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58-643: Complex studies to develop the Angara River began in 1930 as part of a large effort for economic development along the river. In 1935, the research stage of the study was complete and recommended a hydroelectric power plant at the top of the Angara for industrial consumption. In 1936, the State Plan of the USSR reviewed the results and determined that six hydroelectric power stations in a cascade should be built on

116-432: A bias for so-called "productive" work (i.e., yielding measurable physical output) over "unproductive" work (services, trade, etc.). "Such a wage policy calls into question the modernization of society, its efficiency, its competitiveness." Using this method any changes in the plan to remove mismatches between inputs and outputs would result in hundreds, even thousands, of changes to material balances. This meant that, without

174-486: A centre point for central planning and expanded investment in heavy industry, with Leon Trotsky one of the leading political patrons of the agency. In June 1922 a new decree further expanded Gosplan's purview, with the agency directed to compose both "long-term" and "immediate" plans of production. Gosplan was to be consulted regarding proposed economic and financial decrees submitted to the Council of People's Commissars by

232-468: A frenetic rate, with an industrial survey of August 1920 indicating that some 37,000 firms had been expropriated by the state — including more than 5,000 which employed only one person. The Supreme Council of National Economy (Vesenkha), chief economic control agency of Soviet Russia in this period, cited a far lower figure of 4,420 nationalized enterprises in November 1920, while a third source indicated

290-614: A frenzied effort to sustain what remained of Russian industry on behalf of the Red Army , locked in a life or death struggle with the anti-Bolshevik White movement , backed by the foreign military intervention of Great Britain, France, Japan, the United States, and other countries. In the countryside food requisitions , often backed by brute force, took place under the nominal auspices of the People's Commissariat of Agriculture . In

348-504: A new monetary device to facilitate the exchange of products, such as "labor units," but the period of War Communism came to a close in 1921 before any such idea could be implemented. The end of War Communism and the establishment of the New Economic Policy was based upon the legalization of petty trade and a replacement of the hated policy of forced requisitioning of grain production with fixed taxation rates. This presumed

406-476: A payment calculation mechanism in many Soviet contracts. As the value of the Soviet ruble crashed, the process of price calculation and wage payment remained chaotic, as historian E. H. Carr later observed, with Soviet workers frequently bearing the brunt of the exchange problem: "The resulting situation was extremely complex. To fix current wage rates from month to month in terms of the goods ruble price-index

464-482: A return to a money-based economy and the stabilization of the Soviet currency became one of the primary tasks of the government's economic functionaries. The first eight months after the Bolshevik Revolution of November 1917 are believed by some scholars of Soviet Russia to have marked a discrete interval in the economic history of the Soviet regime. Economics were bound with politics in this period, it

522-596: A seven-year period of uncontrollable spiraling inflation in the early Soviet Union , running from the earliest days of the Bolshevik Revolution in November 1917 to the reestablishment of the gold standard with the introduction of the chervonets as part of the New Economic Policy . The inflationary crisis effectively ended in March 1924 with the introduction of the so-called "gold ruble" as

580-523: A significant fraction of the GDP. Not only individuals but state enterprises as well engaged in these practices, often out of necessity, when extra-legal influence or illegal operations appeared to be the only way to fulfill the demands of the plan. Claims of plan fulfillment that were passed up the hierarchy became as impossible to believe as the targets in the next plan. Hyperinflation in early Soviet Russia Hyperinflation in early Soviet Russia connotes

638-411: A store of value and a medium of exchange, but nothing had been created to replace it. Faced with economic collapse and widespread peasant revolt, in the spring of 1921 the Soviet government changed course towards a return to market-based relations between the state and the peasantry with the adoption of the New Economic Policy (NEP). No more would forced requisitioning be the order of the day, but rather

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696-480: A total of 4,547 firms under state ownership. That authoritative sources disagree so wildly is indicative of the ad hoc nature of the nationalization process. As the War Communism period progressed manufactured consumer goods came to be in such short supply that they were virtually unobtainable. Peasants refused to sell their surplus products for money which could effectively buy nothing. Facing starvation in

754-552: A year. Power is supplied to the Irkutsk Aluminum Factory in Shelekhov and local areas for residential use. In 1993, a modernization and rehabilitation of the power station was authorized. The work includes replacing the stators on seven of the turbines and a complete replacement of generator No. 5. Relays, switches and transformers are also being replaced and the work is expected to be complete by 2010. After

812-534: Is argued, with primary emphasis placed upon obtaining and maintaining political power. The nationalization of specific industries and institutions — such as banks, communications, and transport — should be seen at least in part through this prism, many believe. Nationalization of industry was further seen as a necessary means to the Bolsheviks' self-proclaimed goal of establishment of a classless society. British Marxist economist Maurice Dobb observed: "If

870-561: The "goods ruble" or "pre-war ruble" — based upon the purchasing power of the Tsarist ruble in 1913, before the distortion of the Russian economy caused by the nation's descent into World War I . From November 1921 onward Narkomfin pegged the value of the Soviet ruble in terms of this theoretical unit each month, allowing wages to be automatically adjusted to compensate for the steadily depreciating currency. In March 1922 Narkomfin abandoned

928-624: The HPS's first operation, G.M. Krzhizhanovsky , who wrote the Plan of Russian State Electrification Committee, exclaimed that "Start-up of the Irkutsk Hydroelectric Power Station is the great holiday for the Soviet power industry. The Irkutsk Hydroelectric Power Station opened a new epoch in development of electrification of the country." Another academic, A.V. Vinter, congratulated the construction team with "The old dream of

986-642: The Soviet engineers came true: Baikal and Angara is a Siberian miracle, a pearl of the Soviet water-power engineering, and now it started working for the people." In 1960, by decree of the Presidium of the Supreme Council of the USSR , 349 workers, engineers and employees including Bochkin were awarded Hero of Socialist Labour medals for the outstanding success of the HPS. Gosplan The State Planning Committee , commonly known as Gosplan (Russian: Госплан , IPA: [ɡosˈpɫan] ),

1044-604: The Statistical Directorate was merged into Gosplan, and on 3 February 1931 Gosplan was resubordinated to the Sovnarkom . During May 1955 Gosplan was divided into two commissions: the USSR Council of Ministers State Commission for Advanced Planning and the USSR Council of Ministers Economic Commission on Current Planning. These were, respectively, tasked with predictive and immediate planning. The work of

1102-445: The adoption of a regularized "tax-in-kind." Part and parcel of NEP would be a return to a functional currency and monetary payment of wages rather than compensation of workers through rations and free services, as was the case under War Communism. House rents, previously free, were charged by the state and social services were placed on a self-funding basis akin to insurance. The People's Commissariat of Finance (Narkomfin) emerged as

1160-490: The aid of information technology, Gosplan could only deal with the economy in very general terms. Ideological bias resulted in unrealistic plans that were impossible to execute. Pressure to execute them anyway resulted in widespread falsification of statistics on all levels of reporting. Falsified plan realization feedback further resulted in Gosplan preparing plans even more detached from reality: The second economy engulfed

1218-402: The cities and the death of industry as peasant-workers returned to their villages, the Soviet state resorted to the use of force to obtain necessary grain to maintain its urban economy. This resort to forced requisitioning had the effect of further decimating agricultural production, already seriously weakened by the loss of millions of able-bodied peasant men to the front. Wherever requisitioning

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1276-529: The country's standard currency. The early Soviet hyperinflationary period was marked by three successive redenominations of its currency , in which "new rubles" replaced old at the rates of 10,000-to-1 (January 1, 1922), 100-to-1 (January 1, 1923), and 50,000-to-1 (March 7, 1924), respectively. After three years of participation in World War I , the economy of the Russian empire was in crisis. In March 1917

1334-482: The countryside to claim a place in land redistribution and in order to avoid the unemployment, lack of food, and lack of fuel which had become endemic. By 1919 hyperinflation had emerged, further pushing the struggling economic system of Soviet Russia towards total collapse. An ad hoc system remembered to history as military communism emerged. The Soviet government's Council of Workers' and Peasants' Defense rushed from economic bottleneck to economic bottleneck in

1392-523: The decision-making STO. Gosplan was formally established by a Sovnarkom decree, dated 22 February 1921. Ironically, the decree was passed on the same day that an article by Soviet leader V. I. Lenin was published in Pravda criticizing advocates of a "single economic plan" for their "idle talk" and "boring pedantry" and arguing that the GOELRO plan for national electrification was the "one serious work on

1450-465: The economy matched outputs from another part of the economy. Gosplan achieved this using a methodology called the system of ' material balances '. For a plan period (in detail for one year and in lesser detail for a five-year plan) Gosplan drew up a balance sheet in terms of units of material (i.e. money was not used as part of the accounting process). The first step in the process was to assess how much steel, cement, wool cloth, etc. would be available for

1508-403: The economy of the new regime became even more chaotic. With mismanagement rampant and hunger sweeping the land, the value of the ruble , currency of the nation, essentially collapsed. During this interval, known as War Communism , money lost its function as a store of value and a means of exchange. A return was made by people in their daily lives to a primitive barter economy. While use of

1566-579: The economy. If mismatches between supply and demand were identified then, for the one-year plan, utilization plans for a particular input material could be cut or alternatively effort was made to increase supply. For the five-year plan mismatches between supply and demand could be mitigated by modifying long-term plans to increase productive capacity. Wages and pensions were leveled upwards, and skilled and manual work began to exceed much mental and professional work in remuneration. The Italian economic historian Rita Di Leo found "a compression of differentials" and

1624-511: The entire economy. To be sure, the system had its limitations, including the absence of meaningful price and cost information and the difficulty of extending planning to all the special commodities and enterprises in a modern economy. More serious difficulties stemmed from the attitudes and priorities built into the Stalinist planning system. "From the start," write the Soviet economists Nikolai Shmelev and Vladimir Popov, "the administrative system

1682-478: The existence of a ruling capitalist class was rooted in ownership and the differential advantage which that ownership gave over the ownerless...it followed that the continued existence of capital in private hands represented a continuance of the capitalist class and its influence..." Consequently, the Bolsheviks sought to expropriate major industry as an integral part of its program of overthrowing one class and replacing it with another, with an emphasis placed upon

1740-526: The existence of separate banking institutions is no longer necessary. Such transactions are now of secondary importance, and may be successfully carried out by the central and local institutions of the Commissariat of Finance..." It was neither Marxist theory that was causing disintegration of the money economy nor the replacement of currency transactions by moneyless credits between state-owned firms, but rather hyperinflation . The ruble had collapsed as

1798-613: The first half of the 1920s, with Gosplan's desires and actual policy largely disjointed. Tension continued between Narkomfin and Gosplan throughout the NEP period, with Narkomfin advocating for increased grain exports as a means of bolstering the currency by balancing imports and exports while simultaneously bolstering peasant prosperity, while Gosplan emerged as the chief advocate of cheap food and planned development of industry. During 1925 Gosplan started creating annual economic plans, known as "control numbers" ( контрольные цифры ). Its work

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1856-459: The further utilization of the People's Bank as an institution of state credit in the accepted sense of the term. The system of banking credit still remains in force for small private industrial enterprise and the needs of individual citizens who place their money in state savings institutions. Nevertheless, as these transactions are gradually losing their importance in the economic life of the country,

1914-477: The last two generators in the HPS were operational ahead of schedule and it was accepted by the state in 1959. The power station is contained in a 240 m (790 ft) long, 77 m (253 ft) wide and 56 m (184 ft) high reinforced concrete building. It consists of 8 generators, 5 rated at 82.8 MW and 3 at 107.5 MW, for a total of 736.5 MW. Since first operation, the station has produced 192 billion kWh of electricity and an average of 4.1 billion kWh

1972-523: The latter was based on the five-year plans delivered by Gosplan, with Gosplan planning 10–15 years ahead. Gosplan was headquartered at the building now occupied by the State Duma, in Moscow. The introduction of the first five-year plan in 1928 led to a re-examination of the roles of Gosplan and VSNKh, the supreme state organization for management of the economy at this time. This re-examination of roles

2030-409: The leading bureaucratic agency seeking currency stabilization. With the value of the Soviet ruble plummeting precipitously from week to week, this chief financial and budgeting agency needed a mechanism for the calculation of wages of Soviet workers, which from the fall of 1921 were calculated in money rather than in-kind commodities. As a result, a new theoretical concept was created by Narkomfin called

2088-516: The midst of such chaos the mere idea of long-term economic planning remained a utopian dream during these first years of existence of Soviet Russia. It was not until the Civil War had drawn to a successful conclusion for the Bolsheviks in 1920 that serious attention was paid to the question of systematic planning for the Soviet economy. In March 1920 the Council of Workers' and Peasants' Defense

2146-496: The nationalization of the largest scale industries held by the leading members of the capitalist class. The process, however, was slow and piecemeal, with only 100 firms nationalized by the central government and somewhat more than 400 by local authorities by July 1918. With the eruption of civil war on a large scale in the summer of 1918, the already grim economic situation in Soviet Russia deteriorated further. Full effort

2204-437: The next year. This calculation was based on the following formula: production minus exports plus imports plus or minus changes in stocks. The planning system as such was fairly simple. Gosplan calculated the sum of the country's resources and facilities, established priorities for their use, and handed down output targets and supply allocations to the various economic ministries and through them to every branch and enterprise in

2262-425: The printing press to produce paper money was employed as virtually the sole means of state finance, manufacturing output simultaneously dropped precipitously, exacerbating the collapse of currency value. Unemployed and under-employed workers often took to the manufacture of small crafts items, often using stolen materials, to have something to trade for food during the economic crisis. Throughout 1919 and into 1920

2320-430: The question of the single economic plan." Other members of Sovnarkom were more optimistic, however, and Lenin sustained a defeat on the establishment of another planning entity, Gosplan. As a compromise measure uniting the mission of the two planning entities, head of GOELRO Gleb Krzhizhanovsky was tapped to head Gosplan. Initially Gosplan had an advisory function, with its entire staff consisting of just 34 people at

2378-529: The river was cut off to allow the filling of the Irkutsk Dam's reservoir and on December 29 of that same year, its first generator began to produce electricity. By December 31, a second generator was operational. Within seven years, the reservoir behind the dam was filled and it had raised Lake Baikal by 1.4 m (4.6 ft). A total of 138,600 hectares of land were inundated by the reservoir, forcing 200 communities and 17,000 people to relocate. By 1958,

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2436-638: The river, the Irkutsk being the first. After further studies, designs and authorizations, the project was approved in 1949. Construction on the Irkutsk HPS began in February 1950 and was conducted by Angaragesstroy with Anton Melnikonis managing. Andrey Efimovich Bochkin served as the Chief of Angaragesstroy and Sergey Nikandrovich Moiseyev was appointed Chief Engineer. At the time, such a large rock-fill dam

2494-608: The so-called February Revolution overthrew the regime of Tsar Nikolai II , which was replaced with a provisional government headed by a succession of leaders ending with Alexander Kerensky . The economy remained disrupted and Russia failed to disengage from the bloody European war, and on November 7, 1917 the Kerensky government fell in a second revolution, this time led by the Bolshevik Party of revolutionary socialist Vladimir Ulyanov (Lenin) . Civil war ensued and

2552-512: The so-called goods ruble for a new unit of measurement, the gold ruble — a new parallel official state currency redeemable in gold. The plummeting Soviet ruble would be henceforth equated to the gold ruble through on-the-fly estimation of the purchasing power of each. Adding to the complexity of the situation, the State Planning Committee (Gosplan) continued to make use of a pre-war "goods ruble" of its own creation, using it as

2610-530: The time of its April 1921 launch. These were selected on the basis of academic expertise in specialized aspects of industry; just 7 were members of the Russian Communist Party (bolsheviks) . With the ongoing turn to a market-based system of production as part of the New Economic Policy (NEP), very real constraints existed on the possible extent of central planning during the initial phase of Gosplan's institutional life. Gosplan quickly became

2668-561: The various economic People's Commissariats. An administrative rivalry ensued between Gosplan and the People's Commissariat of Finance (Narkomfin), the latter the agency most in favor of currency stabilization and expansion of the general economy through the regulated market. Gosplan had no power of compulsion in this early interval, but was forced to work through Sovnarkom, STO, or the People's Commissariats to have its suggestions implemented by decree. The agency's economic calculations and policy suggestions remained largely abstract throughout

2726-442: The virtual collapse of money economy in favor of requisition, rationing, and barter, came a virtual abolition of banking in Soviet Russia. With productive industry almost completely state-owned, the People's Bank (successor to the pre-revolutionary State Bank) had no credit function; rather, it acted as a clearinghouse for transmission of assets to industry, with funds primarily obtained through currency emission. The People's Bank

2784-437: The wages of workers were paid largely in kind through the direct distribution of products. Scarce resources were distributed by ration and were generally free. Concurrently with this decline in the purchasing power and function of money, private trade was formally declared illegal and efforts made to nationalize all industries. With the nation's currency in shambles, Soviet economic officials discussed implementation of

2842-507: The work of the individual People's Commissariats toward this plan's fulfillment, so that "for the first time the RSFSR had a general planning organ with clearly defined functions," as historian E. H. Carr has observed. The State Committee for Planning, commonly known as "Gosplan," was launched as a permanent advisory subcommittee of STO, assigned with the task of conducting detailed economic investigations and providing expert recommendations to

2900-541: Was abolished altogether in January 1920, with the issuance of currency transferred to the People's Commissariat of Finance (Narkomfin). The decree shutting down the People's Bank made provision for continued use of the offices of Narkomfin for private finance on a limited and seemingly temporary basis: "The nationalization of industry has concentrated in the hands of the government all the most important branches of production and supply...thereby excluding any necessity for

2958-434: Was applied, the area of land dedicated to cultivation contracted. In the words of one economic historian, "The only industry which thrived was that concerned with the production of paper money." The amount of currency in circulation from the beginning to the end of 1920, rose from about 225 billion fiat rubles to 1.17 trillion. This represented a 25-fold increase over the amount of paper money in circulation in 1917. With

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3016-821: Was coordinated with the USSR Central Statistical Directorate , the People's Commissariat of Finance, and the Supreme Soviet of the National Economy (VSNKh), and later with the State Bank (Gosbank) and State Supply Committee (Gossnab) . With the introduction of five-year plans in 1928, Gosplan became responsible for their creation and supervision according to the objectives declared by the All-Russian Communist Party (Bolsheviks) . During 1930

3074-445: Was distinguished by economic romanticism, profound economic illiteracy, and incredible exaggeration of the real effect that the 'administrative factor' had on economic processes and on the motivations of the public." The second step was to identify where there were mismatches between levels of outputs of one material that was used as an input in another part of the economy i.e. where there were differences between supply and demand within

3132-562: Was given a new name – the Council of Labor and Defense (STO) – and a broader planning mission. STO was established as a commission of the Council of People's Commissars (Sovnarkom), to be headed by the leading People's Commissars themselves, a representative of the Russian trade unions, and the chief of the Central Statistical Agency. STO was directed to establish a single economic plan for Soviet Russia and to direct

3190-506: Was placed upon military production and factories across the country fell silent for lack of raw materials. According to one estimate, that of P. Popov of the Central Statistical Bureau of Soviet Russia, by 1920 the total production of Russian industry had fallen from a pre-war level of 6.059 billion gold rubles to the equivalent of just 836 million — a decline of more than 85%. Nationalization of industry proceeded at

3248-536: Was required because VSNKh itself also had responsibility for planning through the Industrial Planning Commission (Promplan). Re-examination of roles was also required as the introduction of the first five-year plan meant that Gosplan's role was no longer one of prognosis and drafting of 'control figures' since plans had now become orders to act. In order to ensure the success of the plan it was necessary to ensure that inputs from one part of

3306-907: Was the agency responsible for central economic planning in the Soviet Union . Established in 1921 and remaining in existence until the dissolution of the Soviet Union in 1991, Gosplan had as its main task the creation and administration of a series of five-year plans governing the economy of the USSR . The time of the October Revolution and the Russian Civil War which followed was a period of virtual economic collapse. Production and distribution of necessary commodities were severely tested as factories were shuttered and major cities such as Petrograd (now Saint Petersburg ) were depopulated, with urban residents returning to

3364-418: Was unprecedented in the world and brought difficulties in designing and construction. Earthquakes in the area could reach a magnitude of 8, so the dam needed to be earth-fill and packed firmly. In addition, the cold temperatures and flooding of the river made construction and concrete settling difficult. In June 1954, the foundation stone for the dam was laid and concrete pouring began soon after. On July 7, 1956,

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