Industrialization Debate

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Subject essay: Lewis Siegelbaum

The industrialization debate of the mid-1920s was a key turning point in the history of the Soviet Union, and more broadly, of socialism. For better or for worse, the outcome of the debate over the pace of industrialization, sources of investment, pricing and wages policies, and other related matters would determine the Soviet Union’s answer to the question of how to overcome “backwardness” in the modern era, serving for much of the rest of the world as the only real alternative to a capitalist framework of development. The debate, which in many respects overlapped with the controversies surrounding the party’s policy towards the peasantry, began in 1923 and for all intents and purposes was over by the autumn of 1927.

All participants in the debate accepted the notion that industrialization was a desirable end both on national security grounds as well as for the more ideologically inspired purpose of overcoming contradictions between town and countryside. They differed, however, on the timetable for achieving the goal, the kind of industry to be developed, and the means for doing so. So long as there was underutilized capacity in industry, the debate over how to expand industrial production and the sources of capital to make it possible tended towards the theoretical. In this sense, Evgenii Preobrazhenskii’s “fundamental law of socialist accumulation” which required the state-owned industrial sector to squeeze surpluses from small-scale privately owned agriculture via “non-equivalent exchanges” (i.e., taxation, credit restrictions, and a pricing policy that favored industrial goods) stood at one end of the spectrum. At the other was Nikolai Bukharin’s organic metaphor of “growing into socialism” by strengthening the link (smychka) between town and country and the doctrine of “socialism in one country” which both he and Stalin defended. More compatible with the initial thrust of the New Economic Policy and the party’s “face the countryside” strategy of the mid-1920s, Bukharin’s position was essentially the party’s line. Preobrazhenskii’s was identified with the Left Opposition and its “super-industrialization” strategy deemed by the rest of the party leadership as excessively risky.

Towards the end of 1925, though, the upper limits of industrial recovery were in sight. As Stalin announced to the fourteenth party congress in December 1925, “The main thing in industry is that it has already approached the limit of pre-war standards; further steps in industry involve developing it on a new technical foundation, utilizing new capital equipment and embarking on the new construction of factories.” A policy of industrialization which emphasized the importance of producing means of production was duly approved by the congress and reiterated by the central committee in April 1926. Still, much remained to be worked out in terms of defining levels of investment and growth possibilities. This task fell to the State Planning Commission (Gosplan) which was dominated by economists who were overwhelmingly not members of the party. They employed two approaches: the “genetic” according to which certain objective “regularities” of the pre-war economy were extrapolated to forecast future possibilities, and the “teleological” which altered proportions in the economy in the interests of maximum growth, in effect, making the market adapt to the state rather than the reverse. Both went into successive drafts of the five-year plan that the party’s central committee debated and sent back for (upward) revision. Politics thus became entwined with economic planning. Once the Left had been defeated, the emphasis on increasing levels of investment in “heavy” (producer goods) industry became more politically attractive. The logic of this shift in the party line towards increasing the tempo of industrialization was to step up pressure against the peasantry (disguised as anti-kulak measures) which soon translated into the all-out campaign for collectivization and the abandonment of NEP.

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