Encyclopedia of Russian History

by James Millar

  The process of industrialization is necessarily modified and constrained by a variety of environmental factors. In the case of Russia, those environmental factors should be largely positive insofar as Russia is a country of significant natural wealth and human capital. See also: ECONOMIC GROWTH, SOVIET; INDUSTRIALIZATION, RAPID; INDUSTRIALIZATION, SOVIET

  BIBLIOGRAPHY

  Gregory, Paul R., and Stuart, Robert C. (2001). Russian and Soviet Economic Performance and Structure, 7th ed. New York: Addison Wesley Longman. Millar, James R. (1981). The ABCs of Soviet Socialism. Ur-bana: University of Illinois Press, 1981. Nove, Alec. (1981). The Soviet Economic System. London: Unwin Hyman.

  ROBERT C. STUART

  INDUSTRIALIZATION, RAPID

  Soviet growth strategy was focused on fast growth through intensive industrialization. It involved the self-development of an industrial base, concentrated in capital goods or “means of production,” also dubbed “Sector A” according to Marxian jargon. It became the official strategy of the Soviet leadership as a resolution of the Soviet Industrialization debate that occupied communist thinkers and politicians during the mid-1920s. The industrialization debate considered two growth strategies. One, supported by moderates and led by Nikolai Bukharin, advocated an extension of the New Economic Policy (NEP), centered on industrialization but based on the initial development of agriculture, mostly by individual and independent farmers. A prospering agricultural sector would create demand on the part of both consumers and producers for industrial goods, as well as surplus resources in terms of savings, to finance this industrialization. While all sectors of manufacturing would be developed, surplus agricultural products would be used as exports in order to import machinery and technology from the West. Advocates of the alternative strategy, including leaders of the left such as Leon Trotsky, preferred a more rapid state-led industrialization drive, concentrated in large state-owned heavy industrial enterprises financed by forced savings, extracted from collectivized (thus supposedly more productive) agriculture and from the population. While machinery and technology would be imported, the main thrust would be to build an indigenous heavy industrial base and early self-sufficiency in all industrial goods, and more autarky. The high level of forced savings would minimize consumption and hence provide for higher rate of investment, faster growth, and a relatively smaller “Sector B” of consumer goods and light industry; in contrast with a normal path of early development of light and consumer goods industries, followed by gradual move toward the production of machinery and capital goods. The more radical variant was also more consistent with Marxian doctrine and teaching.

  Josef Stalin used the industrialization debate as a leverage to gain control, first by siding with the moderates to oust Trotsky and his followers, and then by ousting the moderates and adopting an even more extreme variant of forced industrialization. Other motivations for his choice of the heavy industrialization route were the Soviet Union’s rich endowment of natural resources (coal, iron ores, oil, and gas), and the need (facing external threats), or desire, to develop a strong military capability.

  This strategy guided the industrialization drive throughout, with only some easing off toward the end of the Soviet period. The 1930s were characterized by the construction of a large number of giant industrial, power, and transportation projects that involved moving millions of people to new and old cities and regions. This was also the period when collectivized agriculture was expected to provide surplus products and resources to feed the growing industrial labor force and to export in exchange for modern technology. Students of the period differ on the extent to which this really happened, and some claim that most of the extracted surplus through food procurements had to

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  INDUSTRIALIZATION, RAPID

  be reinvested in machinery and other inputs needed to make the new collective and state farms work. With the increasing threat of war toward the end of the 1930s, manufacturing became more oriented toward military production. Much of the industrial effort during the war years was directed toward the production of arms, but it was also characterized by a gigantic transfer of many hundreds of enterprises from the western parts of the USSR eastward to Siberia and the Far East in order to protect them from the advancing German army. This transfer happened to be consistent with an explicit goal of the regime to develop the east and northeast, the main concentration of natural resources, an effort that was facilitated over the years through the exploitation of millions of forced labor workers.

  The rate of industrial growth in the Soviet Union was higher than that of agriculture and services, and the share of industry in total output and in the labor force increased over time as in any developing country. Except that in the Soviet Union these trends were stronger: The gaps in favor of industry were wider, also due to the deliberate constraint on the development of the service sector, considered nonproductive according to Marxian doctrine. Thus the share of industrial output in GNP climbed to more than 40 percent in the 1980s, significantly above the share in other countries of similar levels of economic development. The share of industrial labor was not exceptionally high due to the concentration of capital and of labor-saving technology. This over-industrialization, including noncompetitive industries, even some creating negative value, was recognized in the 1990s as a drag on the ability of former Communist states to adjust to a normal market structure and an open economy during the transition. The autarkic policy of industrialization pursued over most of the Soviet period contributed to a technological non-compatibility with the West, which further hurt the competitiveness of Soviet industry.

  The bias of Soviet industrialization toward Sector A of investment and capital, as well as military goods, is apparent in the internal structure of industry. The share of Sector A industry grew fast to almost half of total industry and stayed at approximately that level throughout the entire period. It was also estimated that during the 1970s and 1980s military-related production occupied a substantial share of the output of the machine-building and metalworking sector as well as more than half the entire activities of research and development. The development of consumer and light industry (“Sector B,” under Marxian parlance) was not only limited in volume; it also suffered from a low priority in the planning process and thus from low quality and technological level. “Sector A” industries, including the major military sector, enjoyed preferential treatment in the allocation of capital and technology, of high-quality labor resources and materials, and of more orderly and timely supplies. Hence some of the technological achievements in the spheres of defense and space. Hence also the very high costs of these achievements to the economy at large and to Sector B consumer industries in particular, which were characterized by low-quality and lagging technology, limited assortment, and perennial shortages. This policy of priorities also explains the very limited construction resources allocated to housing and to urban development, causing housing shortages, as well as the very low production of private cars and (to a lesser extent) household appliances. The biased structure of industry became also a serious barrier for restructuring under the transition. See also: COLLECTIVIZATION OF AGRICULTURE; ECONOMIC GROWTH, SOVIET; INDUSTRIALIZATION

  BIBLIOGRAPHY

  Bergson, Abram. (1961). The Real National Income of Soviet Russia since 1928. Cambridge, MA: Harvard University Press. De Melo, Martha; Denizer, Cevdet; Gelb, Alan; and Tenev, Stoyan. (1997). “Circumstance and Choice: the Role of Initial Conditions and Policies in Transition Economies.” World Bank, Policy Research Working Paper no. 1866. Domar, Evsey. (1953). “A Soviet Model of Growth.” In his Essays in the Theory of Economic Growth. New York: Oxford University Press. Easterly, William, and Fischer, Stanley. (1995). “The Soviet Economic Decline: Historical and Republican Data.” World Bank Economic Review, 9(3):341-371. Erlich, Alexander. (1960). The Soviet Industrialization Debate, 1924-1928. Cambridge, MA: Harvard University Press. Millar, James R. (1990) The Soviet Economic Experience. Urbana, University of Illinois Press.
Ofer, Gur. (1987). “Soviet Economic Growth, 1928-1985.” Journal of Economic Literature 25(4):1767-1833.

  GUR OFER

  INDUSTRIALIZATION, SOVIET

  INDUSTRIALIZATION, SOVIET

  The industrialization of the Soviet Union proceeded at a rapid pace between the two World Wars, starting in 1929. Within an historically short period of twelve to fifteen years, an economically backward agrarian country achieved rapid economic growth, created a more modern industrial sector, and acquired new technologies that changed it from an agrarian to an industrial economy.

  At the turn of the century Imperial Russia was lagging behind its neighbors to the west in practically all aspects of economic development. Weakened by World War I and the civil war that followed, Russia was in ruins in 1918. The Communist Party that seized power after the Bolshevik revolution in 1917 initially proclaimed a world revolution as its goal. The first socialist revolution occurred in Russia, the weakest link among the world capitalist states. However, later failures to propagate communist rule in Germany, Hungary, and Poland demonstrated that the export of revolution required not an ideological dogma, but a powerful economy and military might. Both required powerful industry.

  Soviet industrialization was organized according to five-year plans. The first five-year plan was launched by the Soviet dictator Joseph Stalin in 1928. It was designed to industrialize the USSR in the shortest possible time. The plan, put into action ruthlessly, aimed to make the USSR self-sufficient and emphasized heavy industry at the expense of consumer goods. The first plan covered the period from 1928 to 1933 but was officially considered completed in 1932, although its achievements were greatly exaggerated. One objective of the plan was achieved, however: the transformation of agriculture from predominantly individual farms into a system of large collective farms. The communist regime thought that the resources for industrialization could only be squeezed out of agriculture. Moreover, they believed that collectivization would improve agricultural productivity and produce sufficient grain reserves to feed the growing urban labor force caused by the influx of peasants seeking industrial work. Forced collectivization also enabled the party to extend its political dominance over the peasantry, eliminating the possibility of resurrection of market relations in agriculture. The traditional Russian village was destroyed and replaced by collective farms (kolkhoz) and state farms (sovkhoz), which proved to be highly inefficient. Although the first five-year plan called for the collectivization of only 20 percent of peasant households, by 1940 some 97 percent of all peasant households had been collectivized, and private ownership of property was virtually eliminated in trade. Forced collectivization helped Stalin achieve his goal of rapid industrialization, but the human costs were huge. Stalin focused particular hostility on the wealthier peasants or kulaks. Beginning in 1930 about one million kulak households (some five million people) were deported and never heard from again. Forced collectivization of most of the remaining peasants resulted in a disastrous disruption of agricultural production and a catastrophic famine in 1932 and 1933 in Ukraine, one of the richest agricultural regions in the world, which exacted a toll of millions of lives. The rationale for collectivization in the Soviet Union, with all of its negative consequences, was its historic necessity in communist terms: Russia had to engage in rapid industrialization in order to create a massive heavy industry and subsequently powerful modern armed forces.

  The second five-year plan (1933-1937) continued and expanded the first, albeit with more moderate industrial goals. The third plan (1938-1942) was interrupted by World War II. The institution of the five-year plan was reinforced in 1945, and five-year plans continued to be published until the end of the Soviet Union.

  From the very beginning of industrialization, the Communist Party placed the main emphasis on the development of heavy industry, or, as it was called in the Soviet literature, “production of means of production.” Metallurgical plants that included the whole technological chain from iron ore refining to furnaces and metal rolling and processing facilities were constructed or built near the main coal and iron ore deposits in Ukraine, the Ural Mountains, and Siberia. Similarly, production plants for aluminum and nonferrous metals were constructed at a rapid pace. Electric energy supply was ensured through the construction of dozens of hydroelectric and fuel-operated power stations; one of them, a Dnieper plant, was canonized as a symbol of Soviet industrialization. Railroads and waterways were modernized and built to ensure uninterrupted flow of resources. Automobile and aviation industries were built from scratch. Whole plants were purchased in the West, mostly from the United States, and put in operation in the Soviet Union. Stalingrad Tractor Plant and Gorki Automotive Plant began production in the early

  INORODTSY

  1930s. Many American engineers were lured by promises of high wages to work at those plants and contributed to a rapid technology transfer to Russia.

  New weapon systems were developed and put into production at the expense of consumer goods. On the eve of World War II the Red Army had more than twenty-three thousand tanks-six times more than Fascist Germany. Similar ratios applied for artillery, aircraft, navy vessels, and small arms. Substantial resources were materialized and frozen in the stockpiles of weapons. Nonetheless, World War II did not begin according to Stalin’s plans. The USSR was unprepared for Hitler’s invasion.

  During the first period of war a substantial portion of the European territory was lost to Germany. During the second half of 1941 and the beginning of 1942, industrial facilities were relocated to the east (beyond the Volga river and the Urals) from European Russia, Central and Eastern Ukraine (including major industrial centers of Kharkov, Dniepropetrovsk, Krivoy Rog, Mariupol and Nikopol, Donbass), and the industrial areas of Moscow and Leningrad; this relocation ranks among the most difficult organizational and human achievements of the Soviet Union during World War II. The industrial foundation laid between 1929 and 1940 proved sufficient for victory over Fascist Germany in World War II. See also: INDUSTRIALIZATION; INDUSTRIALIZATION, RAPID

  BIBLIOGRAPHY

  Gregory, Paul R., and Stuart, Robert C. (2001). Russian and Soviet Economic Performance and Structure. Boston, MA: Addison Wesley. Nove, Alec. (1965). The Soviet Economy: An Introduction, rev. ed. New York: Praeger.

  PAUL R. GREGORY

  INORODTSY

  Any non-Slavic subject of the Russian Empire, such as Finns, Germans, or Armenians.

  By the beginning of the twentieth century, the term inorodtsy carried pejorative overtones. First used in a legislative project of 1798, the word was given a precise legal definition by a legal statute of 1822. Here it was used to refer to groups of Russian subjects for whom the fundamental laws of the Empire were deemed inappropriate and who therefore required a special, protected status. While under the protection of the state, they would be gradually “civilized,” becoming more like the settled Russian population. Initially applied to peoples living in Siberia, the category also came to include newly-annexed peoples of Middle Asia (Kazaks, Kyrgyz, Turkmen), some of whom had a long tradition of permanent settlement and high culture.

  With the exception of the Jews, the inorodtsy were indigenous peoples who inhabited areas of Siberia and Central Asia. (Thus, the common translation of this term in English as “aliens” is misleading; “natives” might better convey what the term implied to Russian colonizers.) They included the Kyrgyz; the Samoyeds of Archangel province; the nomads of Stavropol province; the nomanic Kalmuks of Astrakhan and Stavropol provinces; and the Kyrgyz of the Internal Hordes of Middle Asia (the regions of Akmolin, Semipalatinsk, Semi-rech, and the territory beyond the Ural mountains).

  The Statute on the Inorodtsy of 1822, associated with Mikhail Speransky’s enlightened administration of Siberia, sought to protect the traditional hunting and grazing areas of native peoples from encroachment by Russian settlers. The Statute placed all inorodtsy into one of three categories: settled, nomadic, and wandering hunter-gatherer-fishermen. Each category received speci
al prerogatives and levels of protection thought appropriate for its level of culture and its economic pursuits. The inorodtsy were permitted local self-administration, which included police duties, administration of justice (based on customary law), and the collection of taxes in money or in kind, as appropriate. Administration was placed in the hand of the local elites, generally tribal elders and chieftains.

  With a few exceptions, such as some groups of Buryats, inorodtsy were generally exempted from military service. The military reform of 1874 began to erode this privilege. A Bashkir cavalry squadron was created in Orenburg province in 1874, while in the 1880s a growing number of native peoples in Siberia were subject to some form of service. Some groups were permitted to substitute service with a monetary tax, while others were recruited on an individual basis, with the assurance that they would be assigned to specific regiments. An attempt, announced on June 25, 1916, to end the tradition of a general exemption from military service of many Middle Asian peoples and to draft

  INPUT-OUTPUT ANALYSIS

  390,000 inorodtsy into the army for support duties, triggered a vast anticolonial revolt in Middle Asia, which was put down with great brutality.

  Jews were included in the category of inorodtsy by a statute of 1835. This categorization was entirely anomalous. The general tendency of Russian legislation towards the Jews was to promote their sliyanie (merger) with the non-Jewish population, yet their designation as inorodtsy placed them in a special, unique category. All other inorodtsy received special privileges and exemptions as a result of this status, while for the Jews it was a vehicle for the imposition of liabilities. The inorodtsy of Siberia in particular were viewed as living at a lower cultural level, as followers of animistic, pagan belief systems. (Many of the inorodtsy of Middle Asia were Muslims.) The Jews, in contrast, were adherents of a “higher” religion. Most inorodtsy were in the eastern regions of the Empire; the Jews were resident in the Russian-Polish borderlands; indeed, they were largely barred from settlement in those areas where most inorodtsy were to be found. The most distinctive privileges of the inorodtsy were their own institutions of government, and exemption from military service; the Jews were made liable for military service in 1827, and the autonomous Jewish community, the kahal, was abolished in 1844. There was an ethnic component of inorodets status, since any inorodets who converted from paganism to Christianity retained all the rights and privileges of an inorodets; Jewish converts to Christianity lost the legal status of “Jew” and the disabilities that it carried. Nonetheless, this bizarre anomaly endured until the demise of the Russian Empire, when the Provisional Government not only granted full equality to the Jews, but also abolished all special legislation for the in-orodtsy. See also: JEWS; NATIONALITIES POLICIES, TSARIST