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The Continuing Progress of the National Economy and the Internal Situation in the U.S.S.R.

The Continuing Progress of the National Economy and the Internal Situation in the U.S.S.R.

I pass to the question of the internal situation in the U.S.S.R.

From the point of view of the internal situation in the U.S.S.R. the period under review presents a picture of ever increasing progress, both in the sphere of the national economy and in the sphere of culture.

This progress has not been merely a simple quantitative accumulation of strength. This progress is remarkable in that it has introduced fundamental changes into the structure of the U.S.S.R., and has radically changed the face of the country.

During this period, the U.S.S.R. has become radically transformed and has cast off the aspect of backwardness and medievalism. From an agrarian country it has become an industrial country. From a country of small individual agriculture it has become a country of collective, large-scale mechanised agriculture. From an ignorant, illiterate and uncultured country it has become— or rather it is becoming—a literate and cultured country covered by a vast network of higher, secondary and elementary schools functioning in the languages of the nationalities of the U.S.S.R.

New industries have been created: the production of machine tools, automobiles, tractors, chemicals, motors, aircraft, harvester combines, powerful turbines and generators, high-grade steel, ferro-alloys, synthetic rubber, nitrates, artificial fibre, etc., etc. (Prolonged applause.)

During this period thousands of new, fully up-to-date industrial plants have been built and put into operation. Giants like the Dnieprostroi, Magnitostroi, Kuz-netskstroi, Chelyabstroi, Bobriki, Uralmashstroi and Krammashstroi have been built. Thousands of old plants have been reconstructed and provided with modern technical equipment. New plants have been built, and industrial centres created, in the national republics and in the border regions of the U.S.S.R.: in Byelorussia, in the Ukraine, in the North Caucasus, in Transcaucasia, in Central Asia, in Kazakhstan, in Buryat-Mongolia, in Tataria, in Bashkiria, in the Urals, in Eastern and Western Siberia, in the Far East, etc.

More than 200,000 collective farms and 5,000 state farms have been organised, with new district centres and industrial centres serving them.

New large towns, with large populations, have sprung up in what were almost uninhabited places. The old towns and industrial centres have grown enormously.

The foundations have been laid for the Urals-Kuznetsk Combine, which unites the coking coal of Kuznetsk with the iron ore of the Urals. Thus, we may consider that the dream of a new metallurgical base in the East has become a reality.

The foundations for a powerful new oil base have been laid in areas of the western and southern slopes of the Urals range—in the Urals region, Bashkiria and Kazakhstan.

It is obvious that the huge capital investments of the state in all branches of the national economy, amounting in the period under review to over 60,000 million rubles, have not been spent in vain, and are already beginning to bear fruit.

As a result of these achievements the national income of the U.S.S.R. has increased from 29,000 million rubles in 1929 to 50,000 million in 1933; whereas during the same period there has been an enormous decline in the national income of all the capitalist countries without exception.

Naturally, all these achievements and all this progress were bound to lead—and actually have led—to the further consolidation of the internal situation in the U.S.S.R.

How was it possible for these colossal changes to take place in a matter of three or four years on the territory of a vast state with a backward technique and a backward culture? Was it not a miracle? It would have been a miracle if this development had taken place on the basis of capitalism and individual small farming. But it cannot be described as a miracle if we bear in mind that this development took place on the basis of expanding socialist construction.

Naturally, this enormous progress could take place only on the basis of the successful building of socialism; on the basis of the socially organised work of scores of millions of peoples; on the basis of the advantages which the socialist system of economy has over the capitalist and individual peasant system.

It is not surprising, therefore, that the colossal progress in the economy and culture of the U.S.S.R. during the period under review has at the same time meant the elimination of the capitalist elements and the relegation of individual peasant economy to the background. It is a fact that the socialist system of economy in the sphere of industry now constitutes 99 per cent of the total; and in agriculture, according to the area sown to grain crops, it constitutes 84.5 per cent of the total, whereas individual peasant economy accounts for only 15.5 per cent.

It follows, then, that capitalist economy in the U.S.S.R. has already been eliminated and that the individual peasant sector in the countryside has been relegated to a secondary position.

At the time when the New Economic Policy was being introduced, Lenin said that there were elements of five forms of social and economic structure in our country: 1) patriarchal economy (largely natural economy); 2) small-commodity production (the majority of the peasants who sell grain); 3) private capitalism; 4) state capitalism; 5) socialism.7 Lenin considered that, of all these forms, the socialist form must in the end gain the upper hand. We can now say that the first, the third and the fourth forms of social and economic structure no longer exist; the second form has been forced into a secondary position, while the fifth form — the socialist form of social and economic structure—now holds undivided sway and is the sole commanding force in the whole national economy. (Stormy and prolonged applause.)

Such is the result.

In this result is contained the basis of the stability of the internal situation in the U.S.S.R., the basis of the firmness of its front and rear positions in the circumstances of the capitalist encirclement.

Let us pass to an examination of the concrete material relating to various questions of the economic and political situation in the Soviet Union.

1. The Progress of Industry

Of all branches of our national economy, the one that has grown most rapidly is industry. During the period under review, i.e., beginning with 1930, our industry has more than doubled, namely, it has increased by 101.6 per cent; and compared with the pre-war level it has grown almost four-fold, namely, by 291.9 per cent.

This means that our industrialisation has been going ahead at full speed.

As a result of the rapid growth of industrialisation the output of industry has advanced to first place in the gross output of the whole national economy.

Here is the corresponding table :
Relative Importance of Industry in the Gross Output
of the National Economy
(Per cent of total, in prices of 1926-27)
1.   Industry (without small industry)42.154.561.666.70.770.4
2.   Agriculture57.945.538.433.329.329.6

This means that our country has definitely and finally become an industrial country.

Of decisive significance for the industrialisation of the country is the growth of the output of instruments and means of production in the total development of industry. The figures for the period under review show that this item has become predominant in the gross output of industry.

Here is the corresponding table:
Relative Importance of the Output of the Two Main
Branches of Large-Scale Industry
(In prices of 1926-27)
Gross output (in thousand million rubles)
   Total large-scale industry.21.027.533.938.541.9
        Of which:
   Group "A": instruments
       and means of production
   Group "B": consumer goods10.813.015.116.517.6
   Relative importance(per cent of total)
   Group "A": instruments
      and means of production . . .
   Group "B": consumer goods51.547.444.643.042.0
As you see, this table requires no explanation.

In our country, which is still young as regards technical development, industry has a special task to fulfil. It must reconstruct on a new technical basis not only itself, not only all branches of industry, including light industry, the food industry, and the timber industry; it must also reconstruct all forms of transport and all branches of agriculture. It can fulfil this task, however, only if the machine-building industry—which is the main lever for the reconstruction of the national economy—occupies a predominant place in it. The figures for the period under review show that our machine-building industry has advanced to the leading place in the total volume of industrial output.

Here is the corresponding table:
Relative Importance of Various Branches of Industry
(Per cent of total gross output)
Oil (extraction)
Oil (refining)
Iron and steelNo data4.53.74.0
Non-ferrous metals,, ,,
Machine building11.
Basic chemicals0.
Cotton textiles18.315.27.67.3
Woolen textiles3.
This means that our industry is developing on a sound foundation, and that the key to reconstruction—the machine building industry—is entirely in our hands. All that is required is that we use it skilfully and rationally.

The development of industry according to social sectors during the period under review present an interesting picture.

Here is the corresponding table:
Gross Output of Large-Scale Industry According to Social Sectors
(In prices of 1926-27)
(In million rubles)
Total output21,02527,47733,90338,46441,968
Of which:
        I. Socialised industry. .
20,89127,402No data38,43641,940
Of which:
       a) State industry
19,14324,989,, ,,35,58738,932
        b) Co-operative industry1,7482,413,, ,,2,8493,008
        II. Private industry . . .13475,, ,,2828
(Per cent of total)
Total output100100100100100
Of which:
       I. Socialised industry. .
99.499.7No data99.9399.93
Of which:
       a) State industry
91.190.9,, ,,92.5292.76
       b) Co-operative industry8.38.8,, ,,7.417.17
       II. Private industry . . .0.60.3,, ,,0.070.07

From this table it is evident that the capitalist elements in industry have already come to an end and that the socialist system of economy is now the sole system, holding a position of monopoly, in our industry. (Applause.)

However, of all the achievements of industry in the period under review the most important is the fact that it has succeeded in this period in training and moulding thousands of new men and women, of new leaders of industry, whole strata of new engineers and technicians, hundreds of thousands of young skilled workers who have mastered the new technique and who have advanced our socialist industry. There can be no doubt that without these men and women industry could not have achieved the successes it has achieved, and of which it has a right to be proud. The figures show that in the period under review about 800,000 more or less skilled workers have graduated into industry from factory training schools, and over 180,000 engineers and technicians from higher technical educational institutions, other higher educational institutions and technical schools. If it is true that the problem of cadres is a most important problem of our development, then it must be admitted that our industry is beginning really to cope with this problem.

Such are the principal achievements of our industry.

It would be wrong, however, to think that industry has only successes to record. No, it also has its defects. The chief of these are:

a) The continuing lag of the iron and steel industry;

b) The lack of order in the non-ferrous metals industry;

c) The underestimation of the great importance of developing the mining of local coal for the general fuel supply of the country (Moscow Region, the Caucasus, the Urals, Karaganda, Central Asia, Siberia, the Far East, the Northern Territory, etc.);

d) The absence of proper attention to the question of organising a new oil centre in areas of the Urals, Bashkiria, and the Emba;

e) The absence of serious concern for expanding the production of goods for mass consumption both in the light and food industries and in the timber industry;

f) The absence of proper attention to the question of developing local industry;

g) An absolutely impermissible attitude towards the question of improving the quality of output;

h) The continuing lag as regards increasing the productivity of labour, reducing the cost of production, and adopting business accounting;

i) The fact that bad organisation of work and wages, lack of personal responsibility in work, and wage equalisation have not yet been eliminated;

j) The fact that red-tape and bureaucratic methods of management in the economic People's Commissariats and their bodies, including the People's Commissariats of the light and food industries, are still far from having been eliminated.

The absolute necessity for the speedy elimination of these defects scarcely needs any further explanation. As you know, the iron and steel and non-ferrous metals industries failed to fulfil their plan throughout the first five-year plan period; nor have they fulfilled the plan for the first year of the second five year plan period. If they continue to lag behind they may become a brake on industry and the cause of failures in its work. As to the creation of new centres of the coal and oil industries, it is not difficult to understand that unless this urgent task is fulfilled both industry and transport may run aground. The question of goods for mass consumption and of developing local industry, as well as the questions of improving the quality of output, of increasing the productivity of labour, of reducing production costs, and of adopting business accounting also need no further explanation. As for the bad organisation of work and wages, and red-tape and bureaucratic methods of management, the case of the Donbas and of the enterprises of the light and food industries has shown that this dangerous disease is to be found in all branches of industry and hinders their development. If it is not eliminated, industry will be in a bad way.

Our immediate tasks are:

1) To maintain the present leading role of machine building in the system of industry.

2) To eliminate the lag of the iron and steel industry.

3) To put the non-ferrous metals industries in order.

4) To develop to the utmost the mining of local coal in all the areas already known; to develop new coalfields (for example, in the Bureya district in the Far East), and to convert the Kuzbas into a second Donbas. (Prolonged applause.)

5) Seriously to set about organising a centre of the oil industry in the areas of the western and southern slopes of the Urals range.

6) To expand the production of goods for mass consumption by all the economic People's Commissariats.

7) To develop local Soviet industry; to give it the opportunity of displaying initiative in the production of goods for mass consumption and to give it all possible assistance in the way of raw materials and funds.

8) To improve the quality of the goods produced; to stop turning out incomplete sets of goods, and to punish all those comrades, irrespective of their post, who violate or evade Soviet laws concerning the quality and completeness of sets of goods.

9) To secure a systematic increase in the productivity of labour, a reduction in production costs, and the adoption of business accounting.

10) To put an end to lack of personal responsibility in work and to wage equalisation.

11) To eliminate red-tape and bureaucratic methods of management in all the departments of the economic Commissariats, and to check systematically the fulfilment of the decisions and instructions of the directing centres by the subordinate bodies.

2. The Progress of Agriculture

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