Soviet Economic Planning, the 1929 Crash, and Fascism

Soviet Five-Year Economic Plans

The five-year plans for the national economy of the USSR were a series of nationwide projects focused on the centralized economic development of the Soviet Union. These projects were developed by the State Planning Commission (Gosplan) based on the theory of productive forces, which was part of the Communist Party's general guidelines for economic development. Fulfilling the plan became a key goal for the Soviet bureaucracy. These initiatives involved planning the national economy in five-year increments. Several five-year plans were not fully completed within their allocated periods; some were successfully finished ahead of schedule, while others failed and were abandoned.

Interwar Europe and the Crash of 1929

In 1929, companies faced overproduction, leading to a decline in share values and corporate profits. Investors began selling shares to secure profits, but the massive supply of securities caused prices to plummet, triggering further sales. Companies failed, banks collapsed, families lost their savings, the economy tumbled, and banks closed. This culminated on 'Black Tuesday'. On 'Black Thursday' (October 24, 1929), investor panic intensified as 13 million shares were put up for sale with no buyers, devastating investors and banks. The Crash of 1929, the New York stock market collapse, triggered the widespread Great Depression, affecting all economic sectors and capitalist countries.

Banks failed because:

• Borrowers couldn't repay loans, often secured with now-worthless shares.
• People rushed to withdraw money, but banks lacked liquidity, leading to a banking crisis.
• Around 4,000 banks closed, ruining millions of families.

The crisis deepened as credit dried up for consumers and industries, further reducing consumption. In industry, falling consumption led to increased unsold inventory (stocks) and plummeting prices. More than 100,000 businesses closed, and industrial production fell by 40%. Unemployment soared, poverty spread, further reducing consumption. Even those employed feared losing their jobs.

Principles of Totalitarianism: Fascist Italy Example

Key features, exemplified by Fascist Italy, included:

• The state and the Fascist party became identified as one.
• Laws appointed Mussolini as head of government, granting him full executive, legislative, and judicial powers.
• The Rocco Law was created, prohibiting all political parties and trade unions except Fascist ones.
• Parliament became subordinate to the Fascist Grand Council, which selected its members.
• A Chamber of Fasces and Corporations was established, serving primarily an advisory role.
• New local and provincial officials were appointed by the Fascist regime.
• The state administration was purged.
• A political police force, the OVRA (Organization for Vigilance and Repression of Anti-Fascism), was established to monitor and repress opposition.
• Significant agreements, like the Lateran Pacts with the Vatican, were signed.
• Society underwent increasing militarization.
• Expansionist campaigns aimed to recover territories, sometimes referencing historical claims (like Savoy).