From Fourth International, Vol. 2 No. 4, May 1941, p. 124.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
Foreign Affairs for January 1941 contains an informative article by Freda Utley entitled The Enigma of Soviet Production. This article is crammed with material on the impasse reached by the bureaucracy in Soviet economy.
Up to 1937 production in the USSR increased in spite of all the blunders but “since 1937 production in the basic industries has either been stagnant or has declined.” 1940 was the worst year since the famine of 1931–32. The Finnish War threw the transport system into utter chaos and set back the material conditions in Russia correspondingly.
The First Five-Year Plan completely failed to stick to the planned estimates in regard to labor and wages. The plan had called for a total investment of 86 billion rubles. Instead, it became 120 billions, inflation making up for mistakes and disproportions. The plan had called for an increase of 1.25 billions of rubles in note issues. But already in 1928 it was increased by 1.77 billions and in October 1932 it was greater by 4.6 billions. The plan had called for an increase of 100% in labor productivity (output per worker). The number of workers should have increased from 11.3 to 15.8 millions. But it actually went up to 22.8 millions. This means that 44% more workers than called for, produced less than the plan called for!
By the end of the First Five-Year Plan prices had reduced the value of the ruble to about 1/10 its old value in real wages. Rationing and the “closed distributors” tended to correct this somewhat. But these were abolished in 1935.
Despite the 10 billion rubles of investment In agricultural machinery, the grain crop in 1932 was still 26% below the pre-war level (69.6 million tons as against 94.1 in 1913). Industrial crops were worse off, being down 50%.
Livestock had been reduced by forced collectivization from 276 million head to 160 million. Only by 1937 did agriculture attain the pre-war level. At that time textiles lagged far behind the plan, production being little more than in 1913, despite the increase in population.
The best conditions existed in 1934–36. But then appeared the full effects of the wasteful bureaucratic “driving” to achieve records. The huge investments from 1929 to 1937 were largely wasted through neglect and overworking of the machinery. Since then we have witnessed the so-called “tightening of labor discipline;” in reality, blaming the workers for the condition of the machines caused by bureaucratic direction. Quantitatively the basic industries remained about the same in 1939 as in 1938. Steel and coke production even slumped. Oil was down. There was such a terrible drop in the production of iron, coal and steel in the last quarter of 1938 that it is very likely the workers had gone on a sitdown strike. Production was actually cut in half. The cry against so-called “shirkers” may very well represent a cry against strikers!
To show the conditions of the masses, Freda Utley (who came out of Russia in 1938 – she was a textile specialist) mentions that the output of shoes even by the plan will be only 1½ pair per person per year in 1942. And these don’t last more than one month. There is a tremendous shortage of clothing; people are in rags. The cost of staple foods is 15 times higher in 1937 than in 1914 whereas wages are only five times higher. When prices were increased for all foods except bread from 35% to 100% in 1940, bread-lines formed once again.
Collective farms receive from 1.1 to 1.5 rubles per pood of rye or about 9 kopecks per kilogram. Now the “official” price of bread (it is actually higher) is 1 ruble or 100 kopecks a kilogram in the state stores. This enormous bread tax and the 100% turnover tax on all manufactured goods creates peasant discontent and a chronic food shortage, which in turn causes a reduced productivity of labor. In 1935 Stalin made concessions to the peasants; they were permitted to own a little land, a garden, livestock, etc. This caused a rapid increase in cows, sheep, pigs, poultry and an intensive cultivation of vegetables. The food situation in the towns was considerably alleviated, but the collective farmers “virtually withdrew from the kolkhozes and were spending all their time working on their own land.” Hence in 1939, Stalin again withdrew these concessions and purged many kolkhoz managers who had allowed the peasants to take over a big part of the collective farm lands for private cultivation in return for a fixed rent in kind.
The peasants are unwilling to work on the collective farms because of the terrible mismanagement and the small return for their labor. At every opportunity they relapse into private cultivation. Thus by 1939 the private lot had lost its subsidiary character and in many cases had become the main source of income for the collective farmer. Stalin declared the private lots “illegal” once more in that year and compelled the peasants to sell their renewed livestock back to the collectives at one-tenth their market value. Since then there has again appeared an acute shortage of meat, butter, poultry, etc.
Now the bureaucracy has to turn either to Germany or the US for the machinery needed to replace the tools of production so rapidly worn out.
“It is doubtful,” concludes the author, “whether at this stage the Soviet Government could materially improve the conditions of the Russian workers and peasants except by such radical economic and political changes as would deprive Stalin and his bureaucracy of their power and material privileges. The rot in the social system has already gone too far ... Above all the liquidation of the trained personnel over the past ten years is a loss which cannot be replaced ... This method of (repressive) government can be successful only where there is no threat from abroad. A dictator who lacks popular support dare not risk a war in which weapons would be placed in the hands of the subjects who might be more anxious to use them against him than against the foreign enemy.”
Last updated: 4 November 2015