The Five-Year Plans and Industrial Change, 1928–41 (Edexcel A-Level History): Revision Notes

The Five-Year Plans and Industrial Change, 1928–41

Introduction to Stalin's economic transformation

Between 1928 and 1929, Stalin launched the Revolution from Above (also known as the Great Turn), a series of radical policies that fundamentally transformed the Soviet economy. This revolution aimed to end the New Economic Policy's (NEP) semi-capitalist market economy and turn the Soviet Union from a backward agricultural society into a modern industrial state. Essentially, this was Stalin's plan for building socialism in the Soviet Union.

Stalin's policies successfully transformed the Soviet Union into an industrial giant and laid the groundwork for the war economy that would prove crucial in defeating Germany during the Second World War. However, the economic model created profound problems, particularly in agriculture, which proved impossible to solve within the state planning framework Stalin had established. Nevertheless, the Revolution from Above created a new type of economy that became essential to the Soviet system, with centralised industrial planning enduring from the late 1920s through to the 1980s.

Understanding socialist economics

Before examining the Five-Year Plans in detail, it's important to understand the socialist economic theory that underpinned Stalin's approach.

During the nineteenth century, socialists and communists developed strong criticisms of capitalism. Karl Marx, for example, acknowledged that capitalism generated enormous wealth and technological innovation, but he condemned the inequality and exploitation it created.

Key socialist arguments against capitalism:

• Private property was the root cause of inequality because property ownership was the key to wealth accumulation. Those who owned factories and shops could grow rich, while those with little or no property remained poor
• Competition between companies was inefficient because it led to duplication of production and wasted resources
• Abolishing private property was therefore essential for achieving both equality and efficiency
• The state should own all property and plan production for the benefit of all people

The aims of the Five-Year Plans

Stalin introduced the Five-Year Plans for multiple interconnected reasons, which can be categorised as ideological, economic, military and political.

Industrialisation goals

Stalin's primary objective was to industrialise Russia through a combination of centralised planning and large-scale investment. His ambitions were extraordinarily bold: he declared that the Soviet Union was 100 years behind Britain and the USA, but claimed that through planning, the Soviet Union could close this gap in just 15 years.

Economic efficiency

Soviet economists hoped to eliminate what they saw as the inefficiencies of the NEP. Specifically:

• They wanted to remove Nepmen (private traders who made money through trade rather than production)
• They believed that government-controlled production and distribution would be far more efficient than the small-scale, disorganised NEP-style trading
• Stalin argued that whilst the NEP had helped revive existing Soviet industry, it had failed to lead to the development of new factories

Military preparedness

The Plans reflected serious Soviet military concerns. Stalin and many government officials feared that Germany would invade the Soviet Union. Defending Soviet territory would require modern industry capable of producing the weapons necessary for contemporary warfare.

Political authority

Stalin wanted to assert his own authority and demonstrate his leadership credentials. The Five-Year Plans were more ambitious than any of Lenin's schemes for transforming the Soviet Union, which would prove that Stalin was initiating a new and superior phase of building socialism.

The three Five-Year Plans, 1928–41

Between 1928 and 1941, Stalin implemented three Five-Year Plans:

• First Five-Year Plan: October 1928 – December 1932 (cut short due to problems)
• Second Five-Year Plan: January 1933 – December 1937
• Third Five-Year Plan: January 1938 – June 1941 (ended prematurely due to German invasion)

The nature and structure of the Plans

How the Plans operated

The Five-Year Plans were a government initiative designed to dramatically increase industrial production. Gosplan, the Soviet Union's central economic agency, formulated production targets for every factory, mine and workshop across the Soviet Union. Soviet workers and managers were then responsible for meeting these targets.

Propaganda campaigns

Alongside the targets, there was a massive propaganda campaign designed to inspire workers to fulfil the Plans. These campaigns:

• Focused on the heroic objectives of the Plans
• Celebrated the successes and achievements
• Claimed that the Plans had led to the destruction of capitalism
• Described the modern, industrial future that the Plans would create

Command economy vs planned economy

Despite their name, the Five-Year Plans were not truly "plans" in the strict sense. They were essentially lists of targets backed by propaganda campaigns. Stalin's economy is therefore better understood as a command economy rather than a planned economy.

Achievements of the Five-Year Plans, 1928–41

Overall, Stalin's first three Five-Year Plans succeeded in industrialising the Soviet Union. The economic policy achieved significant success in four main areas: heavy industry, transport, labour productivity, and rearmament.

Heavy industry

Heavy industry was the greatest success of the first three Five-Year Plans. Production of iron, steel, coal, oil and electricity all increased massively:

Product	1927	1940	Increase
Electricity (milliard kWhs)	5.05	48.30	Over 9 times
Coal (million tons)	35.40	165.90	Nearly 5 times
Oil (million tons)	11.70	31.10	Nearly 3 times
Pig iron (million tons)	3.30	14.90	Over 4 times
Steel (million tons)	4.00	18.30	Over 4 times

These impressive increases were achieved partly by building new factories to exploit the Soviet Union's natural resources. Major metallurgical works were constructed at Magnitogorsk, Kuznetsk, Zaporozhye, Tula and Lipetsk between 1929 and 1936, all contributing to the huge increase in iron and steel production.

Transport improvements

Transport infrastructure saw notable successes:

• The Moscow Metro's first train lines opened in 1935, allowing people to travel around Moscow more easily
• The Moscow–Volga Canal was constructed between 1932 and 1937, making the transportation of goods more efficient

Labour productivity and the Stakhanovite movement

Labour productivity in the Soviet Union was extremely low compared to workers in Britain, the USA or Western Europe. Low productivity could be explained by long hours, low pay and lack of incentives in the system, particularly during the First Five-Year Plan.

In 1935, Stalin introduced a nationwide initiative to address this problem:

• Higher payments and a system of rewards for the most productive workers
• Stakhanovites (exceptionally productive workers) were able to reorganise their workplaces to ensure maximum efficiency
• The campaign gained momentum in 1936, and productivity rose significantly across industry in the late 1930s as Stakhanovites educated other workers in effective working methods

Productivity gains, 1936–40:

• Chemicals: 34%
• Electricity production: 51%
• Coal mining: 26%
• Oil production: 25%

However, the Stakhanovite movement created its own problems. Stakhanovite workers were often resented by colleagues and management because they received higher pay, which could create workplace tensions.

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Rearmament

The Five-Year Plans proved very successful in terms of rearmament. As war approached, economic planners increasingly prioritised arms production:

• By 1940, one-third of government spending was devoted to rearmament
• Nine military aircraft factories were successfully constructed between 1939 and 1941
• However, shortages of quality materials such as steel sometimes held up arms production

Problems with the Five-Year Plans

Whilst Stalin's Plans did lead to industrialisation, they proved to be a very inefficient method of achieving this goal. In addition to problems in specific areas of the economy, there were systemic problems with the Stalinist model of economic planning.

Production problems

The command economy was plagued by serious problems:

Poor quality: Production quality was often very low. Because the Plans set targets for quantity, not quality, factory managers were rewarded for producing large amounts of material, regardless of quality.

Waste: The Plans did not specify what materials should be used for, and there was little coordination between different factories. Materials that were produced were often simply stored at the factory and allowed to decay rather than being used. This problem was made worse by the lack of transport in the early years of the Plan. In some industries, as much as 40% of what was produced was wasted.

Disorganisation: The Plans themselves were poorly organised and undermined by Stalin's other policies. The First Five-Year Plan was launched in October 1928, yet the Plan itself was only published in April 1929—six months after it had supposedly begun.

Falsified data: The effectiveness of the Plans was undermined by unrealistic targets set by Gosplan. Industrial managers faced enormous pressure to ensure high levels of production, so they would lie about their production levels and falsify figures. Falsified data made economic management even harder, as effective planning relies on accurate information.

Consumer goods shortages

Between 1928 and 1941, there were continual shortages of consumer goods such as clothes, shoes and furniture. These shortages resulted from:

Stalin's priorities: He prioritised heavy industry and defence rather than consumer production.

Poor planning: Planners underestimated the needs of consumers.

Production techniques: By the mid-1930s, the Soviet economy was effective at producing large quantities of raw materials such as iron, steel and coal. However, producing more complex consumer goods required more sophisticated techniques, which the economy still lacked.

The scarcity of consumer goods was managed through rationing. Between 1928 and 1941, most consumer goods were rationed. However, in the early and late 1930s, there were often such severe shortages that the government could not even supply the minimum level of rations:

• Shoe queues in Moscow in the early 1930s often exceeded 1,000 people
• Some reports suggest queues for clothes and shoes in Leningrad numbered over 6,000 during 1938

Housing and living conditions

Housing was a significant problem between 1928 and 1941:

• The Plans required a huge increase in the urban workforce, but the necessary housing was never built
• Most houses built during the Plans did not have running water
• Bathhouses were scarce (for example, there was not a single bathhouse for the 650,000 people living in the Liubertsy district of Moscow)

Overall living conditions:

Living conditions between 1928 and 1941 were poorer than they had been under the best years of the NEP. A better standard of living was never one of Stalin's key objectives, and this represented a genuine failure of the Plan:

• Food rationing continued for most of the period, except for a period known as the "three good years" in the middle of the 1930s
• Working conditions were harsh—workers were forced to work seven days a week, and long hours were common
• Lateness and absenteeism was criminalised
• Towards the end of the period, internal passports were introduced to stop workers moving from town to town in search of better-paid jobs

The black market

The Five-Year Plans failed to eliminate the free market. Shortages of materials led to the growth of a thriving black market. This was possible due to the inefficiencies of the Plan:

• Workers would steal goods and materials from their workplaces and sell them to the highest bidders
• The thefts would be covered up by falsifying paperwork

Conclusion

In spite of the significant problems, Stalin's Five-Year Plans fundamentally transformed the Soviet economy:

• In 1928, the Soviet Union was a largely capitalist agricultural economy with a small working class
• By 1941, the Soviet Union was a powerful, urban industrial economy capable of producing the resources necessary to defeat the German army in the Second World War

However, the Soviet economy was profoundly unbalanced. Arms production was only possible at the expense of consumer goods. Moreover, the wastefulness of the Soviet economy meant that economic growth did not lead to higher standards of living for ordinary Soviet citizens. The command economy created by the Five-Year Plans would continue to shape Soviet economic policy for decades to come, establishing patterns that would persist until the 1980s.