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industry, etc.), supply or interrepublic deliveries (coal, metal products, etc.), area planning (planning for union-republic development), and coordination and staff support (personnel etc.). Its planning function, broad as the economy itself, embraces the formulation and adjustment of both the short-range (annual) and longer range (5- or 7-year) program through which the state seeks to direct the development of the economy Its monitoring function includes most notably the exercise of close control over the supply of key materials. Through institutes attached to it, it also plays a leading role in theoretical economie research.

As a check on Gosplan there are various economic departments in the Central Committee Secretariat which serve both as watchdogs and as a means of keeping Gosplan continually abreast of thinking at the higher party levels.

At the all-union level the specialized state committees concerned with the execution of economic policy fall into two groups: those whose missions are defined in terms of some facet of the economic process, and those whose missions are defined in terms of some industrial sector. Among the first group are the state committee on questions of labor and wages, the state scientific-technical committee, and the state committee for foreign economic relations.13 (See chart M.) Among the second group, the most notable are the state committees on aviation technology, defense technology, radioelectronics, shipbuilding, chemistry, construction affairs, and automation and machine building.

The specialized committees of the first group may be described as offspring of Gosplan with the function of pushing development in areas that at the moment are considered so vital as to require attention above what they would receive if entrusted to mere sections of the parent planning agency. The committee on questions of labor and wages, broken off from Gosplan in 1955, was set up to tackle wage reorganization—that is to spearhead the effort to eliminate major inconsistencies which had crept into the wage system and to enhance the contribution of that system to labor productivity. The scientifictechnical committee, a reconstituted form of an organization originally broken off from Gosplan in 1948, has as its principal function the searching out and dissemination of new techniques. Research and planning are the phases of control to which these agencies make their primary contribution, but they do have a hand in policy execution. The committee on questions of labor and wages, for instance, monitors the introduction of uniform wage scales in the various industries.

The specialized committees of the second group are, in most cases, rumps of corresponding ministries abolished in the general reorganization of 1957 and its aftermath. They are charged mainly with research and development of new technology in their respective fields. But though primarily active in this phase of control, they too play an executive role. For instance, decisions by the committee concerning the introduction of new processes in plants of the industry, although technically “suggestions, are probably accepted as directives. Moreover, these committees, control pilot-plant productions.

Other central agencies of note concerned with the execution of economic policy are the Central Statistical Administration, the state bank, and the 10 remaining economic ministries. Chiefs of these units are members of the Council of Ministers.

13 For discussion of this organization and the Ministry of Foreign Trade, see ch. III.

The Central Statistical Administration is the head of a hierarchy of information-gathering and reporting organizations, the tentacles of which reach down in the economy to the level of the individual production plant. It is charged with providing the government with a constant flow of accurate, up-to-date information on all facets of economic activity. To secure the integrity of this contribution to intelligent policymaking and policy execution and to avoid such attempts as individual producers may make to misrepresent the performance of their units, each reporter is made responsible to the echelon next above the one on which he reports. This provision is believed to constitute a fairly effective guarantee against misrepresentations and distortion.

The 10 economic ministries at the union level comprise six of the union type and four of the union-republic type. These surviving members of the 60 or so of 1957, while primarily line units concerned with administration of the plans for their respective fields, also share in the formulation role. They draft proposals for programs of activity within their respective fields which Gosplan takes into account in drawing up the master plan.

The state bank, as the depository of funds for industrial and other enterprises, exerts an important check on plan fulfillment, as it has the power to refuse to honor drafts not in accordance with plan. Republic and lower level

The machinery for executing economic policy at the republic level is so nearly like a smaller replica of the machinery at the all-union level that it hardly needs separate description. The supreme executive organ is the Republic Council of Ministers. Beneath it, as above are to be found another (though smaller) set of specialized committees including, usually, a scientific-technical committee; a republic statistical organ; and a somewhat different set of ministries. Save for the fact that they receive and defer to orders from their superiors at the level next above, these units do on the smaller state about what their all-union counterparts do on the larger.

The principal organs concerned with the execution of economic policy below the republic are the sovnarkhozes, which preside over the economic administrative regions established during the 1957 reorganization of industry and construction, and to a lesser extent, the oblast and rayon executive committees. The latter, while primarily administrative, also share in the planning operation. (See Chart B.) The planning operation

The planning operation in the Soviet Union may be described as a cycle embracing three phases-design, counterdesign, and reconciliation. They are carried out respectively by the central government (notably Gosplan), by the lower echelons of government and basic production units, and again by the central government (Gosplan).

The design phase starts with Gosplan's transformation of Presidium objectives into the numerical targets for the more important economic aggregates and individual products: so many thousands of workers for the economy in the year in question, so many billion rubles of investment, so many tons of steel and grain, etc. These "control figures” are based on the economy's achievement in the preceding time period and on estimates of future manpower and progress in technology and labor productivity. This phase ends with the passing down of the "control figures” from Gosplan to the all-union ministries and the Council of Ministers and planning committees of the republics, and from these to the republican ministries, the sovnarkhozes, the oblast executive committees and planning organs, and ultimately, individual factories and farms.

The counterdesign and more concrete phase of the cycle involves movement in the opposite direction. It starts with the formulation of plans by factories and farms. These plans cover all phases of their operations in great detail: what they are to make, in what quantities, and by what combination of labor and capital; what construction they are to undertake; what new processes they are to introduce-all of this in both physical and monetary terms. It ends with coordination, amendment, and aggregation of these programs by successive higher echelons, first at the sovnarkhoz or oblast level, then at the republic, and finally at the center.

The reconciliation phase starts with Gosplan's adjustment of Presidium, objectives from above with the aggregation of concrete programs from below, continues with accommodation to government fiscal, foreign trade, and defense programs, and ends with the approval of the Council of Ministers and Central Committee. Finally, the tasks for each level are passed down the pyramid in the form of firm assignments backed with the full sanction of law. Periodic plans

Generally speaking, the more distant the goals the less regularized is the procedure, the less important the planning operation, and the more important the roles of the Presidium or of individual leaders. 14

In setting economic policy for the middle range of 5 to 10 years, the periodic drafting of comprehensive plans comes into its own. The establishment of perspective 5- and 7-year plans follows closely the cycle of design, counterdesign, and reconciliation. The 7-year plan, for instance, evolved on roughly this schedule. In September 1957 the sixth 5-year plan was abandoned. Gosplan then presumably received its broad directives from the Presidium. At the end of 1957, Gosplan sent its tentative guidelines downward in the hierarchy, and by the middle of 1958, it received the counterproposals from below. By August 1958, Gosplan's draft was accepted by the Presidium. This draft was published in November 1958 under the names of the Council of Ministers and Central Committee, and in February 1959 it was approved by the 21st party congress.

The initial formulation of objectives is a very important part of policymaking at this range. Before Gosplan receives its task of elaborating particulars and subjecting them to technical checks, the Presidium has engaged in extensive discussion not only of such key points as tempo of growth, proportions (e.g., relative growth of heavy and light industry), and investment level, but also of the major strategic posture to be sought and its military and scientific requirements.

In the adjustment of plans to the peculiarly pressing or the unforeseen, action takes place largely within the Presidium and Gosplan. The new course of increased deference to the consumer (1953–54), the program for overcoming agricultural stagnation (1953-54), the program for correcting imbalances arising from construction shortfalls (1956-57), and the industrial reorganization of 1957 were hammered out in the party Presidium and at plenums of the Central Committee. Gosplan's role was that of elaborator and transmitter of the reallocations of resources required.

14 Little is known of the precise character of the operations leading to such decisions as Stalin's to industrialize at maximum speed, and to give priority to heavy industry and collective agriculture, or of such decisions as Khrushchev's to reduce some income differentials and attempt to overtake the United States by 1970. It seems reasonably clear, however, that when decisions on this scale are made, little systematic correlation of goals and paths thereto takes place beforehand. Rather, it is left to the professional planners to pick up the pieces.

Short-range economic policymaking is highly regularized, consisting largely of the annual formulation of the state plan. The directives which set the framework for the annual planning operation are derivatives of the longer range plan. The cycle of design, counterdesign, and reconciliation takes place on a schedule closely tied to the calendar: for instance, sovnarkhozes are to send their supply and output plans up to the Republic Gosplans between July 5 and 10, and the latter must send theirs to U.S.S.R. Gosplan by September 1. In fact, the operation at this range is of so highly technical a nature and so highly programed, that it may more legitimately be viewed as a technique for carrying out policy than one of policymaking itself. In this process the role of Gosplan is critical, and the top organs confine themselves largely to review and ratification. Effectiveness

The formulation of economic policy in the Soviet Union must be considered generally effective, since the U.S.S.R. has successfully expanded its economy over the 40 years of its existence and has realized its goal of gaining world power status.

One of the main strengths of the system is its ability to identify weaknesses. The regularity of the planning process, the extensiveness of the reporting operation, and the doubling of policymaker as executive, all combine to aid early identification of soft spots.

Regularity means periodic review. Each year, when plans for the succeeding year are being set, major courses for that year and for the balance of the current middle-range planning period are reexamined.

The reports constantly fed to the top by the reporting organs, notably the Central Statistical Administration, enable the leaders to keep up with the economy. Such reports alert them to trouble before it becomes acute. Construction shortfalls in 1956 and their adverse impact on production, for instance, could be followed, even by the public at large, in the published (abridged) versions of plan fulfillment reports for the years immediately preceding 1956 and for the first half of that year.

Finally, Soviet policymakers divide the entire economy into spheres of influence in which they are severally expected to be, and generally are, expert. Mikoyan's expertness in matters of trade, for example, made him quickly aware of the inflation that developed in late 1953 and 1954, when price and loan reduction produced an expansion of purchasing power greater than the increase in consumer goods production. Khrushchev's awareness of the problems of a manager led him to adopt measures designed to head off autarchical tendencies among the sovnarkhozes established under the industrial reorganization of 1957.

Proposals for treating weaknesses originate in a number of places. The first is Gosplan, but other groups share in this role. The advice of the Academy of Sciences and research institutes was used, for instance, in the drawing up of the 7-year plan. The state committees 15 Treatment of this problem was not timely enough, but failure was ascribable to political factors rather

15

than to lack of data.

and ministries form another such group. Finally, proposals originate with the leaders themselves. Khrushchev, when production in the Donbass coal mines lagged in mid-1956 made a tour of the area, as a result of which he instituted a number of ameliorative measures, including decrees to shorten hours and reorganize pay scales.

Policy proposals undergo much testing in the interplay between proposal and counterproposal and between successive echelons. The assessments by the higher Soviet authorities of the tasks to be performed by their subordinates commonly disagree with the subordinate counterassessments. The former characteristically expect higher efficiency in operation, higher output for given inputs. The latter characteristically overstate input requirements and understate potential output. A classical example of this give-and-take can be found in the proceedings at the 20th Party Congress. Here the appraisal of the top planners (represented by Saburov and Pervukhin) directly contradicted that of the now defunct industrial operating Ministries, represented by the Ministers of Ferrous Metallurgy and the Coal Industry. The planners accused the Ministries of loading their claims to investment allocations, and claiming that ministerial estimates for 1956-60 would have required expenditures 250 billion rubles higher than finally settled on (that is, than were necessary in the planners' view). The Minister of Ferrous Metallurgy and the Minister of the Coal Industry alleged in rebuttal that they had asked the minimum necessary to meet their output targets, which, with the allotments finally decided on, would be out of reach.

The history of the sovnarkhozes, which replaced the industrial ministries, furnishes other examples. The 1958 increment for output of Sverdlovsk enterprises, which was placed by the enterprises themselves at 3 percent over 1957, was successively raised to 4.4 percent by the sector administrations of the sovnarkhoz, to 5 percent by the sovnarkhoz itself, and to 5.5 percent by the Republic Gosplan, at which level it was finally confirmed. The center retains the final word in setting targets, but it must at least consider counterrepresentations from below, and its final plan benefits from this conflicting view.

Comprehensive plans also receive a test in the form of a check for internal consistency: e.g., to see that plans for the steel inputs of steel consumers agree in total with output planned for the steel industry. The technique for making this check is known as the material balance.

In these procedures, the making of economic policy is generally but not always effective. The failures may be exemplified by the responses to the problems raised in 1956 by the conjunction of satellite disturbances (which the leadership had failed totally to anticipate) with the construction shortfalls in the basic materials industry. The decisions taken at the plenum in December of that year were equivocal. On economic organization, they appeared to be calling both for greater centralization of detailed decisionmaking in Moscow and for more delegation to the Republic and local organs. On the question of the status of the sixth 5-year plan, they appeared to be calling at one time for repair and adjustment, at another for replacement. A few weeks later, 1957 production targets were set at relatively low levels, and Khrushchev called for replacement of the industrial ministries with territorially based units. Some confusion and ambiguity in both policy and detail seemed to remain until the planning apparatus was able to rework the whole complex planning cycle and set at least the outline of the 7-year plan.

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