Not Just Another Recession
Why the Global Economy May Never Be the Same
THE ultimate criterion of Soviet success will be the dynamic power of the system to sustain its revolutionary momentum. That is a dictum which will be disputed by few historians. But to maintain that momentum new fields of conquest must be found. Now, according to Marxian precept the existence of a class-conscious proletariat is considered a sine qua non for initiating social revolution in any present-day society. It has therefore been assumed that the inevitable direction of eventual Soviet expansion would be external and westward, in an effort to win the already industrialized countries to World Revolution. But events of the last five years indicate that exactly the reverse is taking place. As the political issues within Russia are solved, and as the wider horizons of Soviet planning come into view, we see that the direction of expansion is definitely not external and westward, but internal and eastward, into the virgin soil and out amongst the backward non-proletarian peoples of Asiatic Russia.
In this there is more of logical sequence than change in policy. During the first decade of their power, the Bolsheviks seemed obsessed by fears that a European coalition would organize an offensive against them. They sought to defend themselves against this peril not only by direct measures in Europe, but by indirect assaults against the vulnerable salients of western imperialism, the semi-colonial states of Asia. The launching of the First Five Year Plan, however, signalized a change in attitude. And the results of this plan modified the Bolshevik outlook still further. Not only was Russia freed from the traditional economic dependence on the West, but the country was for the first time equipped with an adequate industrial basis for military defense. The new strength, acquired through prodigious effort, tended automatically to lessen the old fear psychosis and to give the Bolsheviks a feeling of increasing economic security. Consequently, while pursuing a highly successful peace policy abroad, they were able to advance to the next major task on their program, that of building up socialism through the reconstruction of the Soviet Union as a whole. A main problem of the Second Five Year Plan is to industrialize the Russian East by utilizing the already created industrial centers as a huge service of supply. This comprehensive and audacious scheme of civilization-building involves moving industry out to the regions where raw materials originate. Geographically, it has started a movement, as though on a many-tongued conveyor belt, of steel, bricks, tools, machinery, towns, scientists, skilled workmen, teachers, over the Urals and out into that vast expanse of land, with its unsurpassable variety of climate, soils and natural riches, known to Russian history as the "world unborn" -- Siberia.
Such an ambitious program should consume Bolshevik energies for many decades to come. An industrialized Russian East would make the Soviet system into a self-contained economy on a continental scale. And even though the Bolsheviks may continue to repudiate the idea of autarchy, their need for any future external expansion would be eliminated if they were able to utilize their own Eastern riches.
To grasp the full significance in world politics of this latest development in revolutionary strategy, one must view, in the large, the physical conditions and governmental policies which have dictated the destinies of this land and people.
To the question, "Why did the Tsarist régime neglect the East?" the Bolsheviks reply somewhat as follows: The autocracy was a unitary agrarian state, resting on the broad back of serf labor. Between the seventeenth and nineteenth centuries it acquired an Eastern empire by conquest and colonization. These territories assumed the status of colonies supplying raw materials to the four industrial districts concentrated in European Russia. The Asiatic races of these Eastern areas thus joined the ranks of the national minorities of the empire, of which there were 185 in all, speaking 140 languages. This policy of enforced Russification was carried through by the dominant Great Russian nationality, which represented only 43 percent of the total population.
This Russian imperial system was characterized by: 1, the economic exploitation of the national minorities, including those of the East, who were condemned to political, economic, and cultural backwardness; 2, the unequal territorial distribution of productive forces; 3, the generally low purchasing power of the masses; 4, over-population and pressure on the land in European Russia; and 5, the imperialistic adventures of Russian capitalism, which was forced to seek markets abroad for cotton goods, sugar, etc., while the country, inadequately supplied with the materials exported, remained on a low economic and cultural level. In the Bolshevik view, the basic causes of this lack of general development of the country, and the failure to explore and utilize the natural wealth, were the autocracy's fear of disrupting the old feudal relationships in agriculture, and the capitalist practice of tapping only such sources as would yield immediate profits. Under such conditions, the Russian East developed mostly as a "dry guillotine" and as a passageway for imperialistic encroachment on neighboring states in Asia. Whether or not we accept the Bolsheviks' interpretation of the past, we must recognize that the Russian East occupies a key position in their program for raising the technico-economic and cultural level of the country as a whole.
To correct the five elements of backwardness, noted above, the Soviet government proposes the following general remedies:
1. Abolish the exploitation of the national minorities by giving them identity as racial units and making them equal participants in a common work. This will be effected by the creation of a federation of equal races, with self-determination for the "toilers" of each nationality, but with privileges for none; by the "nativization" of local government and the training of natives in political and economic offices; and by cultural autonomy, "socialistic in content, national in form," encouraging native languages, literature, arts, etc.
2. Create a new geographical distribution of productive forces, which, planned and coördinated, will best serve the interests of the country as a whole by exploring and opening up new resources; and establish a new "regionalization" of the map and a new inter-regional division of labor.
3. Enlarge the internal market as a whole by raising the purchasing power of the national minorities. To accomplish this, capital is being pumped out to the Eastern territories for industrialization purposes, thus reversing the old flow of capital.
4. Relieve over-population by erecting new industrial centers and opening new areas to agriculture that will automatically draw off surplus labor from the congested districts, by proletarianizing the peasantry on collective farms, and by rapid urbanization as a result of industrialization. The center of gravity of population will thus shift and, in the end, the conflict of economic interests between city and village (industry and agriculture) which has characterized Russian history will be reconciled.
5. And lastly, establish complete economic independence for a self-sustaining, non-imperialistic, socialized land and people by the general development of the country as a whole and through the full exploitation of its natural wealth.
The fulfillment of this program is considered to have been made not only possible, but logical and imperative, by the recently revealed natural treasures of the Russian East.
The idea of the eastward shift of industry is neither accidental nor of recent origin. It has lurked in the background of Soviet long-range planning from the beginning. Even in 1918, when Russia was temporarily deprived of the Ukrainian coal-metal base by the Treaty of Brest-Litovsk, Lenin forecast the eastward move. The early vague plans always included the prospect of eventually tapping the coal, metal and power reserves in the Urals. But years had to pass during which the chief concern was restoration of the old plant in European Russia. The First Five Year Plan mapped out the main lines for the redistribution of productive forces, but it placed reliance on the old coal-metal base of the Ukraine. In the second year of the Plan, however, it was discovered that the output of the Ukraine was insufficient for the scheduled construction. Accordingly, on Stalin's initiative, the 16th Party Congress (1930) decided to accelerate the development of the East, and ordered the creation there of a second coal-metal base, the great Ural-Kuznetsk Combine, which was rushed through to operation in record-breaking time. This gave an impetus to the general development of resources east of the Urals.
But before this program could be put into effect two preliminary tasks had to be performed.
The first was the compilation of adequate geological data on which to base decisions. If industry was to move to the raw materials, the latter had to be accurately located and appraised. Accordingly, exploration was speeded up and the field reports of the many scientific expeditions were turned over to the Gosplan for coördination. Each region was studied with a view to ascertaining the best combination of raw materials and energy resources for the placement of new industrial centers. This work was climaxed by the First All-Union Conference on the Distribution of Productive Forces at Leningrad in 1931. The findings of this First Conference are being published in a long series of volumes, each devoted to a particular region or development. The Conference finally declared the following eight regions to be of the greatest geo-chemical (thus industrial) significance for the future: Kola Peninsula (Murman District); Donetz-Krivoi Rog (Ukraine); Central Asia; Ural-Irtysh; Kuznetz-Minusinsk; Baikal; Urals; and the Trans-Caucasus.[i] Of these eight regions, it should be noted, six are in Asia and one in the Far North.
The First Conference likewise revealed the results of the geological and geodetic surveys which credit the Eastern regions with an astonishingly high proportion of the total resources of the U.S.S.R. in raw materials and energy. In the following table what are termed the Eastern regions include the Urals, Bashkir Republic, Western Siberia, Eastern Siberia, Central Asia, Yakut Republic, Kazakstan, and the Far Eastern Area. The item "energy" includes coal, shale, oil, turf, gas, wood and water power. The item "rare metals" includes chromium, wolfram, nickel, gold, platinum, etc.
I. SHARE OF THE EASTERN REGIONS IN THE ESTIMATED TOTAL RESOURCES OF THE SOVIET UNION[ii]
|Area suitable for wheat||60 (upward)|
|Yearly forest growth||72 (upward)|
The second major task was to re-divide the map into regions of economic significance, the while observing so far as possible the already determined boundaries of the national minorities. The new regions were created with a view to making the best possible combination of the three factors of economic utility, nationality policy, and defense needs. Thus during the course of operation of the First Five Year Plan the map of the internal sub-divisions of the Soviet Union was changed as strikingly from the previous Soviet map as the latter had been from the old Tsarist Gubernia lines. There are now 55 major sub-divisions, each determined by economic or national-cultural considerations, and, presumably, coördinated to make possible the inter-regional division of labor.[iii]
A few general statements will indicate the scope of the new Eastward trend. Whereas production in the old industrial centers doubled during the First Five Year Plan, that of the national minority regions increased three and a half times. In regions such as Moscow and Leningrad, far from the sources of raw materials, industrial construction was ordered discontinued after 1932. These old regions, which will grow less rapidly than the new, are expected to supply the high-grade machinery, tools, and delicate instruments for the equipment of the new industrial centers in the East. They are also being forced to develop so far as possible their local supplies of fuel. In size and importance, the Ural-Kuznetsk Combine towers above all other achievements of this period. When confronted with the problem of either building the great plant on the site of the iron reserves (Magnitogorsk) or on the site of the coal reserves (Kuznetsk), the Soviet planners decided to erect blast furnaces over both, so that the railway cars now carry iron ore eastward and coal westward. The production of pig iron and steel thus goes on at both ends.
In regard to food supply, there is an effort to make all regions relatively independent. The old division of the country into a "consuming" area (North Central) and a "producing" area (Ukraine) has been broken down by the reclamation of waste lands in the North. It is therefore no longer proper to speak of purely agricultural or purely industrial areas. Along with heavy industry, the food industry has moved eastward to the source of supplies. Meat packing combines have gone to Orsk, Semipalatinsk, and Verkhneudinsk, fish canneries to Kamchatka, sugar factories to Kazakstan, Western Siberia, and the Far Eastern Area, etc. As a result of agricultural experimentation, wheat growing has been extended northward and eastward into areas formerly considered fit only for rye. And light industry, in general, has moved out to the areas of industrial crops, e.g. cotton textiles to Central Asia, tanneries, boot and shoe factories, to the steppe region of Kazakstan, etc. In 1906 the celebrated Russian scientist, Professor D. Mendeleev, set forth the thesis that, considering the possibilities of settlement, the center of Russian population eventually should be in the neighborhood of Omsk.[iv] While such a remarkable shift in population is theoretically possible, the very severity of the northern regions precludes any rapid large-scale movement. Nevertheless, the eastward shift of industry to the sources of raw materials does entail a corresponding trend of population centers. Data are not yet available to show its precise extent. Soviet writers are inclined to deal in percentages, which show that whereas the total population of the U.S.S.R. increased 12.2 percent during the First Five Year Plan, that of the eastern regions jumped 24 percent.
Easier to ascertain is the growth of towns, new and old, the urbanization contingent upon industrialization. In the 1926 census the town population of the Soviet Union was counted as 23 million; it was estimated in 1933 as 40 million (based on municipal reports), a change from 18 percent to 23 percent of the total. This urbanization process was furthered by a series of decrees of the Central Executive Committee in 1930 granting much greater municipal autonomy to towns of industrial significance and of more than 50,000 inhabitants, and by placing the agricultural areas immediately adjacent under their jurisdiction. Table II shows the growth of a few selected towns in the East.
II. GROWTH OF TOWNS IN THE EAST [v]
(population in thousands)
|1926||1933||Reason for Importance|
|Novo-Sibirsk||120,100||287,000||Capital; textiles, food|
|Kemerova||21,700||105,000||Coke, chemicals, zinc|
|Leninsk-Kuznetsk||19,600||77,500||Coal and steel, locomotives|
|Stalinsk||6,500||207,000||Coal and steel|
|Stalinabad||5,600 42,200||Capital of Tadzhikistan;|
|near Indian Frontier|
|Alma Ata||45,400||146,600||Railway center; near|
|Frunze||31,800||77,000||Near Sinkiang Frontier|
|Far East Area:|
|Khabarovsk||49,700||102,000||Far East Military GHQ|
|Yakutsk||10,000||23,000||On Lena River|
|Igarka||......||14,300||Arctic port; on Yeneisei|
Who, one may well ask, are the people who go to swell the new town population, and where do they come from?
Here again, information is lacking. Undoubtedly many come from the land in European Russia. In the large labor turnover, there is an almost continuous shifting of labor back and forth between collective farms and industrial centers. There is also a steady absorption of labor from the national minorities into industry. On the other hand, the technicians, skilled workmen, etc., must come from the old industrial centers of European Russia. Table III shows that the number of workmen and employees in the Eastern regions jumped from two and a half to nearly six million between 1929 and 1932. In those two years the total number of the inhabitants of the Soviet Union increased from 12,167,900 to 22,942,800. The relative weight of the Eastern regions in the total of the Union thus increased from 21.2 percent to 24.6 percent.
III. NUMBER OF WORKERS AND EMPLOYEES IN THE EASTERN REGIONS [vi]
|Percentage of Total|
|West Siberian Area||376,400||1,009,800||3.1||4.4|
|East Siberian Area||170,300||422,900||1.4||1.8|
|Far East Area||183,200||468,500||1.5||2.0|
The Second Five Year Plan carries the geographical distribution of productive forces still further, and is expected to complete the regionalization of the U.S.S.R. The capital investment assigned to the Eastern regions is two-fifths of the total for the U.S.S.R. This is illustrated by the Tables IV and V of selected items compiled from the data of the Second Five Year Plan.
IV. CAPITAL INVESTMENT UNDER THE SECOND FIVE YEAR PLAN
(in millions of rubles, 1933 prices)
|Total for U.S.S.R.||Eastern Regions, including|
|All National Economy||133,400||39.25|
V. TOTAL PRODUCTION OF U.S.S.R. AND SHARE OF THE EASTERN REGIONS
|in East||in East|
|Capacity of Electric Power Stations|
|(thousands of kilowatts)||4,672||18.85||10,700||30.32|
|Coal (thousands of tons)||64,310||25.73||152,500||37.77|
|Iron Ore (thousands of tons)||12,062||25.87||39,900||31.84|
|Pig Iron (thousands of tons)||6,609||24.00||18,963||32.60|
|Copper (thousands of tons)||46||65.96||155||81.93|
The great combines uniting the economic activities of several regions are the most spectacular phenomena in this process of eastward expansion. Take, for instance the Ural Kuznetsk Combine, to be completed in 1937, which comprises the second coal-metal base of the Union and the machine-building base for industrialization of regions further East. It controls numerous auxiliary branches in light industry, food industry, and collectivized agriculture, in the Urals, Western Siberia, Bashkir Republic, Kazakstan, and even the Central Volga.
The third coal-metal base, the Angara-Eniseisk Combine, which will not be completed until the Third Five Year Plan, is designed to perform similar service for the Baikal region and the Far Eastern Area. This combine is expected to furnish the cheapest electric power in the world, on the basis of which the Bolsheviks intend to create aluminum and nitrogen industries.
Likewise spectacular is the opening up of the Arctic. In the summer of 1932, the Sibiriakov sailed from Archangelsk to Vladivostok. This was the first time in history that the famous "northeast passage to India" was made without spending the winter on the ice. Since then the Northern Sea Route Organization of Moscow has spent huge sums in conquering the north, by means of weather outposts, radio stations, air bases for observation of the ice, construction of ice-breakers and cargo ships, and the establishment of ports on the Siberian rivers accessible to vessels from the Arctic. A point of particular interest is the port of Igarka on the Enisei, north of the Arctic Circle, which is the center of a new combine of timber and wheat. Expenditure on the Northern Sea Route under the Second Five Year Plan is set at half a billion rubles.
Other projects include that of the Greater Volga, creating a network of canals in an enormous internal waterway system, which will cost nearly three billion rubles. The Volga-Moscow Canal, making Moscow a deep-water port, will be completed by 1936. Construction of the Don-Volga Canal, historic dream of Peter the Great, will extend over into the Third Five Year Plan. Involved in this huge system are irrigation projects in the middle and lower Volga, drought control and power stations.
Finally to be noted is the new railway construction. During the First Five Year Plan, 6,500 kilometers of new line were added, 80 percent being in the East, including the Turk-Sib. Building during the present five-year period is expected to add 11,381 kilometers, thus bringing the total for the Union up to 92,281 kilometers by January 1, 1938. Of the new building a total of 7,490 kilometers will be in the East. The most important construction for industrial purposes is the extension of the network of the Ural-Kuznetsk Combine in the Urals, Kazakstan, and the Altais, e.g. the Akmolinsk-Kartaly line, the Karaganda-Lake Balkhash line (to the copper smelter under construction), etc. But more interesting strategically are the lines Verkhneudkinsk-Kyakhta (on the border of Outer Mongolia), 255 kilometers, to be completed in 1937; the Baikal-Amur-Sea of Okhotsk, 1,850 kilometers, with a junction to the Trans-Siberian railway at its northernmost point; and the Lena River Line, 700 kilometers. The two latter projects are to be carried over into the Third Five Year Plan.
VI. RAILWAY BUILDING IN EAST, UNDER SECOND FIVE YEAR PLAN
|Date of||Cost in|
|Distance in||Beginning||Date of||millions of|
|Lena line||700||1935||3rd 5 yr. pl.||210|
|Far Eastern Area:|
|Baikal-Amur-Sea of Okhotsk||1850||1932||3rd 5 yr. pl.||1,100|
|Stalinabad-Kurgan Tyube||131||1936||3rd 5 yr. pl.||80|
The double-tracking of the Trans-Siberian Railroad, undertaken in three sections, from Karymskaya to Urusha, thence to Khabarovsk, and thence to Vladivostok, is to be completed in 1937.
When one views the work laid out for the reconstruction of the Russian East one may perhaps become infected by the enthusiasm of the Moscow planners to the point of ignoring the prodigious human cost involved. There is something eternally alluring about such Homeric efforts as diverting rivers to reflower the desert and reverse the "progressive dessication" of Asia, about populating the vacant taiga and forcing the tundra to yield benefits to man. There is also a compelling note in the Bolsheviks' proclamations to science that they will disprove old theories of "geographical destiny," and to economists that socialistic industrialism will demonstrate that even a very dynamic people need not resort to imperialism.
Even after we have made necessary allowances for the pitfalls of exaggeration, we must recognize that the eastward expansion of the Soviet system is significant, for these reasons:
1. Economic. The eastward shift of Soviet industry to the sources of natural riches; the creation of a second, and even a third, coal-metal base; and a corresponding development of food supply through agriculture and light industry. The completion of these projects should round out the Soviet economic system and make it self-contained on a continental scale. Although the Bolsheviks favor the increase of world trade, still, in the event of further intensification of economic nationalism, the Soviet Union would be better equipped with the sinews of industrial civilization than any other country, except perhaps the United States.
2. Social. The eastward shift of population; the growth of towns in the East; the intermingling of skilled Russian workmen with the racial minorities; the settlement, with special privileges, of peasants, including ex-soldiers and their families, on lands along the Far Eastern frontier.
3. Strategic. As a consequence of the above, the moving of the center of Soviet power away from the European frontier and closer to the Asiatic, with the hard core forming in the Ural-Baikal stretch, which is likewise the coal, iron, and water-power axis of the Asiatic continent. Soviet defense facilities thus advance six and a half days nearer to the Pacific. The cheap electric power of the Anagarastroi for nitrogen, the Lake Balkhash copper smelter at Kounrad, and other projects indicate the development of industries in the East which are of potential military importance. Transport strategy has also been improved by the already completed White Sea-Baltic Canal, giving Leningrad access to the Northern Sea Route; by the Baikal-Amur Railway, being built north of Lake Baikal to supplement the Trans-Siberian Railway, thus providing a second feeder to the Pacific and to the military zone centering at Khabarovsk; and by the diagonal trunk lines being built to unify the great combines east of the Urals.
4. Political. As the eastward trend in industry, agriculture, transport, education, health facilities, etc., reduces the economic and cultural backwardness of the national minorities within the Soviet Union, so also is it bound to have an incalculable influence on the destinies of the non-industrialized kinsmen of these minorities in the lands just across the Asiatic frontier. The natural economic drain of Outer Mongolia and Sinkiang is into the Soviet Union. And Turkey and Persia, although fervently nationalistic, respond strongly to the pull of the great industrial magnet to the north. Inasmuch as the Russian Revolution is, ideologically, to Asia what the French Revolution was to Europe, it seems only a question of time until the border peoples in Asia become subject to Soviet economic and political influence, to the exclusion of influences from elsewhere. The chain of Soviet radio stations in Asia, broadcasting in languages understood on both sides of the frontier, will not allow the border races to forget the growing power and prosperity of their cousins within the Union.
Within a decade and a half the status of Soviet Russia has evolved from that of a pariah behind a cordon sanitaire to that of one of the wielders of the real balance of power in European politics, able to lend powerful backing to the status quo by transferring support from Germany to France after the advent of Hitler. In 1935, Litvinov, as President of the Council of the League of Nations, presides over the efforts of statesmen to settle the Italian-Ethiopian dispute by pacific means. If such an extraordinary change in rôle has been possible for the Bolsheviks in Europe, then what of Asia, where conditions are even more fluid, and where the Bolsheviks are building even greater political and economic power in comparison to that of their neighbors?
In time we shall probably revert to consideration of the question implied at the beginning of this article: Is it to be stabilization, or a new direction for the revolutionary momentum?
[i] "Trudy Pervoi Vsesoyuznoi Konferentsii Po Razmeshcheniyu Proizvoditel'nykh Sil Soyuza S.S.R.," v. I, p. 38-39.
[ii]Ibid., v. XVI, p. 44 et seq.
[iii] See the Literary Digest Map of U.S.S.R., 1935.
[iv] D. Mendeleev: "K. Poznaniyu Rossii" ("Toward Understanding Russia"), 1906.
[v] S. Svirinovskaya, "Voprosy Sovetskogo Stroitelstva," p. 116, Communist Academy, 1934.
[vi] "U.S.S.R.," V. Tsifrakh, 1934.