Economic Transformation

Question 1

First Piakalekta

Answer 1

• Stalin’s first Five Year Plan from 1928-1932 demonstrated the initial success of the Soviet Union’s economic transformation, with a focus on grain exportation the plan bolstered the economy and achieved the capital required for further industrial transformation.
• The first plan supported successful economic transformation through its implementation of collectivisation in the Soviet Union, a policy requiring peasants to give up their collective farms and join communal, state-run farms (kolkhozes).
• Shifting ideology in the Politburo towards leftist ideals marked the introduction of collectivisation in the Soviet Union as the 15th Party Congress in 1927 decreed collectivisation and allowed peasants to join kolkhozes voluntarily, however in order to boost economic transformation this decree was upended in 1928 as the first plan called for 20% of national farmland to be collectivised.
• This forceful policy on peasants led to broad societal discontent despite its success in acquiring agricultural capital for the economy, with only 7.5% of peasants collectivised in 1929.
• Economic production increased by 250% according to state figures, however, the rapid nature of this growth mitigated the economic success as it incited peasant resistance and rebellion, with widespread dissent becoming common in 1930.
• Animosity towards the regime saw peasants destroying their farms, crops, and livestock before joining Kolkhozes, leading to Stalin calling an end to collectivisation and 34% of peasants leaving Kolkhozes.
• In this manner, the first five-year plan was unsuccessful in achieving consistent economic transformation, with its adverse social impact having a negative political effect that damaged its over economic success.
• However, Stalin’s reinstatement of collectivisation in late 1930 saw peasant numbers in Kolkhozes increase to 50%, renewing the production drive and bolstering overall economic transformation.
• However, the need for foreign capital through exports that unlaid the premise of the first plan saw peasants struggling to hold onto surplus production and meet state quotas, leading to the 1932 Holdomor Famine that killed 7 million people, altering the social landscape of the Soviet Union.

Question 2

Second Piakalekta

Answer 2

• Stalin’s second Five-Year Plan continued the trend of economic transformation characterising the 1928-1941 period of the Soviet Union, however, unlike the first plan, the second plan from 1933-1937 was not as successful in bolstering the economy.
• With a focus on industrialisation and harnessing the capital gained from the first five-year plan for industry development, 80% of Soviet investments were shifted into industry and industrial production.
• The need for quantity of products led to a decline in quality, affecting the success of Soviet exports and causing a decline in economic growth for the first time since 1934.
• Despite the emphasis on industrial development and the investment in industrialisation, the damage to the Party image that occurred during the 1928-1932 period saw a shift in focus towards consumer goods to increase government popularity rather than capitalising upon the influx of industry, leading to shortfalls in production such as steel by 60%
• Similarly, the negative consequences of the first five-year plan continued to affect the economic success of the second, with agriculture and industry overstrained from rapid collectivisation, production quotas were reduced to more realistic targets, focusing instead on light industry and the building of factories to accommodate a growing working class.

Question 3

Third Piakalekta

Answer 3

• Stalin’s third Five-Year Plan ran from 1938 to 1941 and was not as impactful as the first two on the overall success of the Soviet Union’s economic transformation.
• This was due primarily to the commencement of World War II in 1939, causing the third plan to end a year early and leading to a shift in overall resources from agriculture and light industry into weapons and military efforts, mitigating its influence on the economy of the Soviet Union.
• Despite this, it had some impact on the economic transformation of the USSR as it marked an increase in heavy industry, primarily weaponry, that saw the Union become a leading industrial superpower.
• However, with 33% of investments going solely to military preparations the focus on producing consumer goods, seen under the second five-year plan, declined significantly, leading to increasing worker discontent which, combined with war-induced fear and poverty, contributed to an overall lack of worker incentive. This is reflected in the production outputs of the third plan which saw steel and coal production decline despite already falling short during 1933-1937.
• However, the early effects of WW2 did have some contribution to the economic transformation of the USSR as its initial trade with Nazi Germany and absorption of many Eastern European states correlated to a boost in foreign capital that supplemented declining internal production, contributing to overall economic successes.
• Over the course of the third-year plan, the USSR saw industrial growth of 12% compared to the 36% of the second five-year plan, highlighting the third plan’s minimal success in overall economic transformation.