Khrushchev's Economy

Question 1

Khrushchev’s Objectives

Answer 1

Destalinisation.
Focus on light industry, consumer goods, chemicals, not heavy industry.
Better SOL.
Incentives > coercion.

Question 2

Issues

Answer 2

Stalin’s Terror limited initiative.
Entrenched bureaucracy = slow decision making.
Command economy was clumsy, wasteful & too inflexible to respond to changes in demand.

Question 3

Reforms

Answer 3

Virgin Land Scheme, 1956-60.
Sovnarkhoz, 1957.
Corn Campaign, 1958.
7YPlan, 1959-65.
Abolished Labour Laws, 1960.
Liberman Plan, 1962.

Question 4

Sovnarkhoz

Answer 4

1957.
Decentralised power from Moscow to 105 regional councils.
Gosplan supervised, but its targets reviewed to be more realistic.

Question 5

Corn Campaign

Answer 5

1958.
Encouraged Ukraine to grow corn after seeing American corn fields.
Use corn to feed animals.
Planted 85m hectares of corn.

Question 6

Corn Campaign Negatives

Answer 6

Ukraine had wrong soil + climate for corn.
Copy America, but lacked tractors + fertilizer.
Produced 50% of corn per hectare than US.
1958-64, animal feed fell 30%.

Question 7

Abolished Labour Laws

Answer 7

1960.
Enterprise managers had to reinvest 60% of profits.
Working week from 48hrs –> 41hrs.

Question 8

Liberman Plan

Answer 8

1962.
Greater autonomy from local managers.
Market > state as price setters.
Decentralisation.

Question 9

7YPlan

Answer 9

1959-65.
Focus on light/chemical industry & consumer goods.
Natural gases cheap + more abundant than coal.

Question 10

Virgin Land Scheme

Answer 10

1953-63.
Khrushchev had peasant background, “agricultural expert”.
Slow growth in food production = hindered SOL + economic growth.
Most farms only grew wheat.
1956, food production had fallen by 40%.
Agricultural investment grew from under 3% a year to 12.8% of budget between 1954-1959.

Question 11

VLS Successes

Answer 11

1955, collectives given more freedom.
MTS abolished, 120k tractors sold + distributed to collectives.
Collectives expanded (economies of scale).
Increased mechanisation + fertiliser.
Peasants allowed to sell surplus grain on private market.
1958, farmers income up 250%, peasant income up 37% food production rose 51%.

Question 12

VLS Failure

Answer 12

Agricultural jobs unpopular.
Grain produced in Kazakkhstan & wheat in Ukriane failed to meet targets.
1963, poor harvest = death of millions of livestock. 54m hogs in 1962, but by end of 1963, fell to 28m.
Grain imported from N. America + Australia.
44% population worked on farms compared to 5% in US, yet US outproduced them x2.
1956, food production had fallen by 40%.

Question 13

22nd Party Congress

Answer 13

10/1961
Divided Party in two, one focused on industry, the other on agriculture.

Question 14

Economic Figures

Answer 14

1957, Sputnik 1st satellite in space.
1961, Yuri Gagarin 1st man in space.
+500k tonnes synthetic fibers produced (660K tonnes).
More consumer goods, but poor quality.
Annual growth of 7% in 1960s.
Power spread thin, confusion in sovnarkoms, too many opinions.
Canada supplied 6.8m tonnes of grain ($500m) and US supplied 2.5m ($400m).