The Industrialisation of Soviet Russia, Volume 4: Crisis and Progress in the Soviet Economy, 1931-1933 [Paperback ed.] 0333745159, 9780333745151

Citation preview

By the same author THE INDUSTRIALISATION OF SOVIET RUSSIA 1: THE SOCIALIST OFFENSIVE: The Collectivisation of Soviet Agriculture, 19~-30

~:

THE SOVIET COLLECTIVE FARM,

19~-30

3: THE SOVIET ECONOMYIN TURMOlL,

19~-30

4: CRISIS AND PROGRESS IN THE SOVIET ECONOMY, 193 1- 1933 5: THE YEARS OF HUNGER: Soviet Agriculture, 1931-1933 (with S. G. Wheatcroft, forthcoming)

THE DEVELOPMENT OF THE SOVIET BUDGETARY SYSTEM FOUNDATIONS OF A PLANNED ECONOMY, VOLUME 1 (with E. H. Carr)

19~6-,

SCIENCE POLICY IN THE USSR (with E. Zaleski and others) THE SOVIET UNION (editor) THE TECHNOLOGICAL LEVEL OF SOVIET INDUSTRY (editor with R. Amann and] M. Coopel)

FROM TSARISM TO THE NEW ECONOMIC POLICY: Continuity and Change in the Economy of the USSR (edit01) SOVIET HISTORY IN THE GORBACHEV REVOLUTION SOVIET HISTORY IN THE YELTSIN ERA THE ECONOMIC TRANSFORMATION OF THE SOVIET UNION, 1913-1945 (editorwith M. Hanison and S. G. Wheatcroft)

THE INDUSTRIALISATION OF SOVIET RUSSIA 3

THE SOVIET ECONOMY IN TURMOlL, 1929-1930

R. W. DAVIES Emeritus Professor of Soviet Economic Studies Centre for Russian and East European Studies University of Birmingham

© R. W. Davies 1989, 1998

All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any Iicence permitting Iimited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London WIP 9HE. Any person who does any unauthorised act in relation to this publication may be Iiable to criminal prosecution and civil claims for damages. The author has asserted his right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988. Published by MACMILLAN PRESS LTD Houndmills, Basingstoke, Hampshire RG21 6XS and London Companies and representatives throughout the world First edition 1989 Reprinted with additional preface 1998

ISBN 978-0-333-74515-1 ISBN 978-1-349-14942-1 (eBook) DOI 10.1007/978-1-349-14942-1 A catalogue record for this book is available from the British Library. This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. 10 9 8 7 6 5 4 3 2 I 07 06 05 04 03 02 01 00 99 98

In memory of my mother

GLADYS HILDA DA VIES 1899- 1984

CONTENTS xi

List of Tables

2

Preface

Xlll

Additional Preface to the 1998 Reprint

XXi

THE INDusTRIAL ECONOMY IN THE MID-1920S (A) The Social Transformation (B) Continuity and Change in the Industrial Economy (i) The changing shape ofindustry (ii) Productivity and the length of the working day (iii) Internal trade (iv) Foreign trade and foreign technology (v) The comparative perspective (c) Instruments öf Planned Industrialisation (D) First Steps to Industrialisation, 1924-7

28 30 32 37 42 46

THE TRIUMPH OF RAPID INDUSTRIALISATION, OCTOBER 192 7-SEPTEMBER 19 2 9 (A) The Expansion ofIndustry (B) The Breakdown ofthe New Economie Poliey (c) The Soeialist Offensive (D) The Industrial Eeonomy, Summer 1929

55 55 60 75 80

SOCIAL CONTEXT, 19 2 9-3° The Socialist Offensive Renewed The Specialists The Workers The Party

3

THE (A) (B) (c) (D)

4

THE INTELLECTUAL FRAMEWORK, 19 2 9-3 0 VII

13 16

95 95 1 IO 125 134 139

VIIl

5

6

7

Contents

ECONOMIC DOCTRINES IN TRANSITION, 19 29-3 0 (A) Political Economy and Economic Theory (B) The Transition fram NEP to Socialism (c) Money and Socialism PLANS FOR A HEROIC AGE, 19 29-3 0 (A) The Contral Figures for 1929/30 (B) The Transformation ofthe Five-Year Plan (i) The plan as a whole (ii) The fuel ind us tries (iii) Iran and steel (iv) The engineering industries (v) Major prajects under stress (vi) 'Giants and dwarfs': the scale of production (vii) Specialisation by product and component (c) The General Plan PROGRESS AND TURMOlL IN THE INDUSTRIAL ECONOMY, OCTOBER 1929-MAY 1930 (A) The Impact ofthe World Economic Crisis (B) The Framework ofCentral Power (c) The Advance ofIndustrialisation (D) The Management ofLabour (i) The nepreryvka and multi-shift working (ii) Socialist emulation (iii) Praduction collectives and production communes (iv) Output norms and wages (v) Workers' participation (vi) Contral over labour (E) Internal Trade and Rationing (i) Retail trade (ii) Rationing (iii) Retail prices (iv) The peasant market (v) Real wages and living standards (F) Financial Contrals (i) Finance and planning

154 155 162 173 179 179 187 187 195 197 208 212 220 222 225 232 232 234 244 251 252 256 261 267 272 278 283 283 289 300 303 304 310 310

Contents (ii) (iii) (iv) (v) (vi)

Cost reduction under strain Khozraschet und er threat The decline of financial controls The unified financial plan The credit reform

IX

3I 2 3I 4 3 I6 3 I8 320

8

THE XVI PARTY CONGRESS, JUNE 26-JULY 13, 193 0 329

9

THE INDUSTRIAL ECONOMY IN DISORDER, JUNE-SEPTEMBER 1930 (A) Five Sectors in Crisis (i) Industry (ii) Railway transport (iii) Construction (iv) Finance (V) Internal trade (B) Deficits and Bottlenecks (i) The labour shortage (ii) The problem of full capacity (iii) Raw materials in deficit (c) Causes of Economic Disorder

346 346 346 348 349 35 I 353 358 358 364 368 370

IO

THE (A) (ß) (c) (D)

ECONOMIC YEAR 1929/30 IN RETROSPECT Capital Investment Industrial Production Finance and Internal Trade Foreign Trade

378 378 382 385 391

II

THE SPECIAL QUARTER: ÜCTOßER-DECEMßER 1930 (A) Two Roads to Socialism (ß) Wreckers on Trial (c) The Syrtsov-Lominadze Affair (D) The Upheaval in Economic Administration (E) Workers Under Pressure (F) Tightening the Financial Screw (G) Results (H) The December Plenum

399 399 406 41 I 415 419 430 434 438

THE ARMAMENTS INDUSTRIES, 1929-30

441

12

Contents

x

13

456 EfTects of the Revolution 456 The Industrialisation Drive, 1927-9 458 Accelerated Industrialisation, 1929-30 467 Industrialisation and the Economic System, 19 29-3° 477

CONCLUSIONS

(A) (B) (c) (D)

Glossary of Russian Terms and Abbreviations used in Text

541

Abbreviations of Titles of Books and Periodieal Publieations, ete., used in Footnotes

549

Bibliography

551

Name Index

571

Subjeet Index

579

LIST OF TABLES

I.

2. 3. 4. 5· 6. 7.

8.

9.

10. I I.

12.

National income by sector oforigin, 1928-1930 489 Gross capital investment by sector of the economy, 1926/27-1930 490 491 Gross capital investment in housing, 1926/27-193° Gross capital investment in industry, by type of ind ustry, 1926/27-1930 492 496 Planned capital investment in industry, 1929/30 Plans in 1929 and 1930 for production of pig-iron by 498 new works, 1932/33 Industrial production in value terms 500 (a) Gross production of large-scale industry, by ind ustry, 1913-1930 500 (b) Gross production of large-scale state industry by quarters, 1927/28-1930 502 (c) Gross production of large-scale state industry by months, 1928/2g-1930 504 507 (d) Indexes of industrial production Industrial production in physical terms, 1928/29 and 508 1929/3 0 (a) Engineering industries 508 (b) Consumer goods 509 Monthly industrial production In physical terms, 1928- 193 0 510 510 (a) Coal (b) Crude oil 511 (c) Pig-iron 512 (d) Crude steel 513 (e) Rolled steel 514 (f) Cotton textiles 5I 5 Allocation of building materials, 1928- I 930 5I 6 Number of retail trade enterprises, 1925/26-January I, 1931 518 Retail trade turnover by social sector 1926/27-1930 519 Xl

XIl

List of Tables

13·

Foreign trade, 1928/29-1930 (a) Exports in value terms (b) Exports in physical terms (c) Imports in value terms (d) Quarterly imports of cotton and other spinning materials Number of persons in non-agricultural employment, 19 26 / 2 7- 193° (a) By economic sector (b) By social sector Number of persons employed in large-scale industry, 1928-3 0 (a) All employed persons (January 1 of each year) (b) Manual workers and apprentices (quarterly average) Number of persons engaged in small-scale industry by social sector, 1926/27, 1928/29 and 1930 Monthly number of persons employed in building, January I, 1928-January 1,193 1 Number ofunemployed registered at labour exchanges October I, 1928-0ctober I, 1930 Quarterly labour turnover In census industry, 1928/29-1929/30 Average monthly earnings, 1927-1930 Party membership, January I, 1924-January I, 193 1 State budget In comparable classification, 1913, 19 26 / 2 7, 19 28 / 29 and 19 29/3 0 (a) Net revenue (b) Net expenditure Currency in circulation, October I, 1926-January I, 193 1 Price indexes, 1926/ 27- I 930 (a) Average annual retail prices (19 13 = 100) (b) Average annual retail prices (1928 = 100) (c) Monthly urban bazaar prices for agricultural goods (July I, 1926 = 100) (d) Indexes of cost of investment inputs, 1926/271931 (annual averages, 1927/28 = 100)

14.

15.

16. 1].

18. 19 20. 21. 22.

23. 24.

520 520 521 522 523 5 24 524 525 526 526 527 528 529 530 53 1 532 533 534 534 535 53 6 537 537 538 539 540

PREFACE The present volume deals with developments in the Soviet industrial economy in the year and a half between the summer of 1929 and the end of 1930. This was a crucial period in Soviet history. By the summer of 1929, the centralisation of political power within the Communist Party, and the personal domination of Stalin, were already far advanced. The Politburo majority, with the support of many party members, had by this time firmly resolved to em bark on the rapid transformation of the Soviet Union into an advanced industrial power. Stalin insisted in November 1928 that the Soviet Union must 'catch up and surpass' the capitalist countries, where technology was 'simply rushing ahead'; otherwise, he claimed, 'they will destroy us'. By the summer of 1929 the first serious efTorts to increase investment in industry in the previous three years had already imposed considerable strain throughout the economy; the New Economic Policy, with its attempt to combine plan and market, was in disarray. From the summer of 1929 the pressures of industrialisation greatly increased. In the calendar year 1930 investment in industry was twice as high in real terms as in the economic year 1928/29, and more than three times greater than the highest pre-revolutionary level. This dramatic acceleration was accompanied by an immense upheaval in every aspect of Soviet life. In the first two volumes of this series, Tlle Socialist Offensive, 1929-1930, and The Soviet Collective Farm, 1929-193°, I examined the efTects ofthis upheaval on agriculture. The Soviet authorities, confronted with the deepening agricultural crisis, sought to break down the established peasant economy, and replace it by kolkhozy (collective farms) subordinate to the will of the state and to the interests of socialist industrialisation. In the first great wave of collectivisation in the winter of 1929-30 more than half the peasantry were cajoled and bullied into joining kolkhozy. But the disorder and peasant resistance which the campaign evoked led to a hasty retreat, and by the summer of XIll

Priface

XlV

1930 less than a quarter of Soviet peasant households remained in the kolkhozy. This retreat was purely temporary. By the autumn of 1930 the collectivisation drive was again resumed, at first more cautiously, and then in 1931 with great ruthlessness. The experience of the winter of 1929-30 nevertheless persuaded the authorities of the need for some circumspection. They relinquished the concept of kolkhozy as huge agricultural economies in which almost all economic activities were socialised. The collective-farm compromise, in which the personal economy and the socialised economy coexisted in uneasy harmony, proved to be a permanent feature of the Soviet economic system. The new social and economic structure of agriculture was erected on very shaky foundations. Disruption prevailed over construction; and only the luck of exceptionally favourable weather in 1930 temporarily mitigated the consequences. In the industrial economy, the state was confronted with a less formidable task. It was already in charge, and in 1929-30 it sought to adapt the existing structure to the accelerated pace of industrial transformation. Difficulties and tribulations were not avoided; but in the capital goods industries at least there was rapid growth in 1929-30. This was a significant stage in the burgeoning of the Soviet system of administrative planning.

*

*

*

In the present volume the two introductory chapters, complementary to Chapter I of Volume I, summarise the state of the industrial economy in the mid- I 920S, and briefly trace the formation and triumph of the policy of rapid industrialisation in the economic years 1927/28 and 1928/29. The October Revolution in 19I7 brought about vast social and economic changes: large-scale industry, the banks and wholesale trade were transferred to state ownership; the private industrialist and the big private merchant vanished. The state economy was now managed by the party; in the 1920S many former workers became managers ofstate enterprises. By 1926/27 a rudimentary system of central planning succeeded in achieving a level of industrial investment exceeding that of 1913. But in 1926/27 the level of industrial production, and the technical structure of industry, still closely resembled that of

Preface

xv

1913. This meant that the relative backwardness of Soviet industry, measured against its counterparts in the major capitalist countries, was even greater than under the tsars. And the decline in agricultural marketings discussed in vol. 1 hampered the consumer industries, and retail trade, and crippled the export programme. From the mid-1920S, the Soviet authorities embarked on their unprecedented endeavour to create a great industrial power by means of comprehensive state planning. An inexorably increasing share of resources was directed towards industrialisation. These policies, which did not avoid errors and inconsistencies, resulted between 1927 and 1929 in the breakdown of the New Economic Policy and were accompanied by a 'socialist offensive' in trade and industry which destroyed or absorbed most of the private sec tor (see Chapter 2). The further expansion of industrialisation in 1929-30 - the main theme of this book - was accompanied and supported by a vast upheaval in every aspect of Soviet life. The urban labourforce expanded rapidly in 1929-30; this was what Moshe Lewin has called 'a quicksand society'. In an endeavour to enlarge the active support for the party leadership and its policies, large numbers of workers were recruited into the party. Simultaneously, many 'bourgeois specialists' and state officials were dismissed or arrested, and many party members were expelled (see Chapter 3). These upheavals in urban society were accompanied by the destruction of the relatively flexible intellectual framework of NEP. In every profession militant marxists sought to predominate. Before thc end of 1930, however, they in turn began to yield to the advance of a toughminded dogmatism imposed or endorsed from above (see Chapter 4). But a firm intellectual framework was not yet established. The simultaneous growth of dogmatism and confusion is exemplified by the inconclusive debates among marxist economists. They sought to establish a doctrine on the transition to socialism, and the nature of the socialist economy, which would encompass and justify Sovict experience. But many years elapsed before an agreed doctrine emerged (see Chapter 5). The central chapters of this volume (Chapter 6-11) provide a narrative of thc development of cconomic policy and of the economy itself between the summer of 1929 and the end of

Preface

XVI

1930. The changes in the annual, five-year and long-term plans are described in so me detail; I seek to show how exaggerated plans came to be adopted, and to be enthusiastically supported by many party members (Chapter 6). The following chapter describes the rapid expansion of the industrial economy in the first seven months of 1929/30, the inflation which accompanied it, and the impact of this expansion on the major sectors of the economy (Chapter 7). This precipitate advance contrasts sharply with the simultaneous temporary retreat from the comprehensive collectivisation of agriculture (see Vol. 1), which dominated the proceedings of the XVI party congress in J uneJuly 1930; this was the first congress at which no voices of political opposition were heard (Chapter 8). But the industrial triumphs of the first half of 1929/30 were followed by a severe if brief economic crisis. I discuss this crisis in some detail and seek to pi ace it in the context of the advances and failures of the economic year 1929/30 as a whole (Chapters 9 and 10). This was a further moment of choice. An unorganised minority, ofwhich Syrtsov was the most articulate representative, sought to bring greater realism into economic policy. But Stalin and the majority of the Politburo resolved to maintain the pace of industrialisation, and to enforce it by better organisation and further repression. During the special quarter, OctoberDecember 1930, the crisis was overcome and industrial expansion resumed. The 1931 plan was the most ambitious and one of the least realistic - of all the annual plans adopted during the course of industrialisation (see Chapter 11). The urgency with wh ich industrialisation was regarded by the party leadership, and by many Soviet citizens, was certainly partly due to the military dangers wh ich hung over the USSR. While immediate military requirements often took second pi ace to long-term industrial goals at this time, the needs of defence were a central preoccupation of the Soviet authorities and of Soviet plans (see Chapter 12).

*

*

*

While this volume was being completed, the Soviet Union embarked on a vast reconsideration of the Stalin period in general, and the turning-point of 1929-30 in particular. In the decade from 1956 to 1966, the de-Stalinisation policy launched

Preface

XVII

by Khrushchev enabled much greater frankness by Soviet writers and historians, though their analysis was generally placed within the simplistic official view that all errors and disasters were due to the 'cult of personality' and to Stalin personally. In the 1970s, some useful historical publications about the 1930S continued to appear, but a much narrower range of information was published, and fresh analysis almost completely ceased. But since the beginning of 1987 publications by authors of creative literature, by journalists and economists, and to a lesser extent by historians, have been much franker and more thoughtful than in the days of Khrushehev. Senior party figures have eneouraged this revaluation. In April 1987, A. N. Yakovlev, now a Politburo member, posed aseries of problems to the historians: Why was the New Eeonomie Poliey departed from at the end 01' the 1920S? How was it that 'administrative-bureaueratie methods of management' were strengthened? Were there alternatives and, if so, why did they remain unrealised? (Vestnik Akademii Nauk, 6, 1987, 61, 68-70). In November 1987, Gorbaehev's re port on the oeeasion of the 70th anniversary of the Oetober revolution eharaeterised the system established in the early 1930S as an 'administrativeeommand system of party-state management of the eountry'. Aeeording to the report, while these arrangements 'in general gave results' in industry, sueh astriet system was unsuitable for agrieulture and had a harmful effeet on society generally. (P, November 3, 1987). In the debates whieh began in 1987 widely different approaches to the upheavals of 1929-30 have been voieed in the Soviet press, from the blunt assertion that the market relation with the peasants should have eontinued, to the almost equally blunt claim that eolleetivisation, dekulakisation and eentral planning were essential to industrialisation, and were marred by relatively minor errors (see my article in The Socialist Register 1988 (London, 1988)). My volumes on The Industrialisation of Soviet Russia form part of the similar diseussion that has been raging among western historians for some years, and I ho pe that they mayaiso be seen by Soviet seholars as a eontribution to their own debate. Some years ago I was a keen advoeate of the view that the fateful ehanges at the end of the 1920S were substantially the neeessary eonsequenee of rapid industrialisation. I now regard

Preface

xviii

this eonclusion as naive. But it seems to me to be equally naive to argue, along lines very familiar nowadays in the Soviet Union as weIl as in the West, that the great shifts in poliey and system at the end of the 1920S were almost entirely due to the ideologieally motivated decisions of a eentralised politieal dietatorship, or ean even be attributed simply to Stalin's efforts to maximise his personal power. I am still eonvinced that rapid industrialisation was incompatible with the market eeonomy of NEP; the industrial objeetives of the leadership required the replacement of NEP by some kind of administrative planning system. As I see it, the ideology and political praetice of the Bolshevik party, the heritage from the pre-revolutionary past, and the personality of Stalin, together with the imperatives of industrialisation in a hostile and dangerous world environment, all played their part in imparting to the Soviet economic and political system of the 1930S its particular charaeteristics, its paradoxical combination of enthusiasm and achievement with vicious repression and waste. Moreover, the economic policies and system adopted at the end of the 1920S proved temporary and even experimental in the sense that they immediately began to be modified under the impact of the practical experience of the industrialisation drive. The way in which the complex interrelationships between the internal and extern al environment, ideology, political structure and practieal experience developed in 1929-30 are further eonsidered in the Conclusions below (Chapter 13).

*

*

*

In the Preface to Volume I, I expressed regret that it had proved impossible to work in Soviet archives. Like a number of other western historians, I have now been able to use archives relating to this period; I worked on material in the Central State Archives of the National Economy (TsGANKh) in the spring of 1981 and on two occasions in 1984. The archives of the Politburo and other party agencies and of the Council of People's Commissars and its eommissions, and the opisi (eatalogues) for all archives of the Soviet period, have not yet been available to western scholars. But the files I received from the archival funds of Vesenkha and Narkomtorg/Narkomsnab and their agencies proved most informative. I am grateful for

Preface

XIX

the assistance of Professor F. M. Vaganov and his colleagues in the State Archives Administration, especially Mrs L. E. Selivanova, and to Dr Tsaplin and his colleagues in TsGANKh. I also worked in the rieh sources of the Lenin Library, the Public History Library, and the Library of INION in Moscow, and of the Saltykov-Shchedrin Library in Leningrad, and again had profitable discussions with Yu. A. Polyakov, V. P. Danilov, V. Z. Drobizhev, I. N. Olegina, and other Soviet historians. The Hoover Institution records of American Engineers in Russia, the US State Department archives and the Trotsky archives in the Houghton Library at Harvard University also proved valuable, and I am grateful to all those concerned for their assistance. In April 1982 I was able to undertake a programme of interviews in Jerusalem and Tel-Aviv with 25 former Soviet citizens who worked in the Soviet economy in the early 1930s, mainly in a managerial or technical capacity. The programme was arranged and the interviews were organised by Mr K. Miroshnik, to whom I am most grateful for his indefatigability, wide knowledge and objectivity. Soviet archival documents, American engineers and former Soviet citizens presented sharply different viewpoints on the Soviet economie system; and these various sources dealt with some important issues which were virtually excluded from Soviet news papers and periodieals ofthe early 1930S. But I was gratified to find that in most respects their account of events and institutions fitted weIl with the picture of Soviet economic life which I had obtained from a critieal scrutiny of the published Soviet records. In this volume I have been able to draw to a greater extent than in previous volumes on the work of western and Soviet scholars. While few studies have examined agriculture in the 1930S in any depth, many valuable books and articles have appeared on various aspects of the industrial economy. Western authors to whose writings I am particularly indebted include Bailes, Barber, Berliner, Gardner Clark, Cooper, Dobb, Dohan, Filtzer, Fitzpatrick, Granick, Holzman, Hunter,Jasny, Kirstein, Kuromiya, N. Lampert, R. A. Lewis, Nove, Rees, S. Schwarz, Shimotomai Shiokawa, Siegelbaum, Westwood and Zaleski. The pioneering and detailed statistieal studies of Bergson and his colleagues, and ofHodgman, Moorsteen, Powell and Nutter have also been constantly at hand while writing this book.

xx

Preface

I have greatly benefitted from comments and advice at various stages in the work from colleagues, who painstakingly read chapters, answered queries and supplied information. I should particularly mention Julian Cooper, who read an early draft and made valuable suggestions and comments, and Vladimir Andrle, John Barber, Peter Gatrell, Mark Harrison, Jonathan Haslam, David Holloway, Nicholas Lampert, Moshe Lewin, Catherine Merridale, Alec Nove, Mario Nuti, Arfon Rees, Michal Reiman, John RusselI, Nobuo Shimotomai, Nabuaki Shiokawa and, last but not least, Stephen Wheatcroft, who departed to Melbourne in 1985 and has been sorely missed. I am most grateful to hirn, and Hiroaki Kuromiya and Nabuaki Shiokawa, for providing me with copies of scarce Soviet documents. Most of my material was again supplied by the Baykov Library of the Centre for Russian and East European Studies at Birmingham University, and I am most grateful to our former librarian, J ennifer Brine, and her worthy successor J ackie Johnson, for their help. Hugh Jenkins once again efficiently undertook the burdensome task of preparing the index. J ean Fyfe again coped speedily and meticulously with typing my various drafts, together with Betty Bennett and Nancy Moore. My wife Frances was an unfailing and indispensable source of support and encouragement. My work on this subject was greatly facilitated by successive grants from the British Economic and Social Research Council for the research projects on Soviet economic development based at Birmingham. These funds made it possible for me to devote the academic year 1984/85 full-time to these studies, and enabled the employment of Dr Wheatcroft and the project secretary Mrs Bennett. They also facilitated the regular meetings of the 'SI PS' seminars (Soviet Industrialisation Project Seminars) at Birmingham, and the conferences of the International Work-Group on Soviet Inter-War Economic History, which were a constant source ofintellectual inspiration.

R. W.

DAVIES

ADDITIONAL PREFACE TO THE Igg8 REPRINT Since this volume went to press in 1988, many more documents have been made available in Russian archives. These have not so far fundamentally changed our understanding of Soviet developments in the early 193os, but they have enriched and sometimes modified it. Two sets of events in the tumultuous years 1929 and 1930 particularly deserve attention. First, the changing role of Tukhachevsky. The new documents cast doubt on Soviet accounts which attributed his demotion in 1928 to his extravagant armaments plans (see this volume, p. 443)" On the other hand, the archives confirm Soviet reports that by 1930 Tukhachevsky was pressing for fan tas tic levels of armament. His 15-page memorandum ofJanuary 11, 1930, which apparently led Stalin to accuse hirn of 'Red militarism', is now available. 2 Tukhachevsky claimed that the Soviet Union could produce 122,500 aircraft, 175,000 aircraft engines and 100,000 tanks a year by 1932/33.3 This would enable the Red Army to conquer foreign territory to a depth of 100-200 km on a front of 450 km or more, and completely destroy the less mechanised enemy forces. Tukhachevsky advocated these extraordinarily high figures on the grounds that Soviet industry should be capable of producing 35 per cent as many aircraft and 50 per cent as many aircraft engines as motor vehicles, and 50 per cent as many tanks as , See the careful discussion in L. Sallluelson, Soviel Defellce IlldusllJ Plalllling: Tukltaclteusk)' alld MilitaT)'-Indusllial Mobilisation, 1926-37 (Stockhollll, 1996),

7 2 -7. 2 RGVA (Rossiiskii gosudarstvennyi voennyi arkhiv), 7/1/170. 11-18 and 33988/2/693, i, 58-65; see also Sallluelson (1996), 120-33, and S. Stoeckel; 'FOl'ging Stalin's AnllY: The Sources and Politics ofMilitary Innovation in Russia, 1928-1933', unpublished Ph.D. dissertation, Jol1l1s Hopkins University, Baltilllore, Maryland (1995),61-6. 3 Actual production in 1933 was only: aircraft 4,116; aircraft engines 7,771; tanks and tankettes 4,116 (RGAE, 4372/91/2527, 9 - report datedJanuary 21, 1935)·

XXI

xxii

Preface to tlle I998 Reprint

tractors. He applied these ratios to the over-ambitious programmes for vehicle and tractor production in 1932/33, prepared during the upward revision of the five-year plan. Voroshilov and Shaposhnikov were realistic enough to repudiate these proposals for armaments production, and they persuaded Stalin they were ridiculous. In a letter to Voroshilov dated March 23, 1930, Stalin dismissed Tukhachevsky's 'plan' as 'a result of fascination with paper and office-desk maximalism', and a 'fantasy'. To 'carryout' such a 'plan' would undoubtedly destroy both the economy of the country, and the army. This would be worse than any counter-revolution. 4 Stalin's attitude was inconsistent: while rejecting Tukhachevsky's proposals he did not modify the equally fantastic targets of the five-year plan as a whole. Tukhachevsky, in spite of these rebuffs, in a memorandum to Stalin on December 30, 1930, claimed that tank production could even equal not 50 per cent but 100 per cent ofvehicle and tractor production, so that, in the event of mobilisation, production of 'autotractors for tanks' could reach 150,000 in the single year 1933 'without special tension'.5 In the midst of this debate, two of the former Tsarist officers, arrested in the course of an extensive purge of the army, gave compromising evidence against Tukhachevsky. Stalin at first purported to believe this material, which was forwarded to hirn by Menzhinsky, People's Commissar for Internal Mfairs. Stalin wrote to Ordzhonikidze on September 24, 1930: Tukh[achevsky] was apparently in the thralls of anti-Soviet elements ... Is that possible? Of course it is possible, in view of the fact that it is not excluded. 6

4 Cited in Voellllye arkhivy Rossii, vypusk 1 (1993), 78-9; this is the re port of a special commission on the case of Tukhachevsky and other offkers, which was sent to Khrushchev onJune 26, 1964. 5 RGVA, 3388713/400, 74-9; this memorandum did not deal with aircraft production. 6 VOell1l)'e arkliivy Rossii, vyp, 1 (1993), 104; the original documents cited in this source have not been available.

PreJace to the I998 Reprint

xxiii

But eventually, following a personal confrontation between Tukhachevsky and his accusers, Stalin decided to take no further action. 7 In all these drcumstances Stalin's dedsion in June 1931 to appoint Tukhachevsky as head of armaments and deputy People's Commissar for Military and Naval Mfairs was a remarkable change of front,s Stalin's voltejace was confirmed by his letter to Tukhachevsky in May 1932, in which he apologised (an extremely rare event) for his letter ofMarch 23,1930: Now, two years later, when certain unclear questions have become clearer to me, I must recognise that my evaluation was too sharp and the conclusions of my letter were not entirely correct .... Don 't curse me because I have somewhat delayed in correcting the faults of my letter. With com [munist] gr[eetings] I. Stalin. 9 The second set of events on which new material has become available is the relation between the authorities and the 'bourgeois specialists' in 1929-30. Stalin's letters to Molotov, and the related documents uncovered by Russian historians and archivists, illuminate several aspects of the campaign against Groman, Kondratiev, Ramzin and other non-party experts. 10 Stalin had always been suspicious of them. In 1925, in the midst of the struggle with Zinoviev, he complained to Molotov that on economic questions it was not the Politburo but the State Planning Commission, Gosplan, which was effectively in charge and 'even worse, not even Gosplan, but the sections of Gosplan which are controlled by specialists'. In 1929 and 1930, the OGPU forced confessions from Groman, Ramzin and others that they had engaged in sabotage and planned to set up an anti-

Ibid. 104-5. For this event, see vol. 4 of this series - Crisis and Progress in the Soviet Econolll)" 193 1- 1 933 (199 6 ) - 114· 9 Cited in VOe/ln)'e arkhivy Rossii, vyp. 1 (1993),79-80. 10 Stalins Leiters to Molotov, 1925-1936, edited by L. T. Lih, O. V. Naumov and O. V. Khlevnillk (1995); L. Kosheleva, V. Lel'chuk, V. Nallmov, O. Nallmov, L. Rogovaya and O. KhlevnYllk, compilers, Pis 'lila l. V. Stalina V. M. J'v[OIOtOVll, 1925-1936 gg. : sbomik doklllllentov (1995) (10,000 copies). I shall eite here the RlIssian edition (as Pis'lIla Molotovu), as the English translation is sometimes inaccllrate. 7

8

xxiv

Preface to the I998 Reprint

Communist government with the support of foreign powers (see pp. 119-20 and 407-11 below). The letters to Molotov provide fascinating details about Stalin's ruthless control of this campaign from his southern vacation resort. Six letters written in the summer of 1930 set out the tactics to be used. His comments ranged from broad hints to virtual instructions about the nature of the confessions to be obtained. 'I t is essen tial to arres t Sukhanov, Bazarov, Ramzin', he insisted in August 1930, 'and Sukhanov's wife should be probed (she is a communist!).'ll 'By the way', he remarked on September 2, 'how about Messrs the defendants admitting their mistakes and disgracing themselves politically, while simultaneously acknowledging the stability of Soviet power and the correctness of the method of collectivisation? That would be rather good.' In the same letter he referred with approval, in a classic and almost untranslatable phrase, to the 'work of inspecting and bashing' (pmverochno-mordoboinaya rabota) being carried out in the State Bank and the Commissariat of Finance by the OGPU and the V\Torkers' and Peasants' Inspectorate. 12 A month later, in a letter to the head of the OGPU discovered by the Russian editors, Stalin commented on the confessions he had been sent, and suggested in detail further confessions which might be obtained: In any new (future) testimonies ... pay particular attention to the question of foreign intervention and its timing ... Run Messrs. Kondratiev, Yurovskii, Chayanov etc. through the mill; they have clearly tried to evade [the charge of having] a tendency to intervention but they are (indisputably) interventionists ... If Ramzin's testimonies are confirmed and corroborated in the depositions of other persons accused (Groman, Larichev, Kondratiev and Company, etc.) that will be a serious success for the OGPU ... Understood? Greetings! I. Stalin. 13 The decision on October 18, 1930 (see p. 415 below) to replace Bryukhanov by Grin'ko as People's Commissar for 11

Pis'ma Mol%vlt (1995), 198.

12

Ibid. 19 2 - 2 °9. Ibid. 187-8.

13

Preface to the I998 Reprint

xxv

Finance, and Pyatakov by Kalmanovich as chair of Gosbank, was closely involved with the campaign against the bourgeois specialists. In the account in the present volume I explain that the background to these dis missals and appointments was the growing inflation, which the Politburo sought to stern from midSeptember 1930 onwards. Grin'ko played a prominent part in further 'tightening the financial screw' after his appointment in October. (See pp. 430-3, 437 below.) It now turns out that this was not the whole story. As early as July 19, 1930, Pyatakov, a former supporter of Trotsky, came to the conclusion that inflation was getting out of hand, and sent a memorandum to Stalin arguing that the production of consumer goods should be increased. Imports of agricultural raw materials should be increased to facilitate this, and exports of meat and dairy products should be reduced. Prices of a number of luxury goods should be increased, and control over capital investment should be tightened up. The purpose of all these measures was to achieve financial stability: The whole financial plan for next year [1930/31] should be drawn up without a deficit. The credit plan of Gosbank should be drawn up without currency issue. The budget should be drawn up with an undistributed reserve of 2-2.5 % (Le. about 3-400 million rubles).14 Stalin's indignation about this memorandum knew no bounds. In successive letters to Molotov he claimed that Pyatakov was being manipulated by supporters of Kondratiev and Groman (early August 1930), described hirn as 'a bad commissar working with bad specialists' and urged his replacement by someone 'from Rabkrin or the OGPU' (August 24). According to Stalin, 'Pyatakov is a truly Right-wing Trotskyist (a second Sokol'nikov) and is the most harmful element in the bloc of Rykov-Pyatakov plus the Kondratiev-defeatist tendencies of bureauerats in the Soviet apparatus' (September 13). 15 With this ferocious criticism of Pyatakov, Stalin had apparently established a political framework for further inflation. But it was Ibid. 178-9; RTsKhIDNI, 85/271397, 50b.-6. n Pis'lIIa MolotOVlI, 193-4,202-3, 217. Sokol'nikov as People's Commissar for Finanee in 1925 supported the Zinoviev-Kamenev opposition while earrying out an orthodox financial poliey under the influenee ofYurovsky and others. H

xxvi

PreJace to the 1998 Reprint

just at this time that he initiated or acquiesced in the abrupt change in financial policy described below. Pyatakov was removed; but his proposals were adopted. This was a striking example of Stalin's well-known ability to 'wear other people's clothes'. December I997

R. W.

DAVIES

Corrections to Crisis and Progress in the Soviet Economy, I 93 I-I 933 ( 1 996) (vol. 4 of this se ries ) : p. 179, line 19. For '20.2 million' read '18.1 million'. p. 505 (Table 1 (b)). The first six columns (including those headed 'I93IB' and 'I932') are in 1928 prices, and only the last three columns (those headed 'I932A', 'I932B' and 'I933') are in 1933 prices. p. 529 (Table 11). The figures for commercial trade (last line of table) have been transposed to the wrong columns: (2000)C should be for I93I (Total) 40002 should be for I932 (Total) 63012 should be for I933 (Total).

CHAPTER ONE

THE INDUSTRIAL ECONOMY IN THE MID- 1920S (A)

THE SOCIAL TRANSFORMATION

The revolution and civil war eliminated, perhaps for ever, private landowners and all substantial private capitalism. The new sodal and political structure which emerged during the 1920S was profoundly influenced by this transformation. The revolution flattened the top and extended the sides of the steep pre-revolutionary sodal pyramid. In the countryside, private peasant farming continued, but much greater equality prevailed than before the revolution (see vol. I, pp. 23-4). In trade and in small-scale industry, some private businessmen prospered, but only 76,000 persons were recorded as employing any kind of hired labour in the whole non-agricultural sector even in 1926/27, the year in wh ich private businesses were most numerous; and of this total only 30,000 were classified as 'middle and large capitalists'.' In Moscow, the number of factory owners declined from 1,791 in 1912 to 145 in 1926, and the number of owners of small-scale industry who were employers of labour from 20,600 to 2,800. 2 The recorded earnings of the top 30,000 private entrepreneurs were substantially greater than average earnings, amounting to 7,352 rubles a year as compared with 729 rubles for the nonagricultural population as a whole. 3 These data based on tax returns are doubtless underestimates. But the average incomes of private entrepreneurs were certainly lower, and their opportunities for accumulating wealth far more limited, than before the revolution. I Tyazhest' oblozheniya (1929), 74-81; these data are discussed in Lewin (1985), 213-6, and in Wheatcroft (1984). 2 HP (Prague), lxx Uune-July 1929),25-6. 3 Tyazhest' oblozheniya (1929),74-8 1.

2

The Industrial Economy in the mid- 1920S

If the old tsarist estates and new capitalist classes had almost completely evaporated, the new ruling elite - consisting largely of senior party and state officials and economic managers - as yet existed only in embryonic form; it was far more modest in its way of life than the leading noble and entrepreneurial families of tsarist Russia. This was most clearly shown by the decline in the number of domestic servants from over 1'/. millions in 1897 to 339,000 in 1926/27.4 Even in Moscow, in spite of the large increase in the number of senior government officials and professional people consequent upon the shift of the capital from Petrograd in 1918, the number of domestic servants declined by 57 per cent between 1912 and 1926.5 No reliable comparison between the number of leading officials and specialists in the mid- I 920S and in 1913 has been possible; accurate data for 1913 are lacking. But such figures as are available indicate a net increase in the number of trained specialists. While some members of the professional classes emigrated in the first few years after the revolution, many more were trained. In 1914/15, there were al ready 124,700 undergraduate students in tsarist Russia, nearly equal to the total stock of graduates. The number of students increased during the civil war, and, although it declined in the early 1920S, remained substantially greater than before the revolution. 6 Some 90,800 students graduated in the four years 1924-7.7 The official claim that the total number of graduates increased from 136,000 in 1913 to 233,000 in 1928 is therefore not implausible. 8 Taking senior administrators, managers and specialists

4 For 1897, see Obshchii svod (St. Petersburg, 1905), ii, 264-5; for 1926/27 see 'lYa;:;hest' oblo;:;heniya (1929), 74-81. In the 1926 census, the number of personal servants was recorded as 319,000 in the towns; a further 133,000 were employed in the countryside, and 13,000 as a secondary occupation (Vsesl!Yu;:;naya peTepis', xxxiv (1930), 160-1). 5 While the number of domestic servants in Moscow fell from 97,600 to 42,200 between 1912 and 1926, the number of persons in non-industrial employment and the free professions increased from 55,650 to 131,600 (BP (Prague), lxx Oune-July 1929),25-6). 6 See NaT. kh. (1932), 507. 7 l;:;meneniya (1979), 166. 8 Sketchy data for individual professions also point to an increase in the number of specialists between the eve of the first world war and the mid-1920S (thousands):

The Social Transformation, mid- 1920S

3

together, the administrative and professional elite in the Soviet Union in the mid-I920S was a tiny minority of the population. According to the returns of the 1926 census, it amounted to only about half-a-million persons out of a total working population of 86,220,000. This included 3 I 1,854 in 'Ieading posts' (senior administrators, and managers of enterprises and their deputies) and 167,065 persons in special ist posts c1assified as 'higher technical' and 'higher'.9 With the .promotion of former workers and others, many of those employed in both 'Ieading' and specialist posts were 'practicals' without higher education. A survey of 3,554 administrators and technical staff in higher posts at certain major factories and industrial building

Eveof first world war Doetors Dentists Teaehers in higher edueation

3 1 '4"

S'8 a

6'7"

1926 cemusC SI'4d 10'0

13'2

" See Leikina-Svirskaya (1981), So-I; in addition there were S'4 thousand pharmaeists, h hmeneniya (1976), 269. " Vsesoyuznaya perepis', xxxiv (1930), [44-80, d Bulletin of the Soeiety for the Soeial History of Medicine, 34 (1984), 19-24 (Wheateroft), shows that 2S'5 thousand of this total were trained before 1917; as there were only about 30,000 doetors in 1917, only a small number of doetors could have emigrated after 1917, Aeeording to the data in Leikina-Svirskaya (198 I ), there were in exeess of 19°,000 seeondary and elementary sehool-teaehers in 1914, as eompared with 326,000 in 1926 (see note 9 below) , This implies a eonsiderable improvement in the teaeher-pupil ratio, whieh seems unlikely. 9 Estimated from VSeJl!yuznaya perepis', xxxiv (1930), 144-80, These figures exclude military offieers and speeialists, literature, journalism and the arts, libraries and museums, as 'higher' oeeupations in these fields are not listed separately; on the same grounds I have excluded 326,265 teaehers from the total. The total includes 'free professions' as weil as those in employment. The principal sub-groups are as folIows: Leading personneI: Administrators, ete, Managers Total

3 118 54 (continued)

4

The Industrial Economy in the mid- 1920S

sites in 1929 revealed that 916, or 25.8 per cent of the total, were practicals. 1O While a high proportion of specialists in the middle and late 1920S had received their training before the revolution, in the state administration personnel already employed before the revolution were in a small minority. A comprehensive survey of 10,832 persons employed in TsIK (the Central Executive Committee of Soviets) and in the all-Union People's Commissariats in October 1929 claimed that only 1,178 of them, 10·9 per cent of the total, were in state service before the revolution. 11 These figures do not, however, adequately indicate the importance as distinct from the total numbers of prerevolutionary personnel. A 1929 survey of industrial staff in higher posts disclosed that of 1,819 with higher specialised education, 872 had qualified before the revolution; 124 of these were former factory owners or directors, and their influence on economic decisions must have been considerable. '2 The social transformation of the administration was also limited in three other respects. First, the workers' revolution had not yet brought about workers predominance in high office. The survey in October 1929 of TsIK and the commissariats showed that most of those who replaced the pre-revolutionary staff were from the middle classes: only 11·9 per cent were former workers, and a further 4·5 per cent children of former Technical and other listed higher posts: Engineers and architects In higher education Agronomists Land surveyors, etc. Veterinary Doctors Dentists Legal professions Other Total

302 35 13 236 1683 2 12 906 5°13 5 1 43° 9969 18206 9 2 38

Of the total technical and other higher posts, 10,237 are in 'free professions' working independently, the rest are wage earners. 10 EO, 12, 1929, 102-22 (Kheinman); a further 10·6 per cent only had secondary specialised education. 11 Thc survcy is. rcportcd in SO, 2, 1930, 82-g2 (Latsygina). 12 EO, I, 1930, 161-5.

The Social Transformation, mid- 19205

5

workcrs. The percentage was somewhat greater in the very highest administrative posts, but reached 39 per cent only for the lowest groups in the hierarchy, janitors, cleaners and other services ('junior ancillary personnel' or MOP). With the exception of thc ancillarics, all grades were dominated by former white-collar workers, and their children. 13 Secondly, there were very few women in administrative or specialist posts. Only 23,700, or 7'6 per cent, of the 31 1,900 'leading' posts recorded in the December 1926 census were occupied by women, and among the higher ranks the proportion was much lower still. In industry, the proportion of women in administrative and specialist posts was also very low; only 597 ofthe 37,898leading posts (1'6 per cent) and 392 ofthe 16,517 higher technical posts (2'4 per cent) were occupied by women. li Thirdly, while a substantial proportion of leading posts were held by party members, many of them were 'practicals'; party membership among graduates was insignificant. The 1929 survey of administrative and technical staff in industry showed that only 5'2 per cent of those with higher education were party members: 15 in the mid-1920S the proportion would have been even lower. But as many as 10'7 per cent were classified as 'alien to us in their political complexion'. 16 In 1927/28, qualified engineers working in industry included a me re 39 party mem bers, and only 12 of these worked in the mining ind ustry Y In the first decade after the revolution, the expansion in 'secondary specialised' education - which encompassed technicians, midwives and others of similar skills - was even more rapid than the expansion of high er education. According to the official statistics, the number of pupils in secondary specialised technical colleges (tekhnikumy) of various kinds, and in the rabfaki, the 'workers' faculties' providing an adult road to higher ed ucation, increased from 48,000 in 191 4/I 5 to 1:1 SO, 2, 1930, 82-92 (Latsygina). It should be noted, however, that on the same date 72 per cent of forernen in factories were ex-workers or workers' children (see Kurorniya (forthcorning), eh. 7). 14 Vsesoyuznaya perepis', xxxiv (1930), 144-80. Wornen played an irnportant part in rnedicine and education: 40 per cent of doctors, 80 per cent of dentists and 61 per cent of school teachers were wornen. 15 EO, 12, 1929, 120-1 (Kheinrnan). 16 EO, I, 1930, 167-8 (Kheinrnan). 17 Carr and Davies (1969),580, n. 5.

6

The Industrial Economy in the mid-192OS

as many as 236,000 in 1928.18 In consequence, the total number of persons with secondary education also rose rapidly, from 54,000 in 1913 to 288,000 in 1928.19 The percentage of party members was much higher at this level of qualification than among graduates. In the 25 factories and sites surveyed in 1929, 17·5 per cent of the 1,487 persons with secondary specialised education were party members or candidates, and a further 3.8 per cent belonged to the Komsomol. Not surprisingly, the higher percentage of party members and candidates, 29.2 per cent, was found among the 4,062 practicals without any specialised education. 20 At the bottom of the educationalladder, 48.9 per cent of the population were recorded as illiterate in the 1926 census. 21 This was a considerable improvement on the situation at the time of the 1897 census, when 76 per cent were illiterate. But the number of children attending school rose rapidly in the last decades of the tsarist period, and a Soviet historian has estimated that the proportion of illiterates had declined to 61-2 per cent on the eve of the war. 22 The rise in the number of children attending school continued after 1917, with abrief break in the early 1920S.23 In the 1920S young workers entering industrial and other occupations were therefore more literate than the older generation: in 1929 13·9 per cent of all workers in census industry were illiterate, but the percentage varied from 30.9 per cent for those aged 40 and over to only 5.2 per cent for those under 23. But the educational level of factory workers, though rising, was not high; in 1929 the average worker had attended school for 3·5 years, the average worker under 23 years of age for 4·3 years. The proportion of illiterates 18 Sols. sir. (1934), 40~; SI. spr. 1928 (1929), 879; of these the number in rabfaki amounted to 49,000; see also Fitzpatrick (1979), 62. An alternative series for all lower trade education (profobrazovanie) shows an increase from 267,000 in 1914/15 to 594,000 in 1926/27 (NaT. kll. (1932),507). 19 Narodnoe obrazovanie (1971), 233. 20 EO, 12, 1929, 120--1 (Kheinman). 21 Illiterates for the purpose of this figure were those not recorded as 'able to read', aged ni ne and over (Lorimer (1946),198-9). 22 Rashin (1956), 311; this is for the population aged eight and over. 23 The total number ofschoolchildren in attendance increased from 7,802,000 in 1914/15 (including children at church schools) to 10,727,000 in 1926/27; the number in forms 5-10 (roughly 12-17 year olds) increased from 565,000 to 1,205,000 (Sols. sir. (1934), 399).

The Social Transformation, mid- 1920S

7

was higher among women and among workers in those industries which involved a great deal of unskilled manual labour. Thus the percentage of illiterates was higher in the textile industries, employing a high proportion ofwomen, and in the coal industry, than in metalworking and engineering,24 During the early and mid-1920S, with the rapid recovery of industry, railway transport and other non-agricultural sectors of the economy, numbers employed expanded rapidly; in industry and on the railways, the number employed in 1926/27 was substantially higher than in 1913 (see p, 28 below), Many, perhaps most, of those recruited to industry in 1922-5 had worked there before the revolution: a 1929 survey recorded that 50'7 per cent of all workers began work in industry before 19 I7, 25 This was in considerable part a second-generation working dass, a working dass which had lost dose connections with the countryside in the form of land holding,26 But, according to one survey, as many as 54 per cent of workers starting work in industry in 1920-7 were previously engaged in agriculture, most as peasants, some as agricultural labourersY In the building industry, as before the revolution, workers were mainly seasonal, and were dosely tied to the land,28 The industrial workers were the heroes of the October revolution, and its major beneficiaries, It is true that their 24 Trud (1930), 30-1; this is the report of a survey of 382,000 workers in the metal, textile and mining industries (20 per cent coverage) carried out by the trade unions in April-May 1929 (ibid, xii), 25 Barber (1978), 2-5, 2(' According to the 1929 survey, 52'2 per cent of industrial workers ca me from working-dass families, while 20'6 per cent held land; in the case of the coal industry, where ties with the land were doser, the respective percentages were 34'4 and 24'6 per cent (Trud (1930), 28-9; Barber (1978), 8-14), Comparable data for the other major section of the working dass, the railway workers, have not been traced, 27 Profioyuz:.naya perepis', 1932-1933, i (1934),94-5; for this survey of tradt' union workers remaining in industry in 1932-3 sec p, 127 n, 149 below, lH A 1929 survey ofbuilding workers showed the following (in percentages):

In industry before 19 18 Working-dass parents Own agriculture in countryside

Permanent workers 37' I 37'6 19'9

Otkl/Odniki 35'9 9'2 90'0

(Trud (1932),83,85; hmeneniya (1961),152,180,194 (Gol'tsman)),

8

The Industrial Economy in the mid- 1920S

political strength greatly diminished between 1917 and the mid1920S. Many politically-active party and Komsomol members were promoted out of the ranks of the working dass to official positions; and ever since 1917 the party authorities had circumscribed and destroyed any political opposition which sought to base itself on the working-dass interest. The workers had effectively lost their hard-won right to strike; the penalties against strikers were al ready more severe than before the revolution. By the mid-1920S the Soviet working dass had virtually ceased to engage in the stormy political activities, or exercise the political initiative, which distinguished it in 1917. But in other respects the revolution had brought a vast enhancement in the status of the industrial workers, in their rights and privileges, and in their material position relative to the peasants, the professional dass es and the minor officials. At the pI ace of work, it brought new organisations and new practices. Nearly all industrial and railway workers, and even most permanent building workers, belonged to trade unions. According to the party census, on January I, 1927, nearly one industrial worker in ten, and at least one transport worker in thirteen, were party members or candidates, as compared with one qualified industrial engineer in 100, and one peasant in 650.29 The proportion of party members varied widely between different industries, ranging from 13'5 per cent in the oil industry to 6'2 per cent in the textile industry; surprisingly, it 29 The number ofparty members and candidates on January follows (thousands):

Workers in industry Workers in transport Other workers Non-manual employees Peasants Other Total

I,

1927, was as

215.6 94'3 33.2 438'8 116'2 163'8 1061'9

(Itogi (n.d. [?1928], 22-3; these figures exclude the Red Army and Navy). The total number ofworkers in census industry on January I, 1927, amounted to 2,365,800 (Trud (1930),7); the total number ofpersons employed in transport in 1926/27 (average) amounted to 1,257,000 (Trud (1930),7) (this figure includes non-manual employees, so the party membership among workers will be high er than one in thirteen); the total lllimber of peasants working in individual households recorded in the 1926 census was 73,456,000 (Vsesoyuznaya perepis', xxxiv (1930), 2-3). For party membership among engineers, see p. 5 above.

The Social Transformation, mid- 1920S

9

tended to be smaller in the larger faetories. 30 But virtually every worker must have been personally aequainted with a party member. The trade unions and the party eells drew faetory personnel dosely into the politieal and administrative system, aeting both as agents of higher authority and, to a diminishing extent, as representatives of the workers. During the industrial diffieulties of 1926, they played an important role in imposing the 'regime of eeonomy' on the workers, and so me role in its subsequent relaxation. 31 But they also guarded workers against the depredations of managers, and proteeted them from arbitrary dismissal. As eompared with pre-revolutionary times, the authority over the worker of the faetory engineer and the foreman, if not of the faetory manager, had eonsiderably diminished. 32 The enhaneed status of the worker brought important material ehanges, induding greater equality of ineome not only between masses and rulers but also within the industrial working dass itself. The differentiation in earnings between higher-paid and lower-paid workers declined substantially between 1914 and 1928.33 This was the result of deliberate poliey. Strenuous efforts to narrow differentials between skills during the civil war gave way in the early 1920S to some inerease in differentiation, but at the end of 1926 a new drive was launehed for wage equalisation (vyravnivanie) between skilled and unskilled. 34 War and revolution also brought wide job opportunities and less eeonomie inequality to women workers. As in other :111 See Carr ([97[), 108-g; this was only partly explained by the fact that most of the cotton textile industry, where female labour predominated, was organised into large units. 31 For the regime ofeconomy, see Carr and Davies ([969), 333-8. :12 On the role ofthe factory engineer, see Carr ([958), 378-9, and Carr and Davies ([969), 578-80; on the foreman, see Predpriyatie, [2, 1926, [3-[4 (Gastev), 22 (Kotel'nikov). :13 See Bergson (Cambridge, Mass., [944), 69; the quartile ratio, which is a measurement of equality, increased substantially in seven out of eight industries studied. 3" For the changes in policy, see Carr ([958), 376--7, Carr and Davies ([969), 529-37, and Bergson ([944), 69, [8-9. For confiicting evidence on the success of the 1926--9 drive for equalisation, see Carr and Davies ([ 969), 533, especially note 3, and Bergson ([944), [88.

The Industrial Economy in the mid-192OS

10

belligerent countries, the war considerably widened the range ofjobs accessible to wornen, and in 1914-18 fernale ernployrnent increased rapidly as a percentage of all workers in census industry. After declining in the first two years of NEP, it then increased steadily between 1923/24 and 1926127, but did not recover to its wartirne peak. 35 Sirnultaneously the wage gap tended to narrow between industries dorninated by rnen, such as rnetalworking and rnining, and industries in which the percentage of wornen was substantial, such as textiles and food. 36 The narrowing of the gap was partly due to the introduction of equal pay for equal work, accornplished in the Soviet Union earlier than in any other countryY A careful study 35 For twelve industries for which data are available for the whole period, covering 76 per cent of industrial workers, the percentages were as folIows:

19'3 '9'5 '9'7 '9,8 '92 ,/22

30.7 36.0 39·7 4'·2 38.0

'9 22 / 23 '9 23/ 24 '9 2 4125 '9 25/26 '926/27

34"7 32.8 34.2 34·3 35.0

For all census industry, the percentage increased from 25.2 in '9'3 to 29·5 per cent in '926127. (Ocherki ('957), 244-5, 206.) 36 According to Soviet estimates, real wages changed as folIows:

Metalworking Mining Woodworking Printing Food Paper Chemicals Textiles All industry

Wornen as % of nurnber of workers' 1913 1926/ 2 7 10·2 4.8 8·0 '4·5 8·2 ,6·4 22·' 9·' 26·8 2'·3 36.7 29·3 3'·3 3'·2 56·, 60·2 25.2 29·5

Real wages" ('9'3 = 100) 19 26/ 2 7 85. 0 75. 0 108·2 106·8

'20·0 99.6

• Ocherki (1957), 206--57 (Mints). h EO, '0, '927, '44-7 (Kheinman). 37 This did not, however, result in equal earnings for men and women, as female labour was concentrated in the less remunerative jobs. According to surveys of the central bureau of labour statistics, the average daily earnings by adult women increased from 63·4 per cent of adult male earnings in March '926 to 6]"2 per cent in March '928; the equivalent percentage for June '9'4 was only 5'·' (Statistika truda, 9-10, '928, 2-48 - Rashin ).

The Social Transformation, mid- 1920S

I I

of Soviet data by an American economist shows a substantial but irregular rise in the daily wages of women relative to those of men between 1914 and 1928; in the eight industries studied the increase varied between 1,8 and 23'3 percentage points,38 But the relative improvement in women's wages was also partly and perhaps mainly due to the fact that it was easier in conditions of NEP to raise prices and pay higher wages in the consumer industries, where most women worked,39 But perhaps the most important reform in working conditions for everyone employed by the state was the introduction of the eight-hour day, the call for which was emblazoned on the banners of every European socialist party,40 The normallength of the working day declined by over 20 per cent from 9'9 ho urs in 1913 to 7'8 ho urs in 1928,41 On the occasion of the tenth anniversary of the revolution in 1927 further legislation authorised the gradual introduction ofthe seven-hour dayY The pleasures of increased leisure resulting from the reduced working day were moderated by the possibility of being condemned to an enforced life of complete leisure through unemployment. Unemployment statistics in the Soviet Union, as in capitalist countries, were very unreliable, Estimates for the beginning of 1927 ranged from 1'0 to 2'3 millions, But even on the narrow definition used in the population census of December 1926, unemployment amounted to some 9 per cent of the employed population; and numbers increased continuously Bergson (1944), 73-6, A Soviet economist wryly commented: 'We are maintaining adefinite policy of eliminating the pre-revolutionary gaps in the payment of male and female labour, But generally the shift in the former relationship of wage payments between the producer goods and consumer goods industries is the result ofdisruption ofthe planned control ofwages, a disruption due to market conditions' (EO, 9, 1929, 147 - Kheinman), 40 See Carr (1952), 104, 41 Trud (1936), 98, 371; according to this source, , "the normal length of the working day" refers to the number of hours of work which are fixed for the given worker by existing legislation or the conditions of the labour contract', These figures are for adult workers, According to Trud (1930),37, the actual average length of the working day amounted to 7'45 hours in 1926/27 and 1927/28 (including 0'1 hours overtime) and 7'37 (including 0'13 hours overtime) in 1928/29; this figure presumably includes adolescents, who worked a shorter day, -12 See Carr and Davies (1969),495-500, 38

39

12

The Industrial Economy in the mid- 1920S

throughout the 1920S.43 No reliable estimate of unemployment before the revolution is available; the estimate of a Soviet economist, an average of 400-500,000 in 1900-13,44 is certainly less than half the number of unemployed in the Soviet Union in 1928 by the same definition. In contrast to Western Europe and the United States, unemployment in the USSR was not the result of economic depression. The number of employed persons increased from 6'7 to 10'4 millions between 1924/25 and 1929, sufficient to absorb more than the natural increase in the able-bodied urban poulatin.4~' But the growth in employment was outweighed by the continuous press ure of the migration of adult labour from country to town; according to Soviet estimates, annual net migration increased from one-third of a million to nearly one million people a year during 1923-6.46 The reasons for the huge increase in rural-urban migration compared with the prerevolutionary period have not yet been satisfactorily elucidated. But the growth of job opportunities, and the high prestige of the town and of urban labour, must have played a major part. The intensity of unemployment varied considerably between different industries and professions. In metalworking, chemieals and mining, the percentage ofunemployment was low, especially among certain types of skilled workers. In other industries, labour legislation and the trade unions protected established workers from arbitrary dismissal. But for large numbers of urban workcrs unemployment was an ever-present menace. A survey by the information department of the party central committee admitted that because of unemployment workers were constantly afraid of losing their jobS. 47 A large and increasing number of workers held purely temporary jobs. This doubtless provided a means of enforcing discipline and was in 43 All these definitions of unemployment covered only those seeking work and not obtaining it; they did not include those in work but in some sense 'under-employed'. For these statistics, see Lane, ed. (1986), 19-35 (Davies), 36--49 (Wheatcroft and Davies); the 'employed population' excludes all selfemployed, including peasants not working for hire. H BSE, v (1930), co!. 214; the sketchy data on pre-revolutionary unemployment are examined in Davies, ed. (1988) (Shapiro). 45 Nar. kh. (1932),410-11 (total excluding agricultural workers). 46 See Carr and Davies (1969),454. 47 Cited from the archives in Suvorov (1968), 80.

Continuity and Change any case a major source of uncertainty and frustration for the workers concerned. 48 The complete lack of job opportunities for many young people, including children of workers as weH as migrants from the towns, was frankly acknowledged by the party to be a major source of disturbance and hooliganism. 49 Unemployment was also a constant reproach to the authorities, an urgent reminder that the New Economic Policy was grounded in the capitalist economics of the market. It provided one of the most telling Left Opposition criticisms of offi ci al policies. The Opposition platform of September 1927 claimed that 'the number of unemployed is growing faster than the total number of employed workers', and plausibly attributed this gross defect to the slow growth of industrialisation. 5o But the Opposition, like the party leadership, was committed to the stability of the currency and to the market relation with the mass ofthe peasantry. The drive for economy and rationalisation, by increasing productivity, necessarily reduced employment possibilities, and sometimes resulted in an increase m unemployment. 'Individual groups of workers', Kuibyshev reluctantly admitted in April 1927, 'may suffer from rationalisation, thanks to reduction [of employment] in a given enterprise'Y Until the very end of the 1920S it seemed to all concerned that the early stages of Soviet industrialisation might aHeviate, but could not eliminate, mass unemployment.

(B)

CONTINUITY AND CHANGE IN THE IN DUST RIAL ECONOMY

In the early 1920S Soviet politicians and economists, like their counterparts elsewhere in war-devastated Europe, anticipated that full economic recovery would require many years. In Gosplan, one of the most optimistic projections prepared in 1923 forecast that the production of census industry would reach a mere 70 per cent of the pre-war level by 1926/27; and a plan for the iron and steel industry prepared in the same year See Filtzer (1986), 26-7. Resolution of XV party conference, November 1926, in KPSS v Tez., ii (1954), 324-5. 50 The Plaiform of the Joint Opposition (1927) (London, 1973), 17. 51 See Carr and Davies (1969), 464. -18 -19

The Industrial Economy in the mid- 1920S estimated that rolled steel production would amount to a mere 27 per cent of 1913 in 1926/27.52 A year later, a transport plan prepared in Gosplan calculated that the pre-war level of freight trafIic would not be reached until 1936, and a commission of Sovnarkom, even though it was working under the inftuence of the always optimistic People's Commissariat for Workers' and Peasants' Inspection (Rabkrin), predicted that the pre-war level of freight traffic would not be reached until 1929.53 Even in 1925, Gosplan estimated that the demand for pig iron ten years later in 1935 would amount to a mere 4'8 million tons, slightly higher than in 1913.54 But the pace of economic recovery swept aside these gloomy prognoses. By 1925, agricultural production already exceeded the 1909-13 average level; by 1926, it approximately equalled the level of 1913, an exceptionally good harvest year. 55 Industry, transport and internal trade had also approximately regained the pre-war level:'6 The main lagging sector in 1926/27 was the building industry, classified separately from 'industry' as 'construction' in Soviet statistics. According to the estimates of Gosplan, which were usually optimistic, in 1926/27 the value of construction amounted only to 610 million rubles against 730 millions in 1913.57 52 PKh, 3, '924, 90; Byulleten' Gosplana, 5, '923, 55ff. In fact rolled steel production reached 75 per cent ofthe '9'3 level in '9 26 / 27. 53 See Rees ('982), 208; the '9'3 level on railways and inland waterways was in fact already reached by '926/27 (see Nar. kh. ('932), pp. xlii-xliii). These and other early draft plans are discussed in Strumilin ('958(,)), 273-307 (originally published in PKh, '2, '930, 24,-62), and in Zaleski (Chapel HilI, '97')' 40-7· 54 EZh, May 27, '925 (F. Portenkov); production in '935 was '2.5 million tons. 55 See estimates by Wheatcroft in Davies, ed. ('988); in '926 gross agricultural production reached 112 per cent ofthe '90g-'3 and 102 per cent ofthe '9'3 level; the equivalent percentages for net production were 109 and 98. 56 For industry, see p. ,6 below. For transport, see Davies, ed. ('988) (Westwood). For trade, Gosplan estimated net income at ',350 million rubles in '9'3 and 2,734 million rubles in '926/27, both estimates in current prices (the '9'3 estimate is in EO, 9, '929, "7 (Gukhman), the '926/27 estimate in KTs . .. na 1928/29 (1929), 436); on the basis ofthe price index, these amounts are roughly equal in real terms, but in view of the decline in the number of trading units and trading personnel between '9'3 and '926/27 (see pp. 3'-2 below), some scepticism is in order. 57 EO, 9, '929, "7; KTs ... na 1928/29 ('929); these figures are in '9'3

Continuiry and Change These data for the major sectors of the economy indicate that total national income as measured by sector of origin is likely to have been approximately the same in 1926/27 as in 1913, for a population which had increased by 5'/2 per cent, from 139'3 to I47"0 million persons. 58 The economy of the mid-1920S was restored with little substantial change in the stock of basic capital. While much capital repair took place in the early 1920S, there was very litde net capital investment. Even in 1926/27 net capital investment in the economy as a whole had not fully regained the 1913 level. Net capital investment (including the value of new equipment and net additions to livestock as weil as construction) amounted to roughly 1,700 million rubles in 1926/27, as compared with 1,890 million rubles in 1913.59

In spite of the continmtles between the pre-revolutionary and post-revolutionary economies, the social transformation following the Bolshevik revolution, together with the establishment of a one-party state dedicated to industrialisation and the construction of a socialist society, had brought about profound changes in the economic structure and the economic mechanism. The pages which follow trace the impact ofthe consequences ofwar, revolution and civil war, and of the first phase of planned industrialisation, on the structure of industry, on labour productivity, and on internal and foreign trade; a final subprices. Falkus estimates construction in '9'3 at 878 million rubles (Economica, 35 ('968)). For the number ofbuilding workers, wh ich also declined, see the hazardous suggestions based on Gukhman's estimate for '9'3 and on the population census for '926 in Davies, ed. ('988) (Perrie and Davies). SR In his careful study Russian National Income, 1885-1913 ('982), "2-'3, Gregory estimates that even in '928 national income measured by end-use was still some 5-'0 per cent below the '9'3 level; taking the average '90g--'3 harvest instead of the '9'3 harvest, the equivalent figure would be 2-7 per cent below the '19'3' level. For the view that Gregory somewhat underestimates the extent ofrecovery, see EHR, 2nd series, xxxix ('986),267-70 (Wheatcroft, Davies and Cooper). For population figures, see Arkheograjicheskii e