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Soviet Planning in the 1920's

In the 1920's the Bolsheviks were struggling with the concept of economic planning. This material examines the details of the planning issues they faced and shows that the major problem is that fundamentally they did not have a criterion for establishing whether a proposed investment project was worthwhile or not. From this flaw followed their inability to choose among a variety of investment projects that collectively required more resources than they had available. Consequently the decisions of which projects to undertake and which not to was made on an irrational basis.

Some of the major investment projects under consideration at the time were:

The planning process had less to do with economic analysis and more to do with matters of the jurisdictions of the various governmental agencies and the personalities of the people in control of those agencies at the time. Planning was largely a matter of fantasizing and who could push through their fantasy. The agencies involved were:

Soviet Agencies Involved in Economic Development Decisions
AcronymName in
Name in
VESENKHAVysshii Sovet Narodnogo KhozyaistvaSupreme Council of National Economy
GOSPLANGosudarstvennaya Planovaya KomissiyaState Planning Commission
GOELROGosudarstvennaya Komissiya po Elecktrifikatsii Rossii State Commission for the Electrification of Russia
STOSovet Truda i OboronyCouncil of Labor and Defense
SOVNARKOMSovet Narodnykh KomissarovCouncil of the People's Commissars
TsIKTsentral'nyi Ispolnitel'nyi KomitetCentral Executive Committee
GLAVELECTROGlavnoe Upravlenie Elektricheskoi PromyshlennostiChief Administration of the Electrical Industry

The History of Dnieprostoi

The Czarist government of the Russian Empire proposed in 1905 the building of a hydroelectric dam on the Dnieper River. Nothing was done on the project. When the Bolsheviks began to consider the project it was included within the jurisdiction of GOELRO, the program for the electrification of Russia. In 1921 GOSPLAN was formed and took over the projects of GOELRO. Thus responsibility for the design and execution of Dnieprostoi rested with GOSPLAN although it could just as well been administratively assigned to GLAVELECTRO which was a division of VESENKHA.

It is eerie reviewing the history of the time and noting the number of Bolsheviks who were powerful figures then but who in the 1930's when the system turned psychopathic were arrested and executed as enemies of the people. Enemies of the people really meant real or potential threats to Josef Stalin's power, but in actuality they were, in fact, enemies of the people.

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