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Based on a system of state ownership, the Soviet economy was managed through Gosplan (the State Planning Commission), Gosbank (the State Bank) and the Gossnab (State Commission for Materials and Equipment Supply). Beginning in 1928, the economy was directed by a series of five-year plans, with a brief attempt at seven-year planning. For every enterprise, planning ministries (also known as the "fund holders" or fondoderzhateli) defined the mix of economic inputs (e.g., labor and raw materials), a schedule for completion, all wholesale price s and almost all retail price s.
Industry was long concentrated after 1928 on the production of capital goods through metallurgy, machine manufacture, and chemical industry. In Soviet terminology, the capital goods were known as group A goods, or means of production. This emphasis was based on the perceived necessity for a very fast industrialization and modernization of the Soviet Union. After the death of Stalin in 1953, consumer goods (group B goods) received more emphasis. For further details see consumer goods in the Soviet Union.
Under StalinIosif (Joseph) Vissarionovich Stalin ( Russian: Iosif Vissarionovich Stalin , original name Ioseb Jughashvili ( Georgian: Russian: Iosif Dzhugashvili see Other names section ( December 21 [ December 9, Old Style], 1879 1 March 5, 1953) was a Bolshevik rev's tutelage, a complex system of planning arrangements had developed since the introduction of the first five-year plan in 1928. Until the late- 1980sMillennia: 1st millennium 2nd millennium 3rd millennium Centuries: 19th century 20th century 21st century Decades: 1930s 1940s 1950s 1960s 1970s 1980s 1990s 2000s 2010s 2020s 2030s Years: 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 Events and trends and early- 1990sCenturies: 19th century 20th century 21st century Decades: 1940s 1950s 1960s 1970s 1980s 1990s 2000s 2010s 2020s 2030s 2040s Years: Events and trends Computers, technology Explosive growth of the Internet; decrease in the cost of computers and other techn, when economic reforms backed by Soviet leader Mikhail GorbachevMikhail Sergeyevich Gorbachev ( Russian: ́ ́ ; Pronunciation: mih-kha-ILL ser-GHE-ye-vich gor-bah-CHOFF) (born March 2, 1931), was leader of the Soviet Union from 1985 until 1991. His attempts at reform led to the end of the Cold War, but also introduced significant changes in the traditional system (see PerestroikaPerestroika is the Russian word (which passed into English) for the economic reforms during Soviet leader Mikhail Gorbachev's initial period ( 1985- 1986) in power modified central planning without making truly fundamental changes. Gorbachev and his team), the allocation of resources was directed by a planning apparatus rather than through the interplay of marketA market economy is an economy in which most allocations of resources occur as a result of interactions between buyers and sellers of goods and services. It is often contrasted with a planned economy in which most allocations of resources occur as a resul forces.
Timeframe. From the Stalin-era through the late- 1980sMillennia: 1st millennium 2nd millennium 3rd millennium Centuries: 19th century 20th century 21st century Decades: 1930s 1940s 1950s 1960s 1970s 1980s 1990s 2000s 2010s 2020s 2030s Years: 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 Events and trends, the five-year plan integrated short-range planning into a longer timeframe. It delineated the chief thrust of the country's economic development and specified the way the economy could meet the desired goals of the Communist PartyFor other usage of the initials CPSU see CPSU (disambiguation). The Communist Party of the Soviet Union ( Russian: was the name used by the successors of the Bolshevik faction of the Russian Social Democratic Labour Party from 1952 to 1991, but the wordin. Although the five-year plan was enacted into law, it contained a series of guidelines rather than a set of direct orders.
Periods covered by the five-year plans coincided with those covered by the gatherings of the CPSU Party Congress. At each CPSU Congress, the party leadership presented the targets for the next five-year plan. Thus, each plan had the approval of the most authoritative body of the country's leading political institution.
Guidelines for the plan. The Central Committee of the CPSU and, more specifically, its Politburo, set basic guidelines for planning. The Politburo determined the general direction of the economy via control figures (preliminary plan targets), major investment projects (capacity creation), and general economic policies. These guidelines were submitted as a report of the Central Committee to the Congress of the CPSU to be approved there.
After the approval at the congress, the list of priorities for the five-year plan was processed by the Council of Ministers, which constituted the government of the USSR. The Council of Ministers was composed of industrial ministers, chairmen of various state committees, and chairmen of agencies with ministerial status. This committee stood at the apex of the vast economic administration, including the state planning apparatus, the industrial ministries, the trusts (the intermediate level between the ministries and the enterprises), and finally, the state enterprises. The Council of Ministers elaborated on Politburo plan targets and sent them to Gosplan, which gathered data on plan fulfillment.
Gosplan. Combining the broad goals laid out by the Council of Ministers with data supplied by lower administrative levels regarding the current state of the economy, Gosplan worked out, through trial and error, a set of preliminary plan targets. Among more than twenty state committees, Gosplan headed the government's planning apparatus and was by far the most important agency in the economic administration. The task of planners was to balance resources and requirements to ensure that the necessary inputs were provided for the planned output. The planning apparatus alone was a vast organizational arrangement consisting of councils, commissions, governmental officials, specialists, etc. charged with executing and monitoring economic policy.
The state planning agency was subdivided into its own industrial departments, such as coal, iron, and machine building. It also had summary departments such as finance, dealing with issues that crossed functional boundaries. With the exception of a brief experiment with regional planning during the Khrushchev era in the 1950s, Soviet planning was done on a sectoral basis rather than on a regional basis. The departments of the state planning agency aided the agency's development of a full set of plan targets along with input requirements, a process involving bargaining between the ministries and their superiors.
Planning ministries. Economic ministries performed key roles in the Soviet organizational structure. When the planning goals had been established by Gosplan, economic ministries drafted plans within their jurisdictions and disseminated planning data to the subordinate enterprises.
The planning data were sent downward through the planning hierarchy for progressively more detailed elaboration. The ministry received its control targets, which were then disaggregated by branches within the ministry, then by lower units, eventually until each enterprise received its own control figures (production targets).
Enterprises. Enterprises were called upon to develop the most detailed plans covering all aspects of their operations so that they could assess the feasibility of targets, thus opening up the most intense bargaining phase in the planning process. As the individual enterprise drafted its detailed production plans, the flow of information was reversed; enterprise managers and even rank-and-file workers often participated in the planning process at this level. According to Soviet reports, roughly 110 million Soviet workers took part in discussions in the final period of state planning in the late- 1980s and early- 1990s.
The enterprises' draft plans were then sent back up through the planning ministries for review. This process entailed intensive bargaining, with all parties seeking the target levels and input figures that best suited their interests.
Redrafting the plan. After this bargaining process, Gosplan received the revised estimates and re-aggregated them as it saw fit. Then, the redrafted plan was sent to the Council of Ministers and the Party's Politburo and Central Committee Secretariat for approval. The Council of Ministers submitted the Plan to the Supreme Soviet and the Central Committee submitted the plan to the Party Congress, both for rubber stamp approval. By this time, the process had been completed and the plan became law.
Approval of the plan. The review, revision, and approval of the five-year plan were followed by another downward flow of information, this time with the amended and final plans containing the specific targets for each sector of the economy. At this point, implementation began and was largely the responsibility of enterprise managers.
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