National Economic Planning

Planning, National Economic


in the USSR, the principal method of implementing the economic policy of the Communist Party, which is directed at achieving a comprehensive increase in society’s productive forces and an increasingly complete satisfaction of the material and cultural needs of the population. By means of planning, the state controls the complex process of social labor and organizes and regulates the production, distribution, and exchange of material goods. The methodology of planning relies on the Marxist-Leninist theory of expanded socialist reproduction and on the conscious application of the objective economic laws of socialism.

The planned, proportional character of the development of a socialist economy is an objective, lawlike regularity that is determined by the very nature of social production. Under the conditions associated with private ownership of the means of production, as labor became increasingly socialized, there was an increasingly urgent need for control by society and for conscious, planned regulation of production. Elaborating the doctrine of the founders of Marxism, V. I. Lenin demonstrated that in the stage of imperialism, organized monopoly capital attempts to overcome the chaotic spontaneity of social production and “free competition” by introducing state-monopoly regulation, which sometimes engulfs not only major sectors of the economy of particular countries but also sectors of the world capitalist economy. Under capitalism, however, planning cannot become the law of development for all social production, owing to the spontaneity of development and the anarchy engendered by private ownership of the means of production. This is the case, no matter how extensively the socialization of labor takes hold in particular sectors and spheres of the economy.

The practical possibility and necessity for the planned organization of all social production and for ensuring the necessary proportions in the economy were made possible in the USSR, for the first time in history, by the conquest of political power by the proletariat and the establishment of socialist ownership of the means of production. These were the key prerequisites for the planned development of the productive forces. The advantages of socialist ownership can only be realized by the planned organization of production throughout a society, based on its goals and potentialities. According to the definition adopted in the first Program of the RSDLP (1903), socialism means the “planned organization of social production to ensure the well-being and many-sided development of all the members of society” (V. I. Lenin, Poln. sobr. soch., 5th ed., vol. 32, p. 149).

Planned development of social production is implemented on the basis of a single economic plan. Emphasizing the constructive importance of such a plan, Lenin observed that “only large-scale, planned construction, which aims at evenly utilizing economic and business values, deserves to be called socialist” (ibid., vol. 37, pp. 21–22).

National economic planning based on a single plan makes it possible to develop harmoniously all sectors of production, the service spheres, science and culture; to use financial, material, and labor resources in conformity with the most important socioeconomic tasks of a particular period; and to establish the intersectorial and intrasectorial proportions necessary for attaining these ends. The rational location of the productive forces becomes possible, and high economic efficiency in social production is ensured. Scientifically substantiated planning makes it objectively possible to identify the volume and structure of social needs at the proper time and to make an accurate assessment of available and future resources, so as to ensure the continuously increasing satisfaction of social needs.

The Marxist-Leninist parties of the socialist countries have waged and continue to wage a decisive struggle against right revisionist concepts, which reject the role of national economic planning under socialism and favor a “market economy” and spontaneous economic development. Socialist planning is also incompatible with voluntarism and bureaucratic centralism.

Planned management of the national economy assumes the vigorous use of a number of economic levers affecting the growth of social production, such as economic accountability, price, profit, credit, and forms of material incentive. These levers are expected to create economic conditions for successful work by production collectives; to ensure a sound evaluation of the results of the collectives’ work; and to encourage enterprises to adopt accelerated plans, to use material and labor resources more rationally, to increase labor productivity, and to improve the quality of output.

Organization and discipline in the various links of the economy and among the workers are essential for the realization of plans—indeed, they are the conditions for steady progress in a socialist society. Contrary to the assertions of the enemies of socialism, organization and discipline do not create a “new alienation” of the personality, but serve as essential prerequisites for the comprehensive development of all members of society. Plans for the development of enterprises are worked out by the production collectives, and plans for the development of various sectors and of the national economy as a whole are discussed publicly. This is an important means of worker participation in the management of the economy, and an important means of increasing the productivity and sociopolitical activism of the citizens.

The rudiments of national economic planning were established in the first days after the victory of the Great October Socialist Revolution. The Supreme Council on the National Economy (VSNKh), which was established in December 1917, became the Soviet state’s first planning and coordinating body. At the same time, councils on the national economy were formed at the local level. The State Commision for the Electrification of Russia (GOELRO) was created in Febuary 1920. In December 1920 the Eighth All-Russian Congress of Soviets discussed and approved the GOELRO plan—the world’s first scientific, comprehensive, long-range plan for establishing the foundation of a socialist economy. The plan, which was designed for a period of ten to 15 years, contained a broad program for transferring the entire economy to a new economic basis. It mapped out the fundamental change to be made in the structure of the national economy, the elimination of disproportions, and the establishment of new proportions—both sectorial and regional—suited to the requirements and goals of socialist social production.

In conformity with a report by Lenin, in February 1921 the Soviet government adopted a decision establishing the State Planning Committee (Gosplan of the USSR), which was made responsible for examining the production programs and plan proposals of economic organizations, coordinating them with the nationwide plan, and establishing priorities in carrying out various tasks. A month after the formation of Gosplan, a network of planning agencies had been established in all sectors of the economy.

The Fourteenth Congress of the Communist Party (1925) established the policy of a high rate of socialist industrialization for the country. Because of the magnitude of the tasks related to collectivizing agriculture and rebuilding the national economy on the basis of modern technology, the five-year, long-range plan, supplemented by a breakdown into current (annual) plans, became the principal form of planning. The prewar five-year plans played an important historical role in the economic development of Soviet society. Characteristic of the prewar period were a high rate of growth in social production, with profound qualitative changes in the structure and level of the productive forces, and the final transition from a mixed economy to a socialist people’s economy.

The Great Patriotic War (1941–45) necessitated a sharp disruption in the proportions of the national economy, in order to ensure increased output and rapid changes in the location of industry. Quarterly operational national economic plans, as well as monthly and ten-day ones, became the principal forms of planning. Plants received their assignments for the most important types of war production directly from the State Defense Committee (GKO).

After the war the tasks of restoring the national economy and moving the country to a higher level of economic and social development were resolved on the basis of five-year, long-range planning. A broad program for technological improvement in production, acceleration of growth in labor productivity, and raising the public welfare was implemented under the first four postwar five-year plans (1946–65). There was a steady increase in the volume of output from both heavy industry and consumer goods industries. Priority was given to the development of the electric power, chemical, and machine-building industries— branches crucial for improvement in the structure of the economy, for technological progress, and for production efficiency. During the period of the developed socialist society, the Communist Party began to devote even greater attention to the fundamental questions of perfecting economic relations in society and improving the system of national economic administration, as well as to the system of planning and stimulating production. In industry and agriculture, the party has defined the principles of its economic policy, which meet the requirements of the present stage of the country’s development.

The decisions of the Twenty-fourth Congress of the CPSU (1971) provide an overall conception of the qualitative restructuring of planned economic management that satisfies the requirements of the present level of the highly developed Soviet economy and meets the demands created by the acceleration of scientific and technological progress. As envisioned by the Twenty-fourth Party Congress, the qualitative restructuring of economic planning entails a more profound elaboration of the socioeconomic problems of Soviet society; a thorough study of social needs; and measures to ensure steady growth in the efficiency of social production on the basis of a comprehensive strengthening of the intensive factors in economic development. The qualitative restructuring of economic planning will also involve expansion of the horizons of long-range planning, as well as an increase in the role of scientific forecasting; and a balanced development of the economy, in conformity with progressive standards for the use of resources. The party’s overall conception of qualitative change in planned economic management also calls for strengthening the comprehensive, intersectorial character of planning; increasing the responsibility of personnel for fulfilling state plans and assignments; and strengthening discipline in all links of the national economic mechanism.

Centralized planning is expected to ensure a leading role for the national economic approach to resolving economic questions, as well as a precise determination of the priorities in economic development, the stage-by-stage development of purposeful programs, and the role of each sector in accomplishing these tasks. The comprehensive character of major national economic problems leads inevitably to the strengthening of the programmatic, purposeful approach to the preparation, substantiation, and adoption of national economic decisions in planning.

The fundamental principle of the structure and functioning of the planning system in the USSR is democratic centralism, which was put forth by Lenin. It presupposes the organic combination of centralized planned management and several other factors: maximum development of the creative abilities of the working people in administering production; diverse manifestations of initiative by local agencies in economic and cultural construction; and the economic interest of the producers in fulfilling the plan.

The forms and methods of organizing state planning change with the degree of development of the productive forces, the refinement of socialist production relations, and changes in the concrete historical tasks and conditions of economic construction. Experience in socialist planning has led to the development of three types of national economic plans, classified by the length of the plan period: long-term plans (ten to 15 years), medium-term plans (as a rule, five years), and current (annual) plans. Long-term plans, which express the general directions of a society’s economic, technological, and social development and outline the order in which key national economic problems are to be solved, ensure the continuity, consistency, and coordination of different stages of economic policy. The medium-term, five-year plan provides for the accomplishment of the major, comprehensive economic and social tasks derived from the long-term outlook for economic and cultural development. In the current (annual) plan the targets of the five-year plan are precisely defined, and the course taken by the fulfillment of the five-year plan is taken into account, as are new social needs and advances in science and technology. The combination of the three forms —long-term, medium-term, and annual plans—is the most important principle of national economic planning in the USSR.

National economic planning is the direct responsibility of central agencies (Gosplan, ministries and departments of the USSR) and the Gosplans of the Union and autonomous republics. It is also directly implemented by local planning agencies (the planning commissions of the executive committees of krai, oblast, city, and raion soviets of working people’s deputies) and by the planning personnel at enterprises.

The sectorial and territorial aspects of the state plan are organically combined in national economic planning, making possible the most efficient use of natural and labor resources and the advantages of the socialist division of labor. Each republic has an opportunity, on the basis of a plan, to specialize in the development of the sectors and types of production that ensure increasing production efficiency by taking advantage of favorable natural and economic conditions. At the same time, it has become more common for specialization to be complemented by comprehensive development of republic economies.

The plan for the development of the national economy is elaborated on the basis of a Leninist principle: “the plans of the various branches of production must be soundly coordinated, and linked up so as to constitute the single economic plan we stand in such great need of (Poln. sobr. soch., 5th ed., vol. 42, p. 154).

The primary link in the entire national economic planning system is the enterprise (association) production plan. It is developed “from the bottom up” (that is, at the enterprise) on the basis of the information and instructions received from higher-ranking bodies (central boards, ministries, and departments), which take into account proposals submitted by the enterprise. The plans of central economic bodies (ministries and departments), which take national tasks as their starting point, provide comprehensive plans for the development of particular branches. The comprehensive plans of the Union republics deal with development of all branches of industry in the republic, including industry under dual USSR-republic subordination or exclusively republic subordination. In addition, Union-republic plans include plans for production at enterprises subordinate to all-Union ministries. These are drawn up with due regard for the suggestions submitted by the republics.

The national economic plan includes a complete system of indicators that reflects the political and economic tasks of the plan, the main directions and components of economic development, and the interdependence of production, distribution, and consumption. The indicators are used to establish the necessary rates of economic and cultural growth, to increase the efficiency of social production, and to achieve a balanced, proportional development of the national economy. The system of indicators in the national economic plan is unified and is compulsory for all economic bodies and for all links in the economy. The indicators are broken down by sector and by territorial unit.

The plans for the development of the national economy are directive in character and are addressed to specific bodies. After their ratification at a session of the Supreme Soviet of the USSR, they become laws that are binding not only on enterprises but also on the highest bodies. The plan assignments ratified for an enterprise may only be changed by the Council of Ministers of the USSR in exceptional cases. If the plan assignments for an enterprise are revised, all interconnected indicators of the plan and enterprise accounts with the budget must be adjusted simultaneously.

The national economic plan is a powerful lever for accelerating technological progress in production and for organically combining the achievements of the scientific and technological revolution with the advantages of the socialist economic system. The plan is prepared on the basis of a previously elaborated, comprehensive program for the development of equipment and technology.

One of the most important methods of substantiating and designing national economic plans is the balance method in planning, which is based on the Marxist-Leninist theory of reproduction and is used to draw up five-year and annual plans for the development of the national economy as a whole and the development of the economies of the Union republics, economic regions, and sectors. Using a system of balances, the availability of material, labor, and financial resources is determined in the national economic plan, rates of increase for resources are outlined, and the necessary economic proportions (general economic, intersectorial and intrasectorial) are established. General-economic proportions reflect the most general relationships in the production and use of the social product and the national income. Intersectorial proportions give concrete form to the general-economic proportions and show the sectorial structure of the economy. Intrasectorial proportions reveal in even greater detail the meaning of economic ties and the technical-economic aspect of socialist reproduction. In socialist society the observance of proportions is an element of planned, balanced development. In this regard, both general quantitative coordination of the basic factors of production and maximum correspondence between the structure of production and social needs are important.

The scientific substantiation of plans for national economic development contributes to the discovery of optimal variants for solving economic problems. This makes it possible to ensure increased efficiency in social production, the chief criterion of which is the achievement of the utmost results in the interests of society with the resources available.

Socialist planning, especially long-term planning, relies on scientific forecasts concerning society’s needs and economic resources, the development of the pure and applied sciences, the technological applications of scientific advances, and the concrete economic consequences of technological change. Forecasting is based on projections concerning natural resources, scientific and technological progress, and demographic and social changes. These projections determine the chief elements of the economic forecast, including the reproduction of labor and productive capital, the standard of living of the population, the rate of economic growth, structural changes and intersectorial connections in the national economy, and the location of productive forces.

Science has enriched the theoretical arsenal of planning, and effective methods of economic mathematical models and systems analysis have been developed. Contemporary planning methodology calls for an increase in the role of natural economic calculations in the preliminary stage of designing a long-range plan. Before detailed sectorial projections are made, a preliminary, consolidated model of the plan is drawn up, showing the principal factors and indicators of the rate and proportions of expanded socialist reproduction. This helps determine the main parameters of the forthcoming plan, with due regard for the level of development of productive forces achieved. In addition, it contributes to the formulation of the economic policy problems of the coming period. The economic mathematical model, a schematic representation of real relationships in the economy, makes it possible to take into account a broad range of indicators and their effects on each other. Models are used primarily for the development of five-year plans.

In the USSR a great deal of work is being devoted to the development of an up-to-date technological base for planning, especially through the extensive use of computers, which greatly accelerate the collection and processing of large volumes of data, the preparation of many variants of a plan, and the discovery of optimal decisions. Large computer centers have been established at Gosplan of the USSR and in numerous other central economic departments, in the planning and economic agencies of the Union republics, and at many enterprises and scientific institutions. A nationwide, automated system of data collection and processing is being established for national economic records, planning, and management, based on a state system of computer centers and on the country’s unified, automated communications network.

The planned socialist economic system has won enormous prestige and recognition throughout the world. With the emergence of the world socialist system, the sphere of operation of the law of planned, proportionate development of the economy has expanded, acquiring an international character. The other socialist countries have adopted and drawn on the national economic planning experience of the USSR. However, in practice, planning in each country has a number of specific features, which are associated with the characteristics of each country’s economic and historical development. In establishing independent national economies, many of the countries liberated from colonial oppression have turned to the experience of planned economic management based on the Leninist doctrine of planning. Soviet planning and scientific agencies assist them in developing and implementing plans and in training specialists.

The USSR’s experience in planned economic development demonstrates the possibility of mutually advantageous, large-scale cooperation with all countries, including the developed capitalist countries. The work of the Communist Party and the socialist government has opened new opportunities in the movement toward a purposeful international division of labor.


Marx, K. Kapital, vol. 2. In K. Marx and F. Engels, Soch., 2nd ed., vol. 24.
Marx, K. Kritika Gotskoi programmy. Ibid., vol. 19.
Lenin, V. I. Po povodu tak nazyvaemogo voprosa o rynkakh. Poln. sobr. soch., 5th ed., vol 1.
Lenin, V. I. Materialy poperesmotrupartiinoiprogrammy. Ibid., vol. 32.
Lenin, V. I. “Nabrosok plana nauchno-tekhnicheskikh rabot.” Ibid., vol. 36.
Lenin, V. I. Ocherednye zadachi Sovetskoi vlasti. Ibid.
Lenin, V. I. “Rech’ na s”ezde predsedatelei gubernskikh Sovetov 30 iiulia 1918 g.” Ibid., vol. 37.
Lenin, V. I. Velikii pochin. Ibid., vol. 39.
Lenin, V. I. “Doklad o rabote VTsIK i Sovnarkoma na pervoi sessii VTsIK VII sozyva 2 fevralia 1920 g.” Ibid, vol. 40.
Lenin, V. I. “Ob edinom khoziaistvennom plane.” Ibid., vol. 42.
Lenin, V. I. VIII Vserossiiskiis”ezd Sovetov 22–29 dekabria 1920g. Ibid., vol. 42.
Lenin, V. I. “Luchshe men’she, da luchshe.” Ibid., vol. 45.
Lenin, V. I. “O pridanii zakonodatel’nykh funktsii Gosplanu.” Ibid.
Materialy XXIV s”ezda KPSS. Moscow, 1971.
Ekonomicheskoe planirovanie v SSSR. Moscow, 1967.
Planirovanie narodnogo khoziaistva SSSR, 2nd ed. Edited by L. la. Berri. Moscow, 1973.


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