The first Five-Year Plan

On 1 October 1928 a new economic year began in the Soviet Union, and with it the period that went down in history as the first Five-Year Plan – the first five-year plan for the development of the national economy of the USSR. Within five years, by 1 October 1933, the plan was to turn a peasant country into an industrial power. In practice it meant the end of the relative economic freedom of the 1920s, the construction of hundreds of factories, steelworks, power stations and canals, a huge influx of people from the countryside into the towns and the forced collectivisation of agriculture, which ruined the countryside and led to one of the greatest famines in European history. Behind the plan stood the party’s General Secretary, Joseph Stalin, who in precisely these years became sole ruler. The industry built at the cost of millions of victims was also the industry that a dozen or so years later supplied the Red Army in the war with Germany.

War chronologies record that on 1 October 1928 the Soviet Union “launched” the first Five-Year Plan. This is true as far as the calendar is concerned, but not as regards the document. The Five-Year Plan was counted from 1 October 1928 because that was the start of the Soviet economic year, yet the plan itself was not ready at the time. Its final version was adopted only by the Sixteenth Party Conference, which met in Moscow from 23 to 29 April 1929, and approved by the Fifth Congress of Soviets of the USSR in May 1929. The plan thus applied retrospectively, from the autumn of the previous year.

The end of the NEP

After the Civil War and the great famine of 1921–1922 the Bolsheviks had to let the peasants trade. The New Economic Policy, the NEP, introduced in 1921 by Vladimir Lenin, left heavy industry, the banks, transport and foreign trade in the hands of the state, but the land was farmed by more than 20 million individual peasant households, and shops, workshops and small enterprises returned to private owners. The economy recovered and by the late 1920s had in many fields reached its level from before the First World War. The country nevertheless remained poor and agrarian, and industry was growing more slowly than the party leaders wanted.

How to proceed was debated throughout the 1920s. The Left Opposition of Leon Trotsky, joined in 1926 by Grigory Zinoviev and Lev Kamenev, demanded faster industrialisation, paid for by higher taxes on the better-off peasants. Nikolai Bukharin, the party’s chief ideologist, defended the NEP and slow growth, in which industry would expand together with the prosperity of the countryside. Stalin, who after Lenin’s death had been playing for power, long sided with Bukharin and accused the opposition of wanting to “rob” the peasants. But when in November 1927 Trotsky was expelled from the party and his supporters were sent into exile, Stalin largely took over their programme and went much further than they had proposed.

The immediate cause of the turn was the grain crisis of the winter of 1927–1928. The state paid the peasants low prices for grain, and the shops were short of manufactured goods, so the peasants preferred to keep their grain or feed it to their livestock. Procurement collapsed, and the towns and the army faced a shortage of bread. In January 1928 Stalin travelled to Siberia and demanded that the local authorities take grain by force, prosecuting peasants who would not sell it for speculation. The “extraordinary measures” soon spread across the whole country. To this was added an atmosphere of impending war. In 1927 Britain broke off diplomatic relations with Moscow, in Warsaw the Soviet envoy Pyotr Voykov was shot dead, and in China Chiang Kai-shek brutally crushed the Communists, Moscow’s allies. Soviet propaganda spoke of capitalist encirclement and of imminent intervention. Although the party leaders had themselves largely whipped up this panic, the conviction that war was near and that a country without industry would not survive it became one of the main arguments for forced industrialisation.

In the spring of 1928 the hunt for “wreckers” also began. In the Shakhty trial, held in Moscow from 18 May to 6 July 1928, 53 engineers and officials of the Donbas coal industry, including several Germans, were accused of sabotage on behalf of the former mine owners and foreign intelligence services. Eleven were sentenced to death and five were shot. The trial was a signal to the old, pre-revolutionary technical cadres that any failure could cost them their heads. In July Stalin put forward the thesis that the class struggle would intensify as socialism advanced. On 30 September 1928, on the eve of the Five-Year Plan, Bukharin published “Notes of an Economist” in Pravda, in which he warned against an excessive pace and against the illusion that today’s factories could be built with “tomorrow’s bricks”. In April 1929 his group was condemned as the “Right deviation”, and in November he was removed from the Politburo.

The plan

The plan was drawn up by the State Planning Commission, Gosplan, headed by Gleb Krzhizhanovsky, and by the Supreme Council of the National Economy, led by Valerian Kuibyshev. Economists argued over whether the plan should forecast what the economy could achieve or impose targets on it. The latter won. Gosplan produced two variants, a basic one and a higher one called the optimal variant, and the party adopted the optimal one. Industrial output was to roughly triple within five years, and the production of capital goods – machinery, steel, coal and energy – to grow even faster. About three-quarters of industrial investment was to go to heavy industry. At the same time the plan assumed that consumption, real wages and crop yields would rise, and that by 1933 collectivisation would cover only a portion of farms. These promises were soon forgotten.

As early as 1929 the targets began to be raised. The slogan “the Five-Year Plan in four years” became the official line, and in 1930, at the Sixteenth Party Congress, Stalin argued that in many fields the plan would be exceeded. The pig-iron target for the end of the plan was raised from 10 to 17 million tonnes, which no economy could have achieved in so short a time. The plan ceased to be a calculation and became an instrument of mobilisation. Anyone who doubted that it could be fulfilled risked a charge of sabotage. In the autumn of 1930 further show trials put economists and engineers in the dock, accused of conspiring with foreign powers, and many of the former authors of the moderate variants of the plan ended up in prison.

The great projects

The Five-Year Plan left behind great construction projects that Soviet propaganda presented as symbols of a new world. On the steppe at the foot of the Urals, beside a mountain of iron ore, Magnitogorsk rose from nothing, with a metallurgical combine designed by Americans. Its first blast furnace was fired at the beginning of 1932. On the Dnieper the largest hydroelectric power station in Europe at the time, Dniprohes, was built and ceremonially opened in October 1932. In 1930 the first tractor rolled off the line of the Stalingrad Tractor Factory, and in 1931 the Kharkiv Tractor Factory began production. In Nizhny Novgorod a car factory was built under an agreement with Ford and started production at the beginning of 1932. A steelworks went up at Kuznetsk in Siberia, as did a railway linking Siberia with Central Asia, known as the Turksib, and dozens of other plants.

None of this would have been built without foreign help. The American firm of the architect Albert Kahn, which had built Ford’s factories, designed hundreds of industrial facilities in the USSR in 1929–1932. American and German engineers supervised construction, and machinery was bought in the United States, Germany and Britain. In 1931 the Soviet Union was the largest buyer of German machinery. Western firms, hit by the Great Depression from the autumn of 1929, gladly accepted Soviet orders. They were paid for mainly by exports of raw materials, timber, oil and grain. In 1930–1931 the Soviet Union exported some five million tonnes of grain a year, even as famine was beginning in the countryside.

The sites were built mostly by people who had until recently been peasants. In four years the number of industrial workers roughly doubled, and the towns were flooded with newcomers from the countryside. In Magnitogorsk the first winters were spent in tents, barracks and dugouts. The party mobilised young people from the Komsomol and organised socialist competition and brigades of shock workers, the so-called udarniki. Among them were genuine enthusiasts who believed they were building a new world. At the same time discipline was tightened: lateness and absenteeism were punished with dismissal and the loss of ration cards, and in 1932 the internal passports familiar from tsarist times were reintroduced, tying people to their place of residence, while peasants on collective farms received no passports at all.

More and more of the work was done by prisoners. In 1930 the labour camps were placed under a new OGPU directorate that went down in history as the Gulag. Its first great project was the White Sea–Baltic Canal, dug by prisoners in 1931–1933 almost without machinery. At least thousands of people died building it, and the canal turned out to be too shallow for larger ships.

Collectivisation

The heaviest price was paid by the countryside. The plan provided for the gradual creation of kolkhozes, or collective farms, but in the second half of 1929 Stalin opted for “mass collectivisation”. On 7 November 1929 he proclaimed in Pravda “the year of the great turn”, and at the end of December he announced “the liquidation of the kulaks as a class”. On 30 January 1930 the Politburo adopted a resolution on dekulakisation. In practice anyone pointed out by local activists was deemed a kulak, or rich peasant, including poor peasants who resisted joining the collective farm. Some were shot or sent to camps, and the rest were expropriated and deported. According to the OGPU’s own reports, in 1930–1931 381,000 families – more than 1.8 million people – were deported to so-called special settlements, mainly in the Russian North, the Urals, Siberia and Kazakhstan. Many of them died of hunger, cold and disease in the first years of exile.

The peasants resisted. In 1930 there were thousands of disturbances, often led by women. Before joining the collective farms they slaughtered their animals en masse rather than hand them over for nothing. By 1933 the number of cattle and horses had fallen by roughly half. In the first months of 1930 alone the authorities drove more than half of all households into collective farms. When the countryside was seething and the spring sowing was approaching, on 2 March 1930 Stalin published the article “Dizzy with Success”, in which he blamed the “distortions” on local officials. The peasants began to leave the collective farms in droves, and by the summer they contained less than a quarter of households. In the autumn the pressure was resumed, this time more effectively. By 1932 more than 60 per cent of households had been collectivised, and by the end of the decade almost all.

The collective farms were above all to deliver grain to the state, for which they were paid a pittance. Since the countryside would not sell, the state decided to take it. Delivery quotas were set from above and raised even as harvests fell. On 7 August 1932 a decree on the protection of socialist property was issued, popularly known as the law of spikelets, which for theft of collective-farm grain – even a few ears gleaned from the stubble – prescribed execution or ten years in a camp.

Famine

The result was the famine of 1931–1933. It struck hardest in Kazakhstan, where the forced settlement of the nomads and the seizure of their herds killed, according to estimates, from one and a half to more than two million people – almost two in five Kazakhs – and in Ukraine, the Kuban and the Volga region. In Ukraine, where in the winter of 1932–1933 brigades searched cottages and took away all food, and villages that had not fulfilled the plan were put on “blacklists” and cut off from supplies, between 3.5 and almost 5 million people died, according to various estimates. Ukrainians call this famine the Holodomor. In January 1933 the authorities forbade peasants from Ukraine and the Kuban to leave in search of bread. Ukraine, Poland and many other states recognise the Holodomor as genocide. Historians debate whether the famine was a deliberate blow against Ukrainians as a nation or the result of a ruthless policy whose victims the authorities knowingly accepted, but there is broad agreement that it was Moscow’s decisions that turned a poor harvest into mass death. Across the Soviet Union as a whole, between about five and more than seven million people died.

The authorities concealed the famine. Foreign journalists were not allowed to travel to the countryside, and the New York Times correspondent in Moscow, Walter Duranty, awarded the Pulitzer Prize in 1932 for his reporting on the Five-Year Plan, denied reports of famine. The truth was described by the Welsh journalist Gareth Jones, who in the spring of 1933 walked through Ukrainian villages. Diplomats also informed their governments about the famine, among them the Polish consuls in Kiev and Kharkiv.

The balance sheet

On 7 January 1933 Stalin announced at a plenum of the Central Committee that the first Five-Year Plan had been fulfilled in four years and three months, that is by the end of 1932, and that heavy industry had fulfilled its plan by 108 per cent. The truth was more complicated. Many targets were only partly achieved. Steel output rose from about 4 to just under 6 million tonnes, whereas the plan had envisaged more than 10 million; pig iron from 3.3 to 6.2 million tonnes instead of 10 million; and coal from 35 to 64 million tonnes instead of 75 million. Fewer power stations were built than planned. The plan for machine-building, on the other hand, was decisively exceeded, and for the first time the USSR produced its own tractors, lorries, machine tools and aircraft. Output of textiles and other consumer goods did not rise, and during the famine it fell. From 1929 bread and most basic necessities were rationed. Workers’ real wages in 1932 were considerably lower than in 1928.

The Five-Year Plan also built a new economic system. Private trade and crafts almost disappeared, prices and production were set by the state, and everything was decided by the party apparatus. The political system changed too. Stalin’s opponents in the party leadership were defeated, and Vyacheslav Molotov, one of his most loyal men, replaced Alexei Rykov as head of government in December 1930. The Soviet Union entered the 1930s as a one-man state. The second Five-Year Plan began in 1933 and the third in 1938, interrupted by the war.

Significance

Stalin himself linked industrialisation with war. On 4 February 1931 he told a conference of industrial managers: “We are fifty or a hundred years behind the advanced countries. We must make good this distance in ten years. Either we do it, or they crush us.” From 1931 the Deputy People’s Commissar for Military Affairs and head of armaments was Mikhail Tukhachevsky, who had long demanded that the whole economy be prepared for a war of machines. Some of the new tractor factories were designed on the assumption that in wartime they would switch to making tanks. According to Russian figures, at the beginning of 1932 the Red Army had fewer than 1,500 tanks, and at the beginning of 1934 more than 7,500 – more than the armies of Britain, France and Germany combined. In order to build in peace, Moscow sought calm on its borders and in 1932 concluded non-aggression pacts with Poland, the Baltic states, Finland and France. Earlier, from the 1920s onwards, it had conducted secret military cooperation with Germany, through which the Reichswehr and the Red Army exchanged experience and Soviet officers learned modern warfare.

The industry built in the Urals and beyond during the first Five-Year Plans – in Magnitogorsk, Chelyabinsk and Kuznetsk – proved invaluable in 1941. When the Germans occupied Ukraine and western Russia, and with them most of the old coal and steel basins, including Dniprohes, blown up in August 1941 by the retreating Red Army, hundreds of factories were evacuated to these centres. Chelyabinsk, where a great tractor factory had opened in 1933, soon became known as Tankograd. Historians debate whether rapid industrialisation was a precondition for the USSR’s survival in the war, or whether the same growth could have been achieved without collectivisation and famine. What is beyond doubt is that the price of the Five-Year Plan was millions of victims, a ruined agriculture that never fed the country for as long as the USSR existed, and a system of terror that a few years later, in the Great Purge, struck the party itself and the army command, Tukhachevsky first among them. In the West, sunk in depression from 1929, the Five-Year Plan made a strong impression. Many intellectuals saw it as proof that the planned economy was beating capitalism, and few wanted to hear about the famine. Right-wing dictatorships also copied planning: in 1936 Adolf Hitler announced Germany’s own Four-Year Plan, intended to make the Reich’s economy ready for war within four years.