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New International, July-August 1953

Abe Stein

The New Turn in Kremlin Policy

Background and Implication of Russia’s “Soft” Policy

From New International, Vol.19 No.4, July-August 1953, pp.227-234.
Marked up up by Einde O’Callaghan for ETOL.

The speech delivered by Malenkov before the Supreme Soviet on August 8th marked an historic moment for the totalitarian dictatorship. Malenkov, the spokesman for the new regime, addressed himself not only to the assembled representatives of the privileged bureaucracy, but to the silent, disfranchised Russian people as well. The burden of his discourse transcended the limits of a mere discussion on the current year’s budget. In describing the transformation of the economy in the last 25 years from one based on a backward agriculture, into an economy resting on a powerful heavy industry, Malenkov was summing up the Stalin era and seeking to justify it.

Between 1925 and 1953 the output of steel rose from 1.8 million metric tons to 38 million tons. Coal production expanded from 16.5 tons to 320 million tons. The output of electric power multiplied from. 3 billion kilowatt-hours to 133 billion kilowatt hours. That is, the output of steel multiplied 21 times, coal by 19 times and electric power by 45 times. If we supplement these figures by the statistics on the creation and growth of such industries as aviation, machine-building and tractor, we arrive at a fairly adequate picture of the expansion of Russia’s heavy industry.

However, while the output of the means of production in the last 28 years grew by about 55 times, the production of consumers goods in the same period increased by only 12 times. Malenkov tells us that the share of the production of heavy industry in total industrial output amounted to 34 per cent in 1925, 58 per cent in 1937 and now stands at the figure of 70 per cent. To complete the picture of the deadline of the consumers industries, both absolute as well as relative, one must add the fact that agricultural production, which is the basis for the food and consumers industries, declined absolutely in certain spheres, especially the breeding of livestock which the following table (in millions) summarizes:

In approximately the same period of time, from 1926 to 1953, the total population grew from 147 to about 210 million, and the number of urban dwellers increased from 26 to 80 million. If we correlate the growth of the population with the increase in output of food and manufactured consumers goods, we find that per capita production has barely kept pace with the growth in population, and in some instances, dropped sharply.

(The Kremlin does not publish figures on the output of such important products as eggs, milk, vegetables and fruit, because the poverty stricken diet of the Russian masses would be exposed in all its clarity. In 1938, for example, the annual output of eggs would have allowed for a per capita consumption of about one egg per week. If no figures have been published in the post-war period, this can only mean that output is lower than the pre-war level.)

The deterioration in the living standards of the masses, and this means in the first place the working-class in the urban centers, is not completely indicated by the statistics given above. One must include the serious shortage of living space in the cities which has reached the proportions of a real crisis, and is openly admitted by the regime. Although the Kremlin does not release adequate statistics, there is no doubt that the average living space per person has declined below the pre-war figure, which in turn was below that of 1928. This means that the ordinary worker and his family must still crowd into one room and share kitchen and other facilities with several other families in one apartment on a communal basis. In 1939, urban dwelling-space averaged between 4 and 5 square metres per person. The goal set in the Plan for 1951-55 would allow 6 square metres per person. This is about one-third to one-fifth of the living space per person in most West European countries.

Finally, one must add that a statistical picture of average production per capita of consumers goods does not tell us how these goods are actually distributed. One must take into account the process of social and economic differentiation which began to take on an extremely aggravated form after 1928. A growing, and very privileged layer of the population – the bureaucracy, began to claim a larger and larger share of the meager yearly output of consumer goods, while the share going to the workers declined. A Stakhanovist can make anywhere between 2,000 and 10,000 rubles a month; an engineer in a steel plant, 3,000 rubles plus bonuses that equal his salary; and a factory director, a great deal more. The average worker’s monthly wage today is estimated to be between 500-600 rubles. This means a considerable section of the working-class makes less. The worker does not stand on an equal plane with the Stakhanovist, the engineer or the factory director in the acquisition of scarce goods. A good wool suit costs, for example, 800 rubles, one and a half times a worker’s monthly wage. In addition, the bureaucrat has “connections” when it comes to securing what he wants.
 

AFTER TWENTY-FIVE YEARS OF INDUSTRIAL EXPANSION, with its four Five Year plans, Malenkov now declares it is possible to provide the Russian people with a decent standard of living. With his oblique admission that “the Soviet consumer,” that enigmatic figure, has been faring badly, Malenkov destroyed twenty years of propaganda about the “happy life” in Russia. And the rising standard of living, it should be noted, is still the music of the future. As Malenkov makes clear, it is conditional on the resolution of the crisis in agriculture, which has lagged far behind heavy industry in both gross production and productivity per worker. To provide “the consumer” with more and better food, and with a larger supply of manufactured consumer goods, the light industries must receive from agriculture in as short as possible a time, a swelling stream of raw materials and food to be processed.

To this end, Malenkov declared, the regime has adopted a completely new attitude toward the collective farms and the private holdings of the individual collective farmers. The state will encourage production by permitting the collective farms to keep a somewhat larger share of what they produce. How .much more we are not told. In addition, the supply of farm machinery will be increased in the next few years. As for the private holdings of the collective farmers, punitive taxes designed to wipe them out have been cut in half, and the individual peasant encouraged to raise livestock and vegetables. What was yesterday a crime against the state, today becomes civic virtue.

Is the regime sincere in its desire to raise the living standards of the masses? Lenin once dryly remarked that there exists no scientific method by which to measure sentiments. In Western Europe and the United States, the most popular explanation for this new turn in Kremlin policy is sought in the weakness of the regime and its fear of the masses. As far as it goes, there is a great deal of truth in this explanation. The new clique in the Kremlin is well aware of its isolation and the vast gulf which separates it from the masses. And without a doubt, it is ready to pay a, temporary price to gain some popular support.

However, this is not the whole truth, and if taken as such, is altogether misleading. Not only subjective (political) needs have pushed the regime along the road it is now taking. There are powerful objective (economic) forces which compel it in this same direction.

The regime is aware that the power and privileges of the bureaucracy and its further domination, rest on the continued growth of the economy. But the regime can no longer successfully employ its old accustomed methods of forcing the development of production at the expense of consumption, of industry at the expense of agriculture; of aggravating social and economic inequality as the motor force of economic expansion. The basic “errors” of bureaucratic planning, the chief of which is the lack of proportion in the rates of growth of the different branches of the economy are not “errors” at all. They are the consequence of these methods, which in their sum total can be described as a process of “primitive accumulation.” Their inevitable result has been the impoverishment of the masses at one end of the social scale and the creation of a thin but extremely privileged layer of the population at the other. The social antagonisms generated by this process cart, only be regulated by total suppression, the exertion of an all-embracing system of state compulsion. The reason these methods can no longer work is that The historic conditions which permitted their use have vanished never to return. In this lies the permanent and deep-seated crisis of the economy. And the crisis of the regime is its natural product because the bureaucracy is organically wedded to these methods and can use no other without destroying its class domination.
 

THE CRISIS IN RUSSIAN AGRICULTURE has, of course, an independent reality of its own. But in a sense, the attention being paid it by the regime is an optical illusion. The anxieties which the regime is now manifesting about the lag in agriculture have their origin elsewhere; to be precise, in the relationship between the bureaucracy and the working-class. That enigmatic figure, the “consumer,” whose needs have become a major theme of the official propaganda, is none other than the worker. In general, the regime maintains a death-like silence about the miserable conditions of the workers and their demands, and we are only permitted this distorted reflection in the official propaganda. Yet it is clear, that the regime is motivated by a more than passing anxiety and demagogic desire to pacify the workers temporarily. The attacks on the lower ranks of the bureaucracy for the shoddy quality of consumer goods, for nepotism and petty corruption are too persistent.

Malenkov’s insistence on the need to improve the diet of the “consumer,” and to end dependence on an impoverished fare of bread and cereals is symptomatic of the problem. In the course of his speech before the Supreme Soviet, Malenkov made a statement which has a great deal of interest for us. In speaking of the agricultural crisis, he noted that there would be enough grain to satisfy the needs of the population this year. And yet, in the thirties, the “struggle for grain” was the chief concern of the Kremlin to which everything else was subordinated. So far as the Kremlin was concerned, when it had guaranteed the year’s supply of grain for the urban population, it had achieved a real victory. What has changed the outlook of the regime?

The answer certainly is not that Malenkov and Khrushchev are more cultured than Stalin. It is due to the fact that the old method of expanding production – by expanding the labor force at a very rapid rate has been exhausted. The regime must now rely more and more on increasing the productivity of the existing force for increases in gross production – and this can’t be done on a poverty diet whose main staple is bread and potatoes. An increase in productivity cannot take place unless there is a considerable improvement in the living standards of the main body of the working-class, and not merely of its privileged layers, the Stakhanovists and the Ukarnikia, the shock workers.
 

A BRIEF REVIEW OF THE PERIOD BETWEEN 1928-1950 will show what has happened. According to the First Five Year Plan (1928-32), the labor force (workers and employees) was to increase from 11.3 million to 14.7 million. Instead the urban labor force increased by the sum of 12.5 million between 1928 and 1932, and reached the figure of 23 million. The chief source of this tremendous pool of new labor was the surplus population in the country-side. Of the 12.5 [million] new workers, 8.5 million alone were former peasants.

Whereas the growth of the urban working population between 1929 and 1932 far outstripped the schedules of the First Five Year Plan, the increase of the labor force in the next period fell below the more modest goals set in the Second Five Year Plan (1933-37). Instead of the anticipated increase of 6 million more workers and employees, the number of employed only rose by 4 million. If we allow for the additional increase necessary to offset retirements and deaths, the real addition to the labor force adds up to 9.4 million new employed. But the regime found it could no longer depend on the countryside as the chief source of its labor supply. Only 3.2 million new workers came from agriculture. The rest were drawn from the urban population. And the major share of this new increment to the labor force was contributed by women. Between 1933 and 1937, the number of women workers in the city rose from 6 to 9 million. In 1937 women represented 35 per cent of the urban labor force. The revolution that had been wrought in the relation between town and country, industry and agriculture, can be seen from the following statistics. The total labor force, that is both industry and agriculture combined grew by only 5 million between 1926 and 1939, from 86 million to 90.6 million. But in that same period the agricultural population declined from 120 million to 114 million while the urban population grew from 26 to 55 million, an increase of more than 29 million. This vast internal migration from countryside to town was the primary condition for the rapid growth of the new industry, and in turn depended on the existence of a large surplus population in agriculture. By 1939, however, this chief source of new labor power had been exhausted.
 

IN MANY RESPECTS, THE FOURTH FIVE YEAR PLAN resembles the First. There is the same over fulfillment of the ambitious goals set for heavy industry, and the underfulfillment of the very moderate Ones sent for light industry and agriculture. And, as under the First Five Year Plan, the labor force grew far beyond the limit set by the Plan. Between 1946 and 1950, the number of wage and salary earners was supposed to increase by 6.25 million and reach a total of 33.5 million. Instead, the number of employed reached about 38 million, and the actual increase of the labor force came close to 10 than to 6 million.

Again, we find a close correlation between the actual expansion of industry and the labor force. The growth in labor productivity was a negligible factor, since the need to expand the labor force so far beyond the goal set by the Plan could only mean that not even the over-all prewar rates of productivity had been reached. In individual cases, this was admitted by the official Russian press. In the case of so important an industry as coal mining, an economist writing in the economic magazine, Voprosy Ekonmiki, No.8, 1941, declared that per output wage earner was less than in 1940.

The new supply of labor came from three sources. The first consisted of demobilized veterans, a majority of them peasants, who stayed in the cities instead of returning to the collective farms. This meant that agriculture again, although in indirect form, was making a large contribution to the growth of the labor force. The second source was the Juvenile Labor Reserves, which had first been instituted in 1940 as a war measure, but remains in force to this day. According to the Fourth Five Year Plan, these vocational schools were supposed to deliver 4.5 million young workers, drawn from agriculture and the city, by 1950, with 1.2 million young workers going into industry in that year alone. The last source of labor power was to be tapped by squeezing the urban population – in particular by forcing more women – and this meant married women with children – into industry. If in 1937, the women represented 37 per cent of the working population, by 1950 they made up at least 50 per cent of the urban labor force. (Although the subject lies outside the scope of this article, it is worth noting that women are the mainstay of the agricultural labor force, contributing about 70 per cent of the workers.)

The demobilized veterans could not remain a permanent source of labor. The effect of their influx into the labor pool was most sharply felt in the very first post-war years, especially 1945, when the number of new urban workers increased by 3 million. Thereafter they steadily decreased in importance. As for the compulsory labor recruitment of young people, their number has steadily declined. The largest number contributed by this source to industry was one million in 1948. Since then, this source of labor power has dried up in spite of all the ambitious plans of the regime. Instead of the projected 1.2 million, the vocational training schools only provided industry with less than half a million new workers in 1950. By 1952, their annual contribution had dropped to 326,000. As for women, the deflationary policies of the regime, which resulted in a sharp drop in average wages right after the war, were guaranteed to force those who were employable into industry. The regime is quite aware that it can no longer depend on a very rapid growth of the labor force to ensure the continued expansion of industrial output. This is revealed both by the actual rates of growth since 1950, as well as in the projected goals for the Fifth Year Plan which runs from 1951 to 1955. The following table indicates the annual rate of increase in per cent over the preceding year for different goods. The declining rate of growth is very noticeable:

The Fifth Five Year Plan, which was not announced until late 1952, that is, until the Kremlin had a very real notion of the actual rate of growth it could expect of the economy and the labor force, is quite remarkable in one respect, which distinguishes it from all previous Plans. As under previous Plans, the main emphasis is on the continued expansion of heavy industry, which is to expand by 80 per cent. Gross industrial output is to increase by 70 per cent. However, this increase is to be primarily achieved by a sharp rise in labor productivity and not by a large increase in the labor force. According to Saburov, the Minister of Heavy Industry, reporting to the 19th Party Congress in 1952, three-quarters of the increase in gross industrial output was to be achieved through a rise in productivity. The productivity of labor in industry was to rise by 50 per cent, in building by 55 per cent, and in agriculture by 40 per cent. The labor force was to increase by only 15 per cent over 1950, that is, by the remarkably small figure of between four and a half and five million persons. The average annual increase of the labor force would therefore be somewheres below one million additional workers and employees, as compared with the average annual increase of more than two million between 1946 and1950.

The goal of an annual over-all increase of ten per cent in productivity in industry that has been set by the regime is impossible of attainment. In the United States, for example, an annual increase in the rate of productivity of slightly more than one per cent took place from 1939 to 1947. Between 1948 and 1952, the annual increase of productivity in American industry rose to 3.3 per cent.

However, what is significant is that the Kremlin recognized it could no longer depend on the growth of the labor force as the chief means of expanding output. This shift of emphasis to increasing the productivity of the existing labor force indicates that the Russian economy has entered a new, and for the present regime, critical stage of development.
 

STALIN’S DEATH WAS, IN A SENSE, one of those rare historic events in which accident combines with necessity. The weakness of the regime, an inevitable result of Stalin’s demise, compels it to take a road dictated by the organic tendencies of the economy. However, the regime is caught in a series of contradictions from which it cannot escape. To improve the real living standards of the workers is an absolute necessity. Not even the totalitarian regime in the Kremlin can believe it can spur a sharp rise in the productivity of labor on a diet of poverty. The first step in this process, since it is not strong enough to squeeze more out of the peasantry, is to grant considerable concessions to it as a means of increasing the output of food. But in terms of the national income, this means yielding a larger share of the national income to the collective farmers. At the same time, it must maintain the living standards of the urban workers on a higher plane, if it is to attract any number of additional workers from the country-side into industry. Taking both claims together, this means a completely different division of the output of industry, between means of production and consumer goods in the immediate period ahead. A redistribution of the national income in favor of the masses must now take place.

Without arguing dogmatically, that this is impossible, it raises extremely serious difficulties for the regime. Let us examine briefly some of the alternatives. It must choose between reducing the share of industrial output going into war preparations, and this involves the prestige and privileges of an important social grouping within the bureaucracy – the officer caste; or, restricting the rate of growth of heavy industry to a degree it has never done before. But this would mean abandoning the struggle to “catch up with the West,” and would mean the gap between Russia’s industry and that of the United States would increase in the latter’s favor. In addition, if it is to raise the general standard of living of the masses within a short period of time, it must curtail the range of inequality in income. This means curtailing that share of the national income which goes for the consumption of the bureaucracy as a whole. And in general, it would have to carry on a serious campaign against the wastefulness of the industrial bureaucracy, which nullifies a considerable portion of the annual increase in gross output of industry. Both these aims cannot be accomplished by economic measures alone, and require more than supervision from the top. It would mean nothing less than the application of political measures to restrain and control the appetites and wastefulness of the privileged strata. That is, Malenkov, Khrushchev and company, would have to call upon the workers and peasants to exercise control over the bureaucratic apparatus! This would be reform from above with a vengeance, and we do not believe it is possible.

Within the limits of this article, it has been impossible to deal specifically and at length with the new policy the regime is pursuing with regard to the collective farm peasantry. We leave this for a future article to show that the methods being employed by the regime to increase agricultural production are calculated to lead to a crisis in this sphere in the next period.

 
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