G. M. Krzhizhanovskii

INTRODUCTION TO THE CONTROL FIGURES FOR 1928/29

The discussion on the material of the Control Figures for 1928/29, which has already developed, clearly attests to the growing importance of the Control Figures as well as to the peculiarities of the year which we are entering.

The Control Figures are winning for themselves, to a greater and greater extent, the position of truly basic landmarks of an operational economic plan comprising both construction and “work in progress” in an annual period.

The circle of co-workers taking part in this responsible work is growing. The republics, districts, departments, and establishments rally more and more in the course of the work on the material included in the Control Figures and from year to year, under our eyes, the methodological aspects of this work are perfected more and more.

The scientific analysis that is indispensable for the elucidation of the economic dynamics of the past and setting planned tasks for the future is also becoming more profound. The role of the Gosplan groups working out basic problems in value terms-savings, prices, separate economic balances, efficiency of capital construction, etc.-is acquiring a greater and greater importance. The linking of the work on the Control Figures with the purposeful tasks of perspective plans is improving markedly. The analysis of social ties and social differentiation and the work on the transformation of technico-economical optimum into a social optimum is making notable steps forward with every year. Economics is becoming condensed politics; variants of the Control Figures-the Control Figures as a system of numbers-are becoming a more and more distinct illustration of the currents of political thought.

The problem of metals and the grain problem stand out in particular as critical questions for the entire future dynamics of our economy as a whole. To take full account of the acute-ness of the situation in these “bottlenecks” of our economy means to predetermine the smoothest possible rise of our economy in its totality for the coming years.

The analysis of our current difficulties is richly illustrated with the materials of the present Control Figures: to what does it lead? Nothing has been obscured here. The appropriate figures and facts have been presented with perfect distinctness: difficulties of growth, temporary disproportions, inevitable defects accompanying the huge and complex job of transferring the economy as a whole to planned tracks, or organic defects such as miscalculations of planning leadership which can be explained only by the complexity of the basic tasks.

This is the question, and a reply to it-a direct and unequivocal one-is provided by the entire material of the present Control Figures. This reply is: the direction of our entire economic and political work is deep and historically true. The helm has been set correctly. The pilot is still the same, faithful and well-tried, the Bolshevik Party-Lenin’s party.

But does this mean that an economic plan sketched at the present time will be fulfilled 100 per cent? Of course not. To maintain it means to be a fetishist of the plan, means to forget all that Comrade Lenin was saying about bureaucratization of planning.

The first stage of the period of reconstruction, which we are definitely entering at present, is inevitably accompanied by an extraordinary complication of the surrounding situation in all its aspects. At these initial stages, our hereditary historical economic disproportions are being mitigated and overcome at some individual poles, and are growing, developing, and deepening at other poles. The problems of culture and of organizational skill are acquiring a greater and greater weight, but we still do not have those stable “indexes” for these magnitudes with which we operate in our technico-economical analysis of the material constructs of the economic plan. What a wide range of jobs only barely begun! In prospect there is a transformation of the Gosplan into a most important scientific and research organism of the country.

The XVth Party Congress has already noted those particular difficulties which will stand along our way in connection with the backwardness of agriculture and of its production of grain in particular. This Congress has emphasized a number of basic disproportions left to us from the past: the “scissors” between prices in industry and in agriculture, between wholesale and retail prices, and between world and domestic prices: the disproportion between demand for technical raw materials and their actual supply; and, finally, the disproportions in our country between the possibilities of quantitative growth of the industrial labor army and of the labor “reserve” army. The material of the present Control Figures attests to the fact that the first basic disproportion marked out with such distinctness by the XVth Party Congress-the “scissors” between the dynamics of the growth of industry and of agriculture-has not yet entered its zone of mitigation. On the contrary, a danger seems to be arising of some break of the leading dynamic indicators of industry from their agricultural bases. The most important task of the present Control Figures is to determine, with ample factual materials, all pertinent magnitudes, to provide a mathematically and economically correct” diagnosis of the actual state of the matter, and to project an entire arsenal of measures, proximate as well as perspective, those having an immediate application to power supply in agriculture as well as those elucidating all potential possibilities present in our Soviet reserves. There is no doubt that here we are going beyond the narrow limits of an annual operational plan, but it would be pedantic to become embarrassed by this circumstance.

Which disproportions of a new order can be noted by us as resulting from the entrance of the economy into the phase of socialist reconstruction? It seems to us that the following should be referred to here:

(a) The general growth of domestic production is not accompanied by a corresponding quantitative growth of foreign trade, a fact which, in turn, depends not only on the lack of coordination between domestic outputs and the needs of the world market, but also on the policy of economic and financial isolation of the USSR due to continuing capitalist encirclement. A direct expression of this disproportion is represented by our needs in foreign currencies, by our overexpenditure of our currency means, and by shortage of currency savings as necessary reserves for defense purposes and as insurance against economic difficulties.

(b) The second growing disproportion of the new time is that which arises in conditions of a progressing technico-economical rationalization of our economy in regard to the labor force drawn into the economic organism. At the foundation of rationalization lies the inevitable law of the transfer of the center of gravity of the mechanism of production from living labor to a steel slave—the machine. And our socialist construction requires a more and more definite realization of the basic right of Soviet citizens-the right to productive work. Only a huge growth of the scope of labor, only a gigantic quantitative increase in our entire productive activity can ease off this disproportion and shake off from the shoulders of the living generations the oppressing conditions of unemployment. Thus, on the one hand, maximal rates of growth of industrialization, not only industrialization in industry, but also industrialization of agriculture and development of new areas of activity necessary for the republic of the Soviets in the sphere of material as well as spiritual culture-this is what lies, first of all, on the positive side of the balance. As opposed to it, there are however a whole series of limits, characterized by the shortage of resources at our disposal for economic construction, and by the danger of disruptions in the normal processes of distribution, inevitable in conditions of a slovenly commitment of our resources to constructions which require prolonged building processes for their completion. In the last report, a correct solution can be found only during the drafting of long-term perspective plans, since the solution of the tasks to which we refer here obviously requires “serious and prolonged” work. One of the keys to a correct solution of the problem of unemployment must be a radical revision of all our previous positions regarding the problems of organization of labor, i.e., instillation of new themes connected with the socialist reconstruction also in this area. A definite transition to a seven-hour working day represents only the first sign in this direction. In perspective, the problem hinges on a more radical change in the relationships of time expenditures in the time budget of the workers of the republic...

(c) Finally, the third kind of disproportion of the economic period which we are experiencing is represented by the “scissors” between potentialities and the reality of our reconstructive work. There is here a whole complex of various magnitudes.

It would seem that the nationalization of industry secures for us a rapid mastering of the main key to cheap production and rapid economic turnover-a massed, typified, and standardized production.

In reality, however, it turns out that an actual nationalization of industry, i.e., its real economic mastering through a correctly organized and adequately qualified leadership, represents a process extended in time and meeting considerable resistance from numerous survivals of the past, and from the crossing of group and shop interests.

It would seem that along our way there is a comparative minimum of obstacles to the borrowing of the last word of technology from the countries which have outstripped us for the organization of our factories. But-not to speak of our limited resources for the appropriate capital investments-we are running here against special limits in the availability of adequate technical cadres and in the competition of cheap labor force. Technical optimum does not always coincide with economic optimum and the solution of the problems is becoming complicated.

It would seem that devices of planned economy secure for us a maximally correct distribution of material productive resources over the country, and the proper methods of work, and the allocation of needed human resources to needed places.

In reality, however, we have to take into account unplanned construction and various disruptions in planned policies and directives, and actual economic practice.

In particular, for example, we have to emphasize especially the contradictions between quantitative requirements presented to production and our progress toward its qualitative improvement.

A large growth of the population, a continuing cultural rise of the wide masses of workingmen, a further activation of outlying districts and backward nationalities-all this, in general, presents an ever growing demand on the goods market. The extreme wear, both technical wear and obsolescence, of our production apparatus requires from us a rapid transition to new and technically more perfect units of production, the transfer of the entire economic apparatus to a new technical basis. However, the necessity of considering the market equilibrium and the linking of new construction and of capital reconstruction with not only a considerable expenditure of material means but also with the inevitability of long calendar terms of new large-scale construction force us not only to keep in production technically worn and obsolete equipment but also to put into operation plants of low quality. Quantitative production needs are thus being put in obvious contradiction with qualitative ones. From here follows a certain dispersion of capital means over the entire production front, deviations from the straight lines of planned construction pursuing the aim of a decisive technical reconstruction of the economy, and a resulting considerable reduction of the general efficiency of capital investments.

Finally, there is a considerable distance between “what should be and what is” with regard to the tendency of our organizational projects as well as with regard to the quality of the entire system of our plan. The difficulties of growth are also inevitable here. They are also inevitable results of all that objective environment in which our Soviet economy is developing.

A series of factors is thus acting in the same direction and results in a certain summary disproportion between the absolute growth of capital investments in the reconstruction of our economy and the rates of growth of its actual efficiency. These disproportions can be solved only in proportion to our successes in the actual, thoroughly thought out, and planned rationalization of our economy as a whole....

For the purpose of elucidating the planned ways of rationalization of industry, the Control Figures provide, this time, a more synthetic grasp of the lines of capital construction and of the work of industry in reducing production costs. Along with the division of industry into groups “A” and “B,” i.e., into industries of means of production and of mass consumption goods, the task of dividing industry into a number of categories and sections described by definite indicators is increasingly becoming the next task (indicators of industrial exports, of industrial efficiency, of labor absorption, section “industry and agriculture,” section “industry and transportation,” etc.). Correct construction of these series could greatly contribute to formulation of the necessary methodology of the entire management of our economy in the area of industry, in other words, to a correct orientation in the realization of the most urgent tasks of industrialization. We could act here in the very same manner as mathematics operates in the analysis of magnitudes which are in complex functional dependence. Analyzing such complex functions, a mathematician easily reveals those inner regularities which characterize a given function in distinction from functions of a similar order. The data on industry disclose the critical bottlenecks of our economy; the series on the industrial branches working for export reveal our difficulties in the foreign trade area; the data on industries working on an autonomous business basis give us an idea on the correlation of magnitudes determining internal savings in industry. The series on labor absorption points to our needs concerning the training of cadres and the struggle against unemployment....

Next in order, and no less urgent, is the necessity of working out a special directory of our Control Figures. Into these directories we should enter the addresses and characteristics of exemplary plants and factories, exemplary state and collective farms, and exemplary sections of railroads, all of which, in their totality, could be excellent pushers of rationalization.

While regarding self-criticism as a necessary and very useful tool of socialist construction, we should not lose sight of the fact that it represents only one of all the aspects of our work on the socialist reconstruction of our economy. Self-criticism is a kind of powerful plough of the community which is being socialized, which reveals the inner structure of the entire field of labor. A passage of this plough can remove a mass of weeds from the surface of this field, but this is only a necessary prerequisite and the first stage of the work. Its effectiveness depends entirely on what seeds will be cast upon the soil turned up by self-criticism, what tools of production will then be set in motion on the turned-up soil, and by what methods and by whom it will then be cultivated and harvested. Socialist rationalization as a whole is predetermined by a rationalization of individual parts of the process described by us. The problems of technical reconstruction, of economic expediency, and of securing the interests of workingmen, i.e., the problems of social expediency, are interwoven into one unbreakable whole.

The first and basic task of any economic plan-annual or long-term-consists in finding a proper optimum in the relationship of these critical points: technology and economic and social relations. However, a correct solution of this task, divided in its turn into a whole series of sub-tasks, is extremely difficult, not only by virtue of its extraordinary complexity but also by virtue of definite limits of planned economy and planning possibilities, existing objectively. We must dwell upon this problem once more here, both because the correct evaluation of our economic and planning accomplishments is impossible if we do not realize the changes which occur in planning possibilities, and because critics from the enemy camp incessantly search for “errors” and give a completely distorted picture of the mistakes arising from our attempts to bring the complex Soviet economy under a planning regime.

As a matter of fact, can one limit oneself to an elementary quantitative evaluation of our planning accomplishments only? Can one, for instance, be satisfied with a mechanical comparison of the system of indicators taken, for instance, from the Control Figures for 1927/28 with the indicators of the actual fulfillment of this economic plan? Such a position of our opponents simultaneously greatly honors and greatly dishonors us. First of all, it should be said that in the Control Figures of the present year as well as in those of the next and the following years we still do not by any means have a 100 per cent complete system of solid numbers. The series of these numbers has a definitely conditional meaning as a result of their dependence on the success or failure of some economic maneuver. It is also necessary to note that the part of construction which is being realized during a year’s period of our work constitutes a partial realization of the five-year program of our construction projects, and this program, in turn, constitutes a section of the General Plan of our economy. It is self-evident that the requirements of quantitative approximation are different when we have in mind an annual calendar term and when we consider the presuppositions inherent in a plan for a five- or ten-year period. A consideration of the possibilities of prognosis forces us, for instance, to proceed by way of not one but a series of numbers in the Five-Year Perspective Plan. It is very probable that both the calendar limits and the figures of the General Plan will have to be subjected to special reservations making them particularly conditional. Thus if our critics wish to see an ideal and stable system of solid numbers in our Control Figures, we have to correct them by pointing out that we must decline this honor since it is beyond our abilities. On the other hand, planning of the state sector of the economy, to which we have a sufficiently reliable approach, can be accompanied by coefficients of accuracy very different from those used in planning private and “intermediate” sectors representing a periphery, gigantic in its power. Critics who do not understand the relativeness of our solid numbers press upon us the position of bureaucrats of planning, and we do not deserve this dishonor.

Last year’s Control Figures evoked wide interest not only within our country but also beyond its borders. We hope that the present work will represent a further stage, able to attract even wider attention. We welcome any businesslike criticism, but the criticism which reproaches us for the lack of realism in planning should first of all make sure that it is realistic itself, that it perceives reality as it is and not in a curved mirror. What does this living reality tell us? We are building socialism, but we have not by any means built it yet. In other words, we are building a planned economy, but we are in the process of its construction, and just as it would be strange to require from any large architectural structure that the proportion of its parts be obvious to anybody at the time when the structure is still surrounded by woods and incomplete even in the rough, it would be equally strange to require a perfection in figures and in the quality of projects from our planning presuppositions....

We are convinced that one of the commanding heights of our economy-potentially the most important height-is represented by the planned development of the economy. However, we are realizing this planned development in one of the most technically backward countries, under frequently excruciating circumstances, during a stage of transition from private to collectivized economy. There are no completed theories of such a transition, nor can there be any. There are no analogous precedents even in history. For this reason, the socialist construction cannot at first avoid a considerable amount of groping. And where practical activity outstrips theory, an infallible creation is impossible....

Bureaucratism in planning and a scholastic attitude toward the so-called “laws of the market” would inevitably put us in a hopeless position: a collision between the market and the plan would in such a case be inevitable. This does not mean that we are completely insured against such collisions. Mistakes in plans and mistakes in economic maneuvers lie in wait for us, and there is no smooth road ahead of us by any means. However, a study of the dynamics of capitalist society shows us clearly that ¿e servants of capital make extremely audacious attempts against the same “holy of holies”-the market-which they defend in their conflicts of principle with us. We know how large-scale financial capital operates its conspiracies against national and international markets, how it in fact treats the “sacred” laws of free competition, and how it deals with competitors who defend the rights of free initiative and “equality of conditions.” ...

The Control Figures of every year concern current economic practice. If there is a certain discrepancy between a long-term plan and that section of the plan which is dealt with in the system of Control Figures, there is another discrepancy between the projects of the Control Figures and current economic practice. In other words, the system of Control Figures, if it is successful, presupposes a considerable scope, as was noted above, for an actual economic maneuver....

Our economic balance as a whole, and its practical realization, depend on a firm conviction that only if our economic mechanism works at high speed, only if all its parts put forth an intensive effort, only if there is far-sighted consideration of the rearrangement of class forces that looms beyond the present economic plan, will it be possible to make ends meet with a minimum expenditure of our resources, and in such a way that the basic socialist orientation of our economy will not be distorted.

Kontrol’nye tsifry narodnogo khoziaistva na 1928/29 god. Gosplan SSSR, Introduction; published by Planovoe khoziaistvo, pp. 11-19, Moscow, 1929.