Stalin Introduces Central Planning

By initiating the First Five-Year Plan, Stalin rejected the New Economic Policy and started large-scale industrialization and forced agricultural collectivization.

Summary of Event

The year 1929 was one of tremendous tumult in the Soviet Union. After consolidating his power, Joseph Stalin introduced authoritarian central planning in the Soviet Union and rejected the private profits and market mechanisms allowed by Vladimir Ilich Lenin’s New Economic Policy. New Economic Policy Stalin’s First Five-Year Plan was implemented on October 1, 1928. Its major goals included developing heavy industry and national defense, efforts that would be funded by extracting profits from agriculture to invest in industry. To do this, Stalin called for rapid agricultural collectivization. As a result, the end of the 1920’s saw both the liquidation of the New Economic Policy and the initiation of a radically new phase in the development of the Soviet system. [kw]Stalin Introduces Central Planning (Oct. 1, 1928)
[kw]Central Planning, Stalin Introduces (Oct. 1, 1928)
[kw]Planning, Stalin Introduces Central (Oct. 1, 1928)
First Five-Year Plan (Soviet Union)[First Five Year Plan]
Five-Year Plan (Soviet Union)[Five Year Plan]
Central planning (Soviet Union)
[g]Russia;Oct. 1, 1928: Stalin Introduces Central Planning[07110]
[c]Social issues and reform;Oct. 1, 1928: Stalin Introduces Central Planning[07110]
[c]Trade and commerce;Oct. 1, 1928: Stalin Introduces Central Planning[07110]
[c]Government and politics;Oct. 1, 1928: Stalin Introduces Central Planning[07110]
Stalin, Joseph
[p]Stalin, Joseph;First Five-Year Plan[First Five Year Plan]
Lenin, Vladimir Ilich
Trotsky, Leon
Bukharin, Nikolay Ivanovich
Preobrazhensky, Yevgeny
Kamenev, Lev Borisovich
Zinovyev, Grigory Yevseyevich
Tomsky, Mikhail

Joseph Stalin.

(Library of Congress)

When Lenin died in 1924, he left no designated political heir. One of his last messages, however, urged the Communist Party to reject Stalin as “too rude.” Stalin, however, was general secretary, and he used his position to gain control of the party’s structure. He handpicked supporters for leading party positions and defeated opponents, including Lev Borisovich Kamenev, Grigory Yevseyevich Zinovyev, and Leon Trotsky by 1926. Another Stalin opponent, Nikolay Ivanovich Bukharin, attempted to continue working within the framework of the New Economic Policy. Stalin, however, was able to prevail over opposition led by Bukharin and Mikhail Tomsky in the course of a protracted struggle between July, 1928, and April, 1929. At the struggle’s end, Stalin had gained firm control of both domestic and foreign policy.

In 1924, a debate had begun among Soviet economists. One of these thinkers, Yevgeny Preobrazhensky, sharpened his criticism against the slow pace of industrialization, arguing for “primitive socialist accumulation.” In other words, Preobrazhensky thought that industrialization should be financed using the funds left over from exchanges of agricultural produce and consumer goods and machinery. He insisted that setting artificially low agricultural prices and/or artificially high industrial-goods prices was the politically advantageous method of accomplishing this accumulation.

Preobrazhensky was opposed by Bukharin, who was strongly against treating the peasantry as an enemy. Instead, Bukharin argued for a policy that would encourage the peasants to enrich themselves. When agriculture developed, according to Bukharin, there would be more funding for industrialization. Stalin supported the idea of rapid industrialization and forced agricultural collectivization, and he tried to justify his position by emphasizing the external threat facing the Soviet Union. He said that the country was between fifty and one hundred years behind advanced nations like Great Britain, and that if it did not catch up with these countries in about ten years, it would be crushed by foreign aggressors.

The success of Stalin’s argument led to the First Five-Year Plan’s focus on defense and heavy industry. In the projections, sources of energy (coal and electric power), steel, and heavy engineering were emphasized. Increases in agricultural production were expected but failed to materialize. Output of consumer goods fell below projections, and much of the small-scale handicraft industry, which had served local consumer markets, was closed. The First Five-Year Plan went into operation in October, 1928, although its formal adoption did not take place until April, 1929. The objectives were stunning: Total industrial output was to increase by 250 percent, and coal’s output was to jump more than 330 percent. Output of pig iron was to be nearly tripled, and electric power’s output was to be more than quadrupled. Agricultural production was scheduled to increase 150 percent, and 20 percent of the peasants were to be collectivized. At first, optimism was rampant. In July, 1930, the party adopted a slogan: The Five-Year Plan in Four Years.

During 1928 and 1929, however, dramatic shifts in policy took place. At the beginning of 1928, Stalin was already committed to the continued use of coercion to secure essential supplies of grain and to an accelerated but still protracted program of voluntary collectivization. In the summer of 1929, the party launched a drive to collect more grain more rapidly than in any previous year. In November, the Soviet government called for the comprehensive collectivization of the main grain surplus areas within five months. The new collective enterprises took two basic forms: the state farm and the collective farm. The state farm was the full property of the Soviet government; its manager used hired labor in accordance with the directives put forth by the Ministry of State Farms or by any other ministry to which the farm reported. In contrast, the collective farm was supposed to be a self-governing cooperative made up of peasants who voluntarily pooled their means of production and divided the proceeds.

The plan’s administrators had no blueprint to follow, and the nature and principles of planning were worked out by trial and error. Stalin personally and openly identified himself with the need for harsh emergency action, and the implementation of the First Five-Year Plan marked a return to the military traditions of War Communism War Communism (1918-1921), a Bolshevik policy that tried to keep towns supplied with weapons and food. The party and government approved the plan, and it became law. Businesses that contravened any element of the plan were considered guilty of a criminal offense.

The overall Five-Year Plan gave grand targets, and their detailed application was contained in annual or quarterly operative plans. This enabled administrators to make regular revisions to the plan, which typically involved raising production quotas. Planned output was expressed in physical units, and the plan’s fulfillment was achieved by producing the requisite number, size, weight, or volume of production. Compulsory procurement, which echoed War Communism, had been initiated in 1928; this policy essentially amounted to confiscation. Gradually, a system emerged: Fixed deliveries were made by collectives (and others) in return for fixed prices.

The forced collectivization of agriculture was one of the major causes for the breakdown of market relations between the regime and the peasantry in the winter of 1927-1928. When the state had difficulty obtaining enough grain from peasants in the autumn of 1927, its use of coercive measures resulted in an expedient resolution of the grain crisis. The party quickly became committed to using force against the peasants when doing so helped achieve its ambitious goals. In this way, the Soviets launched a program of rapid industrialization that would have been unachievable within the framework of the New Economic Policy.


The 1917 revolution had transformed the Russian political and economic system, but the Stalinist revolution was more fundamental and far-reaching in its socioeconomic and political impact, and it dramatically transformed state-market relations. Late in 1929, the Communist Party called for the mobilization of twenty-five thousand urban workers to spearhead the agricultural collectivization drive. The kulaks (rich peasants) were to be liquidated as a class, and the expropriation of their property was sanctioned. The introduction of this policy was one of the most important additions to the legacy of authoritarian central planning, whose tightening of state control on all major aspects of the Soviet economy had profound impacts on the country’s economic development.

Under central planning, heavy industry and the defense industry expanded at the cost of agriculture and consumer industry. The establishment of the Stalinist system involved not only material costs but also enormous human sacrifices. The will of the Communist Party permeated the machinery of the state, and the state controlled many aspects of citizens’ lives. The party, through the state, took charge of all public affairs. The state was the only employer; all independent sources of income were eliminated. Even peasants were now subject to state supervision of production; they were allowed to retain only their garden plots.

At the end of 1932, the First Five-Year Plan was declared to have been fulfilled, but the claim had a hollow ring. Stalin contended that production of machinery and electrical equipment had risen 157 percent, but many admitted that output in heavy metallurgy had increased only 67 percent, coal output 89 percent, and consumer goods 73 percent. Even these figures are questionable. Under the impetus of the First Five-Year Plan and the industrialization drive of the 1930’s, the Soviet Union imported massive quantities of advanced foreign technology, skilled workers, technicians, and engineering consultants. The Soviets went on to combine borrowing with heavy investment in their own research and training programs in science and technology.

Forced collectivization of agriculture was met with significant peasant resistance. Armed peasant uprisings against the Soviet government were ruthlessly suppressed, and many peasants chose to kill their animals rather than join collective farms. In 1933, the number of horses in the Soviet Union was less than half the 1928 figure; during the period from 1929 to 1931 alone, the number of cattle fell by 30 percent, and the number of sheep and goats fell by 50 percent. Peasants slaughtered their animals on such a scale that cattle and sheep numbers and total meat production did not reach their 1929 levels again until after World War II.

To ensure that grain would be collected and delivered to the state, machine tractor stations were established in 1933. Because grain was the most easily mechanized form of work, the state was able to solve the grain procurement problem simply by retaining the necessary grain harvested by the machine tractor stations and by paying whatever price it desired. This practice was largely effective, and by July of 1934, 71.4 percent of households were officially collectivized. By 1937, private agriculture was virtually eliminated. These achievements, however, came at significant human cost: Historians have concluded that nearly 300,000 families (averaging four members each) were exiled to distant regions during the collectivization drive, and several million people died.

Soviet figures for growth in industrial production show 19 percent growth per year in the First Five-Year Plan. Although this figure is grossly exaggerated, industrial growth during the period was impressive: From 1928 to 1932, coal production increased from 35.4 million tons to 64.4 million tons and oil from 11.7 million tons to 21.4 million tons. Consumer goods and agricultural output, however, fell far short of their targets.

The extraordinary rates of growth projected in the First Five-Year Plan period were not achieved, but industry did grow rapidly. For example, the amount of oil produced rose from 11.7 million tons in 1928 to 31.1 million tons in 1940 to 70.8 million tons in 1955; coal production rose from 35.4 million tons in 1928 to 165.0 million in 1955; steel production rose from 4.3 million tons in 1928 to 18.3 million tons in 1955; and electrical energy production rose from 5.0 billion kilowatt-hours in 1928 to 48.3 billion in 1940 to 170.2 billion in 1955.

In the 1930’s, the foundation of the Soviet’s centralized, administrative command economy was established, and this bureau oversaw many of the plan’s campaigns. Results, however, were conflicted: Growth was uneven and unbalanced, and living standards were sacrificed. By 1937, 53.1 percent of national income (by the Soviet definition) was produced by industry, compared with 41.7 percent in 1929. Industry accounted for 77.4 percent of aggregate production and laid the foundation for defense and military production.

The agricultural sector remained large and inefficient; in 1937, 54 percent of the labor force still worked in agriculture. Terror was employed as an economic weapon: Forced labor was used in some areas for particular projects, but the appeared more often as general coercion backed up by the real threat of imprisonment or death. This system was so highly centralized that a small error could result in huge problems, and the balancing mechanisms that exist in most market economies were absent from the Soviet model. No real prices existed to indicate surpluses or shortages, and only terror and coercion could control the crises created by the demands put on the economy. First Five-Year Plan (Soviet Union)[First Five Year Plan]
Five-Year Plan (Soviet Union)[Five Year Plan]
Central planning (Soviet Union)

Further Reading

  • Cohen, Stephen F. Rethinking the Soviet Experience: Politics and History Since 1917. New York: Oxford University Press, 1985. An influential revisionist study of Soviet history with emphases on change and continuity. Examines possible alternatives to the Stalinist system.
  • Conquest, Robert. The Harvest of Sorrow: Soviet Collectivization and the Terror-Famine. New York: Oxford University Press, 1986. Critically examines the collectivization of agriculture. Reveals terrible human suffering and sacrifice during Stalin’s rule.
  • Davies, R. W. The Socialist Offensive: The Collectivization of Soviet Agriculture, 1929-1930. Cambridge, Mass.: Harvard University Press, 1980. The authoritative study of the collectivization of Soviet agriculture in connection with the industrialization program. Highly informative and analytic.
  • Fitzpatrick, Sheila. Stalin’s Peasants: Resistance and Survival in the Russian Village After Collectivization. New York: Oxford University Press, 1994. A pioneering work on collectivization from the point of view of the peasants. Based on previously secret Soviet archives.
  • _______, ed. Cultural Revolution in Russia, 1928-1931. Bloomington: Indiana University Press, 1984. Collection of essays examines sociopolitical and cultural aspects of the dramatic transformation initiated by Stalin in 1928.
  • Hosking, Geoffrey. The First Socialist Society: A History of the Soviet Union from Within. Cambridge, Mass.: Harvard University Press, 1985. A comprehensive and interesting introduction to the history of the Soviet Union with excellent analysis of the Stalin period.
  • Hough, Jerry F., and Merle Fainsod. How the Soviet Union Is Governed. Cambridge, Mass.: Harvard University Press, 1979. A good explanation of the development of the Soviet system and its policy process. Explores how Stalin consolidated his power and established the highly centralized system.
  • Jasny, Naum. Soviet Industrialization: 1928-1952. Chicago: University of Chicago Press, 1961. A close examination of the origins, process, and characteristics of Soviet industrialization. Supported by quantitative data, although dated.
  • Kuromiya, Hiroaki. Stalin’s Industrial Revolution: Politics and Workers, 1928-1932. New York: Cambridge University Press, 1988. Studies the implementation of rapid industrialization during the First Five-Year Plan and analyzes support and resistance among industrial workers.
  • Lewin, Moshe. Russian Peasants and Soviet Power: A Study of Collectivization. Translated by Irene Nove with the assistance of John Biggart. New York: W. W. Norton, 1968. Focuses on debates over economic policy within the Communist Party during the 1920’s and the pivotal grain procurement crisis of 1928.
  • Scott, John. Behind the Urals: An American Worker in Russia’s City of Steel. Enlarged ed. Bloomington: Indiana University Press, 1989. These memoirs by an American who worked in Magnitogorsk, a steel-producing city founded during the First Five-Year Plan, vividly describe working and living conditions.
  • Tucker, Robert C. Stalin in Power: The Revolution from Above, 1928-1941. New York: W. W. Norton, 1990. Argues that Stalin forged a new autocracy modeled on Russia’s Muscovite and czarist past to carry out his revolutionary policy of state-sponsored industrial development.
  • Viola, Lynne. The Best Sons of the Fatherland: Workers in the Vanguard of Soviet Collectivization. New York: Oxford University Press, 1999. An excellent study of the campaign of the twenty-five thousand members of the Soviet industrial proletariat who were recruited to participate in agricultural collectivization.
  • Wolfe, Bertram. Three Who Made a Revolution: A Biographical History of Lenin, Trotsky, and Stalin. 1964. Reprint. New York: Cooper Square Press, 2001. One of the best histories of the Bolshevik Revolution available, a masterpiece of research and writing. The author was acquainted with several original Bolsheviks and lived for a time in Moscow.

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