Farm to Factory: A Reinterpretation of the Soviet Industrial Revolution

Published by EH.NET (June 2004)

Robert C. Allen, Farm to Factory: A Reinterpretation of the Soviet Industrial Revolution. Princeton: Princeton University Press, 2003. xviii + 302 pp. $45 (cloth), ISBN: 0-691-00696-2.

Reviewed for EH.NET by R. W. Davies, Centre for Russian and East European Studies, University of Birmingham.

Robert Allen, Professor of Economic History at the University of Oxford, is well known for his Enclosure and the Yeoman (1992). While teaching Russian history, he became fascinated with the Soviet economy; learned Russian; and for the past ten years has been analyzing, and generalizing from, the Soviet experience. This original and stimulating book is primarily based on very careful use of Western research (it cites about 150 books and articles in English, and about 25 in Russian). It refreshingly places Soviet development in its long-term world context.

The author provides both a systematic description of the economy of the Russian Empire and the Soviet Union in the first half of the twentieth century, and an exploration of feasible alternatives. In recent western and Russian publications historians have reassessed the Soviet past less favorably in the light of the unexpected collapse of the system,. This reassessment has been reinforced by the opening of the archives: the new data tend to illuminate the inhumane and inefficient aspects of the system, minimized or concealed in Soviet times. Allen’s conclusions are much more positive.

He describes the three main economic systems which prevailed between 1900 and World War II. First, tsarism. Allen acknowledges that agriculture and industry developed quite rapidly before 1914, but argues that this progress crucially depended on the favorable world prices for grain and on the “aggressive policy of import substitution” pursued by the state. According to Allen, if tsarist institutions had continued, the post-war slump in world agricultural prices would have meant that “in the absence of the communist revolution and the Five-year Plans — Russia’s fate would have been somewhere between India’s and Argentine’s” (p. 37).

Secondly, the New Economic Policy (NEP) of the 1920s, in which state ownership of large-scale industry was linked with individual peasant agriculture through a free market. On Allen’s view, state industry “operated in the capitalist manner” until the late 1920s. “Businesses looked only to their own profits,” so that “socially profitable investment” was not undertaken, and workers were hired “only if they generated enough sales to cover their salaries,” so that the structural unemployment in the towns and the vast amount of underemployed labor in the countryside was not brought into industry (p. 50). If these arrangements had continued, industrialization and mass urbanization would not have been achieved.

Thirdly, the Stalinist system of the 1930s. Allen explains that rapid industrialization took place through the direction of resources into investment, primarily in producer goods. This was accompanied by the collectivization of agriculture, which was initially disastrous, but did perversely accelerate industrialization by driving people off the land. So far this account is relatively uncontroversial. But Allen goes on to claim, citing the well-known model of the Soviet economist Feldman, that this increased investment in producer goods enabled investment also to be carried out in consumer goods. This investment, together with the recovery of agriculture after 1933, enabled consumption per head to increase by as much as 30 percent between 1928 and 1937 (p. 142). He contrasts this finding with those in the classic studies by Abram Bergson and Janet Chapman, which concluded that both urban and rural consumption per capita declined in this period.

On the late tsarist period, I sympathize with Allen’s view that economic growth was unstable and temporary. But he should have considered the possibility — if only to reject it — that tsarism could have given way not to Bolshevism but to “liberal democracy,” “social democracy” or “peasant democracy.”

His view of NEP before the launching of collectivization is oversimplified. NEP always involved both a substantial element of state management of the level and distribution of investment, and considerable manipulation of the peasant market. The economic system which prevailed briefly before the grain crisis of 1927/28 offered a genuine alternative to both capitalism and Stalinism.

Allen’s description of the 1930s has the considerable merit that it incorporates the growth of the industrial consumer goods sector and of investment in education and health as inherent features of the Stalin revolution. But his assessment of the standard of living raises many queries. To take one element in his assessment: farm income in kind. His key Table 7.3 (p. 142) is difficult to follow because the component elements in farm income in kind have been transposed from the last two columns into the second and third columns. Once this is corrected, it emerges that total farm food income in kind increased slightly between 1928 and 1937. This is dubious. Soviet estimates in the archives, based on peasant budgets, show that the amount of grain available for food to the agricultural population was substantially less even in the good harvest year 1937/38 than in 1928. In view of the decline in the weight and number of livestock, it seems implausible that the consumption of other foods compensated for the reduction in grain. On food consumption by the population as a whole, Wheatcroft concludes that calories consumed per capita per day declined from 2,800 in 1928 to 2,707 in 1940 (Slavic Review 58 (1999), p. 51) while Allen estimates that consumption increased from about 2,300 to about 2,900 calories (his Figure 7.1, p. 135). Wheatcroft also concludes that protein consumption, not discussed by Allen, declined from 101.4 to 95.9 grams a day in the same period. All this needs further investigation. But it is certain that, contrary to popular preconceptions, in the Stalinist period as a whole, between 1938 and the mid-1950s, consumption per head increased substantially in spite of the disastrous impact of the Second World War.

Allen compares the actual performance of the Soviet economy with alternative industrialization strategies using a simulation model. His most important alternative assumes that Soviet investment policy was enforced through a soft-budget constraint but was combined not with collectivization but with a continuation of the NEP arrangements of peasant sale of food on a free market. According to Allen, this would have been feasible because peasants would be willing to sell more food if agricultural prices increased, while simultaneously a large number of surplus rural citizens could have been transferred to the towns without a decline in agricultural production.

He estimates, using data for the years 1913 to1928, that a 10 percent increase in agricultural prices would lead to a 7 percent increase in marketing. But with an urban population at the end of the 1930s more than double that of 1928 agricultural marketings would have had to at least double to retain the existing urban food consumption per head. Even on Allen’s assumptions, this increase in marketings would have required an even larger increase in peasant real income. Was this increase feasible? And could the operation of the soft-budget constraint in the non-agricultural economy have been combined with the peasant market? It necessarily involved the extensive use of the physical allocation of resources. Could this have been combined with a peasant market without the use of compulsion to obtain the agricultural production required by the urban population and industry?

It is certainly true that the Soviet economy of the 1930s would have been more efficient, and accompanied by less suffering, if gross errors had been avoided. The economy was damaged, without compensating benefits, by the forced collectivization of livestock, the mass deportation of “kulaks,” the over-ambitious industrial plans of 1929-32, the repression of the “bourgeois specialists” in the earlier 1930s and the mass executions of 1937-38. A model of the economy without these flaws would yield better economic results with less human misery. But it would certainly have to include some form of state control of agricultural production.

Allen is on the whole an accurate scholar but he makes some minor errors. The “Ural-Siberian method” for obtaining peasant grain was introduced after the 1928 not the 1927 harvest (p. 98). Jasny’s estimates of the Gulag population were not based on the (non-existent) “1940 Five-Year Plan” but on the 1941 annual plan (p. 115). The figure of 10 million deaths from the 1932-33 famine (p. 78) is an exaggeration. Allen himself reduces it to 7.3 million on p. 115; and the true figure, horrendous enough, for all excess deaths in 1930-33 (including the earlier Kazakh famine) is probably 5.5 to 6 million. The author is rather cavalier in his presentation of the views of his fellow historians. I cannot refrain from pointing out that Wheatcroft and I did not present low grain prices as the only cause of the low level of agricultural marketings in the 1920s (his p. 79). And Bergson was more nuanced and more cautious in his conclusions about the standard of living in 1937 than Allen suggests.

R. W. Davies is Emeritus Professor of Soviet Economic Studies at the Centre for Russian and East European Studies, University of Birmingham, UK. He is the author of The Industrialisation of Soviet Russia, the fifth volume of which (written jointly with Stephen G. Wheatcroft) is The Years of Hunger: Soviet Agriculture, 1931-33 (Palgrave/Macmillan, 2004).