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The Five-Year Plan

"Gorbachev Factor"

The enforced elimination of commodity relations, that is, of a market economy, was unthinkable without the setting up of a hierarchical and bureaucratic system of centralized planning. This is because, if a market does not coordinate the millions of decisions taken by thousands of managers, the only alternative is an elaborate and complex command-bureaucratic structure.  

At the center of the planning system was the top economic planning agency of the Soviet state, the Gosplan (the State Planning Committee). It was charged with drawing up a blueprint for national economic activity, usually for a five-year period. The blueprint was driven by the major objectives set by the political leadership for the development of various branches of the national economy, such as electrification targets, agricultural goals, transportation networks, and the like. The five-year plan translated these broad objectives into industry-specific requirements (outputs of generators for electric stations, tractors and fertilizers for the countryside, steel rails and locomotives for railways). These general targets were then transmitted down to ministries charged with the management of the industries in question.

This mechanism displayed certain strengths at periods when the political objectives of the regime called for a kind of crash breakthrough in some branches of the national economy or when the country faced the emergency of war. The Soviet economy achieved remarkably rapid progress in its industrialization drive before the Second World War. It enabled the USSR to win the economic contest during the war with Nazi Germany by outperforming it in the production of military hardware. It was successful enough in repairing the devastation that followed the war. In the postwar period, in areas of intense rivalry with the West, such as nuclear power and space exploration, the planning system was able to concentrate skills and resources regardless of cost. This enabled the Soviet Union to match or better similar undertakings in the West.

The important point to make here is that the economic system created by the Communist regime could hardly function without a high degree of authoritarianism in the political sphere. Political despotism and economic overcentralization developed side by side, naturally complementing and mutually reinforcing each other. The regimes total political control allowed it to dispose freely of the countrys entire demographic and material resources. In turn, the consolidation of the centralized system of state planning and management greatly strengthened the powers of the state and entrenched authoritarianism in politics. In short, political and economic power became closely intertwined in the Soviet system.

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The Economic Structure


Soviet Russia

Understanding the Soviet Period
Russian Political Culture
Soviet Ideology
The Soviet System
Soviet Nationalities
The Economic Structure
The Socialist Experiment
"Great Leap" to Socialism
The USSR in World War II
Stalin's Legacy
Brezhnev's Stagnation
The Economy in Crisis
Political Reform
The USSR's Collapse

Models of Soviet Power

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