Gosplan

Gosplan (Russian: Госпла́н, pronounced [ɡɐsˈplan]) was the committee responsible for economic planning in the Soviet Union. The word "Gosplan" is an abbreviation of Gosudarstvenniy Komitet po Planirovaniyu (Государственный комитет по планированию, "State Committee for Planning"). One of its main duties was the creation of the Five-Year Plans for the National Economy of the Soviet Union.

History

The agency was formed on 22 February 1921 as the "RSFSR State Planning Commission", by decree of the Russian Soviet Federative Socialist Republic's Sovnarkom. The GOELRO plan, the first large-scale Soviet plan to recover the Russian economy, was first to test Gosplan. After the creation of the Union of Soviet Socialist Republics, the USSR State Planning Commission of the USSR Council of Labour and Defence (СТО СССР, Совет Труда и Обороны СССР) was established on 21 August 1923. The abbreviation "Gosplan" has been used since 1921.

Initially Gosplan had an advisory function. Its primary objective was the co-ordination of the economic plans of Union republics and the creation of the common Union plan. During 1925 Gosplan started creating annual economic plans, known as "control numbers" (контрольные цифры).

Its work was coordinated with the USSR Central Statistical Directorate (центральное статистическое управление СССР), the Narkomat of Finance, and the All-Union Council of State Economy (ВСНХ), and later with Gosbank and Gossnab.

With the introduction of five-year plans in 1928, Gosplan became responsible for their creation and supervision according to the objectives declared by the Communist Party of the Soviet Union.

During 1930 the Statistical Directorate was merged into Gosplan, and on 3 February 1931 Gosplan was resubordinated to the Sovnarkom.

During May 1955 Gosplan was divided into two commissions: the USSR Council of Ministers State Commission for Advanced Planning (Государственная комиссия СМ СССР по перспективному планированию, USSR Gosplan), and the USSR Council of Ministers Economic Commission on Current Planning (Государственнaая экономическая комиссия СМ СССР по текущему планированию народного хозяйства, Госэкономкомиссия СССР). These were, respectively, tasked with predictive and immediate planning. The work of the latter was based on the five-year plans delivered by Gosplan, with Gosplan planning 10–15 years ahead.

Gosplan was headquartered at the building now occupied by the State Duma, in Moscow.

Regionalisation Commission

During May 1921, with the introduction of the New Economic Policy, Gosplan's Council of Labour and Defense established the Regionalisation Committee, which was tasked with developing a plan for the economic-administrative organisation of the RSFSR. Composed largely of technical staff - professional engineers and economists from imperialist times, it was directed by Ivan Gavrilovich Alexandrov, former member of the State Commission for the Electrification of Russia, but not however a member of the Bolshevik Party. The commission examined alternatives of ethno-territorial regionalisation, discussing the topic with the People's Commissariat of Agriculture, the Central Statistical Directorate and the Supreme Soviet (VTsIK) Administrative Commission.^[1]

Method of Material Balances

The introduction of the first five-year plan in 1928 led to a re-examination of the roles of Gosplan and VSNKh, the supreme state organization for management of the economy at this time. This re-examination of roles was required because VSNKh itself also had responsibility for planning through the Industrial Planning Commission (Promplan). Re-examination of roles was also required as the introduction of the first five-year plan meant that Gosplan's role was no longer one of prognosis and drafting of 'control figures' since plans had now become orders to act.

In order to ensure the success of the plan it was necessary to ensure that inputs from one part of the economy matched outputs from another part of the economy. Gosplan achieved this using a methodology called the system of 'material balances'. For a plan period (in detail for one year and in lesser detail for a five-year plan) Gosplan drew up a balance sheet in terms of units of material (i.e. money was not used as part of the accounting process).

The first step in the process was to assess how much steel, cement, wool cloth, etc. would be available for the next year. This calculation was based on the following formula: production minus exports plus imports plus or minus changes in stocks).

The planning system as such was fairly simple. Gosplan calculated the sum of the country's resources and facilities, established priorities for their use, and handed down output targets and supply allocations to the various economic ministries and through them to every branch and enterprise in the entire economy. To be sure, the system had its limitations, including the absence of meaningful price and cost information and the difficulty of extending planning to all the special commodities and enterprises in a modern economy. More serious difficulties stemmed from the attitudes and priorities built into the Stalinist planning system. "From the start," write the Soviet economists Nikolai Shmelev and Vladimir Popov, "the administrative system was distinguished by economic romanticism, profound economic illiteracy, and incredible exaggeration of the real effect that the 'administrative factor' had on economic processes and on the motivations of the public."

— R.V.Daniels ^[2]

The second step was to identify where there were mismatches between levels of outputs of one material that was used as an input in another part of the economy i.e. where there were differences between supply and demand within the economy. If mismatches between supply and demand were identified then, for the one-year plan, utilization plans for a particular input material could be cut or alternatively effort was made to increase supply. For the five-year plan mismatches between supply and demand could be mitigated by modifying long terms plans to increase productive capacity.

Wages and pensions were leveled upwards, and skilled and manual work began to exceed much mental and professional work in remuneration. The Italian economic historian Rita Di Leo found "a compression of differentials" and a bias for so-called "productive" work (i.e., yielding measurable physical output) over "unproductive" work (services, trade, etc.). "Such a wage policy calls into question the modernization of society, its efficiency, its competitiveness."

— R.V.Daniels ^[2]

Using this method any changes in the plan to remove mismatches between inputs and outputs would result in hundreds, even thousands, of changes to material balances. This meant that, without the aid of information technology, Gosplan could only deal with the economy in very general terms.

Ideological bias resulted in unrealistic plans that were impossible to execute. Pressure to execute them anyway resulted in widespread falsification of statistics on all levels of reporting. Falsified plan realization feedback further resulted in Gosplan preparing plans even more detached from reality:

The second economy engulfed a significant fraction of the GDP. Not only individuals but state enterprises as well engaged in these practices, often out of necessity, when extra-legal influence or illegal operations appeared to be the only way to fulfill the demands of the plan. Claims of plan fulfillment that were passed up the hierarchy became as impossible to believe as the targets in the next plan.

— R.V.Daniels ^[2]

Directors of Gosplan

See also

• Planned economy

References

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