Gosplan

The State Planning Committee, commonly known as Gosplan (Russian: Госплан, IPA: [ɡosˈpɫan]),^[1] 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

An ad hoc system remembered to history as

In 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

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.^[3] STO was directed to establish a single economic plan for Soviet Russia and to direct 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.^[3]

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 the decision-making STO.^[4]

Gosplan was formally established by a Sovnarkom decree, dated 22 February 1921.

Initially Gosplan had an advisory function,[4] with its entire staff consisting of just 34 people at the time of its April 1921 launch.^[6] These were selected on the basis of academic expertise in specialized aspects of industry; just 7 were members of the Russian Communist Party (bolsheviks).^[6] 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 a centre point for central planning and expanded investment in heavy industry, with Leon Trotsky one of the leading political patrons of the agency.

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.[9] The agency's economic calculations and policy suggestions remained largely abstract throughout the first half of the 1920s, with Gosplan's desires and actual policy largely disjointed.^[9]

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.^[10]

During 1925 Gosplan started creating annual economic plans, known as "control numbers" (контрольные цифры).

Its work was coordinated with the USSR

With the introduction of

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 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 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."

— Robert V. Daniels[11]

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 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 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."

— Robert V. Daniels^[11]

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 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 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.

— Robert V. Daniels^[11]

• Hyperinflation in early Soviet Russia
• Planned economy
• Economic calculation problem

• Bulletin Gosplana (Gosplan Bulletin) Archived 13 April 2017 at the Wayback Machine. Moscow: Gosplan, 1923. —Downloadable pdfs.
• Planovoe khozaistvo (Planned Economy) Archived 13 April 2017 at the Wayback Machine. Moscow: Gosplan, 1924. —Downloadable pdfs.
• Planovoe khozaistvo (Planned Economy) Archived 13 April 2017 at the Wayback Machine. Moscow: Gosplan, 1925. —Downloadable pdfs.