05 Industrial and Agricultural change 1953-85

Question 1

Khrushchev developing agriculture - Agriculture in crisis at the end of the Stalinist period

Answer 1

-There were fewer animals in the USSR in 1953 than before the Revolution in 1917

-Grain harvest levels in 1953 were below levels in 1913

-Collective farm workers had no incentive to work hard because of low wages, high taxes and above all, the collective farm model itself.

-The collective farms lacked modern machinery, fertilisers and skilled workers.

Question 2

Khrushchev developing agriculture - ISSUES WITH Khrushchev attempts to reinvigorate agriculture

Answer 2

-Closing the MTS in 1958 had negatives, many collective farms lacked barns to store new farm equipment so it rusted in the fields, many farms lacked the mechanics to maintain the farm machines, Many collective farms could not afford the MTS machines when they were sold off

-khrushchev’s target for a 700% increase in fertiliser production was never reached

-Raising procurement prices was good but not good enough to incentivise as the prices for eggs, milk, and meat were less than production costs

Question 3

Khrushchev developing agriculture - Virgin Lands Scheme

Answer 3

Khrushchev’s most ambitious agricultural policy, launched in 1953

Khrushchev hoped to increase Soviet agricultural production by turning unfarmed lands in the northern Caucuses, Kazakhstan, and western Siberia into new farms

-In 1956 Khrushchev proclaimed that the USSR would produce more food than the US by 1960

-In 1956 the Virgin Lands made up 50% of the USSR agricultural output

Question 4

Khrushchev developing agriculture - ISSUES WITH Virgin Lands Scheme

Answer 4

-Harvest from the Virgin Lands declined from 1958

-The land was not suitable for intensive farming, rainfall insufficient, irrigation schemes lacked investment

-Soil was fragile and led to soil erosion, 13,000 square miles of topsoil was lost in 1960 alone

Question 5

Khrushchev developing agriculture - The Corn Campaign

Answer 5

-Corn Campaign introduced from 1958 onwards

-Encouraged Ukranian farmers to grow corn rather than wheat

-His plan was to shift wheat production to the newly created Virgin Lands

-The corn would be used to feed animal and therefore increase the amount of meat available to Soviet citizens

-Campaign led to a huge 85 million acres of land being planted with corn, mainly in the Ukraine.

Question 6

Khrushchev developing agriculture - ISSUES WITH The Corn Campaign

Answer 6

-Ukraine had the wrong climate and soil for corn and Soviet farmers did not have the necessary tractors and fertilizer meaning only 1/6th of the corn was viable, meaning a huge waster of resources

-Soviet farms were only able to produce 50% of the corn per hectare that the US farms achieved

Question 7

Khrushchev developing agriculture - Overall Success in food production?

Answer 7

-Between 1953-58 agricultural production went up by 35%

-Meat consumption rose by 55% during the 7-Year Plan

-The famines of the Stalinist era were never repeated

-Under Khrushchev at least 25% of the population of the USSR worked on farms, compared to just 5% in the US, despite the US producing 2x as much food

Question 8

Khrushchev developing agriculture - Overall Success in improving rural living standards

Answer 8

-According to official claims, the average real incomes of peasants rose 70% from 1953-58

-The famines of the Stalinist era were never repeated

Question 9

Khrushchev developing agriculture - Overall failure in food production

Answer 9

-Under Khrushchev at least 25% of the population of the USSR worked on farms, compared to just 5% in the US, despite the US producing 2x as much food

-The USSR did not overtake the US in food production

-Grain output was less per head than in Tsarist Russia in 1913

Question 10

Khrushchev’s plan for modernising the economy - Seven-Year Plan

Answer 10

-Launched in 1959, this plan focused on light industry

-Planned for synthetic fibre production (needed for clothing) to increase by 500,000 tons

Question 11

Khrushchev’s plan for modernising the economy - Moving away from the rigid planning of Gosplan

Answer 11

-1957

-The Soviet Union was divided into 105 economic regions, each run by a Regional Council (Sovnarkhoz).

-Managers were given greater power and allowed to keep 40% of factories profits for re-investment

Question 12

How successful was Khrushchev’s policy of economic modernisation? - Good news on light industry

Answer 12

Synthetic fibre production (needed for clothes) increased 300,000 tons (target 500,000)

Footwear increased by 130 million pairs

Overall, there was a 60% increase in the production of consumer goods (target 65%)

Fertilizer production increased by 19 million tons

The annual growth rate in 1950s was 7% (Compared to 3% in USA)

Question 13

How successful was Khrushchev’s policy of economic modernisation? - Positives in living standards (WORK CONDITIONS

Answer 13

-A minimum wage was introduced in 1956.

-The working week was reduced from 48 hours to 41 by 1960 and harsh Stalinist labour laws were removed.

Question 14

How successful was Khrushchev’s policy of economic modernisation? - Positives in living standards (HOUSEHOLDS)

Answer 14

-Average household incomes grew by 3% per annum under the 7YP

Question 15

The limits to light industrial growth under Khrushchev? - Targets not hit

Answer 15

-The Soviet Union still lagged far behind other European Nations in terms of consumer goods. There were 5 cars per 1000 people in the Soviet Union, compared to 200 in the UK.

-The quality of consumer goods was often poor

Question 16

The limits to light industrial growth under Khrushchev? - A slowing economy

Answer 16

-Another serious problem was a slow down in the economy’s growth rate

-In 1953-60 the Soviet Union had a high growth rate of 9% per annum,however in 1960-64 this reduced to 6.5% per annum.

-This in turn meant that the rise in living standards also slowed.

Question 17

Why did Khrushchev’s attempts to modernise the economy ultimately fail? - Khrushchev’s meddling

Answer 17

-In 1957 he decentralsied power from Gosplan to 105 sovnarkhoz. He hoped it would make central planning more adaptable to local circumstances and avoid waste. However this reform just destroyed the central co-ordination of the economy

-Between 1958-1964 Khrushchev introduced increased centralisation to solve the problems created by the sovnarkhoz reforms. But because responsibilities of the sovnarkhozy and the new central bodies were not clear, this caused confusion in the planning system

-In 1962 Khrushchev divided the Party in two: one half of the Party was responsible for agriculture, one half for industry - Huge reform, unpopular within the party, took place mid-way through the 7 Year Plan.

-Khrushchev changed the targets of the Plan in 1962, setting more ambitious goals. trying to implement this created further chaos in the planning system.

Question 18

Why did Khrushchev’s attempts to modernise the economy ultimately fail? - Impact of cold war

Answer 18

-Turned out the economy was not rich enough to deliver both ‘guns and butter’ i.e. armaments and consumer goods.

-Khrushchev seemed to recognise this as he initially cut military spending from 12% of GDP to 9% in 1958.

-However a series of Cold War crisis (Berlin Wall, Cuba) meant by 1964 military spending was 11%.

-The rise in military spending coincided with a slow down in economic growth, indicating that increased military spending led to a reduction in economic growth.

Question 19

Why did Khrushchev’s attempts to modernise the economy ultimately fail? - The nature of the Soviet economy

Answer 19

-The Soviet economy was not designed to produce consumer goods. This is because the economy was focused on meeting targets, rather than meeting the needs of consumers.

-As a result, although the economy did have a greater focus on consumer goods under Khrushchev, the consumer goods that were produced were often useless or unaffordable.

-Khrushchev was not able to overcome this problem because he was not prepared to fundamentally reform the Stalinist command economy.

Question 20

Industry under Brezhnev - The Kosygin Reform Plan

Answer 20

-1965

-Aimed to give enterprise managers greater independence from the newly reconstituted ministries while encouraging them to pay more attention to cost and profit

-Included the introduction of payment for capital, bonus funds for enterprises, and sales targets

-Sales targets to counter accumulation of excessive stocks of unsold goods

-Decentralisation of some investment decisions

Question 21

Industry under Brezhnev - Why the Kosygin Reform Plan failed

Answer 21

-Fundamental ideas behind reform were put forward by economists which were strongly reformist, but the actual drafting of the measures fell to more moderate officials

-Implementation was led by officials who were generally unenthusiastic about reform and hostile to it

-Brezhnev himself remained strongly committed to party activism in economic management and was sceptical of the reforms

-The failure to reform the pricing structure itself was also significant as many schemes were made to link managers bonuses to indicators like profitability and sales were ineffective

Question 22

Industry under Brezhnev - Why was Brezhnev not prepared to improve the efficiency of the Soviet economy by closing poor performing factories?

Answer 22

-Deteriorating economic performance decreased the regime’s ability to sustain its side of the bargain and thus undermined popular support for it, but the regime’s commitment to maintaining the contract was a major contributor to declining economic performance

-The economic reforms which might have corrected this situation over the long term would have required the authorities to renege on elements of the contract, so despite radical proposals being debated, they were never adopted.

Question 23

Industry under Brezhnev - Why was the problem of ‘underemployment’ in factories not tackled, even though this led to poor productivity?

Answer 23

-As labour force growth slowed, managers’ tendency to keep more workers on the books than they needed became an increasingly serious problem

-To solve this problem, they required incentives for managers to reveal and relinquish their ‘reserves’ of excess labour

-These attempts foundered on the regime’s unwillingness to admit open unemployment and on planners’ readiness to withdraw the rewards offered

Question 24

Agriculture under Brezhnev - problems in agriculture at the start of the Brezhnev era

Answer 24

-¾ of collective farm workers lived below the official poverty line in early 1960s

-Differences in availability of consumer goods meant that rural workers had less opportunity than urban counterparts to spend earnings

-Rural poverty presented a practical as well as a moral problem, since it encouraged the flight to the towns of the most productive elements of the rural workforce

Question 25

Agriculture under Brezhnev - How did Brezhnev attempt to improve agriculture?

Answer 25

-The Ministry of Agriculture was given back many of the managerial functions that Khrushchev had stripped from it

-The abolition of the TPAs (Territorial Production Associations) (mid-level agricultural management) was beneficial for state and collective farms, as it was linked to several other measures e.g., sharp increases in procurement prices, fixing of procurement plans for longer periods, reduction of plans to manageable levels

-Khrushchev-era restrictions on private livestock were eased and attitudes towards peasants’ private economic activity softened

Question 26

Agriculture under Brezhnev - evidence showing increased investment in agriculture

Answer 26

-Investments in agriculture nearly tripled over the period, from 50bn rubles in the first half of the 1960s to 130bn rubles a decade later

Question 27

Agriculture under Brezhnev - evidence showing continuing problems in agriculture

Answer 27

-Failure to raise agricultural production in line with household incomes, which grew rapidly, led to a growing gap between free market and state prices for food and, consequently, unavailability of an increasing range of basic foodstuffs through state outlets

-Prices in collective farmers’ markets in 1965 were 35% higher than in state retail outlets. This had reached a level of 120% above prices in the state retail network 20 years later.

Question 28

Economic Performance under Brezhnev - overall economic growth figures a cause for concern

Answer 28

-Official Soviet data states that growth of net material production fell from 9% in the 1950s to just 3.5% in 1980s – these estimates were most likely overstated anyway

-Moreover, price increases were systematically under-recorded so that as much as 50% of the apparent increase in goods during 1976-80 was actually the result of price inflation, not rising output.

Question 29

Economic Performance under Brezhnev - defence burden contributed to the Soviet Union’s economic stagnation

Answer 29

-By 1980, the USSR was spending more on defence than the USA, despite the fact that its economy was 1/3 the size

-Economic growth would be faster were it not for the burden of defence expenditure which was generally maintained above 10% of GDP

Question 30

Economic Performance under Brezhnev - how a rapidly ageing economic infrastructure became a problem during the Brezhnev era

Answer 30

-By the 1980s, much of the industrial capital stock was very old; most of it was technically out of date and worn out

-Plants were rarely closed, the service lives of machinery and equipment were far too long, and too little attention was paid to obsolescence

-Reported scrappages were so low for so long that many western economists believed them to be substantial under-estimates

-The failure to replace ageing equipment was especially detrimental because labour-force growth was also rapidly declining

Question 31

Economic Performance under Brezhnev - statistics, which show a rise in living standards during the Brezhnev era

Answer 31

-Consumption of meat rose 40% between 1965-70

-Households owning a TV rose by 60% from 1965 to 1980

-Households owning a fridge rose by 75% from 1965 to 1980