The Soviet Five-Year Plan

Report Outline
Background of the Five-Year Plan
Provisions of the Five-Year Plan
Operation of the Five-Year Plan, 1928–30
Special Focus

Background of the Five-Year Plan

Aim of State Planning in Russia

Russia will complete its second year under the Soviet Five-Year Plan of economic development on September 30 of this year. The plan and its workings have attracted widespread attention among economists, industrialists, and bankers as an attempt, at regulated development on a nation-wide scale in a country of 155,000,000 people covering nearly one-sixth of the earth's surface. Soviet statistics indicate that, as the second year draws to a close, the estimates of the original plan have been generally exceeded. Government authorities in Russia assert that the plan will be substantially fulfilled by the end of the fourth year—September 30, 1932.

The object, of state planning, as adopted in Soviet Russia, is to achieve a balanced economy by the elimination of waste, lost motion, and duplication; by the assessment in advance of economic resources and economic needs; by the application of a budgetary system to production on a national scale; and by the adoption of an orderly, detailed scheme of development. The purposes of the Five-Year Plan, as set forth by responsible officials at Moscow, are the creation of a more adequate industrial development in an industrially backward country and the introduction of more efficient methods of agriculture, including large-scale, highly mechanized farming on coöperative lines. It is admitted that the success or failure of the plan will have an important bearing upon the political, as well as the economic, future of Russia, but interest in the experiment transcends its purely Russian aspects, for it represents the first attempt by a national government since the dawn of the industrial era to substitute a system of planned economic development for the prevailing system of laissez faire.

Background of the Five-Year Plan

The significance of the plan, the obstacles it has encountered, and its operation to date can best be made clear if considered against the background of economic developments in Russia after the collapse of the Czarist government in March, 1917, and the seizure of power by the Bolsheviks when Kerensky's provisional government was overthrown in November, 1917.