Until 1928, the Soviet Union conducted the
New Economic Policy. While
agriculture,
retail, services,
food and
light industries were mostly in private hands, the state retained control of heavy industry,
transport,
banks, wholesale and international trade (deemed the
commanding heights of the economy). State-owned enterprises competed with each other, the role of the
Gosplan of the Soviet Union was limited to forecasts that determined the direction and size of public
investment. One of the fundamental contradictions of Bolshevism was the fact that the party that called itself "workers" and its rule the "dictatorship of the proletariat" came to power in an agrarian country where factory workers constituted only a few percent of the population, and most of them were recent immigrants from the village who have not yet completely broken ties with her. Forced industrialization was designed to eliminate this contradiction. From a foreign policy point of view, the country was in hostile conditions. According to the leadership of the
All-Union Communist Party (Bolsheviks), there was a high probability of a new war with capitalist states. It is significant that even at the 10th congress of the Russian Communist Party (Bolsheviks) in 1921,
Lev Kamenev, the author of the report "About the Soviet Republic Surrounded", stated that preparations for the Second World War, which had begun in Europe: Preparation for war required a thorough rearmament. The military schools of the Russian Empire, destroyed by the revolution and the civil war, were rebuilt: military academies, schools, institutes and military courses began training for the Red Army. However, it was impossible to immediately begin technical re-equipment of the Red Army due to the backwardness of heavy industry. At the same time, the existing rates of industrialization seemed insufficient, as the lag behind the capitalist countries, which had an economic upswing in the 1920s, was increasing. One of the first such plans for rearmament was laid out as early as 1921, in the draft reorganization of the Red Army prepared for the 10th congress by
Sergey Gusev and
Mikhail Frunze. The draft stated both the inevitability of a new big war and the unpreparedness of the Red Army for it. Gusev and Frunze suggested organizing mass production of tanks, artillery, "armored cars, armored trains, airplanes" in a "shock" order. A separate point was also suggested to carefully study the combat experience of the Civil War, including the units that opposed the Red Army (officer units of the White Guards, Makhnovists carts, Wrangel "bombing airplanes", etc. In addition, the authors also urged to urgently organize the publication in Russia of foreign "Marxist" works on military issues. After the end of the Civil War, Russia again faced the pre-revolutionary problem of agrarian overpopulation (the "
Malthusian-Marxist trap"). In the reign of Nicholas II, overpopulation caused a gradual decrease in the average allotments of land, the surplus of workers in the village was not absorbed by the outflow to the cities (amounting to about 300,000 people per year, with an average increase of up to 1 million people per year), nor by emigration Stolypin government program of resettling colonists in the Urals. In the 1920s, overpopulation took the form of urban
unemployment. It has become a serious social problem that has grown throughout the New Economic Policy, and by the end of it was more than 2 million people, or about 10% of the urban population. The government believed that one of the factors hindering the development of industry in the cities was the lack of food and the unwillingness of the village to provide the city with
bread at low prices. The party leadership intended to solve these problems by the
planned redistribution of resources between agriculture and industry, in accordance with the concept of
socialism, which was announced at the
14th Congress of the All-Union Communist Party (Bolsheviks) and the 3rd All-Union Congress of Soviets in 1925. In the Stalinist historiography, the 14th congress was called the "industrialization congress", but it made only a general decision about the need to transform the Soviet Union from an agrarian country into an industrial one, without determining the specific forms and rates of industrialization. The choice of a specific implementation of central planning was vigorously discussed in 1926–1928. Proponents of the genetic approach (
Vladimir Bazarov,
Vladimir Groman,
Nikolai Kondratiev) believed that the plan should be based on objective regularities of economic development, identified as a result of an analysis of existing trends. Proponents of the teleological approach (
Gleb Krzhizhanovsky,
Valerian Kuybyshev,
Stanislav Strumilin) believed that the plan should transform the economy and proceed from future structural changes, production opportunities and rigid discipline. Among the party functionaries, the former were supported by a supporter of the evolutionary path to socialism,
Nikolai Bukharin, and the latter by
Leon Trotsky, who insisted on an accelerated pace of industrialization. Trotsky had delivered a joint report to the April Plenum of the
Central Committee in 1926 which proposed a program for national
industrialization and the replacement of annual plans with five-year plans. His proposals were rejected by the
Central Committee majority which was controlled by the
troika and derided by Stalin at the time. Trotsky as president of the
electrification commission and the Opposition bloc also put forward an electrification plan which involved the construction of the
hydroelectric Dnieprostroi dam. One of the first ideologues of industrialization was
Evgeny Preobrazhensky, an economist close to Trotsky, who in 1924–25 developed the concept of forced "superindustrialization" at the expense of funds from the countryside ("initial socialist accumulation", according to Preobrazhensky). For his part, Bukharin accused Preobrazhensky and his "left opposition" who supported him in imposing "feudal military exploitation of the peasantry" and "internal colonialism". The general secretary of the Central Committee of the All-Union Communist Party (Bolsheviks),
Joseph Stalin, initially supported Bukharin's point of view, but after Trotsky's exclusion from the Party's Central Committee in late 1927, he changed his position to the opposite. This led to a decisive victory for the teleological school and a radical turn from the New Economic Policy. Researcher
Vadim Rogovin believes that the cause of Stalin's "left turn" was the grain harvest crisis of 1927; the peasantry, especially the well-to-do, massively refused to sell the bread, considering the purchase prices set by the state to be low. The internal economic crisis of 1927 intertwined with a sharp exacerbation of the foreign policy situation. On February 23, 1927, the British Foreign Secretary sent a note to the Soviet Union demanding that it stop supporting the Kuomintang–Communist government in China. After the refusal, the United Kingdom on May 24–27 broke off diplomatic relations with the Soviet Union. However, at the same time, the alliance of the Kuomintang and the Chinese Communists fell apart; on April 12, Chiang Kai-shek and his allies
massacred the Shanghai Communists. This incident was widely used by the "united opposition" (the "Trotsky-Zinoviev bloc") to criticize the official Stalinist diplomacy as deliberately a failure. In the same period, a raid on the Soviet embassy in Beijing (April 6) took place; British police searched the Soviet-British joint-stock company Arcos in London (May 12). In June 1927, representatives of the
Russian All-Military Union conducted a series of terrorist attacks against the Soviet Union. In particular, on June 7, White émigré
Koverda killed the Soviet Plenipotentiary in Warsaw,
Voykov, on the same day in Minsk, the head of the Belarusian Joint State Political Directorate, Iosif Opansky, was killed, the day before, the
Russian All-Military Union terrorist threw a bomb at the Joint State Political Directorate in Moscow. All these incidents contributed to the creation of a "military psychosis" environment, the emergence of expectations of a new foreign intervention ("crusade against Bolshevism"). By January 1928, only two-thirds of the grain was harvested compared to last year's level, as the peasants massively held the bread, considering the purchase prices to be low. The disruptions in the supply of cities and the army that had begun were aggravated by the exacerbation of the foreign policy situation, which even reached the point of trial mobilisation. In August 1927, a panic began among the population, which resulted in the wholesale purchase of food for the future. At the 15th Congress of the All-Union Communist Party (Bolsheviks) (December 1927), Mikoyan admitted that the country had experienced the difficulties of "the eve of war without having a war". == First five-year plan ==