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industrializationthe general process by which economies and societies in which agriculture and the production of handicrafts predominate become transformed into economics and societies where manufacturing and related extractive industries are central. This process occurred first in the UK during the INDUSTRIAL REVOLUTION and was soon repeated in other Western European societies. Profound changes in the social organization of production and distribution are involved, especially a rapid increase in the DIVISION OF LABOUR, both between individuals and occupational groups and also between industrialized and nonindustrialized nations, changes which lead to a transformation of the techniques and the social organization of agriculture (see AGRICULTURAL REVOLUTION) as well as of extractive and manufacturing industry (see FACTORY SYSTEM, MASS PRODUCTION).
Criteria for delineating countries as industrialized or industrializing vary The most commonly used indicators are:
- the percentage of the labour force employed in the industrial and service sectors compared with primary production;
- manufacturing output as a proportion of GROSS NATIONAL PRODUCT (GNP). However, other criteria such as levels of investment (see ECONOMIC TAKEOFF), the extent of URBANIZATION, levels of literacy, etc., may also be used as more general indicators of industrialization and of MODERNIZATION and development. Thus a country such as New Zealand which is mainly an exporter of primary products, but with a highly modernized agriculture, high literacy, etc., may be regarded as an industrialized country in the most general sense of the term.
The process of industrialization is closely linked with the overall modernization of societies, especially the process of urbanization, the development of SCIENCE and TECHNOLOGY, and POLITICAL MODERNIZATION. Each of these changes can be viewed as either:
- a prerequisite of industrialization; or
- a direct consequence or requirement of it; or
- both of these.
While similarities exist in the overall pattern of industrialization in the first wave of European industrialized societies, important differences are also evident (e.g. in the role played by the state in initiating industrialization, limited in the UK but more extensive in Germany). Differences also exist between those countries which were part of the first wave of industrialization and those for which industrialization occurs later (e.g. whilst later entrants can gain advantage by learning from the mistakes of earlier entrants, they often find it difficult to compete with more established industrial economies, this sometimes restricting new entrants to a relationship of ECONOMIC DEPENDENCY) (see also IMPERIALISM, UNEQUAL EXCHANGE). As well as temporal differences of this sort, important regional differences also exist.
the creation of large-scale machine-based production in all sectors of the national economy, especially manufacturing. Industrialization assures the predominance of production of manufactured goods in a country’s economy and makes possible the transformation of an agrarian or mostly agrarian country into a predominantly industrial country. The production relations prevailing in a country determine the nature, rate, sources of capital, purposes, and social consequences of industrialization.
Capitalist countries. Industrialization in capitalist countries is the creation of large-scale machine-based production and of a material-technical base under conditions of the domination of capitalist production relations. The prerequisites of capitalist industrialization are linked to the primitive accumulation of capital, to forcible expropriation of direct producers, to intensification of the exploitation of the working people, and to the formation of a free labor force. The establishment of the practical conditions for capitalist industrialization coincided with the industrial revolution in the last third of the 18th century and the first quarter of the 19th century in Great Britain and subsequently in other countries of Europe and in the USA. In the course of the industrial revolution, industry of the factory-plant type emerged, supplanting small-scale craft production and hand manufacture of goods.
Capitalist industrialization, as the history of a number of countries has shown, is of a contradictory and often prolonged nature. The development of individual sectors of industrial production is uneven and is periodically interrupted by economic crises. The time and rate of industrialization differ in various countries. Only in Great Britain did the industrial revolution and capitalist industrialization roughly coincide. By the middle of the 19th century, this country had already been transformed into an industrially developed country (“the workshop of the world”), supplying other countries with industrial products. Industrialization extended over decades in Germany, France, and the USA. Germany was transformed into an industrial-agrarian country by the end of the 19th century and France by the beginning of the 1920’s. In Russia, industrialization began in the last decades of the 19th century but was not completed under the conditions of a bourgeois-landlord social system.
The rate of industrialization under capitalism depends on such factors as the amount of accumulated capital, the availability of a reserve army of labor, the capacity of the internal market, and the level of technical progress. The sources of capital to implement industrialization under capitalism are exploitation of the country’s toiling masses and colonial peoples, robbery of other countries as a result of military conquests and imposition of indemnities, and internal and external loans. The history of large-scale industry in Great Britain serves as an example of the accumulation of capital for industrialization through merciless exploitation of the toiling masses of one’s own country and the colonial peoples.
Capitalist industrialization usually begins with light industry, because less capital investment is required than in heavy industry and the capital turnover is faster, with the result that profits are bigger. The transfer of resources from light to heavy industry begins only after a certain time has passed and the necessary level of productive forces has been achieved on the basis of new discoveries and inventions, the need has developed for large quantities of metal, fuel, and other products of heavy industry, and capital has been accumulated. Thus, in Great Britain, where industrialization began with the cotton-textile industry, products of light industry were dominant in the overall output of industry as late as the 1870’s. In Germany, which began industrialization after the Revolution of 1848–49, swift development occurred solely in light industry for decades. Only after the Franco-Prussian War of 1870–71 and the large indemnity that Prussia subsequently received was there a notable transfer of capital into the sectors producing the means of production. The predominance of light industry in the first stage of industrialization was also observed in the USA in the first half of the 19th century, in Russia right up to the Great October Socialist Revolution, and in Japan in the early 20th century.
The second half of the 19th century was marked by the significant growth of large-scale machine-based production in many countries. The basis of industrialization—the output of the means of production—was quickly created; the output of the means of production grew to surpass the production of consumer goods, an essential condition for extended reproduction.
Capitalist industrialization is carried out in the interests of the bourgeoisie. It leads to a strengthening of the economic and political domination of capital over hired labor, to the rise of unemployment, to intensification of the exploitation of the working masses, and to the sharpening of all the contradictions of capitalism. This is particularly true as capitalism enters its highest and final stage—imperialism. The most important social consequences of capitalist industrialization in the stage of imperialism are intensification of the unevenness of growth of individual countries and sectors of production, restraints of the imperialist powers on the economic development of colonial and dependent countries, militarization of the economy, and expansion of the exploitation of industrial workers and the entire mass of toilers. At the same time, the development of large-scale industrial production means a rapid growth of the proletariat and its concentration in cities and industrial regions. The concentration of the proletariat creates the preconditions for the growth of proletarian consciousness and organization, including the formation of the proletariat as a class and the emergence of its political parties.
Industrialization increases the productivity of social labor and the rate of growth of production in all sectors of the economy and expands the productive forces of society.
Since the 1950’s the modern scientific-technical revolution has been spreading, favorably influencing the further course of industrial development of many capitalist countries. However, in capitalist conditions, use of the advances of the scientific-technical revolution is limited. Such advances can be directed to the service of production only to the extent that they assure extraction of maximum profits by the owners of the means of production.
Socialist countries. Socialist industrialization arises from the need for the creation and development of large-scale machine production in all sectors of the economy, particularly in heavy industry; the emphasis on heavy industry ensures the basic reconstruction of the economy on the basis of modern technology under the dominance of socialist productive relations. Socialist industrialization is not essential for all countries building socialism; its desirability depends on the general level of development and the sectorial structure of the economy.
The content and means of industrialization under socialism were scientifically formulated by V. I. Lenin. At the Eighth All-Russian Congress of Soviets (1920), Lenin said: “Only when the country has been electrified, and industry, agriculture, and transport have been placed on the technical basis of modern large-scale industry, only then shall we be fully victorious” (Poln. sobr. soch., 5th ed., vol. 42, p. 159). With the victory of the proletarian revolution in Russia, a disparity emerged between the new advanced political structure and the old backward technical-economic base. Strengthening of the positions of socialism and completion of rehabilitation of the national economy brought the task of industrialization into the forefront. At its Fourteenth Congress (December 1925) the Communist Party proclaimed the course of industrialization of the country as the general line of economic construction. The congress issued a directive “to maintain a course for industrialization of the country and development of output of the means of production” (KPSS v rezoliutsiakh, 8th ed., part 3, 1970, p. 247).
During implementation of the policy of industrialization, the party carried on a struggle both with right-wing deviationists, who were opposed to industrialization, and with “left-wing” adventurists demanding “superindustrialization.”
Socialist industrialization is carried out in a planned manner. It ensures the creation and development of the material-technical base of socialism, the rapid growth of productivity of labor, the extended socialist reproduction of material welfare, and the reproduction of socialist social relations. Socialist industrialization in the USSR was characterized by accelerated growth of heavy industry, particularly the production of machines and equipment. This growth rate was explained by the initial technical and economic backwardness of the Soviet Union. The Soviet state found itself encircled by capitalist states. All this demanded a swift rate of industrialization.
The USSR was industrialized during the fulfillment of the prewar five-year plans. During this period, 9,000 major state industrial enterprises equipped with advanced technology were put into operation. Thousands of other enterprises underwent fundamental reconstruction. New sectors of industry were created, including tractor, motor vehicle, machine-tool construction, and aviation sectors. Qualified staffs of workers, engineers, and technicians emerged. The output of industrial products expanded rapidly. In 1940 the gross output of industry in the USSR had grown 6.5 times over the 1928 level, with a ten-fold increase in output of the means of production. Industry became the dominant sector of the national economy. The production of machines grew exponentially. In 1937 more than 80 percent of the industrial products were from new enterprises. In volume of industrial production, the USSR in 1937 took over first place in Europe and second place in the world. The USSR had been transformed from an agrarian country into an industrial power, possessing a mighty industry independent of the capitalist countries.
Industrialization had enormous importance in strengthening the defense capacity of the country. Soviet industry proved its superiority to the industry of fascist Germany during the Great Patriotic War (1941–45). Industrial development continued after the war. In 1971 industrial production of the USSR had increased 99 times over the 1913 level, including a 230-fold increase in the output of the means of production and a 33-fold increase in consumer goods. In comparison with 1940, industrial production of the USSR had risen 12.8 times. Labor productivity in the industry of the USSR was up 19.6 times in 1971 over the 1913 level.
Industrialization was carried out in the USSR exclusively on the basis of internal sources of accumulation—profits from nationalized industrial enterprises, transportation, external and internal trade, and banks. For the accumulation of capital, very severe economies were essential in all sectors of production and consumption, and mobilization of the resources of the population was also vital (through internal loans, price policy, the tax system, and so on). The program of the CPSU emphasizes: “Industrialization of the USSR was a great achievement of the working class and all the people, who spared neither energy nor means and willingly endured deprivation to drag the country out of backwardness” (1971, p. 13). With development of the economy, the sources of funds for industrialization changed; the share coming from the state budget increased and the share from the population diminished.
Directed toward the creation of the material-technical base of socialism, the socialist transformation of society, and the continuous growth of social wealth and the raising of the material and cultural life of the working people, socialist industrialization is accompanied by a steady growth of the welfare of the masses. Socialist industrialization creates the material base for development of the socialist form of economy, the socialist transformation of small-scale commodity production in general and agriculture in particular, the final liquidation of capitalist elements, an increase in the numbers and improvement of the skills of the working class, and a strengthening of the union between the working class and the peasantry.
Socialist industrialization created the material prerequisites for carrying out the cultural revolution in the USSR. Industrialization was a major factor in the economic and cultural upsurge in the country’s formerly backward regions. It contributed to the creation of modern industry in the outlying parts of the country and to the formation among the nationalities of working-class specialists and a technical intelligentsia. It also contributed to the liquidation of the economic and cultural inequalities between the nationalities that were inherited from the pre-revolutionary past. In this manner, socialist industrialization was one of the most important means of implementing Leninist nationality policies.
Heavy industry is the base for the development of all sectors of the economy and for the construction of cultural-educational institutions, housing, and domestic-service, facilities serving the needs of the working people. Expansion of social production makes possible the raising of the living standards of the working people and the growth of their real incomes, as well as allowing a decrease in prices for goods and a reduction of the workday. Successes in industrial development play an important role in the creation of the material-technical base of communism.
Of the other countries entering on the path to socialism, only Czechoslovakia and the German Democratic Republic had an already established large-scale industry. Their industry is developing further on the base of more modern technology, and attention is being given to the need to improve the structure of the economy and the distribution of productive forces. The other countries were economically backward or semideveloped. The conditions for industrialization in foreign socialist countries are better than those that existed in the USSR. The existence of the world socialist system and the international division of labor allows the specialization of an individual country in the output of certain products and for cooperation in production and the development of other economic ties. The comprehensive program for further deepening and improvement of cooperation and development of socialist economic integration of the member countries of the Council for Mutual Economic Assistance (Comecon), adopted in August 1971 at the 25th Comecon session, will assist in furthering the all-round economic closeness of these countries. The prior example set by the USSR and its unselfish aid to the other socialist countries are of great significance.
Table 1 shows the successes of socialist industrial development and its superiority over capitalist industrialization.
|Table 1. Growth of industrial in socialist and Other countries (1950 = 100)|
|World||Socialist countries||other countries|
|Developed capitalist countries||Developing countries||Total|
In 1971 the volume of industrial production of the socialist countries was approximately 14 times greater than in the same territory in 1937. The production of capitalist countries rose 4.5 times in this same period. The socialist countries accounted for approximately 39 percent of the total volume of world industrial production in 1971, with the developing countries accounting for about 7 percent and the advanced capitalist countries for about 54 percent. The industrial output of the socialist countries in 1971 was about 70 percent of the industrial production of the advanced capitalist countries. The development of industry is particularly successful in the member countries of Comecon, where the average annual growth rates of industrial production from 1961 to 1970 were 1.5 times higher than in the capitalist countries.
The continuing industrial growth of the USSR and other socialist countries is aided by the development of the modern scientific-technical revolution and the integral connection of this revolution with the superiorities of socialism.
Developing countries. Industrialization in the developing countries emphasizes the reconstruction of all sectors of the economy through introduction of industrial methods of production and modern achievements of science and technology and through creation of a national industry, thus assuring the achievement of economic independence and the transformation of the social structure of these countries. In many countries of Asia, Africa, and Latin America, precapitalist relations still persist, with an agrarian and raw material orientation of the economy and with foreign capital holding a strong position. As a result of the many centuries of domination by foreign colonialists, the level of economic development in these countries is still low.
Extractive and light industries are to a greater or lesser degree the main sectors of production in these countries. There is almost a total lack of production of the tools of labor. Industrialization of the developing countries can be carried out only with the creation of modern industry. The direction, rate, and other specific features of industrialization depend on the level of economic and cultural development, the extent of natural resources, the availability of labor reserves, the bases of energy and transportation, the capacity of the market, and the direction and degree of the growth of external economic links. Social factors also have great importance, particularly the economic policies of the government and the alignment and relationship of class forces.
Since attaining independence, the developing countries have already entered the initial stage of industrialization. In a number of countries, representatives of the national bourgeoisie have come to power, which has resulted in a capitalist orientation of industrialization. Other countries have chosen a noncapitalist path of development; that is, they have set forth on a course of construction guided by socialist principles and goals.
Industrial production in the developing countries increased 64 percent between 1963 and 1970. In scale and rate, the best results have been achieved by Egypt and India, where manufacturing industry, including heavy industry, is already taking shape. In Egypt, capital investment in industry (not including energy) during the years of the republic had exceeded E£l billion by 1969, and industry is producing about one-third of the national income. In India the development of heavy industry is concentrated in metallurgy and machine building. Industrial output increased 81 percent between 1958 and 1967. The output of steel in 1970 was 6.3 million tons, up from 1.7 million tons in 1955. Countries like Pakistan, Nigeria, Algeria, Syria, Ghana, Tanzania, and Sri Lanka are currently concentrating on light industry, although individual enterprises in metalworking, metallurgy, chemistry, and other fields are also being built. In many Asian, African, and Latin American countries, the first steps are being taken to create a modern machine-based industry.
The low level of national capital accumulation is a serious brake to the industrialization of the developing countries. They are compelled to seek foreign loans and credits and technical assistance. The imperialist powers, striving to monopolize scientific-technical achievements, are reluctant to invest capital in the industry of developing countries. However, as a result of the growing cooperation of the latter with the world socialist system, the capitalist countries have been forced to change their tactics and to construct industrial enterprises in the developing countries.
The developing countries receive large-scale and unselfish assistance from the USSR and other socialist countries for the creation of national industry. The 714 enterprises and other projects under construction or planned for construction in early 1971 in the developing countries with the technical assistance of the USSR included 31 thermal and hydroelectric stations; 14 oil extraction, oil refining, and gas enterprises; 13 coal installations; and 30 metallurgical and 55 machine-building and metalworking projects.
Industrialization in the developing countries is accompanied by a sharp class struggle. The expanding and increasingly powerful working class, with the support of all the toiling masses, is being forced to overcome the serious opposition of local feudal-landowner circles and also of the bourgeoisie, especially those elements closely linked to foreign monopolies.
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A. M. PODKOIZIN