History of communism in the Soviet Union

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/History_of_communism_in_the_Soviet_Union 

 

In Russia, efforts to build communism began after Tsar Nicholas II lost his power during the February Revolution, which started in 1917, and ended with the dissolution of the USSR in 1991. The Provisional Government was established under the liberal and social-democratic government; however, the Bolsheviks refused to accept the government and revolted in October 1917, taking control of Russia. Vladimir Lenin, their leader, rose to power and governed between 1917 and 1924.

The Communist Party of the Russian Federation remains the second largest political party after United Russia.

Russian Revolution

Main article: Russian Revolution

February Revolution

Main article: February Revolution

The First World War placed an unbearable strain on Russia's weak government and economy, resulting in mass shortages and hunger. In the meantime, the mismanagement and failures of the war turned the people and importantly, the soldiers against the Tsar, whose decision to take personal command of the army seemed to make him personally responsible for the defeats. In February 1917, the Tsar first lost control of the streets, then of the soldiers, and finally of the Duma, resulting in his forced abdication on 2 March 1917.

On 26 February 1917, citywide strikes spread throughout Petrograd. Dozens of demonstrators were killed by troops. The crowds grew hostile, so the soldiers had to decide which side they were on. As the situation became critical, soldiers refused to work for the Tsar. On 26 February 1917, The Army abandoned the Tsar; the soldiers mutinied and refused to put down the riots.

By 27 February 1917, the workers were in control of the entire city.

October Revolution

Part of a series on
Leninism

Main article: October Revolution

On 24–25 October 1917, the Bolsheviks and Left Socialist Revolutionaries organized a revolution, occupying government buildings, telegraph stations, and other strategic points. On 24 October 1917, the Red Guards took over bridges and telephone exchanges. On 25 and 26 October 1917, the Red Guards took over banks, government buildings, and railways stations. The cruiser Aurora fired blank shots at the Winter Palace signalling the start of the revolution. That night (9:40 PM), the Red Guards took over the Winter Palace and arrested the Provisional Government.

On 27 October 1917, Lenin proclaimed that all power now belonged to the Soviets of Workers', Soldiers' and Peasants' Deputies.

The Civil War

Main article: War communism

After Vladimir Lenin and Joseph Stalin took over the Soviet Union, many people still opposed the communist party. This led to the Civil War between the White Army and Red Army. The White Army included the opposition party, while the Red Army included the armed forces of the government and people that supported Vladimir Lenin. The Civil War resulted in the deaths of 10–30 million people.

Soviet Socialism

Main article: Socialism in one country

For broader coverage of this topic, see Dictatorship of the proletariat.

Collapse of the Soviet Union

Main article: Communist Party of the Soviet Union § Gorbachev and the party's demise (1985–91)

In 1991, Mikhail Gorbachev removed the constitutional role of the Communist Party. Because of this it allowed non-communists to take power. As a result, Boris Yeltsin then became the first president of Russia. Russian President Boris Yeltsin would ban the CPSU in the aftermath of the failed coup attempt. The Communist Party of the Russian Federation(CPRF) would be founded at the Second Extraordinary Congress of Russian Communists on 14 February 1993 as the successor organization of the Communist Party of the Russian Soviet Federative Socialist Republic (CPRSFSR). The CPRF was the ruling party in the State Duma, the lower house of the Russian Federal Assembly from 1998 to 1999. It is the second-largest political party in Russia after United Russia.

Modern Russia

Soviet nostalgia remains prevalent amongst the Russian populace. Per the Levada Center in 2018, 66 percent of Russians said they regretted the Soviet break-up.

Nostalgia for the Soviet Union

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Nostalgia_for_the_Soviet_Union 

 

Belarusian Honor Guard carrying the national flags of Belarus and the Soviet Union, as well as the Soviet victory banner, in Minsk, 2019.

 

Advertisement for the 2020 Moscow Victory Day Parade.

 

Protest against Ukrainian decommunization policies in Donetsk, 2014. The red banner reads, "Our homeland USSR".

The social phenomenon of nostalgia for the era of the Soviet Union (Russian: Ностальгия по СССР, romanized: Nostal'giya po SSSR), can include its politics, its society, its culture and cultural artifacts, its superpower status, or simply its aesthetics.

Modern cultural expressions of Soviet nostalgia also emphasize the former Soviet Union's scientific and technological achievements, particularly during the Space Age, and value the Soviet past for its futuristic aspirations.

An analysis by the Harvard Political Review found that sociological explanations for Soviet nostalgia vary from "reminiscing about the USSR's global superpower status" to the "loss of financial, political and social stability" which accompanied the Soviet dissolution in many post-Soviet states.

Polling history

Since the dissolution of the Soviet Union, annual polling by the Levada Center has shown that over 50% of Russia's population regretted this event, with the only exception to this being in the year 2012 when support for the Soviet Union dipped below 50 percent. A 2018 poll showed that 66% of Russians regretted the fall of the Soviet Union, setting a 15-year record, and the majority of these regretting opinions came from people older than 55. In 2020, polls conducted by the Levada Center found that 75% of Russians agreed that the Soviet era was the greatest era in their country's history.

According to the New Russia Barometer (NRB) polls by the Centre for the Study of Public Policy, 50% of Russian respondents reported a positive impression of the Soviet Union in 1991. This increased to about 75% of NRB respondents in 2000, dropping slightly to 71% in 2009. Throughout the 2000s, an average of 32% of NRB respondents supported the restoration of the Soviet Union.

In 1991, a poll conducted by Pew Research Center found that 82% of Ukrainians, 61% of Russians and 56% of Lithuanians believed the standard of living had fallen since the Soviet dissolution, respectively. It also found that a further 34% of Ukrainians, 42% of Russians and 45% of Lithuanians approved of the change from the Soviet command economy to a market economy.

A poll in 2013 conducted by Gallup found that a relative majority of respondents in Armenia, Kyrgyzstan, Ukraine, Russia, Tajikistan, Moldova and Belarus agreed that the Soviet dissolution harmed rather than benefited their countries. Additionally, 33% of Georgians and 31% of Azerbaijanis also agreed with this sentiment. Only 24% of respondents in the post-Soviet states surveyed by Gallup agreed that the Soviet dissolution benefited their countries. A 2012 survey commissioned by Carnegie Endowment found that 38% of Armenians believed that their country "will always have need of a leader like [Joseph] Stalin".

In 2017, another poll conducted by Pew Research Center found that 69% of Russians, 54% of Belarusians, 70% of Moldovans and 79% of Armenians claimed that the breakup of the Soviet Union was a bad thing for their country. With the exception of Estonia, the percentage of people who agreed with the statement was higher amongst people aged 35 or over. 57% of Georgians and 58% of Russians also said that Joseph Stalin played a very/mostly positive role in history.

Polling cited by the Harvard Political Review in 2022 showed that 66% of Armenians, 61% of Kyrgyz, 56% of Tajikistanis, and 42% of Moldovans regretted the dissolution of the Soviet Union.

Sociology

Wall advertisement at the "Soviet Times" pub in Moscow

According to the Levada Center's polls, the primary reasons cited for Soviet nostalgia are the advantages of the shared economic union between the Soviet republics, including perceived financial stability. This was referenced by up to 53% of respondents in 2016. At least 43% also lamented the loss of the Soviet Union's global political superpower status. About 31% cited the loss of social trust and capital. The remainder of the respondents cited a mix of reasons ranging from practical travel difficulties to a sense of national displacement. A 2019 poll found that 59% of Russians felt that the Soviet government "took care of ordinary people". When asked to name positive associations with the Soviet Union in 2020, 16% of the Levada Center's respondents pointed to "future stability and confidence", 15% said they associated it with "a good life in the country", and 11% said they associated it with personal memories from their childhood or youth.

LENINGRAD sign at the Izhory station [ru] on the outskirts of Saint Petersburg.
The sign was added in 2020.

Levada Center sociologist Karina Pipiya observed that the economic factors played the most significant role in rising nostalgia for the Soviet Union, as opposed to loss of prestige or national identity. Pipiya also suggested a secondary factor was that a majority of Russians "regret that there used to be more social justice and that the government worked for the people and that it was better in terms of care for citizens and paternalistic expectations."

Gallup observed in its data review that "For many, life has not been easy since the Soviet Union dissolved in December 1991. Residents there have lived through wars, revolutions, coups, territorial disputes, and multiple economic collapses...Older residents...whose safety nets, such as guaranteed pensions and free healthcare, largely disappeared when the union dissolved are more likely to say the breakup harmed their countries."

In her examination of identities in post-Soviet Ukraine, historian Catherine Wanner concurs that the loss or reduction of social benefits has played a major role in Soviet nostalgia among older residents. Describing elderly female pensioners who expressed nostalgia for the Soviet era, Wanner writes:

They had relied all their lives on the ruling [Communist] Party structure and hierarchy...and with it now absent, they have no recourse of their own...to stave off hardship. As meager as pensions and salaries are, they become indispensable when they are the sole source of income. Once again, these women do not have the networks and the contacts to overcome logistical obstacles to securing alternative employment. Without the protection of the Soviet state and its roster of cradle-to-grave allotments, in this new social Darwinian post-Soviet world without vital blat connections they are left highly vulnerable to poverty. They blame their incomprehensible woes and the elusiveness of a solution on the breakdown of the Soviet state. They recognize that recreating the Soviet Union and the economic and political systems that characterized it is an option that exists only in their dreams. But it is one that exerts tremendous nostalgic appeal.

An analysis of Soviet nostalgia in the Harvard Political Review found that the "the rapid transition from a Soviet-type planned economy to neoliberal capitalism has imposed a high financial burden on the population of these fifteen newly independent post-Soviet states. This period brought a sharp decline of living standards, a reduction in social benefits, and a rise in unemployment and poverty rates. The frustration of ordinary citizens only grew, as they witnessed the creation of an oligarchic elite that was getting richer while everyone else was becoming poorer. Under these circumstances, nostalgia for the Soviet Union is a direct consequence of people’s disappointment with their countries’ political and economic performance."

Many of the ex-Soviet republics suffered economic collapse upon the dissolution, resulting in lowered living standards, increased mortality rates, devaluation of national currencies, and rising income inequality. Chaotic neoliberal market reforms, privatization, and austerity measures urged by Western economic advisers, including Lawrence Summers, and the International Monetary Fund (IMF) were often blamed by the populace of the former Soviet states for exasperating the problem. Between 1991 and 1994, a third of Russia's population was plunged into poverty, and between 1994 and 1998 this figure increased to over half the population. Most of the Soviet state enterprises were acquired and liquidated by Russian business oligarchs as part of the privatization campaign, which rendered large segments of the ex-Soviet workforce unemployed and impoverished. Capital gains made in post-Soviet Russia during the 1990s were mostly concentrated in the hands of oligarchs who benefited from the acquisition of state assets, while the majority of the population suffered severe economic hardship.

According to Kristen Ghodsee, a researcher on post-communist Eastern Europe:

Only by examining how the quotidian aspects of daily life were affected by great social, political and economic changes can we make sense of the desire for this collectively imagined, more egalitarian past. Nobody wants to revive 20th century totalitarianism. But nostalgia for communism has become a common language through which ordinary men and women express disappointment with the shortcomings of parliamentary democracy and neoliberal capitalism today.

Abandoned Soviet factory in Kyiv. The USSR's collapse was accompanied by deindustrialization and mass unemployment, feeding Soviet nostalgia in the working class.

Among the working poor, Soviet nostalgia is often directly linked to the guarantee of state employment and regular salaries. The collapse of Soviet state enterprises and contraction of the public sector after the dissolution resulted in widespread unemployment. With the disappearance of the Soviet industrial complex, as much as half the working class of the former USSR lost their jobs during the 1990s. One study of rural Georgians in the early 2000s found that the vast majority yearned for a return to the security of their public sector jobs, even those that did not favor a return to the centrally planned economy. They attributed their poverty to the demise of the Soviet state, which in turn resulted in the widespread association of stability with the Soviet era and lack of confidence in the post-Soviet governments. A related study of working class Kyrgyz women in the same time frame found that most remembered the Soviet era primarily for its low levels of unemployment.

Security historian Matthew Sussex wrote the 1990s were a period of "social and economic malaise experienced across the former USSR". Upon the Soviet dissolution, "rampant inflation within many newly independent states quickly became coupled to the rise of financial oligarchs...[while] uneven transitions to democracy and the institutionalization of organized crime became the norm." Furthermore, Sussex surmised, the post-Soviet space became politically unstable and prone to armed conflict as a result of the dissolution. With the collapse of the Soviet military and security organs, a security vacuum emerged which was quickly filled by extremist political and religious factions as well as organized crime, further exasperated by tensions between the various post-Soviet states over the ownership of the defunct USSR's energy infrastructure. Sussex claimed that "during its existence the USSR enforced order upon what are today recognized as numerous ethnic, religious, and geostrategic trouble spots," and "although few observers lament the passing of the USSR, even fewer would argue that the area of its former geographical footprint is more secure today than it was under communism." In Armenia, where the dissolution was followed by the Nagorno-Karabakh conflict with neighboring Azerbaijan, Soviet nostalgia was closely tied to a longing for a return to peace and public order.

In a 2020 editorial, Russian-born American journalist Andre Vltchek suggested that Soviet nostalgia may also be closely tied to aspects of Soviet society and public life—for example, the Soviet Union had an extensive public works program, heavily subsidized public facilities and transportation, high levels of civic engagement, and support for the arts. Without state subsidies and central planning, these aspects of society disappeared or became severely diminished in the post-Soviet space. Vltchek emphasized the loss or decay of Soviet-era public amenities and cultural spaces which followed the dissolution.

Anthropologist Alexei Yurchak described modern Soviet nostalgia as "a complex post-Soviet construct" based on the "longing for the very real humane values, ethics, friendships, and creative possibilities that the reality of socialism afforded – often in spite of the state's proclaimed goals – and that were as irreducibly part of the everyday life of socialism as were the feelings of dullness and alienation." Yurchak observed that localized community bonds and social capital were much stronger during the Soviet era due to various practical realities, and theorized that this was an "undeniable constitutive part" of nostalgia as expressed by the last Soviet generation.

Cultural impact

A bus commemorating Victory Day, Saint Petersburg, 2010. The text reads "Eternal glory to the victors" next to a portrait of Joseph Stalin and a Saint George's ribbon.

In 2004, the television channel Nostalgiya, its logo featuring stylized hammer-and-sickle imagery, was launched in Russia.

Soviet holidays

Main article: Victory Day (9 May)

During the 1990s, most key holidays linked to the national and ideological charter of the Soviet Union were eliminated in the former Soviet republics, with the exception of Victory Day, which commemorates the Soviet Union's victory over Nazi Germany in World War II (also known in the Soviet and Russian space as the Great Patriotic War). The commemorations of Victory Day have not changed radically in most of the post-Soviet space since 1991. Catherine Wanner asserts that Victory Day commemorations are a vehicle for Soviet nostalgia, as they "kept alive a mythology of Soviet grandeur, of solidarity among the Sovietskii narod, and of a sense of self as citizen of a superpower state".

Russian Victory Day parades are organized annually in most cities, with the central military parade taking place in Moscow (just as during the Soviet times). Additionally, the recently-introduced Immortal Regiment on May 9 sees millions of Russians carry the portraits of their relatives who fought in the war. Russia also retains other Soviet holidays, such as the Defender of the Fatherland Day (February 23), International Women's Day (March 8), and International Workers' Day.

Political impact

Neo-Soviet politics

Main article: Neo-Sovietism

Writing in the Harvard Political Review, analysist Mihaela Esanu stated that Soviet nostalgia has contributed to a revival in neo-Soviet politics. Yearning for the Soviet past in various post-Soviet republics, Esanu argued, has contributed greatly to the rise of neo-Soviet political factions committed to increasing economic, military, and political ties with Russia, the historic center of the power in the USSR, as opposed to the West. Esanu argued that appeals to Soviet nostalgia are especially prominent with pro-Russian parties in Belarus and Moldova.

Journalist Pamela Druckerman asserts that another aspect of neo-Sovietism is support for the central role of the state in civil society, political life, and the media. Druckerman claimed that neo-Soviet policies resulted in a return to statist philosophy in the Russian government.

Communist Party of the Russian Federation

Supporters of the Russian Communist Party demonstrate in Moscow, 2012.

Gennady Zyuganov, leader of the Communist Party of the Russian Federation, is a harsh critic of President Vladimir Putin, but states that his recipes for Russia's future are true to his Soviet roots. Zyuganov hopes to renationalise all major industries and he believes the USSR was "the most humane state in human history". On 29 November 2008, in his speech before the 13th Party Congress, Zyuganov made these remarks about the state that Russia under Putin was in:

Objectively, Russia's position remains complicated, not to say dismal. The population is dying out. Thanks to the "heroic efforts" of the Yeltsinites the country has lost 5 out of the 22 million square kilometers of its historical territory. Russia has lost half of its production capacity and has yet to reach the 1990 level of output. Our country is facing three mortal dangers: de-industrialization, de-population and mental debilitation. The ruling group has neither notable successes to boast of, nor a clear plan of action. All its activities are geared to a single goal: to stay in power at all costs. Until recently it has been able to keep in power due to the "windfall" high world prices for energy. Its social support rests on the notorious "vertical power structure" which is another way of saying intimidation and blackmail of the broad social strata and the handouts that power chips off the oil and gas pie and throws out to the population in crumbs, especially on the eve of elections.

Communist protesters with a sign portraying an "order of dismissal" for Vladimir Putin for "betrayal of the national interests", Moscow, 1 May 2012.

Under the present conditions in the Russian Federation, the CPRF calls for the following proposals:

• Stop the extinction of the country, restore benefits for large families, reconstruct the network of public kindergartens and provide housing for young families.
• Nationalise natural resources in Russia and the strategic sectors of the economy; revenues in these industries are to be used in the interests of all citizens.
• Return to Russia from foreign banks the state financial reserves and use them for economic and social development.
• Break the system of total fraud in the elections.
• Create a truly independent judiciary.
• Carry out an immediate package of measures to combat poverty and introduce price controls on essential goods.
• Not raise the retirement age.
• Restore government responsibility for housing and utilities, establish fees for municipal services in an amount not more than 10% of family income, stop the eviction of people to the streets and expand public housing.
• Increase funding for science and scientists to provide decent wages and all the necessary research.
• Restore the highest standards of universal and free secondary and higher education that existed during the Soviet era.
• Ensure the availability and quality of health care.
• Vigorously develop high-tech manufacturing.
• Ensure the food and environmental security of the country and support the large collective farms for the production and processing of agricultural products.
• Prioritise domestic debt over foreign debt
• Introduce progressive taxation; low-income citizens will be exempt from paying taxes.
• Create conditions for development of small and medium enterprises.
• Ensure the accessibility of cultural goods, stop the commercialisation of culture, defend Russian culture as the foundation of the spiritual unity of multinational Russia, the national culture of all citizens of the country.
• Stop the slandering of the Russian and Soviet history.
• Take drastic measures to suppress corruption and crime.
• Strengthen national defense and expand social guarantees to servicemen and law enforcement officials.
• Ensure the territorial integrity of Russia and the protection of compatriots abroad.
• Institute a foreign policy based on mutual respect of countries and peoples to facilitate the voluntary restoration of the Union of States.

Russo-Ukrainian War

Main article: Soviet imagery during the Russo-Ukrainian War

 

The Victory Banner and a Z symbol on a Russian military vehicle in Kazan.

 

The Soviet-era Victory Banner has been flown in many occupied towns and cities in Ukraine.

The Russian government has taken advantage of such nostalgia by extensively relying on Soviet imagery to support its war effort during the 2022 invasion of Ukraine, despite United Russia and Vladimir Putin's general anti-communist stance.

Following the invasion, many Russian tanks were shown flying the old flag of the Soviet Union alongside the pro-war Z military symbol. American political scientist Mark Beissinger told France 24 that the purpose of using these symbols was not necessarily to do with the ideology of communism, but rather a desire to re-establish "Russian domination over Ukraine", noting that the use of Soviet symbols in most post-Soviet states (with the exception of Russia and Belarus) is often seen as a deliberate provocative act rather than actually wanting to establish communism.

In addition to symbolism, the Bolshevism of the Russian forces manifests itself in their toponymic policy: the occupiers everywhere "return" their Soviet names to the captured settlements and cities (as well as to those they want to capture). This is officially motivated by the desire to restore historical justice. In fact, as a rule, anti-historical names given by the Bolsheviks in the 1920s and 1930s are restored instead of either returned historical (pre-revolutionary) names or Ukrainianized names obtained as part of the company for the decommunization of the country that intensified since 2014. Examples: Artemivsk instead of Bakhmut, Krasny (Red) Liman instead of Liman, Volodarske instead of Nikolske, Stakhanov instead of Kadiivka, etc.

Events

Artwork of the "Grandmother with a red flag", Anna Ivanovna, used in Russian propaganda.

In April 2022, a video of a Ukrainian woman named Anna Ivanovna greeting Ukrainian soldiers at her home near Dvorichna, whom she thought to be Russian, with a Soviet flag went viral on pro-Russian social media, and featured on Russian state-controlled media. The woman said that she and her husband had "waited, prayed for them, for Putin and all the people". The Ukrainian soldiers gave her food, but went on to mock her and trample on her Soviet flag, after which she said "my parents died for that flag in World War Two". This was used by Russian propagandists to prove that the Russian invasion had popular support, in spite of the fact that most Ukrainians – even in Russian-speaking regions – opposed the invasion. In Russia, murals, postcards, street art, billboards, chevrons and stickers depicting the woman have been created. In Russian-controlled Mariupol, a statue of her was unveiled. She has been nicknamed "Grandmother (Russian: бабушка, romanized: babushka) Z", and the "Grandmother with a red flag" by Russians. Sergey Kiriyenko, a senior Russian politician, referred to her as "Grandma Anya".

Anna told the Ukrayinska Pravda that she met the soldiers with a Soviet flag not out of sympathy, but because she felt the need to reconcile with them so that they would not "destroy" the village and Ukraine after her house was shelled, but now feels like a "traitor" due to the way her image has been used by Russia. According to Ukrainian journalists, Anna and her son later fled to Kharkiv after their house was being shelled by the Russians.

On May 9, 2022, Vladimir Putin utilized Victory Day festivities and military parades to further justify his cause. As his response to the ongoing conflict during Victory Day, he stated "Russia has given a preemptive response to aggression. It was forced, timely and the only correct decision." He avoided directly mentioning the war and even refrained from using the word "Ukraine" in his response to the conflict during the Victory Day parade. Putin also drew parallels between the current Ukrainian government and that of Nazi Germany, praising Russia's military, saying that present troops were "fighting for the motherland, for her future, and so that nobody forgets the lessons of World War II".

On August 26, 2022, the Soviet Victory banner was hoisted over the village Pisky, a fortified area just off Donetsk whose capture is strategic for Russia, further pushing Ukrainian forces away from Donbas.

Additionally, many of Lenin statues, which had been taken down by Ukrainian activists in the preceding years, were re-erected by Russian occupiers in Russian-controlled areas.

Five-year plans of the Soviet Union

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Five-year_plans_of_the_Soviet_Union 

Politics of the Soviet Union

The five-year plans for the development of the national economy of the Union of Soviet Socialist Republics (USSR) (Russian: Пятилетние планы развития народного хозяйства СССР, Pyatiletniye plany razvitiya narodnogo khozyaystva SSSR) consisted of a series of nationwide centralized economic plans in the Soviet Union, beginning in the late 1920s. The Soviet state planning committee Gosplan developed these plans based on the theory of the productive forces that formed part of the ideology of the Communist Party for development of the Soviet economy. Fulfilling the current plan became the watchword of Soviet bureaucracy.

Several Soviet five-year plans did not take up the full period of time assigned to them: some were pronounced successfully completed earlier than expected, some took much longer than expected, and others failed altogether and had to be abandoned. Altogether, Gosplan launched thirteen five-year plans. The initial five-year plans aimed to achieve rapid industrialization in the Soviet Union and thus placed a major focus on heavy industry. The first five-year plan, accepted in 1928 for the period from 1929 to 1933, finished one year early. The last five-year plan, for the period from 1991 to 1995, was not completed, since the Soviet Union was dissolved in 1991.

Other communist states, including the People's Republic of China, and to a lesser extent, the Republic of Indonesia, implemented a process of using five-year plans as focal points for economic and societal development.

Background

Part of a series on
Soviet economics

Joseph Stalin inherited and upheld the New Economic Policy (NEP) from Vladimir Lenin. In 1921, Lenin had persuaded the 10th Party Congress to approve the NEP as a replacement for the War Communism that had been set up during the Russian Civil War. All land had been declared nationalized by the Decree on Land, finalized in the 1922 Land Code, which also set collectivization as the long-term goal. Although the peasants had been allowed to work the land they held, the production surplus was bought by the state (on the state's terms), and the peasants cut production; whereupon food was requisitioned. Money gradually came to be replaced by barter and a system of coupons.

When the war ended, the NEP took over from War Communism. During this time, the state had controlled all large enterprises (i.e. factories, mines, railways) as well as enterprises of medium size, but small private enterprises, employing fewer than 20 people, were allowed. The requisitioning of farm produce was replaced by a tax system (a fixed proportion of the crop), and the peasants were free to sell their surplus (at a state-regulated price) - although they were encouraged to join state farms (Sovkhozes, set up on land expropriated from nobles after the 1917 revolution), in which they worked for a fixed wage like workers in a factory. The money came back into use, with new banknotes being issued and backed by gold.

The NEP had been Lenin's response to a crisis. In 1920, industrial production had been 13% and agricultural production 20% of the 1913 figures. Between February 21 and March 17, 1921, the sailors in Kronstadt had mutinied. In addition, the Russian Civil War, which had been the main reason for the introduction of War Communism, had virtually been won; so controls could be relaxed.

In the 1920s, there was a great debate between Bukharin, Tomsky and Rykov on the one hand, and Trotsky, Zinoviev and Kamenev on the other. The former group considered that the NEP provided sufficient state control of the economy and sufficiently rapid development, while the latter argued in favor of more rapid development and greater state control, taking the view, among other things, that profits should be shared among all people, and not just among a privileged few. In 1925, at the 14th Party Congress, Stalin, as he usually did in the early days, stayed in the background but sided with the Bukharin group. However, later, in 1927, he changed sides, supporting those in favor of a new course, with greater state control.

Plans

Statement from the Newspaper Pereslavl Week. The text reads:

"Plan is law, fulfillment is duty, over-fulfillment is honor!". Here "duty" can also be interpreted as "obligation."

Each five-year plan dealt with all aspects of development: capital goods (those used to produce other goods, like factories and machinery), consumer goods (e.g. chairs, carpets, and irons), agriculture, transportation, communications, health, education, and welfare. However, the emphasis varied from plan to plan, although generally, the emphasis was on power (electricity), capital goods, and agriculture. There were base and optimum targets. Efforts were made, especially in the third plan, to move industry eastward to make it safer from attack during World War II. Soviet planners declared a need for "constant struggle, struggle, and struggle" to achieve a Communist society. These five-year plans outlined programs for huge increases in the output of industrial goods. Stalin warned that without an end to economic backwardness "the advanced countries...will crush us."

First plan, 1928–1932

Main article: First five-year plan

 

Large notice board with slogans about the 5-Year Plan in Moscow, Soviet Union (c., 1931) by a traveler DeCou, Branson [cs]. It reads like it's made by a state-run paper «Economics and Life» (Russian: Экономика и жизнь)

From 1928 to 1940, the number of Soviet workers in industry, construction, and transport grew from 4.6  million to 12.6  million and factory output soared. Stalin's first five-year plan helped make the USSR a leading industrial nation.

During this period, the first purges were initiated targeting many people working for Gosplan. These included Vladimir Bazarov, the 1931 Menshevik Trial (centered on Vladimir Groman).

Stalin announced the start of the first five-year plan for industrialization on October 1, 1928, and it lasted until December 31, 1932. Stalin described it as a new revolution from above. When this plan began, the USSR was fifth in industrialization, and with the first five-year plan moved up to second, with only the United States in first.

This plan met industrial targets in less time than originally predicted. The production goals were increased by a reported 50% during the initial deliberation of industrial targets. Much of the emphasis was placed on heavy industry. Approximately 86% of all industrial investments during this time went directly to heavy industry. Officially, the first five-year plan for the industry was fulfilled to the extent of 93.7% in just four years and three months. The means of production in regards to heavy industry exceeded the quota, registering 103.4%. The light, or consumer goods, the industry reached up to 84.9% of its assigned quota. However, there is some speculation regarding the legitimacy of these numbers as the nature of Soviet statistics is notoriously misleading or exaggerated. Another issue was that quality was sacrificed in order to achieve quantity, and production results generated wildly varied items. Consequently, rationing was implemented to solve chronic food and supply shortages.

Propaganda used before, during, and after the first five-year plan compared the industry to battle. This was highly successful. They used terms such as "fronts," "campaigns," and "breakthroughs," while at the same time, workers were forced to work harder than ever before and were organized into "shock troops," and those who rebelled or failed to keep up with their work were treated as traitors. The posters and flyers used to promote and advertise the plan were also reminiscent of wartime propaganda. A popular military metaphor emerged from the economic success of the first five-year plan: "There are no fortresses Bolsheviks cannot storm." Stalin especially liked this.

The first five-year plan was not just about economics. This plan was a revolution that intended to transform all aspects of society. The way of life for the majority of the people changed drastically during this revolutionary time. The plan was also referred to as the "Great Turn". Individual peasant farming gave way to a more efficient system of collective farming. Peasant property and entire villages were incorporated into the state economy which had its own market forces.

There was, however, strong resistance to this at first. The peasants led an all-out attack to protect individual farming; however, Stalin rightly did not see the peasants as a threat. Despite being the largest segment of the population they had no real strength and thus could pose no serious threat to the state. By the time this was done, the collectivization plan resembled a very bloody military campaign against the peasant's traditional lifestyle. This social transformation along with the incredible economic boom occurred at the same time that the entire Soviet system developed its definitive form in the decade of 1930.

Many scholars believe that a few other important factors, such as foreign policy and internal security, went into the execution of the five-year plan. While ideology and economics were a major part, preparation for the upcoming war also affected all of the major parts of the five-year plan. The war effort really picked up in 1933 when Hitler came to power in Germany. The stress this caused on internal security and control in the five-year plan is difficult to document.

While most of the figures were overstated, Stalin was able to announce truthfully that the plan had been achieved ahead of schedule; however, the many investments made to the west were excluded. While many factories were built and industrial production did increase exponentially, they were not close to reaching their target numbers.

While there was a great success, there were also many problems with not just the plan itself, but how quickly it was completed. Its approach to industrialization was very inefficient and extreme amounts of resources were put into construction that, in many cases, was never completed. These resources were also put into equipment that was never used, or not even needed in the first place. Many of the consumer goods produced during this time were of such low quality that they could never be used and were wasted.

A major event during the first Five Year Plan was the famine of 1932–33. The famine peaked during the winter of '32–'33 claiming the lives of an estimated 3.3 to 7  million people, while millions more were permanently disabled. The famine was the direct result of the industrialization and collectivization implemented by the first Five-Year-Plan. Many of the peasants who were suffering from the famine began to sabotage the fulfillment of their obligations to the state and would, as often as they could, stash away stores of food. Although Stalin was aware of this, he placed the blame for the hostility onto the peasants, saying that they had declared war against the Soviet government.

Second plan, 1932–1937

Further information: Soviet anti-religious legislation and USSR anti-religious campaign (1928–1941)

Because of the success made by the first plan, Stalin did not hesitate with going ahead with the second five-year plan in 1932, although the official start date for the plan was 1933. The second five-year plan gave heavy industry top priority, putting the Soviet Union not far behind Germany as one of the major steel-producing countries of the world. Further improvements were made in communications, especially railways, which became faster and more reliable. As was the case with the other five-year plans, the second was not as successful, failing to reach the recommended production levels in such areas as the coal and oil industries. The second plan employed incentives as well as punishments and the targets were eased as a reward for the first plan being finished ahead of schedule in only four years. With the introduction of childcare, mothers were encouraged to work to aid in the plan's success. By 1937 the tolkachi emerged occupying a key position mediating between the enterprises and the commissariat.

Consistent with the Soviet doctrine of state atheism (gosateizm), this five-year plan from 1932 to 1937 also included the liquidation of houses of worship, with the goals of closing churches between 1932–1933 and the elimination of clergy by 1935–1936.

Third plan, 1938–1941

The third five-year plan ran for only 3½ years, up to June 1941, when Germany invaded the Soviet Union during the Second World War. As war approached, more resources were put into developing armaments, tanks, and weapons, as well as constructing additional military factories east of the Ural mountains.

The first two years of the third five-year plan proved to be even more of a disappointment in terms of proclaimed production goals. Still, a reported 12% to 13% rate of annual industrial growth was attained in the Soviet Union during the 1930s. The plan had intended to focus on consumer goods. The Soviet Union mainly contributed resources to the development of weapons and constructed additional military factories as needed. By 1952, industrial production was nearly double the 1941 level ("five-year plans"). Stalin's five-year plans helped transform the Soviet Union from an untrained society of peasants to an advanced industrial economy.

Fourth and fifth plans, 1945–1955

Stalin in 1945 promised that the USSR would be the leading industrial power by 1960.

The USSR at this stage had been devastated by the war. Officially, 98,000 collective farms had been ransacked and ruined, with the loss of 137,000 tractors, 49,000 combine harvesters, 7  million horses, 17  million cattle, 20  million pigs, 27  million sheep; 25% of all capital equipment had been destroyed in 35,000 plants and factories; 6  million buildings, including 40,000 hospitals, in 70,666 villages and 4,710 towns (40% urban housing) were destroyed, leaving 25  million homeless; about 40% of railway tracks had been destroyed; officially 7.5  million servicemen died, plus 6  million civilians, but perhaps 20  million in all died. In 1945, mining and metallurgy were at 40% of the 1940 levels, electric power was down to 52%, pig-iron 26% and steel 45%; food production was 60% of the 1940 level. After Poland, the USSR had been the hardest hit by the war. Reconstruction was impeded by a chronic labor shortage due to the enormous number of Soviet casualties in the war (between 20 and 30  million). Moreover, 1946 was the driest year since 1891, and the harvest was poor.

The USA and USSR were unable to agree on the terms of a US loan to aid reconstruction, and this was a contributing factor in the rapid escalation of the Cold War. However, the USSR did gain reparations from Germany and made Eastern European countries make payments in return for the Soviets having liberated them from the Nazis. In 1949, the Council for Mutual Economic Assistance (Comecon) was set up, linking the Eastern bloc countries economically. One-third of the fourth plan's capital expenditure was spent on Ukraine, which was important agriculturally and industrially, and which had been one of the areas most devastated by war.

Sixth plan, 1956–1958

The sixth five-year plan was launched in 1956 during a period of dual leadership under Nikita Khrushchev and Nikolai Bulganin, but it was abandoned after two years due to over-optimistic targets.

Seventh plan, 1959–1965

Grain to increase from 8.5 milliard poods (139 million tonnes) in 1958 to 10–11 milliard poods (~172 million tonnes) by 1965

 

Meat to increase from 7.9 million tonnes in 1958 to 16 million tonnes by 1965

The seven-year plan marked by 1959 postage stamps

Unlike other planning periods, 1959 saw the announcement of a seven-year plan (Russian: семилетка, semiletka), approved by the 21st Congress of the Communist Party of the Soviet Union in 1959. This was merged into a seventh five-year plan in 1961, which was launched with the slogan "catch up and overtake the USA by 1970." The plan saw a slight shift away from heavy industry into chemicals, consumer goods, and natural resources.

The plan also intended to establish 18 new institutes by working with the Ukrainian Academy of Sciences.

Eighth plan, 1966–1970

Main article: Eighth five-year plan (Soviet Union)

The eighth plan led to the amount of grain exported being doubled.

Ninth plan, 1971–1975

Main article: Ninth five-year plan (Soviet Union)

About 14.5 million tonnes of grain were imported by the USSR. Détente and improving relations between the Soviet Union and the United States allowed for more trade. The plan's focus was primarily on increasing the number of consumer goods in the economy so as to improve Soviet standards of living. While largely failing at that objective it managed to significantly improve Soviet computer technology.

Tenth plan, 1976–1980

Main article: Tenth five-year plan (Soviet Union)

Leonid Brezhnev declared the slogan "Plan of quality and efficiency" for this period.

Eleventh plan, 1981–1985

Main article: Eleventh five-year plan (Soviet Union)

During the eleventh five-year plan, the country imported some 42 million tons of grain annually, almost twice as much as during the tenth five-year plan and three times as much as during the ninth five-year plan (1971–1975). The bulk of this grain was sold by the West; in 1985, for example, 94% of Soviet grain imports were from the non-socialist world, with the United States selling 14.1  million tons. However, total Soviet export to the West was always almost as high as the import: for example, in 1984 total export to the West was 21.3  billion rubles, while total import was 19.6  billion rubles.

Twelfth plan, 1986–1990

See also: Perestroika

The last, 12th plan started with the slogan of uskoreniye (acceleration), the acceleration of economic development (quickly forgotten in favor of a vaguer motto perestroika) ended in a profound economic crisis in virtually all areas of the Soviet economy and a drop in production.

The 1987 Law on State Enterprise and the follow-up decrees about khozraschyot and self-financing in various areas of the Soviet economy were aimed at the decentralization to overcome the problems of the command economy.

Five-year plans in other countries

Most other communist states, including the People's Republic of China, adopted a similar method of planning. Although the Republic of Indonesia under Suharto is known for its anti-communist purge, his government also adopted the same method of planning because of the policy of its socialist predecessor, Sukarno. This series of five-year plans in Indonesia was termed REPELITA (Rencana Pembangunan Lima Tahun); plans I to VI ran from 1969 to 1998.

Information technology

State planning of the economy required processing large amounts of statistical data. The Soviet State had nationalized the Odhner arithmometer factory in Saint Petersburg after the revolution. The state began renting tabulating equipment later on. By 1929, it was a very large user of statistical machines, on the scale of the US or Germany. The State Bank had tabulating machines in 14 branches. Other users included the Central Statistical Bureau, the Soviet Commissariat of Finance, Soviet Commissariat of Inspection, Soviet Commissariat of Foreign Trade, the Grain Trust, Soviet Railways, Russian Ford, Russian Buick, the Karkov tractor factory, and the Tula Armament Works. IBM also did a good deal of business with the Soviet State in the 1930s, including supplying punch cards to the Stalin Automobile Plant.

Honors

The minor planet 2122 Pyatiletka discovered in 1971 by Soviet astronomer Tamara Mikhailovna Smirnova is named in honor of five-year plans of the USSR.

Soviet-type economic planning

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Soviet-type_economic_planning 

 

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Marxism–Leninism

Soviet-type economic planning (STP) is the specific model of centralized planning employed by Marxist–Leninist socialist states modeled on the economy of the Soviet Union (USSR).

The post-perestroika analysis of the system of the Soviet economic planning describes it as the administrative-command system due to the de facto priority of highly centralized management over planning.

Characteristics

Institutions

The major institutions of Soviet-type planning in the USSR included a planning agency (Gosplan), an organization for allocating state supplies among the various organizations and enterprises in the economy (Gossnab) and enterprises which were engaged in the production and delivery of goods and services in the economy. Enterprises comprised production associations and institutes that were linked together by the plans formulated by Gosplan.

In the Eastern bloc countries (Bulgaria, Czechoslovakia, East Germany, Hungary, Poland, Romania, and Albania), economic planning was primarily accomplished through the Council for Mutual Economic Assistance (CMEA), an international organization meant to promote the coordination of Soviet economic policy amongst the participating countries. The council was founded in 1949 and worked to maintain the Soviet style of economic planning in the Eastern bloc until the Soviet Union's dissolution in 1991.

There is a small amount of information in state archives regarding the founding of CMEA, but documents from the Romania state archive suggest that the Romanian Communist Party was instrumental in beginning the process which led to the creation of the council. Originally, Romania wanted to create a collaborative economic system which would bolster the country's efforts to industrialize. However, the Czech and Polish representatives wanted to have a system of specialization put into place, wherein production plans would be shared amongst members, and each country would specialize in a different area of production. The USSR encouraged the formation of the council as a response to the United States’ Marshall Plan, in hopes of maintaining their sphere of influence in Eastern Europe. There also existed the hope that the less developed member states would ‘catch-up’ economically with the more industrialized ones.

Material balances

Main article: Material balance planning

Material balance planning was the major function of Gosplan in the USSR. This method of planning involved the accounting of material supplies in natural units (as opposed to monetary terms) which are used to balance the supply of available inputs with targeted outputs. Material balancing involves taking a survey of available inputs and raw materials in the economy and then using a balance-sheet to balance them with output targets specified by industry to achieve a balance between supply and demand. This balance is used to formulate a plan for the national economy.

Analysis of Soviet-type planning

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Major types Capitalism Socialism Communism

There are two fundamental ways scholars have carried out an analysis of Soviet-type economic planning. The first involves adapting standard neoclassical economic models and theories to analyze the Soviet economic system. This paradigm stresses the importance of Pareto efficiency standard.

In contrast to this approach, scholars such as Pawel Dembinski argue that neoclassical tools are somewhat inappropriate for evaluating Soviet-type planning because they attempt to quantify and measure phenomena specific to capitalist-based economies. They contend that because standard economic models rely on assumptions not fulfilled in the Soviet system (especially the assumption of economic rationality underlying decision-making), the results obtained from a neoclassical analysis will distort the actual effects of STP. These other scholars proceed along a different course by trying to engage with STP on its own terms, investigating the philosophical, historical and political influences that gave rise to STP whilst evaluating its economic successes and failures (theoretical and actual) with reference to those contexts.

The USSR practiced some form of central planning beginning in 1918 with War Communism until it dissolved in 1991, although the type and extent of planning was of a different nature before imperative centralized planning was introduced in the 1930s. While there were many subtleties to the various forms of economic organization the USSR employed during this 70-year time period, enough features were shared that scholars have broadly examined advantages and disadvantages of Soviet-type economic planning.

Soviet-type planning is not the same as economic planning in general as there are other theoretical models of economic planning and modern mixed economies also practice economic planning to a certain extent, but they are not subject to all of the advantages and disadvantages enumerated here.

Features

"Catch up and overtake" (Russian: Кто кого? Догнать и перегнать). A 1929 Soviet propaganda poster based on 1917 paraphrase from Lenin, praising the economic superiority of state socialism.

The unique features of Soviet-style economy were an ideologically driven attempt to build a total economic plan for the whole society, as well as unquestioned paradigm of superiority of the state socialist system. Attempts to modify or optimize the former based on pragmatic analysis of economic outcomes were hindered by the latter. Dembinski describes the Soviet approach to Marxist economy as "quasi-religious" with economic publications by Marx and Lenin being treated as a "Scripture".

Michael Ellman describes specific features of the Soviet economic planning in economic and mathematical terms, highlighting its primarily computational challenges. The theoretical objective of the Soviet economic planning, as executed by Gosplan, was rational allocation of resources in a way that resulted in output of desired assortment of goods and services. The plan was built and executed in annual cycles: each year, a target output of specific goods were determined and using estimates of available input resources Gosplan would calculate balance sheets planning output for all factories. As the number of commodities reached hundreds of thousands, a number of aggregations and simplifications were made to facilitate the calculations, which until late 60's were performed manually.

Actual performance

At first, the USSR's growth in GDP per capita compared favorably with Western Europe. In 1913, prior to the revolution of 1917, the Russian Empire had a GDP per capita of $1,488 in international dollars which grew 461% to $6,871 by 1990. By comparison, Western Europe grew from a higher base of $3,688 international dollars by a comparable 457% to $16,872 in the same period and reached $17,921 by 1998. Following the fall of the USSR in 1991, its GDP per capita figure fell to $3,893 by 1998.

One 1986 publication compared Physical Quality of Life Index (PQLI) based on infant mortality, life expectancy and literacy rate (World Bank data) and other indicators such as number of patients per physician and argued that countries with socialist-style economic planning achieved slightly better indicators at low and medium levels of income than capitalist countries at the same levels of economic development. The gap narrowed down in case of medium and high income countries, all of the latter however in the "high income" category and none "socialist".

Starting in the 1960's, the Soviet economy suffered from stagnation and became increasingly dependent on undisclosed loans from capitalist countries that were members of the Paris Club, while continuing to present Marxism as progressive and superior to a market economy. At the moment of its default and the dissolution of USSR, Russia alone owed $22 billion to the club, with other Eastern Bloc countries taking loans on their own account.

Main article: Era of Stagnation

Widespread shortage of goods and failures of supply chain were presented as "temporary difficulties" by official propaganda, but numerous scholars in the Eastern bloc argued that these are systemic flaws of the Marxian economy. János Kornai coined the term "economy of shortage" to describe the state of the Soviet economy. Leszek Kołakowski presented the political and economic state of Eastern bloc authoritarianism as a logical consequence of Marxism–Leninism, rather than a "deviation". Nikolay Shmelyov described the state of the Soviet economy in the 80's as having large-scale systemic inefficiencies and unbalanced outputs, with one good being constantly in shortage, while others were constantly in surplus and wasted. These issues were naturally observed by Soviet economists, but any proposals to change the basic operating paradigms of the economic planning in response to observed inefficiencies were blocked by ideological hardliners, who perceived them as an unacceptable deviation from Marxism–Leninism, an economic model which they perceived to be "scientifically" proven to be superior.

The New Economic Policy (1921-1928) was a short period of economic pragmatism in the Soviet economics, introduced by Lenin in response to widely observed shortcomings of the War Communism system following the 1917 revolution. NEP, however, was criticized as reactionary and reversed by Stalin, who returned to total economic planning.

Falsification of statistics and "output juggling" of factories in order to satisfy central plans became a widespread phenomenon, leading to discrepancies between "reality of the plan" and the actual availability of goods as observed on site by consumers. Plan failures, when it was no longer possible to hide them, were blamed on sabotage and "wrecking". Shortages and poor living conditions led to industrial actions and protests, usually violently suppressed by the military and security forces, such as the Novocherkassk massacre.

See also: Ryazan miracle, Socialist emulation, and Vreditelstvo

Performance in the Eastern Bloc

During the 1950s, the economic alliance between members of the Eastern bloc and the state monopoly acted as a safety net in the face of Western sanctions being imposed. As a result, the Eastern Bloc countries started to develop autarkic tendencies which would last until the Soviet Union's dissolution. Trade was also able to grow, not just between member states but within them as well, and the agrarian states of the eastern bloc began to industrialize. The Soviet Union also gave Eastern bloc countries subsidies in the form of raw materials at prices lower than those offered in the global market. However, despite these efforts, varying degrees of development still remained between the industrialized countries and the more agrarian ones, which would contribute to the Bloc's economic stagnation in later decades.

The council began to lose its credibility from the 1960s onwards, because disagreements between member countries over the necessity of various reforms led to the slowing of economic growth. In order to encourage economic integration and maintain soviet economic planning, the International Bank for Economic Cooperation was established in Moscow in 1963, and the ‘transferable ruble’ was introduced. The integration failed to materialize for a number of reasons. Firstly, the new currency was separated from foreign trade as is characteristic of centralized planned economies, and so was not able to perform the various functions of money outside of being a unit of account  Additionally, integration failed due to a general lack of interest, as well as the implementation of ‘market liberalization’ policies within several member states throughout the decade. Hence, the CMEA switched gears in the second half of the 1960s, and instead a reform was proposed which encouraged countries to pursue their own specialized industrialization projects without the needed participation of all other member states. East Germany, Poland, Hungary, and Czechoslovakia agreed to these terms, however Bulgaria and Romania did not, and many political officials throughout the Eastern bloc prevented the ‘market liberalization’ policies from being implemented at the CMEA level. The inability for member countries to reach a consensus about economic reforms coupled with the desire to create ‘dynamics of dissent’ within the Council against the USSR contributed to a lack of planning coordination by the CMEA throughout the decade.

In the 1970s, the CMEA adopted a few initiatives in order to continue economic growth and to modernize the economy. Firstly, the Eastern bloc heavily imported technology from the West in order to modernize, increasing the debt of the Eastern Bloc to the West dramatically. In 1971, the CMEA introduced the ‘complex program’, designed to promote further trade integration. This integration plan heavily relied on countries specializing in the production of certain goods and services, and parallel initiatives were discouraged and to be avoided. For instance, Hungary specialized in the manufacturing of buses for local and long-distance transport, which encouraged other member countries to trade with Hungary in order to acquire them.

However, the economic problems of the Eastern bloc continued to increase as reforms failed to pass and specialization efforts failed to incentivize states to improve their products. This resulted in economic growth which paled in comparison to that of the West. In a study assessing the technical efficiency of three Eastern bloc countries (Hungary, Poland, and Yugoslavia) from the 1970s to the 1980s and comparing it to that of developed and developing countries, it was found that the three European socialist countries were less efficient than both developed and developing countries, and this efficiency gap had only widened in the years of analysis. Additionally, among those three countries, Yugoslavia was consistently the most efficient throughout the period of study, followed by Hungary, then Poland. The raw material subsidies (Molotov Plan) that the Soviet Union had provided since the 1950s were drastically reduced to the point of insignificance by the end of the 1980s, due to Eastern bloc countries having to buy industrial goods at a higher price than what was offered on the global market. The lack of support from the USSR as well as the lack of political consensus over reforms only hastened the decline of the CMEA.

Advantages

From a neoclassical perspective, the advantages of STP are quite limited. One advantage of STP is the theoretical possibility to avoid inflation. Complete price stability is achievable, not only because the state plans all prices and quantities, but also because the state has complete control over the money supply via the wages it pays as the sole employer. To maintain a fixed currency value, all the state must do is balance the total value of goods available during a given planning period with the amount of wages it pays according to the following equation, where ${\displaystyle P}$ represents the general retail price level, ${\displaystyle Q}$ accounts for the quantity of consumer goods and services, ${\displaystyle Y}$ is total household income (wages paid), ${\displaystyle \mathit{T}\mathit{P}}$ is transfer payments, ${\displaystyle S}$ is household saving, and ${\displaystyle T}$ is direct household taxes:

$${\displaystyle P\times Q=Y+\mathit{T}\mathit{P}-S-T}$$

However, the USSR arguably never realized this theoretical possibility. It suffered from both open and repressed inflation throughout much of its history because of failure to balance the above equation.

Another advantage of economic planning from the neoclassical perspective is the ability to eliminate unemployment (with the exception of frictional unemployment) and business cycles. Since the state is effectively the sole business proprietor and controls banking, it theoretically avoids classic financial frictions and consumer confidence challenges. Because the state makes labor compulsory and can run enterprises at a loss, full employment is a theoretical possibility even when capital stocks are too low to justify it in a market system. This was an advantage that the USSR arguably realized by 1930, although critics argue that sometimes certain segments of Soviet labor exhibited zero productivity, meaning that although workers were on employment rolls, they essentially sat idle because of capital deficiencies, i.e. there was employed unemployment.

Those scholars who reject the neoclassical viewpoint consider the benefits of STP that the USSR itself adduced. One is the ability to control for externalities directly in the pricing mechanism. Another is the total capture of value obtained in STP which is neglected in market economies. By this, it is meant that while a worker might put in a certain amount of work to produce a good, a market might value that good at less than the cost of labor the worker put in, effectively negating the value of the work done. Because in STP prices are set by the state, STP avoids this pitfall by never pricing an item below its labor value. While these do seem to be valid theoretical advantages to STP (especially under a Marxist–Leninist framework), it has been argued by some that STP as implemented by the USSR failed to achieve these theoretical possibilities.

Disadvantages

From a neoclassical perspective, there were many disadvantages to STP. They can be divided into two categories: macroeconomic and microeconomic.

Macroeconomic disadvantages included systemic undersupply, the pursuit of full employment at a steep cost, price fixing's devastating effect on agricultural incentives and the loss of the advantages of money because STP eschews money's classic role. Additionally, planners had to aggregate many types of goods and inputs into a single material balance because it was impossible to create an individual balance for each of the approximately 24 million items produced and consumed in the USSR. This system introduced a strong bias towards underproduction, resulting in a scarcity of consumer goods. Another disadvantage is that while STP does allow for the theoretically possibility of full employment, the USSR often achieved full employment by operating enterprises at a loss or leaving workers idle. There was always a Pareto superior alternative available to the USSR rather than full employment, specifically with the option to close some enterprises and make transfer payments to the unemployed.

The microeconomic disadvantages from a neoclassical perspective include the following:

• Encouragement of black-market activity because of fixed resource allocation.
• Low quality of Soviet goods induced by shielding them from world markets.
• The neglect of consumer need because of the challenge in measuring good quality.
• The tendency of enterprise-level Soviet managers to understate productive capacity in fear of the ratchet effect. This effect resulted from an enterprise overproducing in a given plan cycle. They would have to match their new level of higher production in the next cycle as the plan was adjusted to fit the new data.
• An anti-innovation bias (also from fear of the ratchet effect).
• Storming (shturmovshchina), i.e. the hurry to complete the plan at the end of a planning cycle resulting in poor production quality.
• Scattering of resources, i.e. excessive spread (raspylenie sredstv), where too many projects (especially construction) would have been started simultaneously and it took much longer to complete because of a lack of available inputs on time

Scholars who reject the neoclassical approach produce a shorter list of disadvantages, but because these disadvantages are valid even from the Soviet perspective, they are perhaps even more damning of STP than those listed above. These scholars consider STP's inability to predict things like weather, trade and technological advancement as an insurmountable drawback to the planning procedure. STP's use of coercive techniques such as the ratchet effect and labor camps which are argued to be inherent to STP on the one hand ensured the system's survival and on the other hand resulted in the distorted information that made effective planning challenging if not impossible. Lastly, these scholars argue that the semantic limitations of language made it impossible for STP planners to communicate their desires to enterprises in sufficient detail for planning to fully direct economic outcomes. Enterprises themselves under STP still made a variety of economic decisions autonomously.

After the collapse of the USSR, other scholars have argued that a central deficiency of Soviet economic planning was that it was not premised on final consumer demand and that such a system would be increasingly feasible with advances in information technology.