The October Revolution of 1917 brought about the greatest advance of the productive forces of any country in history. Before the Revolution, tsarist Russia was an extremely backward, semi-feudal economy with a predominantly illiterate population. Out of a total population of 150 million people there were only approximately four million industrial workers. That means it was far more backward than Pakistan at the present time.
Under frightful conditions of economic, social and cultural backwardness, the regime of workers’ democracy established by Lenin and Trotsky began the titanic task of dragging Russia out of backwardness on the basis of a nationalised planned economy. The results have no precedent in economic history. Within the space of two decades Russia had established a powerful industrial base, developed industry, science and technology and abolished illiteracy. It achieved remarkable advances in the fields of health, culture and education. This was at a time when the Western world was in the grip of mass unemployment and economic collapse in the Great Depression.
The viability of the new productive system was put to a severe test in 1941-45, when the Soviet Union was invaded by Nazi Germany with all the combined resources of Europe at its disposal. Despite the loss of 27 million lives, the USSR succeeded in defeating Hitler, and went on, after 1945, to reconstruct its shattered economy in a remarkably short space of time, transforming itself into the world’s second power.
Such astonishing advances in a country must give us pause for thought. One can sympathise with the ideals of the Bolshevik Revolution, or oppose them, but such a remarkable transformation in such a short space of time demands the attention of thinking people everywhere.
In a period of 50 years, the USSR increased its gross domestic product nine times over. Despite the terrible destruction of the Second World War, it increased its GDP five times over from 1945 to 1979. In 1950, the GDP of the USSR was only 33 per cent that of the USA. By 1979, it was already 58 per cent. By the late 1970s, the Soviet Union was a formidable industrial power, which in absolute terms had already overtaken the rest of the world in a whole series of key sectors. The USSR was the world’s second biggest industrial producer after the USA and was the biggest producer of oil, steel, cement, tractors, and many machine tools.
Nor is the full extent of the achievement expressed in these figures. All this was achieved virtually without unemployment or inflation. Unemployment like that in the West was unknown in the Soviet Union. In fact, it was legally a crime. (Ironically, this law still remains on the statute books today, although it means nothing.) There might be examples of cases arising from bungling or individuals who came into conflict with the authorities being deprived of their jobs, but such phenomena did not flow from the nature of a nationalised planned economy, and need not have existed. They had nothing in common with either the cyclical unemployment of capitalism or the organic cancer which now affects the whole of the Western world and which currently condemns 35 million people in the OECD countries to a life of enforced idleness.
Moreover, for most of the post-war period, there was little or no inflation. The bureaucracy learned the truth of Trotsky’s warning that “inflation is the syphilis of a planned economy”. After the Second World War, for the most part, they took care to ensure that inflation was kept under control. This was particularly the case with the price of basic items of consumption. Before perestroika (reconstruction), the last time meat and dairy prices had been increased was in 1962. Bread, sugar and most food prices had last been increased in 1955. Rents were extremely low, particularly when compared to the West, where most workers have to pay a third or more of their wages on housing costs. Only in the last period, with the chaos of perestroika, did this begin to break down. With the rush towards a market economy, both unemployment and inflation soared to unprecedented levels.
The USSR had a balanced budget and even a small surplus every year. It is interesting to note that not a single Western government has succeeded in achieving this result (as the Maastricht conditions prove), just as they have not succeeded in achieving full employment and zero inflation, things which also existed in the Soviet Union. The Western critics of the Soviet Union kept very quiet about this, because it demonstrated the possibilities of even a transitional economy, never mind socialism.
From a backward, semi-feudal, mainly illiterate country in 1917, the USSR became a modern, developed economy, with a quarter of the world’s scientists, a health and educational system equal or superior to anything found in the West, able to launch the first space satellite and put the first man into space. In the 1980s, the USSR had more scientists than the USA, Japan, Britain and Germany combined. Only recently was the West compelled to admit grudgingly that the Soviet space programme was far in advance of America’s. The fact that the West still has to use Russian rockets to put men and women into space is sufficient proof of this.