Last time

1. Last time • Collectivization • Input Output Analysis • How Soviet economic planning was carried out in practice • Industrialization

2. Enterprise management • Five year vs. quarterly plans • Information asymmetry problems • “The social ideology of the Soviet system had been long internalized in many ordinary Soviet citizens, and popular attitudes were often not that far from those of the official ideology.”

3. Planning for the labor market Included in the plan: • Number of workers to hire • The wage bill • Planned increases in productivity • Central targets vs. local initiative

4. Forced labor camp system • Davies p. 49 • How much contribution to economy? P. 50

5. The Soviet economic system • Second Economy • Sometimes intertwined with the official system • Market features • Workers free to switch jobs, spend incomes as they see fit, money, etc.

6. Role of money • Different in consumer vs. producer good sectors • Retail price = Industry Wholesale Price + Turnover tax

7. Soviet economic development Year Urban population 1926 16% 1939 33% 1959 48% 1965 53%

8. Soviet economic development Year GNP (1937 prices) 1928 124 1940 251 1945 199 1950 304 1955 442 1960 627 1965 794

9. Pre-war industrialization drive (discussion continued from last class) • Attitude of the state toward bourgeois specialists • Life quality of workers • Wages & unemployment • Education (Suny 303)

10. Stalin’s take Speaking in 1936, Stalin evaluated the industrialization period as follows: Of course, in order to build something new, one has to accumulate means, temporarily limit one’s requirements, borrow from others. If you want to build a new house, you save money temporarily and limit your requirements, otherwise you might not build your house. This is all the more when the upbuilding of a whole new human society is concerned. It was necessary, temporarily, to limit certain requirements, accumulate necessary means, strain forces. We acted precisely in this way and built a socialist society. But we built this society not for the curbing of personal liberty, but in order than human personalities should really feel free. We built it for the sake of real personal liberty, liberty without quotation marks. It is difficult for me to imagine what “personal liberty” the unemployed can have who go hungry and cannot find utilization of their labor. From a Conversation with Roy Howard of the Scripps-Howard Publications

11. “the outcome of the war is to be explained primarily by reference to the ability of the opposing sides to produce munitions in wartime.” • Germany would by 1944 produce 22,000 light and medium tanks and over 5,000 superheavy tanks a year; it would increase its aircraft production from 12,000 in 1941 to 40,000 in 1944. But the Soviets would already be producing 30,000 tanks in 1943 and 2000-3000 aircraft per month in 1944-45.

12. Economic effects of the war • 26 million casualties in 1941-1945 (7-8 million soldiers and 19 million civilians) • Extensive destruction in German-occupied territories • Agriculture production in 1945 lower than the famine year of 1921 (due to enormous death of livestock, decrease in peasant population etc) • Industry production 70-90% if prewar level (compare to the ability of industry to cope with wartime destruction in the years of Civil War/WWI)

13. Amazing recovery • Conversion of armament factories to civilian use • 1950: industrial production exceeds prewar levels, agriculture catches up • Consumer durables in 1950 250% of 1940 levels