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Soviet Union

DEVELOPMENT OF SOVIET INDUSTRY

Russian industrial activity began before 1700, although it was limited to metal-working and textile factories located on feudal estates and required some help from English and Dutch advisers. The largest industrial concerns of the seventeenth century were owned by the Stroganov trading family. In the first quarter of the eighteenth century, Peter the Great applied Western technology more widely to establish larger textile, metallurgical, and naval plants for his military ventures. This first centralized plan for Russian industrialization built some of the largest, best-equipped factories of the time, using mostly forced peasant labor. After a decline in the middle of the eighteenth century, Russian industry received another injection of Western ideas and centralized organization under Catherine the Great. Under Catherine, Russia's iron industry became the largest in the world.

Another major stage in Russian industry began with the emancipation of the serfs in 1861, creating what would eventually become a large industrial labor force. When he became tsar in 1881, Alexander III used this resource in a new, large-scale industrialization program aimed at finally changing Russia from a primarily agricultural country into a modern industrial nation. Lasting until 1914, the program depended on massive assistance from western Europe. From 1881 to 1914, the greatest expansion occurred in textiles, coal, and metallurgy, centered in the Moscow area and the present-day Ukrainian Republic (see fig. 1). But compared with the West, major industrial gaps remained throughout the prerevolutionary period.

Beginning in 1904, industry was diverted and disrupted by foreign wars, strikes, revolutions, and civil war. After the Civil War (1918-21), the victorious Bolsheviks (see Glossary) fully nationalized industry; at that point, industrial production was 13 percent of the 1913 level. To restart the economy, in 1921 Vladimir I. Lenin introduced the New Economic Policy ( NEP--see Glossary), which returned light industry to private enterprise but retained government control over heavy industry. By 1927 NEP had returned many industries to their prewar levels. Under Stalin, the First Five-Year Plan began in 1928. This planning system brought spectacular industrial growth, especially in capital investment. More important, it laid the foundation for centralized industrial planning, which continued into the late 1980s. Heavy industry received much greater investment than light industry throughout the Stalin period. Although occasional plans emphasized consumer goods more strongly, considerations of national security usually militated against such changes.

Industry was again diverted and displaced by World War II, and many enterprises moved permanently eastward, into or beyond the Ural Mountains. Postwar recovery was rapid as a result of the massive application of manpower and funds. Heavy industry again grew rapidly through the 1960s, especially in fuel and energy branches. But this growth was followed by a prolonged slowdown beginning in the late 1960s. Successive five-year plans resulted in no substantial improvement in the growth rate of industrial production (see table 32, Appendix A). Policy makers began reviewing the usefulness of centralized planning in a time of advanced, fast-moving technology. By 1986 General Secretary Mikhail S. Gorbachev was making radical suggestions for restructuring the industrial system.

Data as of May 1989