POLITICAL ECONOMY - SOCIALIST INDUSTRIALISATION

Political Economy

Part III : THE SOCIALIST MODE OF PRODUCTION

A. THE TRANSITIONAL PERIOD FROM CAPITALISM TO SOCIALISM

CHAPTER XXIV : SOCIALIST INDUSTRIALISATION

Large-scale Industry — The Material Basis of Socialism.

The Essence of Socialist Industrialisation

Socialism can only be built on the basis of large-scale machine production. Only large-scale machine production both in town and country can ensure the victory of the socialist forms of economy over the capitalist forms, an uninterrupted growth of the productivity of labour and the improvement of the welfare of the working people.

Lenin wrote: “A large-scale machine industry that is also capable of re­organising agriculture is the only material basis that is possible for socialism." (Lenin, “Theses for the Report on Tactics of the R.C.P. at the 3rd Congress of the Communist International", Selected Works, 1950, English edition, vol. II, Pt. 2, p. 576.)

Capitalism developed large-scale industry and at the same time created the necessary material prerequisites for the proletarian revolution and the construction of socialism. But because of its inherent contradictions capitalism was unable to reconstruct all branches of the economy in all countries on the basis of large-scale machine production. The majority of countries, especially the colonial and dependent countries, lack an adequately developed large-scale industry. The capitalist countries have a numerous class of peasants carrying on a small-scale personal, private economy based on manual labour and primitive technique. Yet the victory of socialism throughout the national economy cannot be secured without the reconstruction of all branches of production on the basis of modern techniques.

The most important part in large-scale industry is played by the branches producing the means of production—metals, coal, oil, machinery, equipment, building materials, etc., that is, heavy industry. Socialist industrialisation means therefore the priority development of heavy industry with its core the engineering industry.

“The centre of industrialisation, the basis for it is the development of heavy industry (fuel, metal, etc.), the development in the last analysis of the production of the means of production, the development of our own engineering industry." (Stalin, “The Economic Situation of the Soviet Union and the Policy of the Party", Works, 1954, English edition, vol. VIII, p. 127.)

The engineering industry occupies a special place in the economy of a country. A developed engineering industry is essential for the re-equipment of all branches of the national economy with modern techniques—machinery, machine tools, appliances, apparatus and instruments—and is the most important source of technical progress.

Socialist industrialisation ensures a growing preponderance of the socialist forms of industry over the small commodity and capitalist forms. It creates the material basis for the development of socialist forms of economy, and the elimination of capitalist elements. It endows the socialist forms of economy with the technical superiority necessary in order to conquer completely the capitalist sector.

The development of heavy industry is the key to the socialist transformation of agriculture on the basis of modern machine techniques. In supplying agriculture with tractors, combines and other agricultural machinery, socialist industry serves as the foundation for the coming into being and development of these new productive forces in the countryside which are necessary for the victory of the collective farm system.

Socialist industrialisation increases the numerical and relative importance of the working class and heightens its leading role in society. It strengthens the basis of the dictatorship of the working class and of its alliance with the peasantry.

Socialist industrialisation ensures the technical and economic independence and defensive capacity of a country building socialism in the presence of a hostile capitalist world. The development of heavy industry provides the material foundation for producing modern weapons necessary to defend the country from the aggression of hostile imperialist States.

Accordingly, socialist industrialisation is such a development of large-scale industry, and in the first place of heavy industry, as will ensure the reconstruction of the entire national economy on the basis of modern machine techniques, the victory of socialist forms of economy, the country’s technical and economic independence of the capitalist world, and its defensive capacity.

Socialist industrialisation is dictated by the demands of the law that the relations of production must necessarily correspond to the nature of the productive forces and by the demands of the basic economic law of socialism, by the necessity of ensuring the material prerequisites for the building of socialism, for uninterrupted growth of production and a steady improvement in the welfare of the people.

Socialist industrialisation was of vital importance for the U.S.S.R. Pre-revolutionary Russia, although it possessed a large-scale industry, was primarily an agrarian country. In the level of its industrial development, particularly of heavy industry, it was considerably behind than the main capitalist countries.

While occupying first place in the world in the size of its territory and third place in the size of its population (after China and India), Tsarist Russia stood fifth in the world for volume of industrial production, and fourth in Europe. Agricultural production in 1913 accounted for 57’9 per cent of gross production of large-scale industry and agriculture taken together, while industrial production accounted for 42.1 per cent. Heavy industry greatly lagged behind light industry. Many important branches of industry, producing machine-tools, tractors, automobiles and other items, were non-existent. Pre-revolutionary Russia was four times worse off for modern instruments of production than England, five times worse off than Germany and ten times worse off than America. Economic and technical backwardness made Tsarist Russia dependent on the developed capitalist countries. It was obliged to import a considerable part of its equipment and other means of production from abroad. Foreign capitalists were in command of the country’s main branches of heavy industry.

The rule of the capitalists and landlords constantly increased Russia’s dependence on the western imperialist Powers. A direct threat of loss of national independence hung over the country. The exploiting classes were incapable of abolishing Russia’s age-long technical and economic backwardness. Only the working class could carry out this historic task. Already on the eve of the great October Revolution, Lenin. was stressing that it was a question of life or death for Russia to overtake and outstrip the most highly developed capitalist countries, technically and economically.

“The result of the revolution has been that the political system of Russia has in a few months caught up with that of the advanced countries.

“But that is not enough. The war is inexorable; it puts the alternative with ruthless severity: either perish, or overtake and outstrip the advanced countries economically as well....

“Perish or drive full-steam ahead. That is the alternative with which history confronts us." (Lenin, “The Impending Catastrophe and How to Combat it", Selected Works, 1950, English edition, vol. II, Pt. I, p. 164.)

The level of development of the productive forces and particularly the existence of large-scale concentrated industry in pre-revolutionary Russia was sufficient for the victory of the proletarian revolution, for the establishment of Soviet Power—the most progressive political power in the world. However, for the creation of the economic basis of socialism, for the socialist transformation of small-scale backward agriculture and for the improvement of the living standards of the people, it was essential to end the age-long technical and, economic, backwardness of the country and to create a powerful heavy industry. Without a developed heavy industry our country would have been doomed to become an agrarian appendage of the more developed capitalist countries, to lose its independence and with it, all the conquests of the socialist revolution.

With the victory of the proletarian revolution in Russia, a contradiction arose between the most progressive political power in the world—Soviet power —and the backward technical and economic basis inherited from the past. The Soviet Government could not for long have maintained itself on the basis of a backward industry. Socialist industrialisation was necessary in order to overcome this contradiction.

Thus socialist industrialisation in the U.S.S.R. was an historical necessity, springing from the most vital and pressing needs of socialist construction.

The Communist Party and the Soviet State recognised this, and consistently put into effect a policy of socialist industrialisation. The 14th Congress of the Communist Party (1925) posed socialist industrialisation as its main task. In the decisions of the Congress it was stated:

“Economic construction must be carried out with a view to converting the U.S.S.R. from a country importing machinery and equipment into a country producing machinery and equipment, so that in conditions of capitalist encirclement it will not be henceforth possible for the U.S.S.R. to be converted into an economic appendage of the capitalist world economy, and it will be an independent economic unit building itself up in the socialist way." (The C.P.S.U. in Resolutions and Decisions of its Congresses, Conferences and Central Committee Meetings, seventh Russian edition, Pt. 2, p. 75.)

The Rate of Socialist Industrialisation

The fundamental tasks of the socialist transformation of the country and of securing its independence required that industrialisation be carried out in the shortest possible period known to history.

The need for a high rate of industrialisation was occasioned by the external and internal circumstances of the Soviet Union, the first land of socialism in the world.

The external circumstances of development of the U.S.S.R. were conditioned by the presence of a hostile capitalist environment. The imperialist countries possessed a more powerful industrial base, and sought to destroy or at least to weaken the Soviet Union. The question of the rate of industrial development would not have been so acute if the Soviet Union had possessed the same developed industry as the advanced capitalist countries. Nor would this question have been so acute if there had been a dictatorship of the proletariat in other more industrially developed States as well. But the Soviet State was a technically and economically backward country and the only country with the dictatorship of the proletariat. In view of this a basis of advanced industry had to be brought into being at high speed.

The internal circumstances of development of the U.S.S.R. also demanded a high rate of industrialisation. So long as the Soviet country remained a land of small peasants, there remained within it a more stable economic base for capitalism than for socialism. In order to answer the question “who will beat whom", the scattered private property economy of the peasant had to be transformed in a historically short time, on the basis of collective labour and armed with modern techniques. Capitalism had to be deprived of its basis in petty commodity production. This task could not be carried out without the rapid development of heavy industry.

Stalin, in stressing the historical necessity for a high speed of socialist industrialisation, said: “We are 50-100 years behind the advanced countries. We must make good this distance in 10 years. Either we do it, or they crush us." (Stalin, “The Tasks of Business Executives", Works, vol. XIII, p. 39.)

The possibility of a high rate of socialist industrialisation was due to the advantages of the socialist economic system and the particular features of the socialist method of industrialisation.

The average yearly rate of growth of industrial production in the U.S.S.R. was about 20 per cent between 1929-37, while in the capitalist countries it averaged no more than 0.3 per cent during this period. The speed of industrial growth in the U.S.S.R. many times exceeded that of the main capitalist countries at the peak of their development. In the U.S.A., for example, the average yearly growth of industrial production was 1890-5 8.2 per cent, 1895­1900 5.2 per cent, 1900-5 2.6 per cent, 1905-10 3,6 per cent.

The Socialist Method of lndustrialisation.

Resources for Socialist lndustrialisation

Only the socialist method of industrialisation, dependent on the new laws of socialism, can achieve the industrialisation of a country in the shortest historical time. Industrialisation in the capitalist countries usually commences with the development of light industry. The turn of heavy industry only comes after a prolonged period of time. This method of industrialisation was unacceptable for the Soviet country. It would have meant the destruction of the socialist revolution and would have converted the U.S.S.R. into a colony of the imperialist States. The Communist Party rejected the capitalist method of industrialisation and started the industrialisation of the country with the development of heavy industry.

Capitalist industrialisation took place spontaneously, as a result of the capitalist drive for profit. Socialist industrialisation is carried out on the basis of the law of the planned development of the national economy, for the purpose of building socialism and satisfying the growing needs of the working people. It could not be achieved if the regulator of production in the socialist sector were the law of value. The Soviet State laid down, in a planned way, such proportions in the allocation of labour and means pf production to the different sectors as were dictated by the needs of socialist industrialisation and secured priority to the development of heavy industry at a high speed. Under the 1st and 2nd Five-Year Plans the Soviet State directed the bulk of capital investment not into light industry, despite its greater profitability, but into the enterprises of heavy industry, the construction of which was of decisive importance for the victory of socialism. The financial and credit system and foreign trade were used in the interests of industrialisation.

Capitalist industrialisation increases the exploitation and impoverishment of the working class and the peasantry, widens the gulf between town and country, and enslaves the colonial peoples. Socialist industrialisation, in accordance with the requirements of the basic economic law of socialism, provides a solid material foundation for the uninterrupted growth of production, using the most modern techniques. It puts an end to unemployment and increases the real wages of the workers.

Socialist industrialisation provides a basis for the progress of agriculture. It leads to the rise of the living standards of the peasantry, bringing town and countryside closer together and strengthens the alliance between the working class and the peasantry. The Communist Party rejected the hostile aims of the Trotskyists, who proposed to industrialise by ruining the peasantry, and tried in this way to undermine the alliance of the working class and peasantry. Socialist industrialisation is a powerful factor in the economic and cultural development of the formerly backward national regions.

The socialist method of industrialisation steadily extends the internal market, and in this way creates a firm internal basis for industrial development. The direct interest of the workers and peasants in socialist industrialisation stems from all the foregoing.

The industrialisation of such a backward country as Russia was a difficult matter, since the creation of a powerful heavy industry required huge material and financial expenditures.

Alongside the merciless exploitation of the workers and peasants, an important role in the industrialisation of the capitalist countries was played by the influx of resources from without, from colonial pillage, war indemnities and enslaving loans and concessions. These methods of mobilising resources for industrialisation are incompatible with the principles of the socialist system. The Soviet Union had to find ways of accumulating resources for heavy industry without enslaving loans from abroad, from internal sources alone, from the planned carrying out of socialist accumulation. Socialist accumulation is the utilisation of part of the national income for the expansion of socialist production. The accumulation of the necessary resources for building new factories necessitated the strictest economy. We are exercising economy in all things," wrote Lenin, “this must be so, because we know that unless we save heavy industry, unless we restore it, we shall not be able to build up any industry; and without that we shall be doomed as an independent country." (Lenin, “Five Years of the Russian Revolution and the Prospects of the World Revolution. Report to the 4th Congress of the Communist International", Selected Works, 1950, English edition, vol. II, Pt. 2, p. 697.).

In carrying but the difficult task of accumulating resources for industrialisation, the Soviet State relied on the superiority of the socialist economy.

The expropriation of the landowners and capitalists made it possible to use for socialist industrialisation a considerable part of the resources which had formerly been appropriated by the exploiters and expended, on parasitic consumption. Soviet power freed the country from huge annual payments abroad as interest on the Tsarist loans and as dividends to foreign capitalists on their investments in Russia. Before the revolution, 800-900 million gold roubles (£85-£95 millions) were expended annually in this way.

The Soviet peasantry got rid of rent payments to the land-owners and considerable indebtedness to the banks. Since the peasantry was interested in the development of industry it was able to allocate a part of its resources for this purpose.

The incomes of nationalised industry, foreign trade, State internal trade and the banking system were the most important sources of finance for socialist industrialisation. Their importance constantly increased with the growth of socialist industry.

Socialist industry has indisputable advantages over capitalist industry in ensuring the growth of accumulation. It is the largest and the most concentrated industry, being on a nationwide scale, and is freed from the operation of the law of competition and anarchy of production. The planned direction of industry, the rational use of its resources, the labour enthusiasm of the working class and the rapid development of techniques created conditions for an uninterrupted growth in the productivity of labour. As a result, socialist industry was enabled steadily to reduce the cost of production, that is, the expenditure of enterprises on the production and sale of their products, expressed in money terms.

One of the important advantages of socialist economy over capitalist is the concentration of the entire monetary accumulation of State and co­operative enterprises in the country, as well as the free resources of the population deposited in State credit institutions, and their planned use for industrial development. The Soviet State ensured the wise expenditure of accumulated resources on the most important requirements of industrialisation. It followed a policy of strictest economy, all round simplification and cheapening of the State and cooperative apparatus, firmer cost-accounting, financial discipline and opposition to unnecessary expenditure of State resources.

All these sources of internal accumulation provided thousands of millions of roubles for industrialisation and made possible large-scale capital investment in industry, particularly in heavy industry.

In this way the Soviet Government successfully overcame the difficulties connected with the accumulation of resources for industrialisation.

Application of the socialist method of industrialisation meant a great gain in time, securing the creation of a first-class socialist industry in the shortest possible time and with a high rate of growth.

Capital Construction. The Mastery of New Techniques and the Problem of Cadres

The accomplishment of socialist industrialisation requires the expansion of capital construction, which was realised in the U.S.S.R. on a large scale. The building of new enterprises, in which more than half the total capital investments in industry was spent, played the chief role in the capital works.

The specific feature of socialist industrialisation in the U.S.S.R., which was determined by the historical conditions of the development of the first stage of socialism, was the need for the creation of all the basic branches of modern heavy industry in the shortest space of time. Scores of branches of modern industry which did not exist in pre-revolutionary Russia, the automobile and tractor industries, the machine-tool industry, a number of chemical industries, the aviation industry, the production of modern agricultural machinery and high-grade steels, and many other industries which in the capitalist countries had been the result of a long period of historical development, were created in the U.S.S.R. during the years of the pre-war Five-Year plans. The basic equipment of the most important branches of heavy industry was created almost anew in a short space of time. The building of new enterprises and reconstruction of those already operating were carried out through the use. on a mass scale of the achievements of modern world technique. The new industrial enterprises were equipped with the latest machine-tools, lathes and apparatus. The process of technical reconstruction covered all branches of industry.

As a result of all this, during the years of the pre-war Five-Year plans, a powerful industry equipped with up-to-date machinery was created.

The basic production funds of all industry (production buildings and installations, machinery and equipment) in 1937 were 5.5 times greater than in 1928, while in the branches producing the means of production they were 7 times greater. During the Five-Year Plans thousands of factories and mills were put into operation. They included scores of giant plants of socialist industry; the Magnitogorsk and Kuznets metallurgical combines, the Dnieper hydro­electric station, the Stalingrad and Kharkov tractor works, automobile factories at Moscow and Gorky, the Urals and Kramatorsk heavy engineering factories, the ball-bearing factory in Moscow the chemical combines at Stalinogorsk, Solikamsk and Berezniki, and numerous other enterprises. The new works began to occupy chief place in the total volume of industrial production. Already by 1937 more than 80 per cent of all production came from enterprises newly built or reconstructed during the first two Five-Year Plans.

During the first Five-Year Plan (1929-32) capital investment in industry amounted to 35.1 milliard roubles (in present-day prices) of which 30.1 milliard roubles were invested in heavy industry. During the second Five-Year Plan (1933-7) capital investment in industry amounted to 82.8 milliard roubles, of which 69.1 milliard roubles were directed into heavy industry. During the three and a half years of the third Five-Year Plan (1938-June 1941) 81.6 milliard roubles were invested in industry, of which 70.3 milliard roubles were invested in heavy industry.

The creation of numerous enterprises equipped with up-to-date machinery set a new, difficult task, that of providing industry with cadres of qualified workers and specialists capable of fully mastering and utilising this technical equipment. These cadres had to be created on a mass scale and in a short space of time.

The problem of supplying labour-power for socialist industry was decided by other means than in the conditions of capitalism, where the chief source of additional labour-power is the reserve army of unemployed. Unemployment was completely eliminated in the U.S.S.R. by the end of 1930, during the years of the first Five-Year Plan. The chief sources from which industry was provided with cadres were the natural increase in the urban population and the reserves of labour-power in the countryside, produced as a result of the new machinery with which agriculture was equipped and the resulting increase in the productivity of labour.

Socialist industrialisation required a systematic rise in the skill of the workers.

The personal interest of the masses in the development of socialist industry, the new character of labour and the growth in the technical efficiency of the workers was shown in the increased activity and creative initiative of the working class.

The task of training new cadres of production engineers and technicians presented itself in all its acuteness. The training of skilled workers in factory schools, and at various courses for production and technical training of new workers, was organised on a large scale. The Soviet State’s planned organisation of industrial training and the interest of the working masses in raising socially-owned production accelerated and facilitated the mastery of new techniques. In this way the conditions for a rapid growth in the productivity of labour were created.

The working class had to create its own intelligentsia, capable of serving the interests of the people and taking an active part in socialist construction. During the first and second Five-Year Plans, the Soviet State developed a huge programme for training cadres, through its network of higher educational institutions and technical colleges, for industry and other sectors of the national economy.

Between 1928 and 1937 the number of manual and clerical workers in industry increased from 3.8 millions to 10.1 millions, i.e., 2.7-fold. The number of skilled workers using the newest mechanical equipment grew considerably more rapidly than the working class as a whole. Between 1926 and 1939 the number of turners increased 6.8-fold, milling machine operators 13-fold, etc. The number of diploma engineers increased 7.7-fold.

The Conversion of the U.S.S.R. from a Backward Agrarian Country into an Advanced Industrial Power

The victory of socialist industrialisation in the U.S.S.R. was made possible because the Communist Party and the Soviet State based their policy on the laws of economic development and skilfully utilised the advantages of the socialist economy. As required by the task of building socialism and satisfying the growing material and cultural needs of the working people, industrial construction was developed on a gigantic scale. The programme of industrialisation of the country found its practical embodiment in the Five-Year Plans, which gave the Soviet people a clear perspective and proved a powerful force, mobilising the working people for the building of socialism.

During the first Five-Year Plan mass socialist emulation was developed, in the effort to fulfil and overfulfil the plans. The second Five-Year Plan was marked by the rise of the Stakhanovite movement. This was connected with the mastery of modern first-class techniques by the workers; it shattered the technically backward, low standards of output and replaced them with higher standards. The Stakhanovite movement was a new stage in socialist emulation. This emulation of the broad masses of the working class brought out the progressive role of the new socialist relations of production, as the chief and decisive force making for a great upsurge of the productive forces. Socialist emulation opened up enormous reserves for increasing the productivity of labour and speeding up the rate of industrialisation. Socialist emulation, widely developed, was the chief factor in the fulfilment of the first and second Five-Year Plans ahead of time.

An important part in the struggle to industrialise the country was played by the consistent application of the economic law of distribution according to work which combined the personal material interests of the working people with the interests of social production. Payment for work in accordance with its quantity and quality, encouraged the growth of the productivity of labour, improvement in the skill of the workers and perfecting of production methods.

The successful fulfilment of the industrialisation programme changed the balance between industry and agriculture. While agricultural production increased, industrial production increased far more rapidly. This resulted in a sharp increase in the share of industrial production in the production of the country as a whole. Socialist industry was transformed into the decisive force of the national economy. The relative proportions of the branches producing the means of production and the branches producing consumer goods was altered. Production of means of production took the predominant place in the total volume of industrial production, and began to play a leading part in the development of industry and the economy of the entire country.

Engineering in the U.S.S.R. had reached a level of development where it was capable of producing within the country any machines that might be required. The Soviet Union had achieved technical and economic independence of the capitalist countries.

Between 1913 and 1940 production of large-scale industry in the U.S.S.R. Increased nearly twelvefold. In volume of industrial production the Soviet Union already occupied, at the end of the second Five-Year Plan, first place in Europe and second place in the world. The U.S.S.R. also occupied second place in the world for volume of railway-freight turnover. The share of large-scale Industry In gross output of large-scale industry and agriculture combined, had been raised from 42.1 per cent in 1913 to 77.4 per cent in 1937. In 1913 the share of means of production in gross output of all Industry was 33.3 per cent and in 1940 more than 60 per cent. On the eve of the first Five-Year Plan, the U.S.S.R. imported approximately one-third of all its machinery. Already by 1932 less than 13 per cent was imported, and by 1937 only 0.9 per cent. The Soviet Union not only ceased to import automobiles, tractors agricultural and other machinery from the capitalist countries, but even commenced to export them.

The rapid growth of Soviet industry made the large-scale socialist enterprise predominant in industrial production. In 1924-5 the share of the private sector in the U.S.S.R.’s industrial output amounted to 20.7 per cent. With the completion of the second Five-Year Plan private industry was finally eliminated. The socialist system had become the only system in the industry of the U.S.S.R.

Socialist industrialisation raised the material and cultural level of the working people. The building of heavy industry provided a basis for the technical reconstruction and rapid development of the sectors producing consumer goods—agriculture, the light and food industries. Capital investment in the consumer industries was almost trebled in the second Five-Year Plan as compared with the first.

In the course of socialist industrialisation there were fundamental changes in the location of industry. New first-class industrial centres were founded in the eastern regions of the country—in the Urals, Western Siberia and Kazakhstan. Socialist industrialisation. was accompanied by the expansion of the old towns and the creation of new towns. Throughout the country, and particularly in the east, large towns and industrial areas sprang up which became economic and cultural centres completely transforming the character of the surrounding districts.

With the success of the industrialisation programme the Soviet Union was converted from a backward agrarian country into a mighty socialist industrial Power. A solid industrial base had been created for the technical reconstruction of the entire national economy, for strengthening the defensive capacity of the U.S.S.R. and for a steady improvement of the living standards of the people. The contradiction between the most progressive political authority in the world and the backward technical and economic base inherited from the past had been abolished.

Thus during the pre-war Five-Year Plans there took place a tempestuous growth of the productive forces of socialist industry. In the thirteen pre-war years the Soviet Union had covered the ground which the developed capitalist countries had taken approximately ten times longer to cover. This was a most outstanding leap forward from backwardness to progress, the like of which world history had never known. The gigantic development of the productive forces of the U.S.S.R. would not have taken place if the old capitalist relations of production had not been replaced by the new socialist relations.

The victory of industrialisation in the U.S.S.R. was achieved by the Communist Party and the Soviet State in struggle—struggle to overcome the enormous difficulties arising from the economic backwardness of the country, the most stubborn resistance of the capitalist elements which were being eliminated, and the existence of a hostile capitalist environment. The Communist Party won its fight for the industrialisation of the country in battle against the worst enemies of socialism, the Trotskyists and Bukharinists, who opposed to the Party’s general line of industrialising the country the line of converting the Soviet Union into an agrarian appendage of imperialist countries and tried to deflect the U.S.S.R. on to a capitalist path of development.

The socialist industrialisation of the U.S.S.R. was of enormous international significance. The rapid conversion of a formerly backward country into a powerful industrial Power demonstrated the indisputable advantages of the socialist system and strengthened the position of the U.S.S.R. in the international arena. The experience of industrialisation in the U.S.S.R. is today being used by the countries of people’s democracy moving along the road of socialist construction.

The process of industrialisation in each country taking this path depends on both internal and external conditions. The Soviet Union being the first, and for a long time the only country building socialism in an environment of hostile capitalist Powers, was obliged to bring into being a heavy industry, comprising all basic branches, in an extremely short period and from its internal resources alone. This gave rise to enormous difficulties in the building of socialism in the U.S.S.R. The countries of people’s democracy enjoy today different and more favourable circumstances, since there exists a powerful camp of democracy and socialism. Industrial construction in these countries takes into account the particular features of each country, which include their natural conditions and the economic expediency of developing this branch or that, bearing in mind all the advantages of a broad division of labour and economic mutual assistance between the countries of the socialist camp.

BRIEF CONCLUSIONS

(1) A large-scale machine industry is the material basis of socialism. Heavy industry is of decisive importance for building socialism. The essence of socialist industrialisation is the creation, using internal sources of accumulation, of a powerful heavy industry capable of re-organising the entire national economy, including agriculture, on the basis of the most modern techniques and of assuring the complete pre-dominance of socialist forms of economy, the technical and economic independence of the country, and its defensive capacity.

2) The socialist method of industrialisation, having decisive advantages over the capitalist method, ensures the priority development of heavy industry at a high speed. Socialist industrialisation is carried out on a planned basis in a historically very brief period, and is put into effect in the interests of the working people. The nationalisation of industry, the banks, transport and foreign trade creates new sources of accumulation undreamed-of under capitalism, and makes possible the rapid mobilisation of resources for building up heavy industry.

(3) The Soviet State, led by the Communist Party, carried out the programme of industrialisation embodied in the Five-Year Plans, thanks to the fact that its policy was founded on economic laws and that it utilised the superiority of socialist economy and the labour enthusiasm of the working class and the entire working people. During the pre-war Five-Year Plans a technically advanced industry was built up which was the basis for the technical reconstruction of the entire national economy, strengthening the defensive capacity of the country and raising the living standards of the people. The Soviet Union was transformed into a strong industrial Power, independent of other countries and producing all the machinery and equipment it required with its own resources. The new socialist relations of production in the country were the decisive force which determined and secured the rapid growth of the productive forces of socialist industry.