Tsarist officials sometimes referred to 'His Excellency, the Harvest' as the factor governing economic affairs in pre-revolutionary Russia. Their counterparts in Stalin's Russia acknowledged the dictatorship of the plan. 'His Excellency, the Plan' lay at the core ofthe economic system. Unlike the harvest, plans took a monthly, quarterly and annual form, whilst for broad strategic purposes the FYP dominated decision-making. Plans were imposed upon state-owned enterprises by superior authorities, notably Gosplan and the economic ministries or commissariats. Targets normally took the form of physical indicators, that is in terms of tons of steel or yards of cloth, but could also be expressed in money terms, such as of the gross value of output in 'constant prices'. Other elements of planned performance might include targets for product assortment, cost reduction, labour productivity and so forth. Quality considerations were secondary. Accompanying the targets were centrally allocated supplies to industrial enterprises. Preparation for this level of intervention had already taken place under NEP, when 'control figures' were formulated and published from 1925 onwards. In the FYP period this process became much more extensive. A large economic bureaucracy supported this hugely ambitious exercise in co-ordination, and intervened when needed to restore a degree of balance.
The consequences were profound in terms of economic behaviour. A complex interplay of interests between the party, the planning agencies, economic ministries, republican, regional and local authorities, and the enterprises (farms, factories, etc.) determined the formulation and the implementation of plans.[7] In principle, Soviet planners dictated the targets, but at each level subordinate agents within the system entered into complex strategies with their superiors to obtain the best possible set of instructions, in other words to negotiate a plan that was achievable. Since no superior had access to perfect information, subordinates were able to understate and conceal productive capacity. Similarly, plan fulfilment required astute and timely action on the part of enterprises. No manager could afford to be exposed to failure to meet the targets, and in these circumstances horizontal networks and contacts flourished; thus managers engaged 'pushers' (tolkachi) to obtain inputs over and above the planned allocation. Ultimately, firms and ministries came to an understanding that the completion of the plan mattered more than the notional budget that underpinned it; hence the phenomenon of the 'soft' budget constraint, whereby struggling enterprises could in the last resort rely upon credits or subsidies in order to survive. Farm managers likewise concealed some of their grain, rather than deliver it to the authorities, in order to boost the seed fund for the next harvest. Thus the formal system of subordination disguised the fact that the principal (the state) did not have perfect information about the behaviour ofits agents (enterprises), about which it frequently remained ignorant. In a sense, therefore, the system was sustained less by the hierarchical character of central economic planningthan by the interaction of dictators and subordinates. It should also be remembered that from time to time the party- state 'mobilised' resources on an ad hoc basis, disrupting the targets agreed with subordinates and thereby contributing to pervasive uncertainty. Sometimes, too, unforeseen external circumstances, such as war scares, wreaked havoc with the assumptions that planners had made.
The First FYP rested upon a significant planned increase in labour productivity, as a means of financing the increased investment. Attempts were made to improve the productivity of Soviet workers, by means of 'shock work', by widening wage differentials, and by creating differential access to rationed goods. But the mass influx of unskilled peasant migrant labour made it difficult to improve output per person. During the mid-i930s the Soviet leadership acknowledged that the productivity gap between the USSR and its capitalist rivals remained wide. All sectors were demanding increased investment, making it imperative to look for ways of reducing costs. The most famous such initiative, the Stakhanov movement, took place during the Second FYP, at a time when the Soviet leadership had embarked on a fresh surge of capital investment. Pravda (1 January 1936) explained this in orthodox Marxist terms: 'every newly emerging social system triumphs over the old outdated mode of production because it brings about a higher productivity of labour'. But most workers responded passively at best, and managers regarded the entire campaign as a pointless distraction. The outcome of Stakhanovism was chaos. By the beginning of 1937 more modest targets for labour productivity were being contemplated. Recent work has pinpointed concerns about financial stability as a major factor; the state budget was already under great strain as a result of increased spending on defence, infrastructure and consumer subsidies. Campaigns, such as the Stalinist drive to boost labour productivity and to over-fulfil output targets, could not but create a climate of uncertainty for Soviet managers and factory directors as well - they suffered a mass purge in 1937 and 1938, at a time when Stalinist ideology celebrated managerial power. In general it proved much more straightforward to draft millions of additional workers to the task of social and economic construction than it was to engineer an improvement in output per person.
What then were results in economic terms? The magnitude of industrial growth in particular has provoked endless debate as well as ingenious attempts to deal with measurement problems. Much of the available statistical record took the form of data on physical output, but apart from issues of concealment and falsification these data raise difficult issues of aggregation. Decisions have to be reached about the appropriate weights to be applied. Next, there is the problem of deciding which prices to apply to the data; according to the 'Gerschenkron effect', the adoption of early year prices overstates growth in an economic system that is undergoing rapid structural transformation. Problems arise from the introduction of new types of product that substitute for old; how quality change is to be measured poses particular difficulties for the measurement of Soviet economic change. For these reasons no final judgement of the growth record is likely to be reached. However, it is now clear that official Soviet estimates greatly overstated total economic growth; Girsh Khanin has revised the official rate of increase of national income from 13.9 per cent to 3.2 per cent for the years 1928-41.
The allocation of additional output reflected the priorities given to investment and to government spending, notably on defence. The total stock of capital more than doubled between 1928 and 1941; this increase was all the more remarkable, given the sharp fall in livestock herds. Defence production increased twenty-eight-fold during the 1930s (far in excess of total industrial production), imposing a heavy burden, particularly after 1936. The Stalin era witnessed Russia's emergence as a modern military power. The hallmarks were the new tank and aviation industries, supported in turn by steel, met- alworking, fuel, chemicals and rubber production. Qualitative improvements had also taken place. But difficulties remained: the defence sector was not immune from the inefficiency prevalent in the economic system as a whole, and by 1941 much of the stock of military equipment was already obsolete. Much reliance continued to be placed upon sheer manpower. The Red Army's increased demand for manpower was met largely by peasant conscription.
7
For discussion of this 'nested dictatorship' in theory and practice see Paul Gregory and Andrei Markevich, 'Creating Soviet Industry: The House that Stalin Built',