Raya Dunayevskaya

An Analysis of Russian Economy

From The New International, Vol. IX No. 1, January 1943, pp. 19–22.

C – The Economics of
Russian Agriculture, 1928–41

Thus far we have been on the industrial front only, where we have been led from industrialization to extended reproduction and have seen how two handmaids (the turnover tax and profit motive) helped socialist accumulation grow fat. What about the agricultural front? Are the same factors at work here? What is the economy of Russian agriculture and what is its law of motion? Let us study the development of Russian agriculture since the initiation of the First Five Year Plan.

By the end of the Second Five Year Plan the Russian state declared the land was collectivized to the extent of 99.6 per cent and the peasantry to the extent of 93.6 per cent. Socialism was indeed “irrevocably established.” Percentages and labels, however, are deceiving, as we shall see when we analyze the economy prevalent on these collectivized farms (kolkhozy) and amidst the collectivized peasantry (kolkhozniki). The Russian state would have us believe that the millions transported to the Far Northern territories during the execution of the First Five Year Plan had indeed liquidated the kulak “as a class.” It may be possible that the newly-created, hot-house fashion, Lubyanka method kolkhozniki were made of a different psychological mold than were the kulaks – but the economic demand was the same: a free market. That demand was granted them in 1932. In 1935 the permanent usufruct of the land was likewise bestowed upon them. And finally, and of most recent vintage, is the appearance and the publicity attendant upon the birth of the millionaire kolkhozy. Does this prosperity embrace the whole “socialist agricultural front”?
 

I – The World Crisis and the Russian Famine

1 – The World Market and the Russian Agricultural Crisis

“Enrich yourself!” had been the slogan while the NEP was still in effect. This slogan the kulak rightly adopted as his own. Since the state did not pay him sufficient for his grain to achieve this enrichment, there was no inducement to produce a large marketable surplus. Eighty per cent of the grain output in 1927 was consumed by the peasantry and only 20 per cent was left to feed the urban population. This contrasted poorly with the period prior to World War I (1909–14) when the peasantry consumed 63 per cent of the grain and 37 per cent of the total constituted the marketable surplus. [15*] Therefore, although the urban population was growing, there was less for it to eat. Moreover, 60 per cent of the marketable surplus in 1927 was concentrated in the hands of the kulaks, who constituted a mere 6 per cent of the peasant population. While Stalin proclaimed that it was “nonsense” [16*] to call the NEP capitalism and Bukharin declared that it was possible to reach socialism “at a tortoise pace,” the kulak had concentrated the greater part of the marketable surplus and refused to turn that over to the state. Forced collectivization was resorted to.

Forced collectivization achieved 78.2 per cent collectivization of the total area under crops by the end of the First Five Year Plan, instead of the 17.5 originally envisaged by the Plan. [17*] Forced collectivization wrought such havoc that the harvest declined from 83.5 million tons in 1930 to 70 million tons in 1931. The attempt of the bureaucracy to erase all past mistakes in encouraging NEPist accumulation as a “step toward socialism” by an absolutely dizzy speed in “collectivization” found its match in the equally terrific thoroughness with which the peasantry proceeded to slaughter its animals. When the Plan was officially declared “completed,” here is what had happened to the livestock:

If we take the 1928 figure as 100, we get the following indices for 1932: for horses, 54.6 per cent; cattle, 57.7 per cent; sheep and goats, 35.4 per cent; pigs, 44.6 per cent!

The havoc on the agricultural front was aggravated by the reality of the world market, which would not permit Russia to tear itself out of the vortex of world economy and build “socialism in one country.” The world crisis adversely affected the price Russian agricultural produce could command on the world market. If we take 1928 to be 100, prices on the world market dropped to 67.2 and on agricultural produce, which is what Russia wished to sell in order to buy machinery, they dropped to 45.5. Tractors, which were not manufactured rapidly enough in Russia to take the place of the draft animals slaughtered, could not be bought in sufficient quantity because of lack of capital. The disorganization on the agricultural front was accompanied by a famine that stalked throughout the Soviet land. Millions died.
 

2 – The Effect of the Russian Famine on the Population.

Despite the fact that, on the one hand, their own statistics of decline in harvest and slaughter of cattle point to catastrophic conditions; and, on the other hand, the fact that the bourgeois journalists in Russia saw to it that the world heard of the famine, the state has denied the existence of famine in 1932–33. Apparently even the bureaucracy did not know what a toll of lives the famine had taken for by 1937 they ordered a census taken to prove that “life had become gayer.” According to the Plan, the census should have proved the existence of a population of 180.7 millions. But the data the census takers brought back told a vastly different story. Despite the fanfare that heralded the census, the data were never made public. The census was declared “defective” and another census was ordered for January 1939 to find the missing millions. The 180.7 millions “planned” for 1937 were based on the three million yearly growth in population characteristic of the period 1922–28. On that basis the 1939 census should have recorded a population of approximately 186 million. However, the accepted 1939 census revealed the population to be 170.5 million. No explanation was made as to the discrepancy in the figures, but much publicity was given to the 15.9 per cent increase over the 1926 census disclosed by the 1939 census. No explanation was made of the discrepancy between the planned figures and those found actually living. This 15.9 per cent increase, however, is not reflected in each age group and thereby hangs a tale of confirmatory evidence of the famine in 1932.

The age group up to seven years does not reflect the general 15.9 per cent increase. Instead it records a 1.6 per cent decrease! Moreover – and this makes the decrease even more appalling – the age group in the 1926 census to which this age group is compared was itself an abnormally small part of the population since the birth rate was below normal and infant mortality above normal in the period 1919–22. Some demographic catastrophe must have occurred in the years when “socialism was irrevocably established” to result in a decline in an age group that is contrasted to one born in the period of civil war and famine! The Stalinist statisticians, for reasons best known to themselves, did not deign to break this age group into single years and we cannot, therefore, tell whether the decree was due to infant mortality or to an abnormally low birth rate. But what is absolutely clear from the official statistics is that the “socialist” year 1932–33 stands out in black relief even against the famine year 1919–20!

That the regime was able to survive such a catastrophe is in no small measure due to the reality of the world crisis. Whereas the world crisis, on the one hand, aggravated the internal situation in Russia by upsetting its financial plans, it had, on the other hand, likewise induced such combustible situations in each of the capitalist countries that none of these governments dared take advantage of the internally weak Soviet Union to the extent of attacking its borders.

In the Soviet Union itself the powers that be felt the discontent of the village. The tops accused the rank and file of being “dizzy from success” (Stalin). Retreat was the order of the day. The village was granted the open market. Never having had the courage of its own convictions, the bureaucracy gave the free market its benediction (April 1932 edict of the CC of the RCP and of the Presidium of the Soviet Government) and the free market was pronounced to be a “collective farm market.” Thus was the exchange process made “kosher” by a ukase of the “socialist state.”
 

II – The Free Market on the Countryside

Forty per cent of the grain output goes to the state in the form of compulsory deliveries or purchases, at a price fixed by the state. Another 20 per cent of the grain crop is given for the use of the MTS (Machine Tractor Stations) and to tractor drivers. Over half of the remaining 40 per cent is consumed by the peasant population itself, leaving 15–20 per cent of grain production as the marketable surplus. Variations in the price of grain, depending upon the buyer, were tremendous. For example, 100 kilograms of rye sold in 1933 at these widely different prices [19*]:

The open market price, which is some ninefold that of the state price, is inducement enough to the kolkhozniki. Though the free market it called the collective farm market, the collectives supply only 15 per cent of the agricultural commodities on the market whereas 85 per cent is supplied by the peasants, collectivized or individual, thus:

An insight into both the prohibitively high prices on the market and of the inflation of the ruble can be gained from the fact that in 1934 the open market turnover was valued at 14,000 million rubles in current prices whereas the country’s total agricultural produce that year, calculated in 1926–27 prices, was valued at 14,600 million rubles! It is therefore not surprising that in 1935 the sale on the open market of less than 20 per cent of the marketable surplus yielded a greater sum of money than the sale of 60 per cent of the marketable surplus to the state and state organizations:

Because of this extreme difference between open market sales and sales to the state, 25 per cent of the whole money income (10,783 million rubles out of 43,646 million rubles) of the kolkhozniki (and the whole means not only what they earned in the kolkhoz but also outside earnings in factories off-seasons) was derived from open market sales. [21*] Moreover, the kolkhozniki need not submit any turnover tax to the state.

At the 18th congress of the RCP held in March 1939, it was stated that the free market turnover of foodstuffs in 1938 was valued at 24,399 million rubles, or 15 per cent of the total value of all retail trade, including public feeding. However, this does not mean that the actual commodities sold approached that percentage. Because the prohibitively high prices on the open market and the inflated rubles, the value output, as we have seen above, give no indication of the physical output. Small wonder that the newly-created kolkhozniki jealously guards an old institution: the free market!
 

III – Private Property in the Kolkhozy;
Millionaires and Paupers

The tree market was not the only conquest of the village. In 1935 the kolkhozy were granted the permanent use of the land and the kolkhozniki the following private property rights: their dwelling, one-half to two and one-half acres of land (depending upon the region) and the following livestock [1]: one cow, two calves, one sow and its litter, up to ten sheep or goats, unlimited poultry and rabbits and up to ten bee-hives. The slogan for industry, “fight for profit,” had its parallel in the countryside: “Make all kolkhozniki prosperous.” Since all produce of his private property was his and the sale of it on the open market was unencumbered by a turnover tax, the kolkhoznik began to pay a lot of attention to the care of his own small plot of land, where he carried on diversified farming. Planned Economy, in its December 1938 issue, carries a report which reveals that the kolkhozniki spend 30 to 45 per cent of their time on their own homesteads while the women spend most of their time on their own plot. The reports to the 18th conference in February 1941 related the fact that farming on their own homesteads “overshadowed farming in the collective”!

Despite the trumpeted 99.6 per cent collectivization, here is the extent to which private property has developed: although the kolkhozy own 79.2 per cent of the area under crops, they own only 17.6 per cent of all cows, 30.4 per cent of sheep and goats. On the other hand, the kolkhozniki, who own a mere 3.3 per cent of the area under crop, own as high as 55.7 per cent of all cows and 40 per cent of all sheep and goats. Individual (private) peasants cultivate only 5.2 per cent of the land under crops but own 12.1 per cent of draught horses, 16.9 of cows and 13 per cent of the sheep and goats. Contrast to this the sovkhozy (state farms which are owned and managed by the state like the factories) which control 12.3 per cent of the area under crops but own only 9.8 per cent of the cows and 16.6 per cent of the sheep and goats. The sovkhozy possess only as many productive cattle as are owned by the workmen and employees who live in the country and are responsible for sowing only 1.1 million hectares of land! [22*]

Besides these legitimate claims (that is, those recognized by the state) the People’s Commissar of Agriculture reported in May 1939 that the following surplus allotments were found to exist illicitly as private property:

The Commissar failed to inform us as to the degree of concentration of these surplus allotments. Surely they were not divided some one-tenth of an acre evenly among all homesteads or there would have been no necessity for promulgating the May 27, 1933, decree forbidding the sale or transfer of kolkhoz property. That decree also made it obligatory for kolkhoz members to work a minimum of sixty to a hundred days a year, depending upon the region, in order to be entitled to kolkhoz membership. Kolkhoz membership, however, does not mean being an equal among equals. No, among the kolkhoz members there are millionaires and there are paupers. That is a fact, notwithstanding the praise of the millionaire kolkhozy in the Russian press as if their existence signified the realization of the slogan, “Make all kolkhozy prosperous.”

Far from eliminating the poverty of the village, the millionaire kolkhozy have so accentuated it that the “differentiation” in social composition parallels the Czarist village. There are small, medium-sized and vast kolkhozy, and the crops grown on them and the tractor drivers available to them vary greatly. The “fortunate” ones are those which possess high grade soils, produce industrial and medicinal crops for the state, have comparatively large area in proportion to the number of members, have a great many more than the average number of tractor drivers at their disposal. Pravda of January 14, 1939, reported that on November 15, 1938, 5,000 MTS still owed their drivers 206 million rubles. The report reads that, naturally, the tractor drivers left the kolkhozy serviced by these MTS. The kolkhozy that could afford to pay well and on time got the best tractor drivers. Besides having the best soil and the best tractor drivers, the kolkhozy were able to work into the millionaire class by having had a larger surplus to put away for the further improvement of the kolkhozy. A certain percentage continually grew richer and richer. To be precise, the millionaire kolkhozy comprize one-third of one per cent of all kolkhozy (610 kolkhozy out of 2,424 thousand kolkhozy in the USSR!) [23*]

In extreme contrast to this handful of millionaire kolkhozy are the PAUPER kolkhozy, which are twenty times as numerous as the millionaire ones. They constitute 6.7 per cent of the kolkhozy and earn annually 1,000 to 5,000 rubles. The overwhelming majority, 75 per cent, of the kolkhozy are medium-sized and earn about 60,000 rubles annually. This means only 172 rubles per member. [24*]

Enormous extremes prevail in the distribution of farm products as compensation for labor, as well as in farm wages. In 1937, 8 per cent of all kolkhozy allotted less than 1½ kilogram of grain per labor day to each worker, over 50 per cent gave up to three kilos, 10 per cent distributed seven to fifteen kilos and, again, one one-third of one per cent allotted over fifteen kilos.

It must be emphasized that the labor day is not a calendar working day but a piece rate unit accorded the various categories of skilled and unskilled labor. A field hand’s working day is “worth” one-half a labor day and a tractor driver’s day is worth five labor days! Moreover, a labor day does not command the same price in all regions, as can be seen from the following table [25*]:

Thus, even for the same work, the kolkhozniki might have been paid either 34 kopeks or 1 ruble and 37 kopeks – a four-fold difference per labor unit!

In 1939 the Central Administration of National Economy Statistics reported that 25 per cent of the kolkhozniki had earned 300 labor days, the average being 150 labor days a year, while 3.5 per cent had not earned a single labor day. The other extreme to this polarization of wealth is told in Pravda of January 17, 1939, which reports that a single collective peasant family in the Soviet cotton growing region of Uzbekistan had earned 22,000 rubles. These “differentiations,” we must bear in mind, are within the kolkhoz. It is not from amongst the three million individual peasants that the “millionaires” arise but from amongst the 75 million collective farmers, out of those that have the largest tracts of land and are favored by the state with “contracts,” that is, produce industrial and medicinal crops for the state. As we have seen, the state gets approximately 40 per cent of the gross crops of the kolkhozy through obligatory deliveries, taxes and payments for use of tractors and combines. Of the surplus reverting to the kolkhozy and kolkhozniki there is economic base for both millionaire and pauper members.
 

IV – Mechanization and Unemployment
in the Countryside

Unemployment has been officially declared abolished ever since 1930. However, such a bourgeois agronomy specialist as Sir John E. Russell, director of the Rothamsted Experimental Station, declared after his visit to Russia in 1937 that the number of workers per hectare of land was some two to four times as many as would be used in England and that, most probably, only half of the agricultural population of Russia was necessary to run production efficiently. That, despite the fact that between 1928 and 1938, 22.8 million individuals left the farms and the peasant population declined by 20 per cent. That Russia is still overwhelmingly a peasant country (67.2 per cent of the total population is still rural) was revealed by the 1939 census. Of the 114.6 million rural inhabitants 78.6 million are peasants. Are all these millions still necessary to agricultural requirements, despite the extent of mechanization?

The Russian state prided itself on the tremendous development of mechanization on the agricultural front, yet denied the existence of unemployment and continued to deny it until 1939. The mop-up operations against the remaining revolutionists in the 1937 Trials and the anti-labor legislation in 1938 resulted in a mass flight of labor. Industry once again found itself without sufficient help. It was then that “The Leader” indirectly revealed the existence of unemployment in the countryside. At the 18th congress of the RCP in March 1939, Stalin appealed to the kolkhozniki for their surplus labor: “The kolkhozy have the full possibility,” he stressed. “to satisfy our request inasmuch as abundance of mechanization in the kolkhozy frees part of the workers in the country and these workers, if they were transferred to industry, could bring about a great benefit to the whole national economy.” Since that appeal was issued, it became the vogue in Soviet periodicals to speak of the “balance of labor” (a euphemistic enough name for the unemployed!) on the kolkhozy. Here is one table officially published to show the effects of mechanization:

Here we see a full 50 per cent decrease in the need for manpower on the farm.

Still more directly, unemployment is attested to in the December 1938 issue of Planned Economy, which published the following interesting table regarding the portion of labor resources that took part in kolkhoz work:

This reveals that even in the busiest month of the year, July, about 15 per cent of the men and 30 per cent of the women were surplus to labor requirements in the kolkhozy, regardless of whether they were officially declared to be among the unemployed or not. In the January 1941 issue of the Problems of Economy there appeared an article called Labor Productivity in Agriculture in the USSR and USA (an article we have already discussed in the section on labor productivity on the industrial front), in which the writer comes to the conclusion that, although the Russian worker put in an average 152 labor days per year, the American farmer works 258.6 days, and that Russia has three times as many farmers as the USA: 36.6 million against 12.1 million.

However, no amount of discussions about the “balance of labor” in the kolkhozy, no scientific proof that much of labor was surplus to agricultural requirements, not even the appeal of “The Leader” himself, proved powerful enough to move the peasant off from his half acre plot of land and willingly give himself over to the factory regime. It was then that the state enacted the October 2, 1940, decree creating the state labor reserves. The decree made is obligatory for the kolkhozy and city Soviets to give up to one million youths between the ages of 14 and 17 for compulsory vocational training. After two years of training for the 14 and 15 year olds and a bare six months for the 16 and 17 year olds, the youths had to work for the state for four years at the prevailing rate of wages. The irony of this decree lies in its being officially predicated on the fact that it was made necessary “as a consequence” of the “abolition of unemployment and the fact that the poverty and ruin of the village and city are forever done away with” and “therefore” there were no people “quietly forming a constant reserve of manpower for industry”! The truth of the matter is that unemployment, poverty and misery continue to exist in the country but even under his unhappy lot the peasant will not turn to industry because conditions in the factory, especially after 1938, are well known to him and he prefers un-employment in the country instead.

And what about the proletariat who cannot escape the factory regime? What is the factory regime like? What are the production relations at the point of production?

Author’s Footnote

1. It is considerably higher in nomad regions.

Author’s Notes

15*. Cf. L.E. Hubbard: Economics of Soviet Agriculture.

16*. Cf. Minutes of the 14th Congress of the RCP, page 493 (in Russian).

17*. Cf. Gosplan, The First Five Year Plan.

18*. First officially revealed in 1934 in Stalin’s Report to the 17th Congress of the RCP.

19*. Cf. article by Baykov in Economic Journal, London, December 1941.

20*. Development of Kolkhoz Trade in 1936, in Russian.

21*. Problems of Economy, No. 8, 1838, in Russian (as are all official magazines and newspapers mentioned in this article).

22*. Quarterly Bulletin of Soviet Russian Economics, No. 1–2, 1939, Prague; Prokopovicz is the editor of this and it is translated into English: excellently documented.

23*. Socialist Agriculture of the USSR Statistical Yearbook, for 1939, in Russian.

24*. Cf. Russia’s Economic Front for War and Peace, by Yugow.

25*. Income, Savings and Finance in Collective Farms, in Russian.

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