KHRUSCHEV ECONOMY 1953-64

Question 1

changes in industrial organisation from Stalin to Khrushchev

INDUSTRIAL DEVELOPMENT UNDER KHRUSHCHEV, 1953-64
Economic issues were one of the most hotly debated areas during the leadership struggle after 1953. Initially, Khrushchev opposed Malenkov’s proposal to

Nevertheless, once firmly established in power, Khrushchev

Answer 1

move the economic focus away from heavy to light industry (and, in return, Khrushchev’s agricultural proposals were criticised by Malenkov).

introduced industrial changes which went some way to changing the rigid Stalinist planning system that he inherited and also took steps towards developing new industrial areas.

Question 2

changes in industrial organisation from Stalin to Khrushchev

DECENTRALISATION AND INDUSTRIAL PLANNING
Although the USSR had seen some impressive economic growth under the Stalinist system, by 1953 that growth was slowing down.
There were several issues with the Stalinist system:

* Ministers in Moscow

Answer 2

• Ministers in Moscow (who were often out of touch with the situation on the ground) set different industrial targets for each enterprise. (Such a system was complex enough in itself, but as the number of enterprises had increased and the products which they supplied to one another required increasingly complex planning, it began to break down.)

Question 3

changes in industrial organisation from Stalin to Khrushchev

There were several issues with the Stalinist system:

Enterprises would set and given bonuses according to

Answer 3

fulfilling their output targets. However, exceeding targets would mean that the targets were raised the next year, so managers preferred to play safe, hide the productive capacity of their enterprises and avoid too much innovation and improvement.

Question 4

changes in industrial organisation from Stalin to Khrushchev

There were several issues with the Stalinist system:
* Another disincentive to modernisation was the way the output targets were assessed, which was usually by weight. As a result

Answer 4

heavy goods were favoured over lighter ones, regardless of whether this was what consumers wanted

Question 5

changes in industrial organisation from Stalin to Khrushchev

There were several issues with the Stalinist system:

Since resources were not being efficiently used, increasing amounts of

Answer 5

• capital investment were needed even to stand still - and even more was needed to maintain growth

Question 6

changes in industrial organisation from Stalin to Khrushchev

The changes that Khrushchev introduced in industry were not all his own ideas, but he implemented them with a new energy and drive, helping to break some of the past constraints. The Sixth Five Year Plan was launched in 1956, but

Answer 6

its targets were over-optimistic and the plan was abandoned after two years.

Question 7

changes in industrial organisation from Stalin to Khrushchev

Nevertheless an important step forward took place in 1957, which helped to move the Soviet economy towards a degree of decentralisation:

2 points and motive?

Answer 7

• Sixty Moscow ministries were abolished.
• The USSR was divided into 105 economic regions, each with its own local economic council (sovnarkhoz) to plan and supervise economic affairs.
  This reform had an ulterior political motive in that it removed Malenkov’s men (in the central ministries) and extended Khrushchev’s patronage network in the localities.

Question 8

changes in industrial organisation from Stalin to Khrushchev

Even with the decentralisation measures in place, there still needed to be a degree of ‘central planning’ in Moscow.
State committees and

Answer 8

a new Supreme Economic Council were therefore set up to supervise a new seven year plan, announced in 1959.

Question 9

changes in industrial organisation from Stalin to Khrushchev

The seven year plan of 1959 had an emphasis on improving standards of living for ordinary people, with

Answer 9

a 40-hour week and a 40 per cent wage rise promised by 1965.

Question 10

changes in industrial organisation from Stalin to Khrushchev

The targets it laid down were merged into a Seventh Five Year Plan (1961-65). Both were trumpeted with the slogan ‘Catch up and overtake the USA by 1970’ and there was a slight shift in priorities from the old heavy industries to the previously-neglected ‘modern industries’:

10 points!

Answer 10

• vast expansion of chemicals industry - especially in fields of plastics, fertilisers, and artificial fibres
• housing factories to produce prefabricated sections for new flats increased production of consumer goods.
• greater exploitation of USSR’s resources - natural gas, oil and coal - and building of power stations.
• Expanding Soviet communications and technology was also a major focus throughout the Khrushchev period and impressive displays of Soviet technology amazed the world at the Brussels World Fair in 1958.
• Many railway lines were electrified or had engines converted to run on diesel. In addition, the network was greatly expanded.
• Air transport was expanded, and the Aeroflot corporation was subsidised to offer cheap long-distance passenger travel - often undercutting the railways. (It was said that a peasant could afford to buy an air ticket to travel 200 miles to Moscow to sell his produce in a Moscow market, and still make a profit!)
• In 1957, the USSR launched the Earth’s first artificial satellite (Sputnik); the take further research into the t space programme.
• same year, Sputnik II took a dog - Laika - into orbit; in 1959 a red flag was placed on the moon and pictures of the dark side of the moon were taken.
• In 1959, the icebreaker Lenin was launched. This was the world’s first civil nuclear-powered ship.
• Russian space science made continuous advances. A test flight brought two dogs back to Earth alive and in April 1961 Yuri Gagarin became the first human in space; in 1963 Valentina Tereshkova became the first female cosmonaut.

Question 11

RESULTS OF INDUSTRIAL CHANGE
Statistically, Khrushchev would appear to have been very successful:

Coal, TV sets (thousands) Refrigerators increase from 1955 to 65

Answer 11

Coal (million tons) 391 to 578
TV sets (thousands) 495 to 3655
Refrigerators (thousands) 151 to 1675

Question 12

Khrushchev’s ambition was, however, rather greater than his achievement. His decentralisation measures actually just added another layer of

Answer 12

bureaucracy, and his system was rapidly abandoned in 1965, shortly after his fall from power. Standards of living certainly improved but there were still severe limitations to the quality of life.

Question 13

Heavy spending on armaments and the space race distorted the economy and although the USSR narrowed the gap between its own economic growth and that of the USA, it came nowhere near to overtaking its rival.
Indeed, from 1958, Soviet industrial growth began to

figures

Answer 13

slow down significantly. Having been over 10 per cent per annum for the previous decade, it fell to 7.5 per cent in 1964.

Question 14

Moreover, the decline was particularly marked in consumer industries, which enjoyed only a

Answer 14

2 per cent growth in 1964.

Question 15

Furthermore, while the Soviet Union certainly marked itself out as a leader in the space race, this was only by some excessive risk-taking

Answer 15

(Laika, the first creature sent into space in 1957, died in orbit) and while Soviet rocketry was good, its instrumentation was unsophisticated and inferior to that of the USA.

Question 16

agriculture and the Virgin Lands scheme

Khrushchev prided himself on his agricultural expertise. Coming from a peasant background himself, he

Answer 16

enjoyed spending time in the countryside, talking with the peasants in an earthy’ language which at least suggested (and probably meant) he was interested in farming matters.

Question 17

agriculture and the Virgin Lands scheme

As early as 1953 Khrushchev told the Central Committee that the limitations of agricultural production under Stalin had been concealed by unreliable statistics and that, in practice, grain output and the number of livestock being reared had been

Answer 17

less than in the last years of tsarist Russia.

Question 18

agriculture and the Virgin Lands scheme

Stalin’s encouragement of particular farming methods was also criticised as counter-productive, although Khrushchev continued to favour some whose ideas were scientifically dubious, such as Trofim Lysenko. Khrushchev therefore increased investment and put forward a number of proposals for change. As with industry, he placed the implementation of reforms

Answer 18

in the hands of the local Party organisations. The Ministry of Agriculture’s powers were thus reduced so that it became little more than a consultative and advisory body.

Question 19

agriculture and the Virgin Lands scheme

Several changes were introduced to incentivise peasants to produce more:

Answer 19

• the price paid for state procurements of grain and other agricultural goods was raised (grain prices rose 25 per cent between 1953 and 1956)
• taxes were reduced (and made payable on plot size rather than what the peasant owned, for example, livestock)
• quotas on peasants’ private plots were cut
• peasants who did not possess animals were no longer to be required to deliver meat to the State.
• collectives were allowed to set their own production targets and choose how to use their land.

Question 20

agriculture and the Virgin Lands scheme

Other changes were designed to increase production:

Answer 20

• increase in the numbers of farms which were connected to the electricity grid (previously most were without electricity although some had their own diesel generators)
• buy from the Machine Tractor Stations (then disbanded in 1958 - which suited the peasants who had formerly had to pay for the loan of equipment in goods - and turned into repair stations)
• chat the number of collectives wives to create larger farms. The result was that the number of collectives was halved 1950-60 and the number of ‘state farms’ (generally double the size of the collectives) was increased. These were used in particular to develop previously uncultivated virgin lands.

Question 21

agriculture and the Virgin Lands scheme

Khrushchev believed that one way to increase production was to cultivate grazing lands in western Siberia and northern Kazakhstan that had not previously been put under the plough.
When the first scheme in 1953 proved successful,

Answer 21

the cultivated area was extended, and a huge campaign was launched to attract farmers to settle in these parts. Members of the Soviet youth movement, the Komsomol, were also encouraged to spend time on the new farms, helping to build settlements, put up fences, dig ditches and build roads.

Question 22

agriculture and the Virgin Lands scheme

By 1956,

Answer 22

35.9 million hectares of ‘virgin land’ had been ploughed for wheat.

Question 23

agriculture and the Virgin Lands scheme

Khrushchev also launched several campaigns for new crops, particularly maize. He thought this would be the answer to the

Answer 23

USSR’s food shortages, since it produced a high tonnage per hectare and not only could it be used for human consumption, it also provided good animal fodder. Indeed, after he visited the USA in 1959, he encouraged the production of cornflakes (made of maize).

Question 24

agriculture and the Virgin Lands scheme

He even staged a campaign against private cows - many of which were voluntarily transferred to the collectives.
Another idea involved the creation of agrocities’ -

an attempt to

Answer 24

huge collective farm/towns. This was an attempt to replicate urban conditions of work and living on the land and so destroying the old, conservative, rural villages, making for greater efficiency. However, this never got beyond the visionary stage.

Question 25

agriculture and the Virgin Lands scheme

avergae production of
Cereals (excluding maize)
Milk

from 1953-64

Answer 25

Cereals (excluding maize) 82 to 132 million tonnes
Milk 36 to 63 million tonnes

The statistics look impressive, although Khrushchev’s target of 180 million tons of cereals was not met.

Question 26

agriculture and the Virgin Lands scheme

The new measures failed to encourage the peasants to put more effort into their work on the collectives and state farms. Although there was some attempt to increase the amount of time the peasants spent on communal farming (as opposed to their own private plots), the latter

Answer 26

continued to provide about half the peasants’ income and to contribute over 30 per cent of the produce sold in the USSR. This was despite the fact that private plots represented only around 3 per cent of the total cultivated area.

Question 27

agriculture and the Virgin Lands scheme

Furthermore, the new pricing system proved a failure because state officials kept altering the prices, so farmers found it difficult to plan ahead.
Frustrations at the low prices the State paid for products and the interference of Party officials in farm management brought plenty of grumbling, and sometimes had the effect of reducing peasant output.

selling of tractors

Answer 27

Even the selling of tractors to collectives was less effective than it might have been, because there were too few farmers capable of carrying out repairs, and peasants were not prepared to pay the repair stations to service the machinery.

Question 28

agriculture and the Virgin Lands scheme

Khrushchev’s grand schemes’ also had their problems. The Virgin Lands Scheme was much less successful in the longer term than it seemed at first.

Answer 28

Climatic conditions had not been taken into account, and the land was worked so intensively, and without any rotation of wheat with other crops, that land erosion took place and the soil rapidly became infertile.
A particularly bad harvest in 1963 did not help matters but, embarrassingly for Khrushchev, the USSR was forced to import grain as a result - some from North America.

Question 29

agriculture and the Virgin Lands scheme

Similarly the over-enthusiasm of local officials to meet with favour by growing maize, growing legumes, or ploughing up grassland was not always agriculturally sound. There was only a

Answer 29

limited rise in milk production when cows were transferred to the collectives while crops, such as maize, were often grown in unsuitable soil and sometimes to the detriment of much-needed wheat. In any case, Khrushchey’s cornflakes did not go down well with a population more used to buckwheat porridge

Question 30

agriculture and the Virgin Lands scheme

Khrushchev was the first USSR leader to show such an interesting agriculture and he also made a huge effort to integrate rural areas into the Party structure, increasing rural representation within the Party at both the local and a more senior level. The Soviet-controlled press devoted many pages to exalting the new initiatives and commenting on the carefully massaged statistics. However, despite all the effort,

Answer 30

results were really very mixed, Khrushchev’s USSR was, in reality, a time of too many different initiatives, carried out with insufficient thought.

Question 31

THE ECONOMIC CONDITION OF THE SOVIET UNION by 1964

THE ECONOMIC CONDITION OF THE SOVIET UNION
The Stalinist era had created a large industrial base for the Soviet economy and, despite the destruction wrought by the war, much had been accomplished to rebuild that economy by 1953. Stalin’s successors were thus in the favourable position of being able to make some redirection of resources away from heavy industry and armaments towards consumer goods, housing and agriculture.

Answer 31

• Changing the workings of the centralised command economy, which had always had a strong heavy industry base, created new problems for the planners and led to an expanded bureaucracy.
• The USSR also developed technologically in the postwar period with the acquisition of nuclear weapons and huge advances in rocketry perpetuating the reputation of the Soviet Union as a great military power.

Question 32

THE ECONOMIC CONDITION OF THE SOVIET UNION by 1964

Stalinist industrial and agricultural development had been wasteful of resources - particularly human labour. The challenge after 1953 was

Answer 32

to stimulate greater productivity without relying on increases in labour or the exploitation of new materials - neither of which was capable of increasing indefinitely.

Question 33

THE ECONOMIC CONDITION OF THE SOVIET UNION by 1964

Khrushchev attempted a limited degree of decentralisation in an attempt to incentivise, and he made an increase in agricultural productivity levels his personal crusade. However, his campaigns were not always well thought through; such improvements as there were relied

Answer 33

more on the increased use of land than on real improvements, and there was no significant increase in the output from either factories or farms.

By 1964, no solution to the major issue of how to sustain economic growth had been found.