THE PROBLEM OF

CONSUMER GOODS:

AN HISTORICAL REVIEW

Consumer products vs. the development of heavy industry. Soviet losses in WWII. The Marshall Plan and European capitalist recovery. Hiroshima and the opening of the Cold War. Emphasis on heavy industry in USSR to counter NATO. The Korean War. Post-war attempts to boost agriculture and light industry. Khrushchev's virgin lands program. State farms vs. collectives. Khrushchev's analysis of agriculture compared to Gorbachev's.

In comparing the two antagonistic social systems, particularly the U.S. versus the Soviet Union, the bourgeois ideologists and economists almost always define the fundamental issue as the level of consumer goods. They inevitably refer to capitalism as being based on consumer demand. The consumer is king and decides everything. They contrast this very sharply with the Soviet system, which they say is almost exclusively based not on consumer demand but on heavy industry, to the great detriment of the consumer. While Soviet society continues to have a shortage of consumer goods both in quality and quantity, this is precisely what the capitalist countries excel in, they say. (Never mentioned, of course, is that over the last three decades the imperialist countries, particularly the U.S., have enjoyed an abundance of cheap consumer goods which in part or in whole are produced in some of the most oppressed countries.)

They then equate the abundance of consumer goods in the capitalist countries with democracy, freedom of the individual and so on. On the other hand, they contend, the emphasis on heavy industry in the USSR makes it anti-consumer and explains why the USSR supposedly is aggressive and tends toward militarism. In one way or another, that is the theme of the bourgeois economists, ideologists and apologists. They have a convenient loss of memory with regard to capitalist abundance, forgetting that it is the result of capitalist overproduction, which leads to capitalist crisis, poverty and unemployment. This bourgeois explanation creates a sort of Chinese wall between the means of production and consumption. There is not the slightest hint that light industry in the production of consumer goods is the product of the prior development of heavy industry. Look at the British coal industry. It was first developed in the 1500s, but it took centuries for workers to be able to get the benefits of it in home furnaces.

It should not be denied that there has been an historic disparity in the production of consumer goods between the Soviet Union and the capitalist West, especially the most developed countries like the U.S., Japan and Germany. This disparity was considerably narrowed, however, after the first five-year plan in 1929 and all the way up to June 21, 1941, when the Nazis began their assault upon the USSR.

Of course, it's now too well known to be denied that the USSR lost about 20 million people during the war. But this is generally referred to in the category of the human costs of the war. What is left to footnotes is the economic effect that these vast human casualties had in the USSR in contrast to what happened in the capitalist West. This is very important, not only so far as Soviet production in general is concerned, but most particularly in the production of consumer goods, for it helps us to understand the economic development of the USSR, including the present economic restructuring plans.

Take, for instance, the demobilization plans of the various armed forces at the end of the war. The problem in the U.S. and the European capitalist countries was how to absorb the millions of veterans and reintegrate them into the workforce. From the point of view of the conversion to a so-called peacetime economy, the problem once again was unemployment, even for veterans--except those protected by union contracts and some semblance of law.

But what was it like in the USSR immediately after the war? Instead of having millions of excess worker-veterans returning, a whole layer of society, 20 million workers and peasants, had been torn away. A mighty economic force had thus been wiped out. These included men and women, both skilled and unskilled. Those who were killed were generally younger, which left an older population to tend to industry and agriculture. The USSR was deprived of a tremendous source of labor power, most particularly among the young on whom future generations generally rely. This set the USSR far behind the U.S., which had suffered no destruction at home and had lost 400,000 troops, or about one-fiftieth of the Soviet war dead. As soon as the war ended, the U.S. was able to begin the production of consumer goods. These had been scarce during the war, but not nearly as scarce as in the USSR, which suffered the full-scale invasion of the Nazi armies.

The problem in the USSR was therefore first, judged again from an economic view, to return the economy to the pre-war level of 1941, which was not a problem in the U.S. Even the European capitalist countries, although they all suffered severe damage and destruction in the war, were able to raise the level of production of heavy industry and were quickly aided in the acquisition of consumer goods.

It should also be noted in connection with the destruction of industry that the U.S. and British bombing of targets in Germany was generally of a selective character, with a view to postwar hegemony and collaboration with Germany as a capitalist country (notwithstanding the barbarous destruction of Dresden, which they feared would be liberated by the Red Army). The Nazis, on the other hand, in their drive against the Soviet Union wantonly and indiscriminately destroyed everything in sight that was not immediately useful to them for military purposes.

It wasn't the internal functioning of the capitalist economies in Western Europe that led to their speedy recovery. It was the development of the Marshall Plan, by which the U.S. poured in between $16 billion and $20 billion to resuscitate European capitalism, first of all helping to rehabilitate the battered standard of living and avoid proletarian revolution. Even before the war was in full swing, the U.S. in 1941 had passed the Lend-Lease Act, which granted military credits to Britain but also included consumer goods. Also not to be underestimated was the widely publicized campaign "Bundles to Britain," which sent aid during the Nazi Luftwaffe attacks.

So we see that the disparity between the capitalist countries and the USSR was widened, particularly in the area of consumer goods, first, because the U.S. quickly came to the aid of capitalist Europe and second, but just as importantly, because the U.S. failed to respond to Soviet requests for credit and trade on an equal basis. The Soviet government had hoped to begin peaceful reconversion plans so as to restore and raise the consumption level of the people, but this could not be done. U.S. imperialism, however, was only too anxious to aid a rapid recovery of the capitalist system in Europe and above all to militarily surround the USSR. Had the imperialist West confined itself to merely rehabilitating capitalist Europe and allowed the USSR to freely proceed with its own restoration and conversion plans based on socialist planning, there's no saying but that the economic balance between the buildup of heavy industries as against consumer goods might have been altogether different.

The big question was whether the USSR should concentrate so much on building heavy industry. The Soviet government itself published a study urging a balanced proportion of the economic sectors. But the very year the war ended, the U.S. threw a monkey wrench into any kind of plan for a balanced economy in the USSR. The atomic bombing of Hiroshima and Nagasaki forced a shift back toward giving higher priority to the heavy industries, to the development of manufacturing and technology for purposes particularly related to the defense industry.

Some of the revisionist historians in the West (so-called because they revised the bitterly anti-Soviet Cold War interpretation of post-war events) have come around to the point of view that the U.S. bombing of Hiroshima and Nagasaki was unnecessary. In the light of the surrender of Nazi Germany and the military advances made by the USSR, it was entirely impossible for the Japanese militarists to continue the war. Some have flatly said it was an effort to thwart the Red Army's advance and to quickly be in a position to occupy Japan. The dropping of the atomic bomb undoubtedly moved the USSR to further strengthen its technological and economic base and give more emphasis to heavy industry. But this decision was also greatly influenced by the reemergence in the West of the old anti-Soviet class hatred on the part of imperialism in the political as well as the diplomatic and military fields.

Even before the war was over, and just immediately after the tremendous Soviet victories at Stalingrad early in 1943 and in the Kursk area, there was a perceptible change in the tone of the capitalist press reports on the Soviet Union. The mass of the people still retained much admiration and tremendous goodwill for the Soviet Union and its struggle against the Nazis, but the U.S. military leaders feared that these successes foreshadowed the reconstruction of the USSR into a tremendous economic, political and military force.

Here's a Soviet account of the military and industrial strength that emerged during that period of the war:

The Soviet Air Force caused great losses to German fascist aircraft in the counter-attack at Stalingrad, and then at Kursk it firmly seized and held control of the sky along the entire Soviet-German front until the end of the war. This domination of the air made it possible for the ground forces to conduct offensive operations simultaneously in several sectors.

The self-sacrificing labors of the Soviet people in the rear contributed significantly to Soviet Army successes at the front. In 1943 our industry produced 34,000 aircraft, and 40,000 in 1944. This greatly increased the aircraft reserves at the front; both a quantitative and a qualitative superiority over the enemy was achieved in aircraft technology.¹

After 1945, the U.S. wanted to restore the pre-war status in Eastern Europe, but under its own hegemony. The campaign began with a venom which startled the broad public in the Western capitalist countries and in particular in the U.S., where it had been taken for granted that the alliance between the USSR and the capitalist "democracies" would continue in peacetime in the form of economic cooperation, as well as the pursuit of peaceful foreign policies. But this was not to be. The U.S. in particular began its campaign of "rolling back the red carpet." It was anxious to restore the pre-war regimes in Eastern Europe, which included some of the most reactionary monarchist elements. The campaign for "democracy and freedom" with the forces that the imperialists had at their disposal was very much akin to the kind of democracy, the kind of freedom fighters, that the U.S. today supports in Nicaragua and in El Salvador. But that was not all. Together with Britain, the U.S. also demanded that the USSR repay the lend-lease war loans, and even old czarist debts from World War I. It was all the beginning of a violent anti-Soviet campaign which became menacing on the European continent with the establishment of the North Atlantic Treaty Organization (NATO) in August 1949. What gave them pause, however, in the drive for the "liberation" of Eastern Europe, was of course the USSR's explosion of an atomic bomb.

Thus the international situation least of all commended itself to any easy narrowing of the disparity in the USSR between consumer production and the priority on heavy industries, which were urgently needed in the face of possible U.S. aggression. The development of atomic energy had of necessity to be as speedy as possible, and while it of course added to energy production, it nevertheless again emphasized the primacy of the basic means of production. The Soviet public was learning about the McCarthy period in this country and could not have viewed it with equanimity so far as the peaceful intentions of the U.S. were concerned. On the contrary, the transition to peacetime objectives was made more unfavorable in the USSR.

However, the most dangerous aspect came on the mainland of Asia as a result of the 1950-53 Korean War, which was instigated and prepared by the U.S. The Korean War eclipsed for a period of time the transition to a peacetime economy, preventing an easy demobilization of USSR military forces. Although no real peace treaty was ever signed, from a practical point of view the Korean War virtually terminated and a cease-fire was declared. Nevertheless, the U.S. keeps 42,000 troops stationed there under a so-called UN Command, with a U.S. commander, and many cease-fire violations have occurred over the years.

By 1953, the Korean War was winding down, the Chinese Revolution had strengthened the international position of the USSR and, notwithstanding all its difficulties, the situation had economically ripened for a forward step in improving the agricultural situation. This opened up greater opportunities for a better balance between the development of heavy industries and consumer goods in order to raise the standard of living of the mass of the people. We are obliged to put all this in the popular concept of the West, that is, consumer goods versus production of the heavy industries, as a sort of shorthand way of explaining the related problems in the USSR of socialist production, distribution and consumption.

Almost immediately after Stalin's death in 1953 the new leadership started a program to balance light and heavy industry, particularly as this applied to agriculture and food production. In varying degrees this struggle to create a better balance has continued until this day; the Gorbachev report on economic reorganization given to the 27th Party Congress in June 1987 says it will be given a top priority. Except for the period of the early 1950s, the tendency has been to put greater emphasis on the production of consumer goods and particularly on agriculture.

The worst havoc during World War II in terms of the economic well-being of the Soviet people had been to the food supply. The majority of the population were still peasants or from rural areas. In the Ukraine and other areas invaded by the Nazis the destruction temporarily halted cultivation of the land. All this is well known in the USSR but is not well understood by the U.S. public, precisely because of the very tendentious way in which the capitalist press and its ideologues explain that period of Soviet history.

One of the first things the Soviet government did under Khrushchev was set forth a plan to increase agricultural production. As early as September 1953, in his report to the Central Committee, Khrushchev called attention to the seriousness of the agricultural situation and proposed a number of measures to raise food production. (For the time being, we are leaving aside the question of material incentives and remuneration, which we will discuss in a later article.)

Khrushchev introduced the so-called virgin lands program, which was calculated to speed up agricultural production and thereby raise the food supply and the standard of living. The areas of new cultivation included not only western Siberia but also northern Kazakhstan. The proposal was meant to accelerate grain production and required the transfer of equipment and personnel and more capital investment to agriculture. While it seemed to be a move away from the priority on heavy industry, here again, as in earlier developments, this didn't happen.

First of all, the virgin lands program was dependent on weather conditions in areas where the climate was only marginally favorable and subject to drought. It turned out to be only a limited success. Bourgeois criticism should not be taken too seriously, but criticism within the USSR is another matter.

References

Main menu Book menu