Once in power, Stalin set out to make the Soviet Union a modern industrial power. In the past, said Stalin, Russia had suffered because of its economic backwardness. In 1928, he proposed the first of several “five-year plans” aimed at building heavy industry, improving transportation, and increasing farm output.
To achieve his goals, Stalin brought all economic activity under government control. The government owned all businesses and distributed all resources. The Soviet Union developed a command economy, in which government officials made all basic economic decisions. By contrast, in a capitalist system, the free market determines most economic decisions. Privately owned businesses compete to win the consumer's choice. This competition regulates the price and quality of goods.
Stalin's five-year plans set high production goals, especially for heavy industry and transportation. The government pushed workers and managers to meet these goals by giving bonuses to those who succeeded—and by punishing those who did not. Between 1928 and 1939, large factories, hydroelectric power stations, and huge industrial complexes rose across the Soviet Union. Oil, coal, and steel production grew. Mining expanded, and new railroads were built.
During this time, the West was in the grip of the Great Depression. The Soviet Union had little international trade, so it was insulated from many of the harshest effects of the global economic crisis. Some people in Europe and North American pointed to the industrial growth of the Soviet Union as proof that Stalin's economic policies were successful—ignoring the fact that this success came at a staggering human cost.
Despite impressive progress in some areas, Soviet workers had little to show for their efforts. Some former peasants did become skilled factory workers or managers. Overall, though, the standard of living remained low. Wages were low, workers were forbidden to strike, and consumer goods were scarce. Central planning was often inefficient, causing shortages of some goods and surpluses of others. Many managers, concerned only with meeting production quotas, turned out large quantities of low-quality goods.
During and after the Stalin era, the Soviet Union continued to produce well in heavy industry, such as the manufacture of farm machinery. But its planned economy failed to match the capitalist world in making consumer goods, such as clothing and cars.
Stalin also brought agriculture under government control, but at a horrendous cost. The government wanted farmers to produce more grain to feed workers in the cities. It also hoped to sell grain abroad to earn money.
Describe the effect of the Five-Year Plans on steel and corn production.