industry


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industry

1. organized economic activity concerned with manufacture, extraction and processing of raw materials, or construction
2. a branch of commercial enterprise concerned with the output of a specified product or service

Industry

 

the most important sector of the national economy, exercising a decisive influence on the level of development of society’s productive forces. It comprises enterprises (plants, factories, mines, power stations) engaged in the production of implements of labor both for industry itself and for other economic sectors, in the extraction of raw and other materials and fuel, in energy production, in forestry, and in the further processing of industrial or agricultural products.

Industry comprises two large groups of sectors: the extraction industry and the manufacturing (processing) industry. In the USSR, the extraction industry consists of enterprises engaged in the mining of chemical raw materials, ores of ferrous and nonferrous metals and nonore raw material for metallurgy, nonmetallic ores, petroleum, gas, coal, peat, shale, salt, nonore building materials, lightweight natural aggregates, and limestone. The extraction industry also includes hydroelectric power stations, forestry enterprises, enterprises engaged in fishing and the extraction of marine products, and water supply systems. The manufacturing industry comprises enterprises producing ferrous and nonferrous metals, rolled metal products, chemical and petrochemical products, machinery and equipment, wood products and paper and pulp, cement and other building materials, light industry goods, and food products. Enterprises engaged in the repair of industrial goods and thermal electric power stations are also classified in this category.

Industry is also divided into the production of the means of production (group A) and the production of consumer goods (group B). By the accounting and planning method adopted in the USSR, some types of goods are classified entirely in group A (machine tools, equipment, ores of ferrous and nonferrous metals, mineral fertilizers, wood pulp, and the like), and others belong entirely to group B (for example, finished sewn and knitted garments, fish products for human consumption, bread and pastry, refrigerators, radios, and furniture). A number of commodities used for both production and nonproduction purposes (including electrical energy, coal, fabrics, flour, meat, and animal fat) are distributed between group A and group B according to actual use. The output of group A is further subdivided into the means and objects of labor and the means of production for group A industries (engaged in the production of the means of production) and into the means of production for group B industries (producing consumer goods).

Industry originated within the subsistence family farm, where raw material was both obtained and processed. It developed into an independent sector of social production as artisan crafts gradually became separated from agriculture. Artisan crafts played an important economic role in antiquity and particularly in the feudal period. In many countries the transformation of industry into a special sphere of social labor was linked to the rise of feudal cities, which became the trade and industrial centers for vast areas.

The emergence and development of capitalism stimulated a rapid growth of industry and profound changes in industrial production. As it developed, capitalist industry went through three stages: simple capitalist cooperation, industry based on manual artisan techniques (manufactures), and large-scale machine industry (factories). The shift from manufactures to large-scale machine industry was caused by the industrial revolution, which occurred in Great Britain between the 1760’s and the first quarter of the 19th century and later in other countries. By the turn of the 20th century large-scale machine industry had become the dominant form of industrial production in many countries. It developed especially rapidly in the USA and Germany, both of which surpassed Great Britain in the growth rate and amount of industrial output by the early 20th century.

In Russia, where industry essentially bypassed the guild system, several types of manufactures emerged—state, private, and manorial. Russian industry embarked on the path of large-scale capitalist production much later than many other European countries. The shift from manufactures to large-scale capitalist industry was retarded by the long ascendancy of feudal relations. In Russia the industrial revolution began in the first half of the 19th century and ended between the late 1870’s and early 1880’s. After serfdom was abolished in 1861, the rate of industrial

Table 1. Growth rates of the gross industrial output of the USSR (1913 = 1)
 19281940196019701974
Gross output of all industry................................1.37.740.391.5121.9
Production of the means of production (group A).............1.613.489.4213.6288.2
Production of consumer goods (group B)......................1.24.61530.439.2
Fuel Industry............................1.516.422.741.151.4
Ferrous metallurgy.......................0.975.827.553.364.7
Chemical and petrochemical industry......1.4817.5134468697
Machine building and metalworking........1.7529.62688401,308
Light industry............1.444.713.122.326.5
Food industry............0.9993.88.616.219.9

development increased sharply. In the last 40 years of the 19th century the volume of industrial output increased more than seven times.

High rates of industrial growth were also characteristic of the early 20th century. Between 1898 and 1908 the volume of all industrial production increased 73 percent. In manufacturing the volume of output more than tripled in the first 13 years of the 20th century. Moreover, the level of concentration of industrial production, based on the number of workers, was significantly higher than anywhere else in the world. In 1910, 53.5 percent of all Russian workers were employed at large enterprises with more than 500 workers, as compared to about 30 percent in the USA.

Because it accelerated the centralization of capital and the monopolization of industry through the creation of large syndicates and joint-stock companies, the concentration of production contributed to the relatively high rate of industrial development in Russia before World War I. However, although certain enterprises were well equipped and organized, the technical level of industry as a whole remained low. The industrial structure was underdeveloped, and serious disproportions and contradictions made the Russian economy greatly dependent on foreign capital.

Before World War I the share of various industrial sectors in the total volume of industrial output was as follows: electric power, 0.3 percent; coal, 1.8 percent; ferrous metallurgy, 4.6 percent; metalworking, 8.9 percent (with machine building and repair plants accounting for 5.7 percent); chemicals, 2.8 percent; textiles, 21.6 percent; and food, 35.7 percent.

Agricultural commodities and products of the food and condiments industries accounted for more than 75 percent of Russian exports, and the share of the manufacturing sectors of heavy industry was negligible. Production goods constituted roughly two-thirds of all imports. Prerevolutionary Russia imported machine tools, machinery, boilers, motors, railroad cars, motor vehicles, chemicals, refractory materials, wire, paper and paper products, ferrous and nonferrous metals, and raw material for light industry.

The distribution of Russian industry was extremely uneven, and great distances lay between manufacturing centers and their sources of raw material. By 1914 the major industrial regions were the Central Industrial, Ural, Donets-Dnieper, St. Petersburg, Baltic, and Baku regions. Industry had also developed in the southwestern Ukraine and the Volga Region. Only small industrial centers existed in the rest of the country. Before World War I the entire Asian part of the country accounted for less than 3.5 percent of the gross industrial output.

Although it had an average level of capitalist development, Russia was 50 to 100 years behind the main capitalist countries in its technology. In 1913, Russia held fifth place in the world in volume of industrial output. Russian industry produced eight times less than the USA, 3.5 times less than Germany, three times less than Great Britain, and 1.5 times less than France. The technological backwardness of prerevolutionary Russia was overcome in a very short time after the formation of the USSR.

USSR industry. The Great October Socialist Revolution marked the beginning of socialist industry. Compared to capitalist industry, its main distinguishing features are social ownership of the means of production (which gives rise to new production relations), active participation by the working masses in industrial management, and fundamentally different goals of production—the maximum satisfaction of the material and nonmaterial needs of the people. Soviet industry, like the entire national economy, is characterized by planned development, a consciously established proportionality, and high, stable growth rates that reflect the operation of the economic laws of socialism and the fundamental advantages of the socialist mode of production. USSR industry plays a decisive role in the creation of the material and technical basis for communism and in the rapid industrialization of all sectors of social production on the basis of modern machine technology. Industry accounts for

Table 2. Output of leading industrial products in the USSR
 191319281940196019701974
Electricity (billion kW-hr) ..................2.05.048.6292741975
Steel (million tons) ......................4.34.318.365.3116136
 0.33.245.3198261
Petroleum, including gas condensate (million tons) . .10.311.631.1148353459
Coal (million tons).......................29.235.5166510624684
Cement (million tons) ....................1.81.85.745.595.2115
Metalcutting machine tools (units) ............1,8002,00058,400156,000202,000224,000
 100840145,000524,000916,0001,846,000
Tractors (units) ........................1,30031,600239,000459,000531,000
Mineral fertilizers, in standard units (million tons) …0.090.13.213.955.480.3
Plastics and synthetic resins (tons)............30010,900312,0001,673,0002,491,000
Chemical fibers and threads (tons) ............20011,100211,000623,000887,000
Fabrics of all types (million sqm)..............2,1942,1983,3006,6368,8529,825
Leather footwear (million pairs) ..............6858211419679684
Granulated sugar (tons)...................1,363,0001,283,0002,165,0006,363,00010,221,0009,447,000
Radios and radio-phonographs (units)..........3,000160,0004,165,0007,815,0008,753,000
Television sets (units) ....................3001,726,0006,682,0006,570,000
Refrigerators (units) .....................3,500529,0004,140,0005,442,000
Table 3. Structure of USSR Industry, showing share of a particular sector in the overall industrial output (percent)
 196019701974
All industry.............100100100
Electric power................2.42.92.9
Fuel .........................7.76.25.8
Chemical and petrochemical..........3.966.7
Machine building and metalworking .....16.62326.9
Lumber, woodworking, and pulp-and-paper6.95.24.7
Building materials.................44.14.1
Light industry ...................22.51715.1
Food industry ...................25.421.219.6

more than half of the USSR’s national income, and its share of aggregate social product was 63.7 percent in 1973, as compared to 45.1 percent in 1928.

The development of Soviet industry has been inseparably linked to the growth of the state sector of the economy. The devastation brought on by the Civil War and military intervention of 1918–20 resulted in a sharp decline in the country’s industrial potential. The number of workers and the output decreased. In 1920 the volume of industrial output was less than one third that of 1917. After the Civil War and military intervention the state directed its efforts toward accomplishing the main task of the revolution—the building of a socialist society. In December 1920, on the initiative of V. I. Lenin, the GOELRO Plan (State Plan for the Electrification of Russia) was discussed and approved at the Eighth Congress of Soviets. This was actually the first comprehensive and long-range scientific plan for developing the Soviet economy. It encompassed not only the power industry but all the leading economic sectors and outlined essential changes in the location of industry.

Table 4. Growth of fixed productive assets assets in USSR industry1 (as percentage of 1913)
 Growth rate
1 End of year
1913 ....................................100
1940 ....................................689
1960 ....................................2.925
1970 ....................................7.493
1974 ....................................10 269

The New Economic Policy (NEP) was a continuation and elaboration of Lenin’s plan, outlined in the spring of 1918, to establish the foundations of a socialist economy. From the very first years of the NEP there was a marked growth of industrial output. Between 1921 and 1923 the volume of industrial output virtually doubled. The successful development of industry made it possible to overcome the fuel crisis, establish a reliable transportation system, and expand the commodity turnover between cities and the countryside. In 1926 the output of large-scale industry as a whole surpassed the prewar level by 8 percent, and the production of electricity was up 80 percent.

Table 5. Distribution of fixed productive assets in USSR industry by sector’ (percent)
 19401950196019701974
11940, 1950 at year’s end; 1960, 1970. and 1974 on January 1. Data for 1960–74 are given for enterprises with independent budget, 2Chemical industry
Total fixed productive assets in industry .................100100100100100
Electric power ................................8.99.311.915.816
Fuel industry.................................10615.71713.512.7
Ferrous metallurgy .............................8.58.79.610.39.9
Chemical and petrochemical industry .................7.35.44.928.79.4
Machine building and metalworking...................28.127.720.319.721
Lumber, woodworking, and pulp-and-paper .............6.16.45.954.9
Building materials industry ........................3.74.15.36.26.1
Glass and china industry..........................0.80.60.60.50.5
Light industry.................................7.34.74.54.54.6
Food industry ................................11.19.19.18.68.3

The main objective of further industrial development was to increase the industrial potential of the USSR, raise the technical level of production, and above all strengthen the country’s machine-building industry. The Fourteenth Party Congress, held in 1925, adopted a resolution on the socialist industrialization of the country. The development of industry had an increasingly strong progressive influence on the entire course of socialist construction. V. I. Lenin noted the special role played by industry in the creation of the new social order and in the socialist transformation of other economic sectors. He stressed that “a large-scale machine industry capable of reorganizing agriculture is the only material basis that is possible for socialism” (Poln. sobr. soch., 5th ed., vol. 44, p. 9).

Beginning with the 1928–29 fiscal year the Soviet economy developed on the basis of five-year plans. As the result of fulfilling the first five-year plans, the USSR’s industrial output on the eve of World War II was the largest in Europe and the second largest in the world.

In 1940 the gross industrial output was 7.7 times that of 1913. During this period the production of electricity had increased 24 times, petroleum extraction three times, iron ore mining 3.2 times, pig iron production 3.5 times, steel production 4.3 times, and the manufacture of metalcutting machine tools 32 times. Fundamental changes had taken place in the economic structure of the national economy, and proportions typical of highly developed industrial countries had evolved. Great progressive changes occurred in the technology and organization of production. The industrialization of the country created the essential prerequisites for the fundamental socialist transformation of agriculture and for carrying out a cultural revolution. It assured the victory of socialism in the USSR. The creation of a large-scale industrial potential also played a decisive role in bolstering the country’s defense capability and in providing equipment and materials for defense industry enterprises.

The Great Patriotic War required that the entire national economy be placed on a war footing. Some industries were moved to the eastern regions of the country, where defense enterprises were built in record time. The war caused great damage to the Soviet economy. The country lost roughly 30 percent of its national wealth. The fascist German aggressors destroyed 31,850 industrial enterprises and put out of commission metallurgical plants that before the war had produced about 60 percent of the country’s steel and mines that had produced more than 60 percent of its coal. In 1945 the gross industrial output of the USSR was 92 percent of the 1940 output.

The postwar reconstruction of industry was completed as early as 1946. In 1948 industrial output exceeded the 1940 level by 18 percent, and in 1950 the output increased by 73 percent. In subsequent years industry continued to develop rapidly. Its structure changed considerably, the technical level of production rose, and the number of workers, technicians, and engineers increased, as well as their qualifications. Economic development was intensified by accelerating technological progress and improving the intersectorial and intrasectorial proportions of industrial production. New kinds of machines, equipment, and materials were developed and introduced, and measures were adopted to use productive resources more efficiently and to satisfy as fully as possible the country’s needs for high-quality goods.

Table 6. Share of eastern regions of the USSR in production of selected products1 (percent)
 19401950196019701973
1Totals for regions east of the Urals include data for Western Siberia, Eastern Siberia, the Far East, Middle Asia, and Kazakhstan
Electricity ....................................21.737.338.437.938.3
Steel .......................................31.451.942.441.543.3
Petroleum, including gas condensate...................6.314.99.624.937.4
Gas ........................................0.69.33.530.940.7
Coal........................................35.94746.750.652.5
Cement......................................19.525.734.434.534.9
Metalcutting machine tools .........................7.120.21412.213.1
Tractors (units).................................27.126.62119.621.4
Mineral fertilizers (standard units) .....................31.541.140.527.529.7
Lumber......................................3632.63840.641.5
Paper .......................................19.426.429.427.928
Cardboard....................................3.88.810.921.224.3
Fabrics     
Cotton.....................................3.87.18.39.19.4
Wool ......................................2.34.33.75.77.8
Silk.......................................8.212.39.715.920.4
Leather footwear................................10.316.32021.521.8
Radios and radio-phonographs ......................31.849.540.533.8
Household refrigerators ...........................2.338.434.8

For a long time group A grew at a considerably faster rate than group B. This was dictated by the necessity of establishing a strong material and technical base for the national economy and developing all aspects of heavy industry. As a result, the share of group A in the gross industrial output grew from 35.1 percent in 1913 to 61.2 percent in 1940, reaching 74 percent in 1974. Meanwhile, as the productive potential grew, it became possible to bring the growth rates of the two groups much closer together in response to the concrete needs and real conditions of the current period. Between 1961 and 1965 the production of the means of production grew by an average of 9.6 percent annually and the production of consumer goods by 6.3 percent. Between 1966 and 1970 the growth rates were 8.6 and 8.4 percent, respectively. The convergence of the growth rates of groups A and B is consistent with the party and state’s general policy of accelerating the development of the production of means of production. Heavy industry has been and remains the basis of the country’s economic strength and the growth of the people’s prosperity.

Table 1 shows the growth rate of the gross industrial output for USSR industry as a whole and for its main sectors, and Table 2 shows the increase in output of the leading industrial products.

The USSR’s share of the world industrial output is steadily growing. Whereas in 1913, Russia’s share was slightly more than 4 percent, in 1937 it was almost 10 percent and in 1974 it was one fifth (the population of the USSR is 6.5 percent of the

Table 7. Growth rates of gross industrial output by Union republic (1913 = 1)
 19401950196019701974
USSR-all industry ...........7.713.3240.3292122
RSFSR...................8.7154392122
Ukrainian SSR ..............7.38.4276180
Byelorussian SSR............8.19.334101150
Uzbek SSR ................4.78.6204056
Kazakh SSR ............7.81857146196
Georgian SSR ..............10164085107
Azerbaijan SSR .............5.98.3173345
Lithuanian SSR..............2.64.92780110
Moldavian SSR..............5.81252146206
Latvian SSR................0.92.8102633
Kirghiz SSR................9.92161188265
TadzhikSSR ...............8.8133887111
Armenian SSR ..............8.72268184244
Turkmen SSR...............6.79.6224562
Estonian SSR...............1.34.3153546

world total). The USSR’s share of the world output of leading industrial products is also steadily increasing. For example, in 1913, Russia’s steel output was 14 percent of the US output and considerably less than that of Germany, Great Britain, or France. In 1974, USSR steel production was 100.9 percent of the US output and far surpassed production in Great Britain, France, the Federal Republic of Germany, and Italy taken together.

Table 8. Average annual growth rate of industrial production in other socialist countries, 1951–74 (percent)
1 1963–74 21956–74 31950–74 4Data not available since 1960
Albania...........13.7
Bulgaria ..........12.4
Cuba ............4.41
Czechoslovakia .....8.1
Democratic Republic of Vietnam .......14.32
German Democratic Republic ........8.4
Hungary..........8.3
Mongolian People’s Republic......10.3
People’s Democratic Republic of Korea ...15.83
People’s Republic of China ......4
Poland.........10.3
Rumania .......12.9
Yugoslavia......9.1

The growth rate of industrial production in the USSR is much higher than in the advanced capitalist countries, including the USA. Between 1951 and 1974 the average annual growth rate of industrial production was 9.7 percent in the USSR and 4.4 percent in the USA. In 1974 the volume of the USSR’s industrial output was roughly 80 percent of that of the USA; in 1913, Russia’s output had been 12.5 percent of US production. The absolute increase in certain major industrial goods has been greater in the USSR than in the USA since the 1950’s (and the group of such goods is expanding). The per capita industrial output is also growing in the USSR. Compared to 1913, the per capita output increased 6.5 times in 1940, 11.8 times in 1950, 30 times in 1960, 60 times in 1970, and 77 times in 1974.

The growth in the volume of industrial output is accompanied by an expanding social division of labor, which is reflected in the development of the sectoral structure of industry—in the composition of the sectors and the relationships between them. The most highly consolidated sectoral structure of industry, the structure that has been adopted in USSR statistics, includes 16 composite sectors.

The consolidated- industrial sectors may, in turn, be subdivided into sectors and types of production with a more detailed and concrete designation of the goods produced by their

Table 9. Growth in the socialist countries’ share of world industrial output
1917 ..................................less than 3%
1922 ..................................about 1%
1937 ..................................less than 10%
1950 ..................................about 20%
1974 ..................................about 40%

enterprises. For example, the fuel industry consists of sectors that include enterprises of the petroleum-extraction, petroleum-refining, gas, coal, shale, and peat industries. The food industry encompasses enterprises of the meat, milk, butter and cheese, baking, confectionery, oil and fat, vodka, wine, beer, fruit and vegetable, tea, and salt sectors. (The sectoral structure of industry is given in Table 3.)

A characteristic feature of the USSR’s present industrial structure is the existence of large complexes of sectors producing both the means of production and consumer goods and sectors that include both extraction and manufacturing enterprises. During the years of Soviet power a number of new sectors have been established, among them the manufacture of motor vehicles, aircraft, and tractors, electrical engineering, radio engineering, instrument-making, petroleum refining, and the production of gas, plastics, synthetic rubber, and artificial and synthetic fibers. The 1960’s and 1970’s saw the rapid development of such ultramodern sectors of industry as the atomic, electronics, aerospace, laser, and superpure metals sectors, as well as the production of equipment for mining the sea and ocean floor and environmental protection equipment.

The industrial structure is being improved chiefly through the more rapid development of the sectors that directly affect technical progress in the entire economy and that are linked to the appearance of new types of energy, materials, implements of labor, and technological processes. These sectors are the electric power, machine-building, chemical, and petrochemical industries. Because of their faster growth, these sectors are accounting for an increasing share of the industrial output. The structural changes that have occurred in USSR industry may also be seen from the development of the USSR’s energy base. Whereas in 1940 the share of petroleum and gas in the total fuel output was 20.6 percent, in 1960 it was 38.4 percent, rising to 60.1 percent in 1970 and 63.1 percentin 1973.

In 1974 some 49,000 industrial enterprises had independent budgets, and their industrial and clerical workers accounted for 33 percent of the total number of such workers in the national economy. Between 1918 and 1974 more than 43,000 large state industrial enterprises were either built or rebuilt and put into operation in the USSR. The value of fixed productive assets in industry rose 15 times between 1940 and 1974. On Jan. 1, 1975, it was 353 billion rubles (in current prices), or roughly half of the fixed productive assets of the entire economy (see Table 4).

The technical level of the industrial production apparatus of the USSR may be characterized by the sectoral structure of industry’s fixed productive assets (see Table 5).

The value of fixed productive assets in heavy industry grew especially rapidly, which led to changes in the structure of fixed productive assets for industry as a whole. The most active part of fixed assets, machinery and equipment, was quickly modernized. Capital investments in industry also grew. From 1918 to 1973 capital investment from all sources of financing totaled 462.1 billion rubles, of which 434 billion rubles had been allocated since 1946. Capital investment in the petroleum-extraction, gas, oil-refining, chemical, lumber, and pulp and paper industries, as well as ferrous and nonferrous metallurgy, has increased rapidly.

The technical level of all sectors of Soviet industry is rising in accordance with scientific planning. Today, technological development involves the electrification of production, the introduction of chemical processes in production, and the comprehensive mechanization and automation of technological processes. The rate of growth of the energy-worker and electricity-worker ratios attests to the USSR’s achievements in raising the technical level of production. In 1973 these important indexes of the country’s industrial development were about six times larger than in 1940.

Modern industry is characterized by a high level of production mechanization. In addition to the increasing flow of new technology into all sectors of the national economy, there is an ever larger selection of new machines and mechanisms to supplant manual labor processes or replace obsolete machinery. The highest stage in the development of modern technology is the automatic system of machines. Automatic processes predominate in electric power engineering, in some sectors of the petroleum-refining, chemical, petrochemical, and food industries, and in the building materials industry. The introduction of highly sophisticated automatic control systems is being stepped up. Cybernetics and electronic computer and control systems are being used extensively.

The objective conditions for the development of production made the introduction of chemical processes a primary task. The use of chemical products and synthetic materials permits

Table 10. Production of selected industrial goods in other socialist countries
 1950196019701974
Production of electricity (billion kW-hr)
Albania..............0.020.21
Bulgaria .............0.84.719.522.8
Cuba ...............1.2346.1
Czechoslovakia ........9.324.545.256
Democratic Republic of Vietnam ..........0.30.6
German Democratic Republic19.540.367.780.3
Hungary.............37.614.518.9
Mongolian People’s Republic0.020.10.50.7
People’s Democratic Republic of Korea......4.69.116.5-
People’s Republic of China .4.558.574100
Poland ..............9.429.364.591.6
Rumania.............2.17.735.149.3
Yugoslavia ...........2.48.92639.5
Coal mining (million tons)
Albania..............0.040.30.6
Bulgaria .............5.91629.224.3
Czechoslovakia ........4584.3109.5110.1
Democratic Republic of Vietnam ..........2.62.5
German Democratic Republic140228.2261.6244.1
Hungary.............13.326.527.825.8
Mongolian People’s Republic0.30.622.5
People’s Democratic Republic of Korea......410.627.5
People’s Republic of China .42.9425300330
Poland..............82.8113.8172.9201.8
Rumania.............3.26.820.526.9
Yugoslavia ...........12.822.728.433.6
Steel production (million tons)
Bulgaria .............0.010.31.82.2
Czechoslovakia ........3.16.811.513.6
German Democratic Republic1.33.75.16.2
Hungary.............11.93.13.5
People’s Republic of China .0.6181726
Poland ..............2.56.711.814.6
Rumania.............0.61.86.58.8
Yugoslavia ...........0.41.42.22.8
Motor vehicle production (units)
Bulgaria .............10,90018,800
Czechoslovakia ........31,40075,300171,700204,100
German Democratic Republic8,20077,400153,400191,100
Hungary.............2,9004,4009,80011,700
Poland ..............80036,400118,000216,100
Rumania.............12,10066,900113,100
Yugoslavia ...........80015,900127,400181,800
Table 11. Share of the advanced capitalist countries in the industrial production and population of the nonsocialist world (percent)
 1950196019701973
Industrial production92908988
Population .........34.5322928

the fundamental transformation of leading spheres of material production in short periods of time with minimum expenditures. The introduction of new production facilities and the intensified operation of existing production facilities made it possible to increase the output of chemical products 3.6 times between 1963 and 1973, while the overall industrial output grew 2.3 times. The production of synthetic resins and plastics increased 3.9 times during this period; the chemical fiber output rose 4.6 times; and the output of mineral fertilizers increased 3.7 times.

The development of mass production and an increase in the concentration of production are extremely important economic prerequisites for accelerating technical progress. From the very first days of Soviet power the industrial production apparatus was rebuilt and developed through the planned concentration of production. By 1935 two-thirds of the gross output of the USSR’s metalworking industry was being produced by enterprises constituting only 2.5 percent of the total number of enterprises in this sector. Half of the country’s metalworkers were employed by these large enterprises. In 1973, 99.5 percent of all industrial output was produced at enterprises with an annual output valued at more than 500,000 rubles. That year 16.2 percent of all industrial enterprises produced 77.3 percent of the gross output, and 3.2 percent of the enterprises produced 45.6 percent of the output. Moreover, these enterprises employed 64.3 percent and 31.9 percent, respectively, of the total number of industrial production personnel.

New technology and an expanding scale of production stimulated greater concentration and the development of specialization, cooperation, and integration—all progressive ways of organizing modern industrial production. The specific type of specialization and cooperation adopted by enterprises depends on the characteristics of each industrial sector. In machine building, for example, cooperation depends on the development of specialization by part and by production process.

The high degree of social division of labor and cooperation in socialist industry require improved production management in which the sectoral principle of management is combined with the territorial principle, as well as with the intersectoral tasks of developing the national economy as a whole and the economies of the country’s republics and regions. In this respect the formation of production associations is very important: They enable new machinery, progressive technology, and rational ways of organizing production to be introduced more successfully. They also make it possible to improve the quality and assortment of goods and to use labor, materials, and financial resources more efficiently.

The enormous growth in the scale of industrial production in the USSR, the introduction of new enterprises, and the modernization of old ones have been accompanied by a systematic increase in industrial production personnel, who numbered 4,339,000 in 1928 and 33,370,000 in 1974. The general structural changes in industry were reflected in changes in the distribution of labor among particular sectors and types of production. An important result of the industrial development of the USSR is the training of a highly skilled technical intelligentsia. In 1973,

Table 12. Average annual growth rate of industrial production in the leading capitalist countries, 1961–74 (percent)
Canada ..........6.2
Federal Republic of Germany.......5
France...........5.4
Great Britain .......2.5
Italy .............6.3
Japan ............11.3
Netherlands ........6.4
Sweden...........5.7
USA .............4.6

USSR industry had 177 specialists with a higher or secondary specialized education per 1,000 production workers as compared to 109 in 1965.

The technical modernization of Soviet industry, the higher qualifications of workers, and the scientific organization of production created the prerequisites for high growth rates of labor productivity. Compared to 1928, the productivity of persons employed in USSR industry had increased 3.1 times by 1940, 4.5 times by 1950, 9.3 times by 1960, 15.4 times by 1970, and 19.5 times by 1974. Labor productivity accounts for a growing proportion of the increase in industrial output. In labor productivity, the USSR has overtaken the main European capitalist countries and has significantly reduced the gap between it and the USA. From 1951 to 1973 the average annual growth rate of labor productivity in USSR industry was 6.2 percent, as compared to 3.3 in the USA.

USSR industry has a vast raw material base. Natural resources continue to occupy the principal place in the raw material base, although synthetic and manmade materials that replace natural raw materials or extend their use are becoming increasingly important. At the same time, there has been a decrease in the proportion of agricultural and forest raw material.

During the five-year plans USSR industry has spread into new regions (see Table 6).

Industrialization has affected all the Union republics without exception. During the years of Soviet power they have been transformed into highly developed industrial regions actively participating in the nationwide division of labor. The growth of industry in the Union republics has promoted the comprehensive development of their economies and a steady rise in the living standard and cultural level of the population. (Table 7 shows the dynamics of industrial development in the Union republics.)

Table 13. Share of selected countries in the industrial output of the advanced capitalist countries (percent)
Canada ........................3.43.63.8
Federal Republic of Germany...........9.89.99.4
France.........................5.55.65.9
Great Britain .....................10.17.66.9
Italy...........................3.43.93.9
Japan ..........................4.89.810.8
Netherlands......................1.31.51.6
Sweden ........................1.41.51.5
USA...........................50.847.246.2

Industry will hold its leading place in the economic system of the USSR as it develops in the future. The chief task of industry is to further expand and improve the industrial base of the socialist economy. Industry plays a decisive role in the successful application of the advances of the scientific and technological revolution in all spheres of material production and services by creating highly efficient implements and objects of labor and by introducing progressive technological processes and organizational systems. This ensures a more rapid growth in the productivity of social labor and the full satisfaction of the needs of the Soviet people.

A. N. EFIMOV

Other socialist countries. The level of industrial development in the European and Asian countries that adopted socialism after World War II varied. The German Democratic Republic (GDR) and Czechoslovakia had a much more highly developed industry than Poland, Rumania, Hungary, Bulgaria, and Yugoslavia. Albania, the Democratic Republic of Vietnam, and Mongolia had virtually no industry at all. After the victory of people’s power, industry began to develop rapidly in these countries (see Table 8).

The high industrial growth rates in the socialist countries and the growth in the number of such countries led to an increase in their share of world industrial output (see Table 9).

Advances have been especially significant in the development of such sectors as electrical engineering, machine building, and the chemical industry. In certain socialist countries

Table 14. Share of selected sectors in the industrial output of the advanced capitalist countries1 (percent of total)
 195819631972
According to 1974 UN classification
Extraction.................7.264.6
Manufacturing.................92.89495.4
Electricity, gas, and water.................6.46.88.4
Metallurgy.................7.67.47
Machine building.................30 732.533.2
Chemical.................10.51215.8
Woodworking.................3.53.33.1
Paper and printing.................7 67.36.8
Building materials.................3.93.93.6
Textiles.................5.14.84.1
Clothing and footwear.................4.64.23.1
Food and condiments.................11.810.59.1

these sectors were essentially established for the first time. (Table 10 shows the growth in industrial output.)

Industry is growing especially rapidly in the countries belonging to the Council for Mutual Economic Assistance (COMECON). Between 1949 and 1974 industrial production in these countries increased 11.4 times, as compared to four times in the capitalist countries. Of great importance are the joint efforts of the COMECON countries to build and operate industrial installations, develop production specialization and cooperation, expand the international socialist division of labor, and integrate their national economies into a single well-coordinated economic body operating in the common interest of all the countries of the socialist community.

Capitalist countries. World War I greatly undermined the industry of the warring countries of Europe. By contrast, industry in the USA underwent a period of swift growth. Between 1915 and 1918, US industrial output increased by about 40 percent. French industry regained its prewar level only in 1924; German industry, in 1927; and British industry, in 1935. The world economic crisis that began in 1929 was accompanied by a sharp decline in industrial production in the capitalist countries. In 1932 industrial production in the USA was 54 percent of the 1929 level; in Great Britain, 84 percent; in France, 75 percent; in Germany, 59 percent; and in Italy, 67 percent. From 1933 to 1939 the economic development of the capitalist countries was characterized by instability, a series of declines and short-term revivals. Only in Germany and Japan, which were preparing for another war, was there a marked growth in production, primarily in the military sectors.

World War II dealt a powerful blow to the industry of the European countries and Japan. But for US industry the war was a period of unprecedented growth. From 1920 to 1939 industrial production in the USA had increased at an average rate of 2.2 percent a year. In 1940 it grew to 15 percent (compared with the preceding year); in 1941, 26 percent; in 1942, 16 percent; and in 1943, 21 percent. The war intensified the unequal industrial development of the capitalist countries. In the first postwar years the USA accounted for more than half of the industrial output of the entire capitalist world. Later this proportion decreased, but even in 1974 the USA produced two-fifths of the industrial output of the nonsocialist countries and about half of the output of the advanced capitalist countries.

The advanced capitalist countries dominate the industrial output of the nonsocialist world (Table 11).

Under capitalist conditions economic integration is inseparable from the activity of monopolies, which make use of various international economic alliances to facilitate the export of capital and goods, to circumvent government regulations, and ultimately to obtain maximum profits.

Despite the enormous opportunities created by the scientific and technological revolution, the average annual growth rate of industrial production in the advanced capitalist countries between 1951 and 1974 was barely half that of the socialist countries. The rates vary from one country to another (see Table 12).

The uneven development has caused major changes in the level of production and in the share of various countries in the industrial output of the advanced capitalist countries (see Table 13).

One of the most important consequences of scientific and technological progress and of the greater social division of labor is an enormous growth in the number of sectors (groups of industries) and individual industries. According to UN statistics published in the early 1960’s, industrial production includes 12, 470 commodity groups divided among 740 industrial sectors. But the growth rates of various sectors differ greatly.

Table 15. Production of selected industrial goods in the advanced capitalist countries
 19501960197019741
1 Production of synthetic resins and plastics and of chemical fibers given for 1973
Gross output of electricity (billion kW-hr)
Canada55.9116.2207.8283
Federal Republic of Germany46.2116.4237.2308
France34.675.1146.8185
Great Britain67.2137248.6270
Italy24.756.2117.4148
Japan44.9111.9352.9466
USA408.4889.51,731.72,100
Extraction of commercial coal (million tons)
Canada17.41015.121
Federal Republic of Germany201.6238.4219220
France52.558.240.125
Great Britain219.8196.7144.6100
Italy1.81.51.71.5
Japan39.752.539.919
USA508.4394555.6541
Steel production (million tons)
Canada.3 15.311.2
Federal Republic of Germany1434.14553.2
France8.717.323.827
Great Britain16624.728322 5
Italy2.48.217.323.9
Japan4.822.193.3117.1
USA9092.1122135
Motor vehicle production (million units)
Canada0.40.41.21.5
Federal Republic of Germany0.32.13.83.1
France0.41.42.753.5
Great Britain0.81.82.11.9
Italy0.10.61.91.9
Japan0.030.55.36.5
USA87.98.210.3
Production of synthetic resins and plastics (tons)
Federal Republic of Germany84,000964,0004,360,0006,430,000
France33,000347,0001,518,0002,470,000
Great Britain157,000558,0001,448,0001,886,000
Italy24,000456,0001,527,0002,540,000
Japan18,000559,0005,117,0006,535,000
USA1,043,0002,850,0008,714,00012,746,000
Production of chemical fibers (tons)
Federal Republic of Germany163,000282,000693,000780,000
France83,000164,000306,000390,000
Great Britain168,000266,000599,000650,000
Italy104,000196,000411,000470 000
Japan115,000551,0001,517,0001,650,000
USA627.000774,0002,250,0003,300,00

thereby causing major changes in the sectoral structure of industrial production.

In the second half of the 19th century the most important sectors of industry were textiles, metallurgy, and railroad machine building. Since the first third of the 20th century the automotive industry, electric power production, power machine building, and the chemical industry have predominated. After World War II such sectors as the atomic, electronics, aerospace, petrochemical, and pharmaceutical industries became extremely important. The decisive role in assuring scientific and technological progress and in raising labor productivity belongs to electric power engineering, machine building, and the chemical industry which, through the scale and structure of their production, determine the rate and nature of the technical modernization of all national economic sectors. In 1972 these sectors accounted for 57.4 percent of all industrial output in the advanced capitalist countries (see Table 14).

The internal structure of industrial sectors is also changing. For example, in electric power engineering the share of energy produced at nuclear power stations is growing. In metallurgy the proportion of converter steel, rolled products subjected to heat treatment, light metals, and alloys is increasing. In machine building, electronics, the aerospace industry, and laser technology are becoming more important. The chemical industry is producing a larger proportion of chemical fibers, synthetic resins and plastics, and synthetic rubber. In the consumer goods industry knitted goods and electrical appliances account for a larger share of the output. The extraction industry’s share of the industrial output has decreased. The advanced capitalist countries prefer to import cheap raw material rather than develop the extraction sectors, which are capital-intensive and have a high capital-output ratio. (The output of the leading industrial goods is shown in Table 15.)

Developing countries. Domination by the imperialist states was the chief cause of the economic backwardness of the colonies and the weak development or complete lack of industry in these countries. After World War II many colonies gained their political independence and began to establish national industries. Between 1950 and 1973 the growth rate of industrial production in the developing countries was 1.5 times greater than that of the advanced capitalist countries. Nevertheless, these countries remained far behind the advanced capitalist countries in industrial output (see Table 16).

The backward sectoral structure of industry in the colonies was to a large extent responsible for their dependent position. The colonial countries were raw material appendages of the advanced capitalist countries, which pumped industrial and agricultural raw material (petroleum, copper, bauxite, tin, natural rubber, cotton) from the colonies at low prices. Only in a few countries, notably India and Pakistan, was the textile industry relatively well developed.

With the abolition of the colonial system, the industrial output of the developing countries increased, as did their share of the industrial output of the nonsocialist world. But this share is

Table 16. Share of the developing countries in the industrial production and population of the nonsocialist world (percent)
 1950196019701973
Industrial production8101112
Population .........65677172

increasing very slowly, especially when the high rate of population growth in the developing countries is taken into account. In 1973 the per capita industrial output in the developing countries was 16 times lower than in the advanced capitalist countries. As industrial production increases, the sectoral structure of industry is improved. Industry in India, Peru, Mexico, Brazil, Argentina, and Zaire is developing rapidly.

IA. A. IOFFE

REFERENCES

Marx, K. Kapital, vol. I. In K. Marx and F. Engels, Soch. 2nd ed. vol 23, chs. 11, 12, 13.
Lenin, V. I. Razvitie kapitalizma v Rossii. In Poln. sobr. soch., 5th ed vol 3, chs. 5, 6, 7.
Lenin, V. I. Imperializm, kak vysshaia stadiia kapitalizma. Ibid., vol. 27.
Lenin, V. I. Ocherednye zadachi Sovetskoivlasti. Ibid., vol. 36.
Lenin, V. I. “Velikii pochin.” Ibid., vol. 39.
Lenin, V. I. “Ekonomika i politika v epokhu diktatury proletariata.” Ibid.
Materialy XXIV s”ezda KPSS. Moscow, 1971.
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Kapitalisticheskie strany v 1913, 1920–1936 gg.: Statistich. sbornik, vol. 1. Moscow, 1937.
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Mir sotsializmav tsifrakh ifaktakh, 1973 g: Spravochnik. Moscow, 1974. SSSR v tsifrakh v 1973 g. Moscow, 1974.
Efimov, A. N. Ekonomika i planirovanie sovetskoi promyshlennosti. Moscow, 1970.
Ekonomicheskaia zhizn’ SSSR: Khronika sobytii ifaktov, 2nd ed. vols. 1–2. Moscow, 1967.
Liashchenko, P. I. Istoriia narodnogo khoziaistva SSSR, 4th ed., vols. 1–2. [Noplace] 1956.
Drobizhev, V. Z., I. D. Koval’chenko, and A. V. Murav’ev. Istoricheskaia geografiia SSSR. Moscow, 1973.
Ekonomika promyshlennogo proizvodstva. Edited by A. I. Demichev. Moscow, 1973.
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