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The Soviet Industrialization Debate, 1924–1928 PDF

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RussRieasne aCrecnhtS etru dies 41 THES OVIEITND USTRIALIZATION DEBAT1E9,2.. 14 9 28 THE SOVIET INDUSTRIALIZATION DEBAT1E9,2--1 4928 b Alexander Erlich y HARV ARD UNIPVREERSSSI TY CAMBRIDGMEA,S SACHUSET1T9S67 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

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