How far did economic policy change 1953-85?

The promotion of light industry, chemicals and consumer goods

• Khrushchev wanted to move the focus of economic policy away from heavy industry, the so-called 'metal eater", towards light industry, chemicals and consumer goods

• would broaden the base of the Soviet economy and start to bring real benefits to the lives of the Soviet population

• The long-promised 'workers' paradise would start to become a reality

Khrushchev's economic policy key challenges: fear restricting intuitive

• A vast bureaucratic system of administrators based in Moscow stifled initiative

• It was difficult for local inovations to take place for fear of upsetting the Plan

• The atmosphere of terror under Stalin had done little to encourage initiative

• The workforce was subject to harsh labour laws, including fines for absenteeism

Khrushchev's economic policy key challenges: impractical system

• The system was clumsy and wasteful

• It was particularly difficult to deal with new trends and unforeseen events

• Administrators worked out the likely demand for goods and then set targets to ensure demand was met

• If demand increased, say for heavy coats because of a particularly hard winter, the system was too inflexible to respond
  

Reforms to deal with Khrushchev’s economic policy key challenges: Sovnarkhoz

In 1957, Khrushchev set up 105 Regional Economic Councils (Sovnarkhozy) to supervise enterprises

It was an attempt to move some decision-making from the centre to regional bases, which would be able to take more account of local circumstances.

Reforms to deal with Khrushchev’s economic policy key challenges: removal of harsh labour laws

The harsh labour laws of the Stalin years were removed and the working week reduced from 48 hours to 41 by 1960. Incentives replaced Stalin's policy of coercion.

Reforms to deal with Khrushchev’s economic policy key challenges: managers influences

• Managers of industrial enterprises were given more influence in their factories

• Khrushchev disliked the fact that they were merely robots of Moscow

• To encourage initiative they were allowed to keep 40 percent of the profits made by their factory to invest as they wished in their enterprise

Reforms to deal with Khrushchev’s economic policy key challenges: vocational education

There was a greater emphasis on vocational education to support industrial developments. Specialist technical schools were set up and vocational education expanded.

Reforms to deal with Khrushchev’s economic policy key challenges: Liberian

Many of these reforms were promoted by Evsei Liberman.

The Liberman Plan, 1962 called for greater autonomy for local managers and for the market to replace the state as the decider of prices. His ideas were watered down by conservatives in the Politburo who preferred to stick to Stalinist principles.

The Seven-Year Plan (1959-65): mineral resources

• The discovery of new mineral resources, especially in the Volga-Urals fields, encouraged the government to push ahead with transforming the fuel and chemical industries

• This would involve a shift of emphasis from coal to oil and gas

• Natural gas was cheap and available in abundant quantities, but it was little used

The Seven-Year Plan (1959-65): consumer goods

• The focus on the chemical industry was linked to the increased targets for consumer goods

• The production of synthetic fibres was to increase from 166,000 tons in 1958 to a target of 666,000 tons by 1965

• Substantial increases were also targeted in footwear, natural fabrics and housing

The Seven-Year Plan (1959-65): regional development

regional development was to be promoted, with areas east of the Urals receiving over 40 percent of the available investment