Chapter

The Soviet Industrialization Debate and Collectivization

Raaj K. Sah and Joseph E. Stiglitz

in Peasants versus City-Dwellers

Published in print February 2002 | ISBN: 9780199253579
Published online January 2005 | e-ISBN: 9780191601682 | DOI: http://dx.doi.org/10.1093/0199253579.003.0007
The Soviet Industrialization Debate and Collectivization

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An economic question that became pivotal in the Soviet Union in the aftermath of the October Revolution of 1917 concerned how to raise the resources required to finance industrialization. The need for industrialization was not a matter of debate, but the issue of the appropriate source of revenue (in particular, the role of the price scissors (the price of industrial (urban) goods relative to that of agricultural (rural) goods) in squeezing resources out of the rural sector), became a raging controversy in the ensuing debate on Soviet industrialization. This debate is important, despite its polemics, because it anticipated some of the difficult but central trade-offs that confront many less developed countries (LDCs) today. This chapter addresses the propositions put forward by Evgeny Preobrazhensky on the Soviet industrialization debate on the basis of the closed-economy model advanced in the previous chapter, in which rural and urban prices are the same and there are binding constraints on trade. Issues concerning the appropriateness of this model are also addressed, in the light of suggestions made by other economists that an open-economy model would be a better vehicle.

Keywords: agricultural goods; agricultural prices; closed economies; industrial goods; industrialization; models; October Revolution; price scissors; rural sector; socialist economies; Soviet Union; trade constraints; trade-offs; urban prices; urban sector

Chapter.  4378 words.  Illustrated.

Subjects: Economic Development and Growth

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