The modern discussion about planning is reminiscent of the debate about the first five-year plans. And it's a dangerous resemblance

Economic planning is coming back into fashion. Prime Minister Mikhail Fradkov says that it is necessary to adjust the country’s development directions to the specific parameters of economic growth - this, he notes, is “a fundamentally new element in planning our work.” Presidential economic adviser Andrei Illarionov believes that GDP needs to be doubled not in 10, but in eight years.

“The conversation about growth rates has been reduced to mathematics, a game of percentages, divorced from the quality of economic development,” a well-known analyst comments on these plans. And here’s another statement: “Digital has obscured and suppressed the economic concept and perspective...” Is it true, it seems? But this is from a completely different era: economist Albert Weinstein wrote this in 1927 regarding one of the first drafts of the USSR’s five-year plan.

The analogies can be continued. Now we need to break out of the raw material export trap, then into industrialization. The current forecast growth rates, as in the 20s, are considered insufficiently ambitious; one would like to push further.

The discussion of 1919–1920, so uncontemporary in its terms and surroundings, is very similar to the current one in content. It is dangerous to pretend that that discussion did not happen and not remember how tragically it ended. Publicist and economist Vladimir Mau wrote about the need to remember the lessons of the first Soviet years in the early 90s in the book “Reforms and Dogmas: 1914–1929.” Now it makes sense to re-read it.

Collision of approaches

After the turn from “war communism” to the new economic policy, two approaches to planning developed in Soviet science - analytical (or, as they said then, “genetic”) and goal-setting.

A notable representative of the first was Nikolai Kondratiev, a Socialist Revolutionary, who at the age of 25 became a comrade (deputy) minister of food in the Provisional Government. Kondratiev treated the economy as a living organism: study it and you will be able to determine the direction of development. In addition, he adhered to the medical principle of “do no harm”: intervention in the body is possible only on the basis of anamnesis, study of its past life and illnesses. Kondratiev considered constructing a plan in the form of an exact balance to be a utopia. He proposed introducing qualitative rather than quantitative indicators into the plan.

Another approach was formulated by Vladimir Bazarov, a translator of Marx's Capital and later an economist at the State Planning Committee. He defended the “teleological approach” - building a plan based on the goals facing society. Such a plan, he believed, could be described as a balance. True, Bazarov did not strictly tie the achievement of the desired indicators to dates. As Mau points out, Bazarov understood the danger of calendar-planning fetishism. But those who later used his ideas, including to smash the “geneticists,” refused to understand this danger. Another interesting feature of Bazarov’s theory, which has also been forgotten: he proposed to apply his target approach to nationalized industries, and the genetic approach to private farming, especially to agriculture.

Returning to the topic of analogies, we note: in those years, an instrumental contradiction emerged in the structure of power, which is also characteristic of the current government.

The regulation of current economic activities was carried out by the Narkomfin, and the development of general economic plans was, naturally, the responsibility of the State Planning Committee. The goal of Commissioner Grigory Sokolnikov was to strengthen the financial system, replace the Sovznak with a strong chervonets, contain inflation and implement the budget. Serious economists worked in the commissariat, regardless of party affiliation; the budget control figures they developed were in practice the most important planning document. And the State Planning Committee was just creating accounting methods, and its first planned product was “Control figures for the national economy of the USSR for 1925/26.” - an annual, not a five-year plan, which, by the way, has not been approved.

The State Planning Committee was a product of “war communism”. It was created in February 1921 on the basis of the GOELRO commission, which employed engineers, not economists and financiers. Lenin considered the electrification plan the first step towards a unified economic plan. Like the designers of the “electrification of the entire country,” the state planners first created a feasibility study, and then supplemented it with financial details. The budget was seen as a nuisance. One of the leading planners, the future head of the Five-Year Plan Commission, Stanislav Strumilin, was generally famous for his incredible ideological flexibility. Economics was for him the “handmaiden” of politics, which he himself wrote about and which he proved in practice, first developing a method of non-monetary accounting during “war communism”, then studying the market during the NEP, and after some time - fighting the NEP and making five year plans.

The path to the five-year plan

The policy of the Bolshevik monetarist Sokolnikov was not and, probably, could not be consistent. Faced in 1925–1926 with a growing commodity deficit and a depreciation of the chervonets, he applied currency intervention and limited the issue of money. At the same time, he sought to increase taxation for the wealthy and reduce taxes for the poor. This hit the wealthy peasants, but did not solve the problem of limiting growing consumer demand. And the administrative measures taken at the same time to crowd out private capital from trade did not help increase the supply of goods. In general, the further, the stronger the contradiction became: economic feasibility did not fit in with political guidelines - the reliance of Soviet power on the poor, distrust of private capital.

In 1926, Narkomfin was finally defeated in a hardware battle. Sokolnikov, who could at least somehow resist the pressure of the State Planning bureaucrats, was fired. The “dictatorship of finance” was overthrown, and work began on a master plan and five-year plans.

Why was the five-year term chosen? The head of the State Planning Committee, Gleb Krzhizhanovsky, explained it this way: five years is enough to complete the construction of large industrial facilities. And for agriculture, in his opinion, such a period was suitable: there was a cyclical nature, which means that it was possible to calculate the “average yield” for the plan.

Strumilin, who released the first three versions of the five-year plan in 1926–1927, actually announced a fundamental contradiction between the market and the plan. He wrote about the confrontation between two factors: “independent of our planned influence of objective circumstances” and “free creative-reconstruction ideas of a social organizer.” It was here that the debate about “genetics” and goal setting moved into a practical plane - the teleological approach began to look more and more like a command approach. “Now the time has come and the opportunity has arisen to move from fortune-telling and predictions (that is, forecasts) to a “system of economic tasks in the field of socialist construction,” wrote Strumilin.

The tasks were as follows: within five years, construction was planned to grow by 148%, in industry - by 75%. There was no talk of collectivization yet, although figures for the growth of agricultural production were present in the plan: tobacco, for example, should be harvested by 48%, cotton by 74%, and beets by 76%. How to achieve such progress was not entirely clear. It was planned to keep prices in agriculture unchanged, and in construction, by the way, generally reduce them by 17.5%. This was a clear manifestation of the isolation of economic plans from finance.

End of discussion

In essence, the discussion was about whether the authorities were ready or not to recognize the existence of economic laws. Some of the plan's critics pointed out, for example, that the production of tractors and other expensive agricultural equipment would be unprofitable. Demand will be low due to the small size of peasant farms, for which it is not profitable to buy or operate equipment. Economists Abram Ginzburg and Bazarov spoke about the impossibility of industrialization on a “broad front”, proposing to allocate specific industries and individual projects for development as funding becomes available and depending on profitability (how there are not enough such specific tasks now!). Former Socialist Revolutionary Kondratiev wrote that turning a plan into a directive is dangerous, since it dooms the national economy to deep crises.

The discussion was closed by Stalin at the XV Party Congress: “Our plans are not forecast plans, not guesswork plans, but plans-directives that are binding on the governing bodies.”

But in the path of the directive there was a whole layer of the population - peasants who were not economically controlled by the authorities. The peasants could sell grain to the state, or they might not. Then, in the winter of 1927/28, grain began to be taken from the peasants by force. And they solved the problem of demand for tractors - they began to herd peasants onto collective farms.

When the final five-year plan was approved in the spring of 1929, there was no longer any discussion. It was terminated by a series of political accusations of various “deviations.” The personnel of the State Planning Committee and the economic commissariats have been purged more than once. Even Krzhizhanovsky was dismissed as a “moderate”, and he was replaced by Kuibyshev, who was close to Stalin, whose favorite economic mechanism was confiscation. In the early 30s, Weinstein, Bazarov, Ginzburg, Kondratyev, Sokolnikov and many more were arrested in the cases of the Industrial Party, the “Labor Peasant Party”, the Menshevik Bureau and others.

The debate about economic planning ended outside of economics. Of course, there are no direct historical parallels. But let this story at least make you think about what a dangerous combination this is - an economic plan and non-economic methods.

The author is the editor of the “Comments” department of the Vedomosti newspaper.

Princes of the State Planning Committee