Stalin

Already in the summer and fall of 1930, while luminaries such as H. G. Wells, the British science fiction writer, were lauding the Five-Year Plan as “the most important thing in the world today,” the “planlessness” of Soviet planning was exposed in an incisive analysis by the Menshevik émigré newspaper Socialist Herald, which pointed out that setting maximal quantitative targets and goading each factory to meet them, where some would succeed and others not, and where even successes would be at varied levels, rendered coherence impossible. Overfulfilling the output target of nuts only led to waste if they exceeded the production of bolts; an increased supply of bricks provided no extra utility with insufficient mortar.²³⁸ Hoarding and wheeling and dealing via illegal markets—a shadow economy—became indispensable to the working of the “planned” economy but rendered shortages and corruption endemic. “We buy up materials we do not need,” noted the head of supply at Moscow’s electrical engineering plant, “so that we can barter them for what we do need.”²³⁹ With no legal market mechanisms to control quality, defective goods proliferated. Even priority industrial customers suffered anywhere from 8 to 80 percent defective inputs, with no alternative suppliers, and one factory’s poor inputs became another factory’s low-quality output.²⁴⁰

Stalin was well informed about the problems.²⁴¹ But he understood next to nothing of the structural pathologies he had embedded by eliminating private property and legal market mechanisms. Unaccountable regional party machines, meanwhile, were consumed by skirmishing. After a collective denunciation had arrived from Western Siberia against Roberts Eihe, Stalin wrote to Molotov (August 13, 1930) that Siberia had just been divided into two regions, west and east, and that no one had complained about Eihe when he had run all of Siberia. “Suddenly Eihe turns out to be ‘unable to cope’ with his assignments? I have no doubt this is a crudely masked attempt to deceive the Central Committee and create ‘their own’ artel-like regional committee based on mutual protection. I advise you to kick out all the intriguers and . . . put full trust in Eihe.”²⁴² Convoluted infighting near his holiday dacha, in the South Caucasus federation, involving Georgia, Armenia, and Azerbaijan party bosses, was giving Stalin fits.²⁴³

The dictator also kept a close eye on Mikhail Kalinin, who enjoyed a high profile because of his peasant origins and his role as ceremonial head of state (chairman of the Soviet central executive committee).²⁴⁴ At the politburo, Kalinin occasionally allowed himself to vote against Stalin (as in the case of closing the cafeteria for the Society of Old Political Prisoners). Orjonikidze, at the party Control Commission, had received materials from the tsarist police archives to the effect that Kalinin, as well as Jānis Rudzutaks, had squealed while under arrest, leading to incarceration of other comrades in the underground.²⁴⁵ Then, individuals accused of belonging to a fabricated “Laboring Peasant Party” testified in prison about their plans to include Kalinin in a replacement government. Molotov hesitated to circulate the extracted testimony. “That Kalinin has sinned cannot be doubted,” Stalin insisted (August 23), intent on narrowing Kalinin’s scope to act independently. “The Central Committee must definitely be informed about this in order to teach Kalinin never to get mixed up with such rascals again.”²⁴⁶

Even as he attended to his personal power, Stalin drove the financing of industrialization. “We have one and a half months left to export grain: starting in late October (perhaps even earlier), American grain will come onto the market in massive quantities, and we will not be able to withstand that,” he warned Molotov (August 23). “Once again: we must force through grain exports with all our might.”²⁴⁷ Stalin insisted on sales even though world grain prices had fallen 6 percent in 1929 and would fall another 49 percent in 1930. (The equivalent of a year’s grain exports were being stockpiled across countries.) Prices for industrial machinery remained more or less stable, meaning that in 1930, twice as much Soviet grain had to be exported per unit of machinery imported than had been the case in 1928.²⁴⁸ “Some clever people will come along and propose holding off on the shipments until the price of grain on the world markets rises ‘to its ceiling,’” he cautioned Molotov in the August 23 letter. “There are quite a few of these clever people in trade. They ought to be horsewhipped, because they are dragging us into a trap. In order to hold out, we must have hard currency reserves. But we don’t have them. . . . In short, we must push grain exports furiously.”²⁴⁹