(History) Russian Economic Miracle. Stalin's Economy

[Russian Bear]

The Russian economic miracle that everyone is silent about. Stalin's economy

Source: https://youtube.com/watch?v=f9p20dxtTkY

As is well known, the USSR suffered the greatest losses in World War II. Then Hitler's European Union marched across the country to the capital, destroying everything in its path. Later, when the Nazis' backs were broken, and the victory salutes had just died down, in 1946 the same West, only now under the leadership of the USA, not Hitler, declared another war. The Cold War. Because no one in their right mind would have thought of fighting the Soviet Army.

That is, our country was still in ruins, and the West again rose up against Russia. And now it is almost impossible to imagine such a thing, but during this difficult time in the Soviet Union from 1947 to 1953, i.e. until Stalin's death, every spring the prices of consumer goods were reduced. This was not just a temporary proposal or a pre-election PR campaign, but a government decree that was immediately implemented.

Look at the front page of the Soviet newspaper “Pulse” from April 2, 1953.


The Pulse newspaper, April 2, 1953

Here they write about a new decree on price reduction, provide a list of goods and percentages by which the cost will be reduced.

By the way, this was one of the largest reductions from 5 to 50%.

➡️ Wine, knitwear and furniture fell by 5%,
➡️ and refrigerators, socks and tools - by 20%.
➡️ And absolutely fantastically for us today, gasoline has become 25% cheaper. ➡️ Vegetables beat everyone, the price of which fell by 50%.

This seems incredible if you remember how dynamically prices in stores are growing today.

And as a climax - the obligatory phrase at the end of the list of cheaper goods: ❗️"Reduce prices in restaurants, canteens and other public catering establishments accordingly"❗️

Regardless of the dollar exchange rate, tough sanctions against the USSR, the cost of oil and gas, every spring the Council of Ministers of the USSR issued a decree on price reductions.



By the way, what was the price of oil at that time? After all, as we are told today, it was the only thing the Soviet Union depended on, and when it fell in price in the 80s from 35 to 15 dollars, the USSR fell apart. So, during the price decline, when the USSR was recovering from the war, created nuclear weapons and was the first in the world to launch satellites into space, the price of oil was no more than 3 dollars.

But nevertheless, in the country that survived the bloodiest war in history, cities were being rebuilt, wages were being raised and affordable housing was being built. Workers could take out a mortgage for an apartment at 1% per annum. And all this with zero inflation! Agree that it would be nice to implement this trend today.

Yes, of course, it is not entirely correct to compare the 50-60s with today. I do not want to say that Stalin's time was a wonderful time. No. These were very difficult times, when our country should have remained on the sidelines of history. But despite all the adversity, miracles happened.

Including economic miracles, which need to be remembered and studied, because history repeats itself. And today it is especially important to know how our ancestors acted in similar situations.

But instead, today we only hear that the USSR economy was ineffective. Yes, "ineffective"
💯 won the largest war in history,
💯 rebuilt the country,
💯 created nuclear weapons
💯 and was the first in history to send a man into space,
💯 not to mention free education, medicine and housing,
💯 metro,
💯 the first high-rise buildings,
💯 factories and enterprises, etc.

This is usually hushed up, because at that time there was the "terrible GULAG and repressions" - this is what they always talk about today, mentioning Stalin's time and exaggerating exactly this. But for some reason everything else is still hushed up.

➡️ So, what were Stalin's motives and how did he achieve such incredible results❔
➡️ And can our government today lower prices instead of raising them❔

Let's figure it out.

STALIN'S ECONOMIC POLICY


To understand how prices were lowered, first, let's figure out what a price is.

✔️Price, to put it simply, is the amount of money for a product.

The number of products in the world is constantly changing, the amount of money is changing, and if so, then their ratio, that is, the price, is changing.

Let's say that in our country there are 100 products.
100 units of money are printed for them.
Thus, the price of 1 product will be equal to one monetary unit.
Such a price can last for a year, two, or decades. It will not grow anywhere by itself. In order for the price to rise, we need to print not 100 units of money, but, say, 110 or 150.

❗️ This comparison shows us that price increases are nothing more than printing more money for a non-existent product (if we do not take into account force majeure situations that affect prices, for example, natural disasters).

And as we know, there is a main currency in the world - the dollar - which is happily printed just like that at the whim of the American elite. Thus, today in the dollar zone (and this is the whole world) prices will inevitably rise, because the United States does not maintain this balance and prints as much money as it wants. Yes, the United States prints money for itself, and prices rise all over the world. Including in Russia.

Printing money, issuing rubles or any other currency is possible, necessary and required. And this will not lead to price increases.

But only in one case - when the volume of rubles issued per year or month is equal to the annual or monthly increase in gross product.

The ratio of goods and money must remain unchanged. If this ratio is not observed, then the price rises.

So, the number of goods produced in the Soviet Union, let's say, per year, increased by a certain percentage, but the Soviet Central Bank did not print more money or printed a little more, but not by the same percentage as the goods, services, new factories, new production facilities, goods, etc. were increased.

Thus, it turned out that the same amount of money remained, but there were more goods. Accordingly, the government could reduce prices so that these two components would be equal.

Among other things, this is why Stalin could reduce prices.

E. Spitsyn (historian):

By the time of the death of the leader of all nations, the average level of retail prices for basic types of industrial and food products were approximately 45% lower than the 1947 level, which, with an annual increase in the average salary from 640 to 800 rubles, allowed the standard of living of the majority of the country's population to be raised quite quickly and significantly.

Of course, there was no ready-made economic model that would suit the USSR. Everything was done from scratch. In December 1925, at the XIV Party Congress, a course was set for the creation of industry - industrialization, which was planned to be carried out in the shortest possible time.

The main goal is to eliminate the huge gap in economic development between the USSR and Western countries.

➡️ In 1931, Stalin uttered the famous prophetic words: "We are 50-100 years behind the advanced countries. We must cover this distance in 10 years. Either we do it, or we will be crushed."
This was said exactly 10 years before the start of the Great Patriotic War.
➡️ Since 1920, the USSR began to electrify the country.
In the same year, science fiction writer Herbert Wells, author of "The Time Machine", "The Invisible Man" and "War of the Worlds", visited the USSR, got acquainted with the electrification plans and considered them unrealistic.
However, most of the indicators were achieved by the beginning of the 1930s.
➡️ From 1929 to 1940, 364 new cities and 9,000 large enterprises were built.
➡️ New industries were created: tractor, aviation, tank, chemical.
➡️ In 1932, the Nizhny Novgorod Automobile Plant (the future GAZ) began operating.
➡️ And in general, wherever you poke, all the industrial giants, even in today's Russia, were built at this time.

Stalin's economy looks even more impressive on the charts.



They show that the decline occurred only during the years of the Great Patriotic War.

➡️ GDP growth was approximately 20% per year.
Today it is 10 times less.

➡️ By 1937, industrial volumes had grown significantly and the Union occupied 3rd place in the world, behind the USA and England.

➡️ And by 1956, the Union was already in 2nd place, having displaced England (let me remind you that in 1913, the Russian Empire occupied only 5th place in this indicator).

➡️ At the same time, the growth of labor productivity and national income seriously outpaced similar indicators of the capitalist powers of that time.


USSR - red line, USA - blue, England - light blue, France - green

Stalin had no illusions that the West would cooperate on a mutually beneficial basis.

He set the goal of achieving economic independence.
Almost all necessary goods were produced within the country. Such self-sufficiency allowed the country's economy to be independent of global crises and foreign exchange rates. And while the West was in the Great Depression, the Soviet Union was developing successfully. Of course, this required the mobilization of all resources, but otherwise it was impossible to create a strong state and build a defensive shield for the country. And by June 1941, the country had this shield.

Stalin sought to create a powerful industrial power that could satisfy the needs of people.
Not just individuals, but the entire society. And the needs were expressed not in monetary terms, but in physical indicators: tons, liters, kilowatts, but not profit or gross income. Money became important for the USSR later - under Khrushchev.

A. Fursov (historian):

In the mid-50s, the model for increasing economic efficiency - MPE - was very quietly eliminated in the Soviet Union.
What is MPE? The method for increasing economic efficiency - it was introduced in 1939 and it ensured very high rates of development of the Soviet economy until the mid-50s, when it was cancelled.

In 1955, Japan borrowed it, which ensured its rapid growth. And the USSR abandoned MPE in the same year.

In 1991, Japanese billionaire Heroshi Terawama said: "In 1939, you Russians were smart, and we Japanese were fools. In 1949, you Russians became even smarter, and we were still fools. But in 1955, we Japanese became smarter, and you turned into 5-year-old children. Our entire economic system is copied from yours. All our companies have your Stalin-era slogans hanging in their posters."

SHORTAGE IN THE USSR
So, now about the various deficits that liberals love to talk about today. They existed because the USSR economy was planned. What and how much to produce was decided not by demand, but by officials in their offices who did not understand how ordinary people lived. That is, to put it simply, there was a shortage of small private businesses that would produce consumer goods.

Perhaps someone will be surprised, but Khrushchev banned it.
Under Stalin, individual artisans and their cooperatives flourished in the USSR: shoemakers, tailors, jewelers, mechanics and repairmen. Private traders produced: toys, dishes, radios, furniture, clothes, shoes and even televisions - almost everything that Soviet people needed in everyday life.

To confirm this, I will cite a quote from Katasonov's book "Stalin's Economy": "In the late 1940s - early 1950s. hundreds of thousands, if not millions of people were engaged in various kinds of small private entrepreneurship. Of course, artisans were under the watchful eye of the authorities. But the order for the total elimination of this layer never came."

That is, small business flourished in the USSR.
PRICE REDUCTION AFTER WORLD WAR II
After World War II in the Soviet Union
❌ 1,710 cities were destroyed
❌ and about 32 thousand industrial enterprises,
❌ 100 thousand collective farms were ruined.
❌ 25 million people lost their homes.
❌ The country lost a third of its national wealth.

❗️ And then unexpectedly: the USSR reached its pre-war level already in 1948.

➡️ Among other things, this was facilitated by the monetary reform. At that time, the country had a shortage of goods and a surplus of money, which, according to government statements, ended up in the hands of a small part of the country's population.

That is, after the war, when the government decided to establish a peaceful life, it turned out that the bulk of the money flowed to a small percentage of the country's population, among whom were speculators and the trading mafia, who had dishonestly profited during the war. Thus, there was a shortage of money among the general population. And the leadership of the Soviet Union decided to act like Robin Hood - take from the rich and give to the poor.

The monetary reform of 1947 was prepared in conditions of the strictest secrecy in order to avoid leaks, so that there would be no panic among people and so that the especially rich would not rush to buy up goods. According to one legend, the People's Commissar of Finance Arseny Zverev locked his wife in the bathroom the day before the event so that she would not blab to her friends.

In the country, old paper money was exchanged for new banknotes in a week.
Amounts on deposits up to 3 thousand rubles were exchanged one to one; from 3 to 10 thousand were reduced by one third; and two thirds of the amount were withdrawn from savings over 10 thousand. Thus, workers and ordinary people did not suffer. Except for those who kept their wealth under their beds - for them the rate was 1 new ruble to 10 old ones.

➡️ The Soviet Union also abolished the rationing system and did so earlier than other victorious states in Europe.



For example, in England, clothing rationing was abolished only in March 1949.

This is what needs to be compared when talking about the USSR and the West!

E. Spitsyn (historian):

Great Britain, on whose territory, as is known, no serious military actions were conducted at all and which suffered from the Second World War incomparably less than the Soviet Union, could not abolish the rationing system even in the early 1950s, and in the former workshop of the world, there were mass strikes by miners who DEMANDED TO BE PROVIDED WITH THE SAME STANDARD OF LIVING AS THE MINERS IN THE SOVIET UNION.



The first serious price reduction after the war took place already in December 1947 - bread, flour and cereals became 10-12% cheaper.

And after that they were reduced annually in March or April. A Soviet citizen, going to the store after the decree was issued, could be sure that the prices were set according to the order.

This approach shocks Western leaders. How can they reduce prices every year? The country suffers direct losses from this. Of course, it does, if profit is the main priority.

Stalin tried to improve the well-being of the entire population and increase the ability to buy.
The economy developed thanks to the attraction of domestic investment, trade turnover increased, the ruble strengthened. The domestic market of the USSR became vibrant and self-sufficient.

Stalin even planned to make bread free by 1960. And, as he himself said, only another war could prevent him from doing this.

By the way, in many departmental canteens of the USSR bread was already free, and lunches cost a symbolic 20-40 kopecks.

The currency system under Stalin was multi-circuit. There was a currency supply, which grew rich from exports and was spent on the needs of the country. And the money supply - rubles, which the State Bank created in exactly the quantities that the state requested. And these two masses were not interconnected in any way.

As has already been said, there were exactly as many rubles available as all the goods and services that the population could consume. If the volume of goods grew, then the amount of money remained unchanged. The Union did not print more rubles and did not earn money on their creation. It reduced prices in order to achieve balance again. The goal of Stalin's economy was to reduce the cost of production and make production more rational. And the teams of enterprises received huge bonuses for being able to achieve savings without losing quality.

➡️ From 1940 to 1953, budget expenditures on education, health care, and culture increased several times.
➡️ In 1950, the budget surplus was 9.6 billion rubles,
➡️ and in 1953 - 25.1 billion rubles.
Fantastic results with a regular reduction in retail prices, which reduced budget revenue!

What was happening in the USSR in those years is incredible in comparison with the situation in capitalist countries, where prices only rose.

How did the Soviet people react? They were impatiently waiting for a new spring, and with it lower prices.

On April 2, 1953, Molotov received a report from Anastas Mikoyan on the progress of trade, and notes from buyers were attached to it:
✏ “Every year life is getting better, and if they don’t force a war on us, we will live even better.” ✏“On kerosene alone, and on potatoes, we save almost a ruble a day.”
✏“They cut the vodka price a bit, but we can’t do otherwise with our kind.”

What Stalin did would have inevitably led to the death of the typewriter. By the way, there is a version that in 1949 he did not have a stroke at all. He was poisoned. Agree, it is a reasonable explanation, considering the threat he posed to the entire capitalist community. But that is a separate topic.

AND CAN WE DO SO NOW?
Is it possible to implement Stalin's approach today? Many people will point out: "Well, under Stalin there was a communist system, and today it is capitalist. So, they say, first we need to carry out a revolution, and then implement something there."

Complete nonsense. In general, the denigration of Stalin with the arrival of Khrushchev took place under the slogans that Stalin actually spat on the Marxist-Leninist doctrine. The entire Communist Party agreed with Khrushchev. And those who did not agree, simply kept silent.

Yes, Stalin really did not follow the precepts of Marx and Lenin, because they were theoreticians, they did not have experience in state construction - everything was on paper. But Stalin was a practitioner. He did as the situation required, regardless of what Marx wrote there.

Now, what happened during Stalin's period can be taken, thoroughly studied and, if possible, used.

After all, Russia is once again the initiator of a dollar-free trade zone. Let me remind you that in 1950, Stalin made the ruble, so to speak, golden and refused to trade for foreign currency. So his approaches are still relevant.

Something like that, friends.

❓Should we make a release about repressions? - write in the comments.

The USSR economy before collapse. (History) The Soviet Economic Model Was the Best in the World (CIA Documents) https://projectavalon.net/forum4/sho...=1#post1664047

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