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But, as had already happened in the case of the meaning of October , rational analysis was replaced by miraclism and voluntarism. Within a few years, Piatakov arrived at the point of theorizing this substitution, e. There is no doubt though, that what was still only an objective convergence of the two men's projects, as early as played an important role in making the Soviet leadership accept Piatakov's line regarding industry. This line, which favored stat- ism and great constructions, was in agreement with the gensek's interests and ambitions. Within the party, support for Piatakov's policies came from the most diverse quarters: these ranged from "believers" in the mythology already mentioned, to West- ernizers, like Serebrovskii,41 convinced by their knowledge of other countries that the modernization of the USSR was urgent, to "Peter the Great ists," who saw the party's new aim of industrialization as a "civilizing" mission.

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Rvgeniia Bosh,92 his companion from 1 9 1 2 to and one of the most important leaders of the Civil War, committed suicide. Piatakov had since remarried and now had a son,9' so that in appearance Bosh's death affected Preobrazhenskii more than him. But in fact that suicide meant probably the disappearing of one of Piatakov's last direct links with the revolutionary period and the ideas of that time.

Always in January , as we saw, Trotsky joined the VSNKh, where he was to play a role not yet well studied but of some significance. He was soon in charge of a special conference on the quality of production, of the NTO supporting Ipat'ev policy and of Dneprostroi. And on January 15 the VSNKh Presidium charged Piatakov with presenting the theses for a plan for the reproduction of fixed capital, theses which were destined to direct the activity of the VSNKh during the whole of Significantly enough, on that very day Bukharin published his "K kritike ekono- micheskoi platformy oppozitsii.

But, as the subtitle itself said, it referred to debates which had taken place at the beginning of the previous year. In other words, Bukharin was behind the times, almost as though he had not realized that Piatakov's line regarding industry had already been adopted. Something similar was to happen in September 1 , when again Bukharin criticized decisions which had in fact already been taken, rather than vague proposals.

On February 25, , the Presidium of the VSNKh accepted the theses formulated by Piatakov on the reproduction of fixed capital, whose "renewal" was now defined as the " central problem" of Soviet industrial policy. The partial centralization and the increase in amortization funds were now also approved, though with the contradictory footnote, added by Dzerzhinskii, that this must not involve an increase in industrial prices. Piatakov was ready to promise it, refusing to admit the evident contradiction between the two aims. This may have been because he was in bad faith, or else because he labored under an illusion regarding the immediacy of the effects of the investments he intended making.

It was probably at that time that the process began which, within eighteen months, was to lead Dzerzhinskii to feel betrayed and "taken for a ride" by his second-in-command, to whom he had conceded everything. This conference was the great industrial event of the year, attended by hundreds of leaders and spe- tsy of Soviet industry.

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This showed that the ex-Mensheviks still agreed with him, and that the VSNKh leadership was still united, even if this unity rested on very shaky foundations. There was complete agreement regarding centralism, the plan, acceleration of the investment program, etc.


During the debate, the trusts again protested against the "attack" on their independence, but these protests were ineffectual against a united VSNKh central leadership. It was a time of frenetic and grandiose work97 which lasted about a year and which involved hundreds of leaders and spetsv of industry, young and old, chosen for their competence, their talent and their enthusiasm.

As had already happened in the Donbass, Piatakov was soon able to set up "a well- coordinated machine, accustomed to joint work. Piatakov hardly missed any of them. At one he would stress the importance of synthetic fihres, to which the members of the textile industry section allotted too little importance; at another he would discuss Anton Weber's theses on the raionirovanie of industry, and so on. The "plan" for industrialization which so astonished Ipat'ev with its ambition was thus created. He thought it "highly fantastic," but a few years later it was felt to be too moderate.

Glazer 1997, Hollinger 1995, Taylor 1992). North America, Australia, and New Zealand).

All of this came about in a relatively open cultural climate, as is shown both by Piatakov's appeals to competence and independent judgement and by his continual reference to the West. Though these references were no longer political in nature, they were still more than merely technical as they were to become at the beginning of the next decade, before vanishing entirely. A corporation-like, administrative vision of the plan thus grew up with the creation of the OSVOK, alongside the economic vision prevalent in the Oosplan at that time.

In the former, on the one hand, the plan became a long-term investment project, aimed at establishing what and where to build in order to reach a well-proportioned and modern administered industrial system. From this perspective, the list of new factories was, in Piatakov's words, "the soul of the five-year plan," as well as its starting point. On the other hand, the plan was also made up of all those medium- and short-term operative plans required to define the various steps along the route to the goal, as well as to make the existing machinery operate within this scheme.

Piatakov believed that a strong center should both draw up this long-term plan and draft and administer the short- and medium-term ones. Thus the quality of this center was decisive even though its work was helped by the existence in reality, i. This was the germ of that "plan" as a set of plans at different levels and with varying scopes and as an administrative instrument, which, as Zaleski has shown, was to become the essence of Soviet "planning. Just while Piatakov was heading the VSNKh towards investments in fixed capital for heavy industry, Bukharin, the other of the "youths" whom Lenin mentioned in his Testament, was inviting the peasants to "get rich.

Piatakov was a member of the defeated opposition, whereas Bukharin was about to reach the high-point of his political power and success, cooperating with Sta- lin in the defeat of Kamenev and Zinov'ev. But, from the point of view of economic policy, it was Bukharin who was defeated, and who soon had to eat his words.

The intellectual victory of the model proposed by the bureaucratic "Left" within the party was so complete that Bukharin himself, as Hrlich has pointed out. From our standpoint then, seems to be a crucial year for the NFP. Unlike the previous year, when Sokol'nikov had managed to carry through the monetary reform, Soviet economic policy then took on a character which openly contradicted the decisions at the base of the NFP.

Obviously, the basic compromise between the new state and the peasants on which the NFP rested was still valid, and as long as it remained so, at least in theory it would still have been possible to turn back. But nor is there any doubt that as early as the "builders" of the administered system of nationalized industry and soon of the whole economy , some of whom were formally members of the opposition, had been able to push the Soviet government's economic policy in the direction they had chosen.

Behind their victory lay the combination of factors already mentioned - the mythology of which even the "Right" of the party was prisoner, the interests of the new state machinery, Stalin's ambition and his peculiar statism, etc. As early as , the victory of the "statists" in the industrial field was accompanied by the first similar measures in the agricultural field. The zagotovki of that year, a "good" year for harvests, confirmed the state's difficulty in finding wheat at the prices it fixed, a difficulty which had been concealed in by bad weather.

The idea of a "reform" of the zagotovki to strengthen the power of the state thus came into being. The first measure to be taken in this direction was the banning of inter-regional private trade in wheat. Thus agriculture too began moving along that path which was to lead to the crisis of the NEP, a path along which industry began that autumn to rush headlong with a further leap forward in industrial investments. In order to prepare it, Piatakov had been working since the summer of at the TslKiP, without, however, reducing the pressure on the OSVOK front and thus confirming his enormous capacity for work.

The problem now facing him concerned the coordination of the elastic long-term investment plan, which was being continually re-elaborated at the OSVOK. In June 1 , the theses he had just elaborated laid the foundation on which the annual VSNKh operative plans were to be drafted. TsSU, etc. This plurality produced innumerable complications and doomed the operative plans to continual delays.

For example, it was already normal practice to start working without formally approved plans only to see them sanctioned and changed after the fact and in a great rush. This way, the cross-checking system which justified the existence of so many agencies became a pure formality. The criticism was justified, but its aim was to make the Gosplun and the other agencies work for industry using only VSNKh data, and thus formalize the principle of self- regulation in industry in this field too.

Piatakov also proposed to leave to the Tsl IGP directorates the drawing of the annual plans for the trusts, complete with "precise economic coefficients," on the basis of materials received by the trusts themselves and controlled by the TslJGP alone. Thus the trusts were more strongly controlled: after their loss of power over investments and amortization funds, they lost their independence as well as their ability to operate on the market even in the short term.

The execution of the decisions taken over the previous months, however, brought to the surface the conflict between Piatakov and the moderates, who had accepted his conceptions on paper, but who now began to have to cope with their consequences. We have said that the entire VSNKh leadership agreed to the principle of increasing amortization in order to gather additional money for investments, and of centralizing the administration of those funds, at least partially.

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Hut how should they be calculated? But, considering the condition of the assets, this would mean low amortization and low margins for its increase. Piatakov, on the other hand, suggested using the investment it was hoped to realize as the basis for calculation, rather than the "objective" value of the capital. But in these conflicts seemed still to arise within a commonly held position.

It was therefore relatively easy for Piatakov to force the VSNKh leadership's hand, taking advantage of his greater energy. And the VSNKh ended up accepting both his conception of planning, and his method for calculating amortization. Was he, in other words, a "hypocritical Vice- President," a traitor, as Dzerzhinskii himself proclaimed in July ? And why did it take Dzerzhinskii and the others so long to see what was going on? The question is an interesting one because of the light it sheds on the knowledge of economics in the VSNKh leadership, including both its "Left" and its ex-Menshevik component.

It is certain that Piatakov sustained views which were clearly contradictory in order to have his proposals accepted. On one side, there was the problem of the relationship between investments, profits, amortization and industrial prices, transformed into a sort of card game. Increasing amortization would not affect prices, because the increase would be to the detriment of profits. This could only be true on one condition - inadmissible for Piatakov - that the increased contribution of amortization to the investment fund be compensated by a decrease in the quota from profits.

On the other side, there were the repeated promises to bring the new factories into operation very rapidly, with miraculous effects on prices. Or the alleged irrelevance, or almost, for the countryside and for consumers, of investing in heavy or in light industry. It is also certain that these things were believed, at least in part, even by Piata- kov's adversaries. This was as true of Piatakov as it was of his adversaries.

Whatever Trotsky thought, in other words, Piatakov in the 's proved himself to be an excellent administrator, but at the same time a very bad economist.

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For example, he knew nothing of the possible effects of huge investments in a situation recognized to be one of full utilization of resources, and this not even in the immediate terms of the problem, identified by Dzerzhinskii in. Ix'ss still was he able to analyze the possible effect which decisions of this sort might have on the entire economy, in the form of inflation and tensions, however these might be masked. These tensions were aggravated by the new addition to the VSNKh program, launched in the summer , which entailed pushing the exploitation of the existing plant to the limit, exactly at the same time that the great investments in fixed capital were beginning. The decision, which found Dzerzhinskii in agreement, was justified by the argument that the consequent increase in production would have afforded a significant reduction in industrial prices.

Nobody seemed to realize it was more than probable that the economy would become overheated, with consequent inflation, nor did they understand the possible effects on costs of the "law" of diminishing returns.

This increased output was to be obtained from the old plant by increasing the numbers of workers in industry in new hiring in industry reached, in relative terms, an absolute peak. Despite this radical disagreement, in those months at the end of Piatakov and Sokol'nikov were surprised to find themselves on what was becoming the same political side, i.