies that helped build up the Soviet military.

Failure of Stalin's Economic Policies

Despite the initial successes, Stalin's economic policies had some significant failures.

• While the First Five-Year Plan was successful, the government most likely manipulated the figures to make output increases seem more than they were. Therefore, it is hard to gauge exactly how successful the First Five-year plan actually was.
• Collectivisation was very detrimental to the lives of the working people in the Soviet Union. The Kulaks were harshly treated, and those who worked on the farms had their freedoms restricted significantly.
• Government requisitioning of grain from the collective farms often meant insufficient food was left for those in rural areas. The lack of food combined with a growing population resulted in a famine from 1931-1934, which killed around 5 million people - including 3.9 million Ukrainians.