INTRODUCTORY NOTE

A. STRATEGIES OF DEVELOPMENT

Rapid increases in output may be secured in a number of radically different ways. As Solomon Fabricant once pointed out, the differences arise because (a) “so little is known of the determinants of economic growth” and (b) there are other objectives besides higher output-each of which “may be impeded or furthered by the way the others are sought.”

There seemed to be little doubt among the Bolsheviks, on the eve of the era of all-out industrialization, that the key to economic growth was the allocation of as large a share as possible of the total product to investment in productive capital. But this foreknowledge did not suffice to determine what was actually feasible in respect to investment, output, and employment, when all the objectives of the regime were taken into account: what pattern of investment allocation should be chosen between sectors (particularly industry and agriculture) and between industries (heavy versus light); which outputs should be produced, or, alternatively, whose demand-that of the peasants or that of the state industriai complex itself-should be viewed as the most appropriate for propelling the economy onto a new and higher technological plane.

Concerning objectives other than large investments and higher output per se, the Bolsheviks were crucially interested in certain specific “social forms” of economic growth-namely, inthe faster growth of the socialist than of the capitalist sector. This from the outset biased their decision infavor of the state-owned industrial complex and against atomized peasant agriculture. Politically, industry’s faster development was viewed as necessary in order to check the restoration of capitalism and to secure the independence of the country from its capitalist environment.

The articles included in this section present detailed arguments in favor of a strategy emphasizing simultaneous industrial and agricultural development, due account being taken of the output and demand patterns of agriculture, and of an alternative strategy aiming at a one-sided investment effort and a deliberately faster growth of heavy industrial branches in preference to all other branches or sectors. The first strategy stressed the “necessity” of complementarity among sectoral investments; the second the “necessity” of discrepancies in sectoral growth rates, given the objective of a massive technological shift and the limitation of factor resources. Within this framework, the controversy took on a familiar ring and recalls a dilemma which today besets countries aiming at rapid economic development.

The papers of Shanin, Bazarov, and Bukharín present the strategy of simultaneous agricultural and industrial growth; those of Preobrazhenskii present the thesis in favor of the accelerated growth of heavy industry. Stalin’s paper, finally, puts an official end to the controversy. The Shanin paper sets the stage with a discussion of the shortage of industrial goods in the mid-1920’s. Shanin questions whether the shortage arose from a lag in industry’s growth in capital formation and output or from the fact that its demand for agricultural raw materials exceeded its supplies of manufactured goods to the peasants-a discrepancy created, according to Shanin, because of unduly high investments in industry. The Preobrazhenskii articles, excerpted from his New Economics, present rather bluntly the famous thesis of the need for a massive agricultural “tribute” to industry, if the latter is to be shifted rapidly to a higher technological level. Agriculture, and the peasantry as a whole, are to be “dragged” along until a new, powerful industry is able to mechanize agriculture and “reconstruct” the economy, in its entirety, on a new basis.