East-West Trade Trends. United States. Foreign Operations Administration
urgent task [Malenkov said] lies in raising sharply in 2 or 3 years the population’s supply of foodstuffs and manufactured goods, meat and meat produce, fish and fish produce, butter, sugar, confectionery, textiles, garments, footwear, crockery, furniture and other cultural and household goods; in raising considerably the supply to the population of all kinds of consumer goods.
The program was to be accomplished in “2 or 3 years,” and this was later repeated in other official statements. In other words it was to be a relatively short-term program of expansion, hardly long enough to make a major shift in industrial emphasis—nor did Malenkov claim such a shift. He said, “We shall continue to develop, by all possible means, heavy industry and transport.... We must always remember that heavy industry constitutes the basic foundation of our socialist economy, because without its development, it is impossible to insure further growth of light industry, increase productivity of agriculture, and the strengthening of the defensive power of our country.” Taking up this theme, the Communist propagandists in the U.S.S.R. and the satellites have constantly assured the people that they should not interpret the “present tasks of the economic policy as a retreat from the Marxist-Leninist principles of building up socialism.” The continued growth of basic industries was declared to be essential.
The assertion was made, not that the consumer program would displace basic industrialization, but that both could progress simultaneously. Malenkov said that heavy industry had risen from 34 percent of the total industrial output in 1924-25 to 70 percent in 1953. And while that was going on, he said, the U.S.S.R. was unable to develop light industry (textiles, garments, shoes) and the food industry at the same rate as heavy industry. But now, he said, the Nation was at last able to develop those industries rapidly.
This “now-we-are-strong-enough” theme runs all through the Communist propaganda on the subject. But it doesn’t harmonize with existing facts and figures.
In the first place, though the Soviet Union has made large industrial gains, it has not built its industrial base anywhere near the long-term goals that Stalin set in 1946 for the ensuing 15 years or so—goals which, even if attained, would not bring the U.S.S.R. in most respects to the production levels which the United States has already reached.
In the second place, the “now-we-are-strong” theme seems to leave out of account the truly deplorable condition of Soviet agriculture. Malenkov himself said a drastic increase in consumer goods could not be achieved without “further development and upsurge” of agriculture, because agriculture “supplies the population with food and light industry with raw materials.”
Khrushchev and the Livestock Lag
On the condition of agriculture, Nikita S. Khrushchev had a great deal to say at a session of the Communist Party’s Central Committee on September 7. Khrushchev is the First Secretary of the Party. His speech was an even more dismal confession of the “serious lag” than Malenkov’s. He revealed that the Soviet Union had 10 million fewer cattle at the beginning of 1953 than in 1928, and that the number fell by 2,200,000 during 1952 alone, instead of increasing by that same number as planned. In biting words he described the sharp decline in pork production and in wool, the unsatisfactory fodder situation, the deficiencies in potatoes and vegetables. His speech showed beyond doubt that even the production of grain, traditionally the Soviet Union’s No. 1 food staple and No. 1 export commodity, was in bad shape and that a far greater acreage needed to be devoted to feed grains in order to bolster the faltering livestock industry.
Khrushchev listed a number of measures to raise production. They included higher farm prices for livestock, milk, butter, and vegetables; the reduction of obligatory deliveries from the small private plots still held by collective farm members; the assignment of more tractors and more skilled workers to the collective farms; and the tightening of Communist Party control over agriculture. The decisions to place greater reliance on material incentives and to give slightly more recognition to what remains of private enterprise were intriguing, but the collective farm system itself remained basically unchanged.
Students of the Soviet economy, surveying previous efforts to stimulate agriculture and especially mindful of the biological limitations on the reproduction of livestock, were doubtful that the new measures could bring anything like the planned increase in 1954 or 1955.
Mikoyan Advertises the Program
Anastas I. Mikoyan, the Soviet Minister of Domestic Trade, then made a speech October 17 before the All-Union Conference of Trade Workers.
Mikoyan, as the man in charge of large segments of the consumer goods program, enthusiastically described the program as “gigantic”. In the manner of Malenkov and Khrushchev, he also enthusiastically flayed an astonishing number of deficiencies in the production, packaging, distribution, and marketing of consumer goods. He even condemned dull advertising slogans and inconsiderate retail clerks, and said there were some things about capitalist business methods that were worthy of emulating.
He stated, too, that not only the Ministry of Consumer Goods Industry but other ministries—including aircraft and defense—were getting assignments to produce such things as refrigerators, washing machines, metal beds, bicycles, and radio and television sets. Actually, small quantities of durable consumer goods have always been produced by heavy industry ministries. Mikoyan’s statement was, no doubt, intended to sound as if these ministries were being transformed, but there is no evidence that the U.S.S.R. actually planned to reduce its production of aircraft and armaments to make way for household appliances. If such evidence shows up, the free world will welcome it.
Mikoyan gave a few figures on the production of household appliances. They revealed plans for large percentage increases, but even if achieved, these increases would still leave the consumer many years behind. For example, he said the output of refrigerators would rise from 62,000 in 1953 to 330,000 in 1955 (for a population of more than 200 million). This, even if achieved, would still be tiny by Western standards.
In August, Premier Malenkov had spoken cordially of the expansion of trade of the U.S.S.R. with Western countries but he had avoided connecting this with consumer goods. Now, however, the following brief passage appeared in the middle of Mikoyan’s long and rambling speech:
A few words must be said about the import of consumer goods. During recent years we have been making use of this additional source of supply for the population. Having become better off we can now allow ourselves to import such foodstuffs as rice, citrus fruits, bananas, pineapples, herrings, and such manufactured goods as high standard woolens and silk fabrics, furniture, and certain other goods supplementing our range. These goods are in demand by the population.
Although we are buying 4 billion rubles’ worth of consumer goods from abroad this year, two-thirds of this sum will be spent on goods from the People’s Democracies. In turn, we are exporting certain consumer goods of which we have a sufficiency, and are helping the People’s Democracies with certain commodities.
Mikoyan, revising his figures in December, estimated the Soviet Union’s imports of consumer goods from non-Communist countries in 1953 at 1 billion rubles. Rubles are not used in foreign trade and translation into dollar values may be misleading, but at the official (although artificial) rate, 1 billion rubles would be 250 million dollars. This is a slender figure in relation to the annual consumption needs of more than 200 million persons. Even so, the amount that was actually imported during the year did not equal the $250 million estimate.
There is, however, some connection between the new regime’s promises of more consumer goods and the recent activities of the Soviet Union in the field of East-West trade. We shall be examining those activities in the next chapter.
Has Stalin Been Overruled?