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The Great Depression and Soviet Industrialization
The Great Depression was the worst economic downturn the capitalist world have ever experienced in the age of mass politics. It was this, more than almost any other factor, which gave the USSR the ability to recover from the crisis of the mid-late 1920s and march towards becoming an industrialized power.
The Soviet Union was relatively insulated from the depression's negative effects for several reasons. Unlike much of the capitalist world the USSR was not on the gold standard, which meant it did not experience the deflationary cycles which wrecked western economies. [1] Second, despite hit to its export revenues due to lower commodity prices: the Soviets were still far less interconnected with global trade and financial networks than most other countries. The planned nature of Soviet industry also meant it was more immune to market forces and the downturn did not result in unemployment: depressed global conditions hardly caused lower quotas issued by industrial managers.
The depression also provided significant opportunities to the USSR: first in terms of a trickle of immigrants from the United States and other western countries. [2] A significant minority of them were highly educated leftists who lacked job opportunities in their native countries where 25% unemployment was common. They saw Soviet socialism as the future and an alternative to the "crash of the old world" in capitalist countries. Those ideologically convicted intellectuals would prove valuable in lending their skills at mathematics, engineering and technology to the Soviet economy in the 1930s and beyond.
Most importantly, the prices of capital goods fell through the floor during the depression. Nobody was looking to open new factories in America or England, so western machine tools manufacturers were desperate for customers. All of a sudden it was a buyer's market for the most advanced industrial technologies at literal fire sale pries, with the Soviets being one of the few purchasers. The crown Jewels of American industrial capitalism became an open catalog for their arch-nemesis to purchase. [3]
By 1930, Freyn Engineering was helping setting up brand new steel plants as big as the flagship US steel plant in Gary, Indiana in the Ural mountains [4]. Caterpillar build factories producing tractors in Kharkov and Leningrad. Ford was building auto-plants modeled on the Baton Rouge in southern Russia. Electric plants, ball bearings plants, textile factories, furniture factories flowed in from Sweden, the UK, France and Germany. Factories for everything from the highest valued capital goods to the lowest valued consumer goods was being built all across the USSR. [5] The Soviets would also use quite a few "tricks", such as purchasing the license to build one factory plant, and then simply built a dozen using the blueprints they acquired to cut down on costs. All over the Soviet Union, industrial productivity was finally up, and Russia for the first time had something akin for a modern industrial economy on par with that of its western rivals. Finally consumer goods were being manufactured at a rate which met at least some of the demands of the Soviet people. [6]
Hidden from view however, this industrialization was paid for with horrific human costs....
- A History of Global Industrialization, David Landes, Harvard University Press
[1] The great depression was a financial crisis turned deflationary spiral, with central banks unable to act because of adherence to convertibility to gold. Countries like China which was on the silver standard suffered less otl, and recovery in the US began when FDR went off the gold standard.
[2] As per otl, except they (mostly) don't end up being purged
[3] Exactly as per otl, an understated reason for the "success" of Stalinist industrialization was that western technologies became available exactly when it was "do or die" for the Soviet industries.
[4] Magnitogorsk will be built as otl thanks to the lobbying of newly minted heavy industry commissar Sergo Ordzhonikidze
[5] Soviet industries is more focused on light industry and consumer goods as opposed to heavy industries like steel than OTL. Without collectivization, and with more pragmatic and risk averse leadership, increasing consumer goods production to pay for grain overcomes ideological disposition towards heavy industry. Overall Soviet industrialization is also slower than OTL for reasons we will explore
[6] Note, collectivization never took place ttl, this is going to have incalculable consequences in the future. Overall living standards in the USSR are also much, much higher than otl 1930s. It's hard to overstate what a disaster collectivization was. In some areas such as Kazakh SSR the number of livestock fell by 90%. Without collectivization the peasantry are immensely better off.
The Great Depression was the worst economic downturn the capitalist world have ever experienced in the age of mass politics. It was this, more than almost any other factor, which gave the USSR the ability to recover from the crisis of the mid-late 1920s and march towards becoming an industrialized power.
The Soviet Union was relatively insulated from the depression's negative effects for several reasons. Unlike much of the capitalist world the USSR was not on the gold standard, which meant it did not experience the deflationary cycles which wrecked western economies. [1] Second, despite hit to its export revenues due to lower commodity prices: the Soviets were still far less interconnected with global trade and financial networks than most other countries. The planned nature of Soviet industry also meant it was more immune to market forces and the downturn did not result in unemployment: depressed global conditions hardly caused lower quotas issued by industrial managers.
The depression also provided significant opportunities to the USSR: first in terms of a trickle of immigrants from the United States and other western countries. [2] A significant minority of them were highly educated leftists who lacked job opportunities in their native countries where 25% unemployment was common. They saw Soviet socialism as the future and an alternative to the "crash of the old world" in capitalist countries. Those ideologically convicted intellectuals would prove valuable in lending their skills at mathematics, engineering and technology to the Soviet economy in the 1930s and beyond.
Most importantly, the prices of capital goods fell through the floor during the depression. Nobody was looking to open new factories in America or England, so western machine tools manufacturers were desperate for customers. All of a sudden it was a buyer's market for the most advanced industrial technologies at literal fire sale pries, with the Soviets being one of the few purchasers. The crown Jewels of American industrial capitalism became an open catalog for their arch-nemesis to purchase. [3]
By 1930, Freyn Engineering was helping setting up brand new steel plants as big as the flagship US steel plant in Gary, Indiana in the Ural mountains [4]. Caterpillar build factories producing tractors in Kharkov and Leningrad. Ford was building auto-plants modeled on the Baton Rouge in southern Russia. Electric plants, ball bearings plants, textile factories, furniture factories flowed in from Sweden, the UK, France and Germany. Factories for everything from the highest valued capital goods to the lowest valued consumer goods was being built all across the USSR. [5] The Soviets would also use quite a few "tricks", such as purchasing the license to build one factory plant, and then simply built a dozen using the blueprints they acquired to cut down on costs. All over the Soviet Union, industrial productivity was finally up, and Russia for the first time had something akin for a modern industrial economy on par with that of its western rivals. Finally consumer goods were being manufactured at a rate which met at least some of the demands of the Soviet people. [6]
Hidden from view however, this industrialization was paid for with horrific human costs....
- A History of Global Industrialization, David Landes, Harvard University Press
[1] The great depression was a financial crisis turned deflationary spiral, with central banks unable to act because of adherence to convertibility to gold. Countries like China which was on the silver standard suffered less otl, and recovery in the US began when FDR went off the gold standard.
[2] As per otl, except they (mostly) don't end up being purged
[3] Exactly as per otl, an understated reason for the "success" of Stalinist industrialization was that western technologies became available exactly when it was "do or die" for the Soviet industries.
[4] Magnitogorsk will be built as otl thanks to the lobbying of newly minted heavy industry commissar Sergo Ordzhonikidze
[5] Soviet industries is more focused on light industry and consumer goods as opposed to heavy industries like steel than OTL. Without collectivization, and with more pragmatic and risk averse leadership, increasing consumer goods production to pay for grain overcomes ideological disposition towards heavy industry. Overall Soviet industrialization is also slower than OTL for reasons we will explore
[6] Note, collectivization never took place ttl, this is going to have incalculable consequences in the future. Overall living standards in the USSR are also much, much higher than otl 1930s. It's hard to overstate what a disaster collectivization was. In some areas such as Kazakh SSR the number of livestock fell by 90%. Without collectivization the peasantry are immensely better off.
- RousseauX
- Word Count: 770