The Soviet Industrialization Debate, 1924–1928

228 Pages·27.888 MB·English

by  Alexander Erlich

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THES OVIEITND USTRIALIZATION
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THE SOVIET
INDUSTRIALIZATION
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b Alexander Erlich
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The Russian Research Center of Harvard University -is supported by
a grant from the Carnegie Corporation. The Centel" carries out inter­
disciplinary study of Russian institutions and behavior and related
subjects.
© Copyright 196o by the President and Fellows of Harvard College
Second Printing
Distributed in Great Britain by the Oxford University Press, London
Library of Congress Catalog Card Number: Go-13287
Printed in the United States of America
This volume was prepared under a grant from the Carnegie Corpora­
tion of New York. That Corporation is not, however, the author,
owner, publisher, or proprietor of this publication and is not to be
understood as approving by virtue of its grant any of the statements
made or views expressed herein.
To the Memory of
HENRYIC ERLICH
Acknowledgments
A few brief paragraphs can only inadequately express
my gratitude to all those who by their cooperation and
support have made it possible for me to complete this
book.
My debt is greatest to three persons. Abba P. Lerner, my
chief guide in economic theory during my graduate years,
suggested the general direction of this study and has fol­
lowed its development with unfaltering perseverance and
incisive criticism. Abram Bergson helped me to delineate
the topic more sharply, and has been a source of invaluable
aid and stimulation as the indomitable reader and critic of
several successive drafts. Alexander Gerschenkron took an
active interest in my work at an early stage and has cleared
away many a hurdle by his good advice and warm encour­
agement. To the extent that this book represents any con­
tribution whatsoever, a lion's share of credit must go to
these men. However, neither they nor my other advisers
and friends should be held responsible for the opinions ex­
pressed in it and for the many errors that undoubtedly
remain.
The writing of my doctoral dissertation, which was sub­
mitted to the Graduate Faculty of the New School for So­
cial Research in early 1953 and which forms the basis for
the present study, was done under the tenure of a research
fellowship of the Russian Research Center of Harvard Uni­
versity. Clyde Kluckhohn, the :first director of the Center,
viii ACKNOWLEDGMENTS
was unstinting in his kindness and readiness to help. As a
result, I was able to devote my full time over a period of
four years to research in the problem area of this book in
an atmosphere of high intellectual inspiration and good com­
panionship. Merle Fainsod, Walter Galenson, Gregory Gross­
man, Donald R. Hodgman, and Barrington Moore read por­
tions of the original manuscript, and their critical sugges­
tions resulted in many improvements. Exchanging views
with them, as well as with Miriam H. Berlin, Joseph S.
Berliner, Robert V. Daniels, Alexander Eckstein, Franklyn
D. Holzman, Alex Inkeles, Benjamin I. Schwartz, Demitri
Shimkin, Carolyn R. Shilling, and Adam B. Ulam, was a most
gratifying experience.
During the same period, and in years that followed, it was
my good fortune to have the comments of Eduard Heimann,
Adolph Lowe, and Hans P. Neisser, my teachers at the New
School for Social Research, as well as of Evsey D. Domar,
James S. Duesenberry, Wassily Leontief, and P. N. Rosen­
stein-Rodan, all of whom consented to read particular chap­
ters of my manuscript. Boris Nicolaevsky was very generous
in lending books from his rich collection and in giving me
the benefit of his reminiscences on problems and person­
alities. Lev Magerovsky, Curator of the Russian and Eastern
European Archives at Columbia University, put me in his
debt by letting me read the very interesting memoirs of
N. V. Vol'ski covering the period of the twenties. The kind
permission to use the Trotsky Archives of the Houghton
Library of Harvard University made it possible for me to
incorporate some material which had not been published
before.
In the final states of my work, also, there were many who
lent a helping hand: Helen W. Parsons, Administrative
Assistant to the Director of the Russian Research Center
displayed true virtuosity in securing required secretarial
assistance at the shortest possible time and was an unfailing
ACKNOWLEDGMENTS ix
source of good cheer; Ruth DeWitt, Joan J. Miller, Mary
E. Towle, and Rose DiBenedetto were conscientious and
competent typists of successive drafts. I want to thank also
the staff of the Harvard University Press; especially Eleanor
D. Kewer for her understanding cooperation and Ann Orlov
for editing the manuscript with great skill and care.
A research training grant from the Social Science Research
Council allowed me to complete extensive preparatory work.
A summer grant from the same organization, awarded in
1957, enabled me to make substantial progress toward the
completion of the present manuscript, and a contribution
from Columbia University's Council for Research in Social
Sciences helped to defray typing expenses.
Some of the material contained in this volume has previ­
ously appeared in print. Portions of Chapters II and IX
are taken from my article, ••Preobrazhenski and the Eco­
nomics of Soviet Industrialization" (Q uarterloyf Journal
Econo6m4iF,ceb srua,ry 1950). Chapter V represents, by
and large, a section of my paper, "Stalin's Views on Soviet
Economic Development" (in Ernest J. Simmons, ed., Con­
tinuandi Cthya nignReus sian and SovTiheotu gCahm­t,
bridge, 1955). I am indebted to the publishers of these
essays for permission to reproduce parts of them, and to the
Macmillan Company for the permission to use, in slightly
changed form, a diagram from Abba P. Lerner's The Eco­
nomiof cCso nt(Nreow lYo rk, 1944).
Last, but very definitely not least, thanks are due to my
wife and daughter for their help in proofreading and typing,
and above all for their willingness to bear with an author
in travail.
Alexander Erlich
March 8, 1g6o
The Russian Institute,
Columbia University
Introduction
T
BE years 1924-1928 witnessed a remarkable debate in
the Soviet Union. Its major participants were leading Com­
munist theoreticians and eminent nonparty economists; the
keenly interested audience included everyone who was
politically and intellectually articulate in Soviet society. The
debate ranged far and wide from issues concerning the
theory of value to day-to-day political minutiae. At its cen­
ter, overshadowing all the rest, loomed the problem of the
appropriate speed and pattern for the prospective economic
development of the country.
A discussion of this scope was in keeping with a time­
honored tradition. In its sweep and in the dimensions of the
problems it raised, it revived memories of the ideological
battle royal which had reached its peak before the turn of
the century when the protagonists of Westernization led
by the "students of Marx" had clashed with the Populist
defenders of Russia's "uniqueness." Indeed, many Soviet
debaters harked back to this old dispute in search of sup­
porting argument and polemical spice. And just as the pre­
revolutionary logomachy moved towards its climax under
the impact of such momentous events as the hurried indus­
trialization of the eighties and nineties and the disintegra­
tion of the Populist movement after 1881, its Soviet sequel
was born of a cycle of stunning defeats and unexpected
successes. The crushing of the German Communist uprising
in early 1921 and the stabilization of the mark in 1924
xvi INTRODUCTION
marked the beginning and the end of the chain of events
which shattered the hopes of the imminent European revo­
lution. At the same time, the retreat from War Communism
to the NEP ( New Economic Policy) which took place al­
most simultaneously with the ill-fated putsch in central
Germany and which had been forced upon the Bolshevik
regime by economic catastrophe and political upheaval,
seemed to pay off in a most spectacular way. The abolition
of the indiscriminate requisitioning of peasant produce in
favor of a fixed tax, at first in kind and later in money; the
opening of channels of trade through which the nontaxable
part of peasant surplus could be freely sold; the denationali­
zation of small-scale and medium-scale industry and trade;
putting the bulk of the nationalized large-scale enterprises
on the basis of "cost accounting" -all these policies repre­
sented a flagrant denial of the notions and beliefs about the
nature of the "true" socialism which had been instilled in
the minds of tens of thousands of party stalwarts during the
period of Civil War -but they worked. The output of large­
scale industry which had plummeted to 14 per cent of its
prewar level by 1920 1 rose to 46 per cent in 1924 and to 75
per cent in the following year. The marketable output of agri­
64
culture climbed by per cent from 1922 to 1925.2 Last but
not least, the year 1924 saw the sum total of gross invest­
ment for the first time since 1917 exceed annual deprecia­
tion.8
Yet this development, while impressive and uninterrupted,
was interlaced with tension which manifested itseH in a
variety of disturbances. The "scissors crisis" of 1923, which
represented a contraction of rural markets for industrial
goods, was followed slightly more than two years later by
the "goods famine" -a Soviet term for repressed inflation.
And along with these temporary disruptions, and obviously
not unrelated to them, there were other more constant
sources of anxiety. After having risen toward 6.2 per
INTRODUCTION xvii
cent of its prewar volume by 1923, the marketable share
of agricultural output showed only a very limited fur­
ther increase.' In industry the recovery of prewar output
levels was more rapid as well as more continuous. But here,
too, there was a perceptible slackening after the huge for­
ward leap of 1925; and it did not take a passion for progress
to feel that the vicinity of the 1913 level which stamped
Tsarist Russia as the most backward of the great powers of
the world was not an ideal resting place.
These were the facts which set the stage and provided an
impetus for the new tum in thinking. The successes of the
NEP carried the Soviet economy beyond the range in which
immediate survival was at stake, and enhanced the state's
power to influence the course of events not merely by de­
sisting from wrong-headed interference. But the jolts of im­
balances and the steadily approaching ceilings for smooth
increases indicated clearly that recovery was drawing to a
close and that an enlargement of the capacity for growth
was necessary. In Soviet parlance, the transition from "resto­
ration" to "reconstruction" was impending. The perspective
of protracted isolation within a hostile and much more
powerful world, finally, made it imperative for the country to
rely in this expansion upon its own resources, to a much
greater extent than had been true of Tsarist Russia, or than
had been hoped for in those heady years when the frontiers
of the revolution seemed to lie on the Rhine.
It was at this point that the basic differences between the
two ideological tournaments became visible. On the face of
it, the Soviet controversy seemed an easier game because it
could build on a framework laid several decades back, and
because the fundamental disagreements of the old days were
no longer present. All contestants were now as one in their
refusal to romanticize Russian backwardness; to all of them
industrialization was both the synonym of economic progress
and an indispensable basis for a fully socialist society in the