The Structural Origins of Soviet Industrial Expansion

249 Pages·1984·23.88 MB·English

by  Raymond Hutchings (auth.)

THE STRUCTURAL ORIGINS OF SOVIET INDUSTRIAL
EXPANSION
Is a 'planned economy' in control of its own development? Not only has
it to take account of the important limitations fixed at any one moment
by natural resources, geography, technology, or foreign relations. A still
more fundamental issue is: how is the structure and growth of the
economy affected by influences which arise spontaneously and ap
parently in spite of the authorities, but whose nature is governed by the
centrally determined economic structure and the political and economic
aims of the government and the ruling Party?
The influence of spontaneous forces on the structure and development
of Soviet industry is the subject of the present book. Structural forces are
found to have imparted a very important impetus to Soviet industrial
expansion. This impetus is still continuing, and it may well be partly
responsible for the persistent features of unbalanced growth in the
Soviet economy, which in turn are linked with another characteristic:
the high degree of continuity in business attitudes and of stability in the
basic forms of the industrial and planning structure.
The book focuses on the 1920s and 1930s, which was the formative
period of Soviet economic institutions and growth patterns. It relies on a
very detailed investigation into original sources, which are documented
in ample notes. A number of processes involved in Soviet industrial
expansion are investigated here in depth for the first time. The role
of legal-economic constraints and of institutional interactions is
illuminated along with the pressure exerted by ambitious plans.
The analysis is found to be relevant to other economies, and in special
circumstances even to other types of economic system.
Dr Raymond Hutchings is Senior Editor of ABSEES (Abstracts, Soviet
and East European Series) and Project-Secretary for the United
Kingdom for a multilingual economics dictionary. His career has
included both diplomatic and academic appointments. A member of the
research cadre of the British Foreign Service from 1952 to 1968, he
served as Second Secretary in the Moscow Embassy from 1957 to 1959
and has visited the USSR another four times, most recently in 1971 when
he was included in the retaliatory ban imposed by the Soviet govern
ment. In the academic world, he has held research posts at the
Australian National University, 1964-8, Harvard University, 1972-3,
and the Royal Institute of International Affairs, 1968-71, and teaching
posts at the University of Southern California, 1962, the University of
Maryland, 1961-2 and 1972, Pennsylvania State University, 1973, and
the University of Texas at Austin, 1976, the last three posts with the
status of visiting professor. He has made lecture tours in North America
in most years from 1973 onwards.
He is the author of Soviet Economic Development, Seasonal Influences
in Soviet Industry, Soviet Science, Technology, Design and The Soviet
Budget, and of numerous articles and reviews, mainly about Soviet
affairs.
THE STRUCTURAL
ORIGINS OF SOVIET
INDUSTRIAL EXPANSION
Raymond Hutchings
M
MACMILLAN PRESS
LONDON
© Raymond Hutchings 1984
Softcover reprint of the hardcover 1st edition 1984 978-0-333-35484-1
All rights reserved. No part of this publication may be
reproduced or transmitted, in any form or by any means,
without permission.
First published 1984 by
THE MACMILLAN PRESS LTD
London and Basingstoke
Companies and representatives
throughout the world
ISBN 978-1-349-06884-5 ISBN 978-1-349-06882-1 (eBook)
DOI 10.1007/978-1-349-06882-1
Contents
List of Tables vi
List of Abbreviations vii
Preface ix
PART I INTRODUCTION
2 The Problem and its Solution 3
2 General Description of Industrial Structure in 1957 7
PART II INTERNAL INFLUENCES ON INDUSTRIAL
STRUCTURE
3 Internal Influences upon Structural Patterns 27
4 Internal Influences upon Intra-Hierarchical
Relationships 48
5 Internal Influences upon Specialization and Territorial
Administration 59
PART III STRUCTURAL INFLUENCES ON INDUSTRIAL
DEVELOPMENT
6 Structural Influences on the Provision of Working Capital 73
7 Structural Influences on the Planning and Organization of
Fixed Capital Investments 95
8 Structural Influences on the Financing of Fixed Capital
Investments 128
9 Structural Interactions with the System of Plan Targets 172
10 Structural Influences and their Contribution to Industrial
Expansion 184
&~ 1~
Index of Names 234
Index of Subjects 238
List of Tables
6.1 Credit investments of the Gosbank 81
6.2 Budget surpluses and loan investments 82
6.3 Budget genuine surpluses 83
7.1 Capital investment plans at successive stages (republics) 98
7.2 Capital investment plans at successive stages (branches) 99
7.3 Earliest and latest estimates (Khavin) 100
7.4 Earliest and latest estimates (Kviring) 101
7.5 First and last estimates 101
8.1 Overvaluation of property by the 'inventory' method 133
8.2 Accumulations in industry 136
8.3 Amortisation allowances, profits and capital expendi-
tures in the petroleum industry 137
8.4 Circulating capital as a percentage of the total balance-
sheet 150
8.5 Elements in circulating capital as a percentage of the
balance-sheet 150
8.6 Excess planr:ed capital expenditures in leather
manufacture 155
8.7 Civilian industry: gains and losses relative to the budget 164
10.1 Total volumes of capital investments in post-war five-
year plans 187
10.2 Capital investments in industry in post-war five-year
plans 187
vi
List of Abbreviations
TITLES WHICH ARE NOT PUBLICATIONS
BDK Bank of Long-Term Credit
BVR Bureau(x) of Reciprocal Settlements
GES Hydro-Electric Construction
GOELRO State Plan of Electrification
GSNKH Provincial Council of National Economy
KPSS Communist Party of the Soviet Union
KSK Commission of State Control
KTS Control figures
MVD Ministry of Internal Affairs
NEP New Economic Policy (1921-8)
NKF People's Commissariat of Finance
NKRKI People's Commissariat of Workers' and
Peasants' Inspection
NKYU People's Commissariat of Justice
ODK Department for Long-Term Credit
OKS Section for Capital Construction
OTK Section for Technical Control
PEU Planning-Economic Administration
RSFSR Russian Soviet Federated Socialist Republic
SNK Council of People's Commissars
SNKH Council of National Economy
SSR Republic of the USSR
SSSR USSR
STO Council of Labour and Defence
TSIK Central Executive Committee
VSNKH Supreme Economic Council
VKP(b) All-Union Communist Party (of Bolsheviks)
VTSIK Supreme Central Executive Committee
vii
viii List of Abbreviations
PUBLICATIONS
D.K. Den 'gi i kredit
E.Zh. Ekonomicheskaya zhizn'
F.K. Finansy i kredit SSSR
F.P.P.Kh. Finansovyye problemy planovogo khozyaystva
F.S. Finansy SSSR
F.S.Kh. Finansy i sotsialisticheskoye khozyaystvo
I.A.N. (O.E.P.) Izvestiya akademiii nauk ( otdel ekonomiki i
prava)
Ind. Industriya
P.E. Problemy ekonomiki
P.l. Puti industrializatsii
P.Kh. Planovoye khozyaystvo
S.F. Sovetskiye finansy
S.G.P. Sovetskoye gosudarstvo i pravo
T.P.G. Torgovo-promyshlennaya gazeta
V.E. Voprosy ekonomiki
V.S. Vestnik statistiki
Z.l Za industrializatsiyu
Preface
The present book is based upon my Ph.D. Dissertation 'Studies in Soviet
Industrial Development' (University of London, 1958), but not upon
the whole of it. Chapter 4, 'The Development of the System of Price
Formation and Control', was published in modified form in Soviet
Studies, July 1961, as 'The Origins of the Soviet Industrial Price
System'.
Used as a source-book, the dissertation formed the back-up for my
Soviet Economic Development (Basil Blackwell, 1971, and its second
edition, 1982), in particular for its chapters 15 and 16, on 'Investment
Planning and Practice' and 'Location Policy'. The underpinning
especially of the passages in chapter 15 relating to over-investment was
far more extensive than was exhibited in the cited sources for Soviet
Economic Development. Apart from this oblique use, by far the largest
fraction of the text remained unpublished. In 1966-7 I had rewritten
some passages in the dissertation, reordered its chapter arrangement,
and added a postscript on events between 1957 and 1965 (the original
narrative having terminated in 1957).
This version then stayed unaltered until 1982, when the Macmillan
Press Ltd made an offer of publication. Despite the time that had elapsed
since it was first written it appeared to me that it might still be received
with some appreciation by a wider readership. Its primary theme of the
tendencies towards overheating of socialist economies, as exemplified in
the Soviet economy, is nowadays commonplace, but as far as I am aware
there has not appeared in print any thoroughly documented investiga
tion of the process involved, as manifested over a forty-year period.
Moreover, although between 1957 and 1965, during the sovnarkhoz
interlude, my description of Soviet industrial structure appeared to have
been overtaken by events, following the reconstitution of the ministerial
system in 1965 it reacquired a measure of actuality, while the passage of
time has underlined the importance of the internally generated devi
ations from officially prescribed behaviour on which the dissertation
had focused.
ix