From International Affairs (Moscow) No. 7, July 1955.

The Heavy Industry of the European People’s Democracies – Foundation of Their Economic Might

I. Dudinsky

It is now over 10 years since the people’s democratic system was established in a number of countries of Central and South-East Europe as a result of the victory of the democratic forces in these countries in conditions of the successful conclusion of the Second World War against Hitler fascism.’

During this brief historical period the peoples of these countries have severed their age-old chains, ended the foreign domination and, with the fraternal assistance of their great friend the Soviet Union, achieved remarkable successes in economic, political and cultural life. The experience of these states, most of which were backward and oppressed, shows what boundless possibilities open before peoples firmly and irrevocably stepping out along the road of socialist construction.

At the same time, this has been a period in which the strength and unity of the powerful socialist camp – the greatest gain of the peoples, the lodestar of peace and progress – have been consolidated. In the friendly family of nations, headed by the Soviet Union, the European People’s Democracies have for the first time won genuine independence and have been transformed into strong, sovereign and industrially-developed states, bastions of peace in Europe.

The victory of the new social structure has altered the whole course of their economic development. With the transition to national ownership of the basic means of production in Poland, Czechoslovakia, Hungary, Rumania, Bulgaria and Albania, the economic laws of capitalism, which engender bitter competitive struggle, crises of overproduction, impoverishment of the masses and unemployment, have ceased to be dominant. New economic laws, making possible the uninterrupted growth of production, increased economic might and steady rise in living standards, have begun to operate. The elemental operation of the laws of capitalism has given place to the conscious regulation of the process of social production in line with its objective laws, which society has come to know and applied in its service. For the first time in the history of the Central and South-East European countries, conditions were created in which the productive forces received wide scope for development and in which the main productive force of society – the working class – was freed from exploitation and enabled to enjoy the full fruits of its labour.

In creating the new social structure the Communist and Workers’ Parties of the European People’s Democracies are guided by the basic principle laid down by Lenin and Stalin – that socialism can be built only on the basis of large-scale machine-building industry. “A large-scale machine industry that is also capable of reorganizing agriculture,” Lenin wrote, “is the only material basis that is possible for socialism.”* The decisive place in large-scale industry is occupied by the branches producing means of production – metals, coal, oil, machinery and equipment – that is, heavy industry. Development of heavy industry in every possible way is the basis of the economic policy of the countries building socialism.

Soviet experience in building socialist society is the guiding star for the working population of the People’s Democracies. This experience – the rapid transformation of a backward agrarian country like pre-revolutionary Russia into a mighty industrialized, collective-farm power – is of universal historic significance. It incontrovertibly demonstrated the need for priority in developing heavy industry – the material basis of socialism.

The primary role of heavy industry is a necessary condition for the process of extended reproduction. It is precisely heavy industry which provides the up-to-date instruments of production – machines, without which large-scale production is impossible. Lenin defined the priority expansion of the means of production as a law of extended reproduction. “The production of means of production for means of production grows faster,” he wrote, “then comes the production of means of production for means of consumption, and the growth of the production of means of consumption is slowest.”* Lenin and Stalin underlined that Marx’s formula showing the need for the more rapid growth of the first subdivision of social production (means of production) compared with the second subdivision (means of consumption) is fully applicable to both the capitalist system and to the transition period and both phases of communism.

Extended socialist reproduction takes place in accordance with its law of priority growth of the production of the means of production and in line with the basic economic law of socialism and that of balanced, proportional development. This means that socialist extended reproduction takes place according to plan and that it is subordinated to the aim of the maximum satisfaction of the constantly rising material and cultural requirements of the whole of society. This aim can be achieved only by means of uninterrupted growth and perfection of socialist production on the basis of the most up-to-date equipment and technique. Heavy industry with its very core, machine building, is the key to its achievement.

The European People’s Democracies, in laying the foundations of socialism, are devoting their main attention to the development of heavy industry. This is shown by the fact that the working people of these countries, led by the Communist and Workers’ Parties, are consistently carrying out a policy of socialist industrialization. The need for such a policy arises from the objective demands of the laws of socialist economy, above all from the basic economic law of socialism. Ensuring the priority of heavy industry it creates the means with which the aim of socialist production will be achieved – the maximum satisfaction of the growing demands of the working people possible at the given stage of development. The very possibility of the successful carrying-through of socialist industrialization demonstrates the indisputable superiority of the socialist system over that of capitalism: as distinct from capitalist industrialization, far from leading to the impoverishment of the broad masses, it, on the contrary, provides the conditions for a radical improvement in the lot of the workers and peasants; it also makes it possible to build a better heavy industry than is to be found under capitalism and to supply it with the most up-to-date equipment. During the transition period, socialist industrialization is called upon to create a technical and economic basis adequate for the new progressive social structure.

Socialist industrialization makes it possible for the people’s democratic state – a form of the dictatorship of the proletariat – to overcome the basic contradictions peculiar to the economy of the transition period and to construct a socialist society; it is the key to the victory of the new social structure; its realization enables the People’s Democracies rapidly to resolve the contradiction between their advanced political system and their backward technical and economic basis. In the course of industrialization, which ensures the victory of the socialist way of life, the people’s democratic states are enabled to resolve, in favour of the people, the question of “Who will beat whom?” – the fundamental class issue of the transition period.

As heavy industry expands, the working class – the leader of the working masses building the new society – grows in number, consolidates its positions, cements its alliance with the working peasantry, and the necessary prerequisites for the abolition of the capitalist elements are created. By means of heavy industry, the People’s Democracies solve one of the most difficult problems of the transition period – that of the voluntary uniting of small, individual peasant farms into large-scale collectives, based on the advanced machine technique of socialist economy. Only industry, Stalin pointed out, “leads agriculture along with it, drawing the peasantry, through the co-operative movement, into the channel of socialist construction.”*

Heavy industry, concentrating in itself all the latest achievements of science and technology, enables the People’s Democracies to raise all branches of their economy to a higher technical level, to increase the productivity of labour and, ultimately, to ensure that abundance of products necessary for the systematic raising of the material and cultural standards of the working people which is the essence of socialism.

Heavy industry is also necessary to the People’s Democracies to increase the defensive strength and further the economic independence vis-à-vis the capitalist world of each of them separately, and, therefore, of the whole great camp of democracy and socialism of which each is an organic part.

To assess correctly the industrialization achievements of the European People’s Democracies during the 10 years of their existence, it is necessary to recall the condition of their economies under the old, anti-popular bourgeois-landlord regimes. In pre-war years the industry of Central and South- East Europe was cramped by capitalist relations of private ownership, while agricultural development was retarded by feudal-serf survivals, land-hunger and the extreme poverty of the bulk of the peasantry. The domination of foreign capital acted as a severe brake on economic development; it exercised a predatory control over the economies of these countries, depriving them of their economic independence and condemning the working people to a dual exploitation.

In Rumania, British, Dutch, American and French capitalists controlled three-quarters of the oil industry and held key points in the banking system. In Bulgaria and Hungary foreign capital controlled the main branches of industry, while in Albania it held unrestricted sway over the entire economy. In Poland the share of foreign capital – British, French and German – in the main branches of industry ranged from 50 to 85 per cent.

Foreign big business tycoons, utilizing the anti-popular, bourgeois-landlord regimes in the Central and South-East European states, transformed them into their agrarian and raw-material appendages, into markets for their unsalable goods and into reservoirs of practically unpaid labour. Since a large part of their national incomes were sent abroad in the form of immense profit on foreign capital, the Central and South-East European countries were deprived of the means to accumulate resources for the development of their own industry. It is not surprising therefore that industrial backwardness was a pre-war feature of almost all these countries.

Among the countries of Central and South-East Europe now confidently building a new life, Albania was in the past the most backward economically. She was an agrarian country without any industry. Rumania and Bulgaria had a poorly-developed industry; their heavy industry was merely in embryo. Bulgaria, for example, with considerable resources of iron ore, coal and non-ferrous metals, had no ferrous or non-ferrous metals industry. Under the bourgeois-landlord regime in Rumania, only the oil industry, which brought immense profits to its foreign owners, was developed. From the point of view of their economic structure, both these states were of an agrarian type.

Poland and Hungary had a more highly-developed industry. It was primarily the light industries which had been developed in these countries, although there were also certain branches of heavy industry. Polish heavy industry combined a more or less developed coal mining industry and ferrous metals smelting industry with a weakly-developed machine-building industry. In bourgeois Hungary the lack of balance in the development of heavy industry was striking: large enterprises making transport machinery mainly for export coupled with an almost complete absence of a machine-tool industry, and bauxite mining coupled with the absence of aluminium smelting plants.

Both Poland and Hungary were agrarian-industrial countries. At the same time it should be underlined that many of the heavy industry enterprises in these countries had a wretched existence, not being in a position to compete with the industries of more advanced countries.

The only industrially-developed country in Central and South-East Europe in pre-war years was Czechoslovakia. Industry’s share in her national income slightly exceeded that of agriculture. But here, too, one-sided industrial development distorted the economy. Czechoslovakia, with a relatively moderate development of heavy industry, had an overgrown light industry (relative to the demands of the home market) in particular in the case of textiles and footwear. Without adequate sources of raw material or an adequate home market, Czechoslovakia was extremely dependent on foreign markets, which aggravated the instability of her economic position.

It should be underlined that during the whole period prior to the Second World War, the dependence of the countries of Central and South-East Europe on the imperialist powers steadily increased; and, step by step, these countries were being transformed into semi-colonies.

The victory of people’s democracy in Poland, Czechoslovakia, Hungary, Rumania, Bulgaria and Albania has ensured the transfer of large- and medium-scale industry, the banks, transport and foreign trade into the hands of the people and thereby ended the economic domination of domestic and foreign big business. At the same time this signifies the emergence of a socialist sector in the economies of these countries, with the economic laws inherent in it. Taking advantage of the operation of these objective laws, the Communist and Workers’ Parties and the popular governments are organizing the planned expansion of socialist production.

The general line of the Communist and Workers’ Parties of the People’s Democracies, as expressed in the long-range development plans, is that of socialist industrialization, of the creation of their own heavy industry – the material basis of socialism. This line, which corresponds to the vital interests of these states, is vigorously supported by all the class-conscious workers of town and country.

The policy of priority development of heavy industry pursued by the Communist and Workers’ Parties of the European People’s Democracies found early expression in the first two- or three-year plans, having the restoration of the national economy as their main task. As a result of their successful fulfilment, the working people not only restored their economies, destroyed by war and fascist occupation, but also made substantial advances in industrial development.

The three-year plan (1947-49) for the restoration of Poland’s national economy was fulfilled in two years and ten months. As a result the gross output of large- and medium-scale industrial undertakings exceeded the 1937 level by 75 per cent. Taking 1946 as 100, the output of means of production in 1949 reached 251 per cent and that of the means of consumption 217 per cent. As a consequence of the priority accorded them, the share of the means of production in total industrial output rose from 48 per cent in 1938 to 54 per cent in 1949.

Czechoslovakia, in fulfilling her two-year (1947-48) plan, exceeded her pre-war level of industrial output by 8 per cent.* By the end of 1948, production in heavy industry was 124.6 per cent and in light industry 82.9 per cent of the 1937 level. As a whole during the two-year period, production in the first subdivision of social production rose by 51.8 per cent and in the second by 37.9 per cent.

In Hungary, where the three-year plan for the restoration of the national economy was completed ahead of time, industrial production went up by 53.4 per cent compared with 1938. The growth of heavy industry compared with pre-war level was 74.1 per cent, that of light industry 38.5 per cent.

As a result of the fulfilment of their two-year national-economic plan, the Bulgarian working people ensured a 75 per cent increase in industrial output compared with 1938. As in the other People’s Democracies, heavy industry developed most rapidly: during the period in question its output went up by 120 per cent, that of the light industry by 55 per cent.

The completion of the first short-term economic plans enabled the People’s Democracies to fulfil the most important task of considerably surpassing the pre-war level of industrial output (especially in heavy industry) and to restore agriculture. During the realization of these plans the socialist sector of the national economy has been considerably strengthened and the material conditions of the working people substantially improved.

All this has created in the European People’s Democracies the economic and political prerequisites for the transition to laying the economic foundations of socialism and for the carrying-through of great programmes of socialist industrialization.

Priority development of heavy industry is the central task and the main link in the present long-term plans of the European People’s Democracies for laying the foundations of socialism. In 1949, work began on the first five-year plans in Czechoslovakia and Bulgaria (1949-55); in 1950, People’s Poland launched its six-year plan (1950-55) and the first Hungarian five-year plan (1950-54) was begun, while 1951 saw the start of the Rumanian and: Albanian five-year plans (1951-55).

Not only a high rate of all-round growth of industrial production, but also a priority growth of heavy industry is a feature of all these plans. The Polish six-year plan envisages that this year the output of branches of heavy industry will be 154 per cent greater than in 1949, while that of branches of light industry will have gone up by 111 per cent. With a 98 per cent all-round growth in industrial output, the Czechoslovak five-year plan envisages a 133 per cent increase in gross output of heavy industry and a 73 per cent increase in that of the light industry. Under the Hungarian five-year plan (prior to the introduction in 1951 of unwarranted increases in the assignments) the value of industrial output scheduled for 1954 was fixed at 136 per cent of that of 1949: for means of production the target was 204 per cent, for means of consumption 173 per cent. Major tasks in the sphere of heavy industry development were also set by the Rumanian and Bulgarian five-year plans.

In rallying the working people for priority development of heavy industry, the Communist and Workers’ Parties are motivated by the need quickly to overcome the technical and economic backwardness surviving from the old order and to transform their countries into industrially-developed states. This is the imperative need of both the domestic and international situation. From the point of view of the domestic situation, steady growth of heavy industry is necessary to ensure the speediest possible victory of socialism in both town and country and in order to give the working people that abundance of material and spiritual benefits which is the goal of the new social structure. From the point of view of international relations, the People’s Democracies need industrialization to increase their economic and defensive strength and, consequently, to strengthen the forces and might of the whole united socialist camp which confronts that of imperialism.

“We cannot permit ourselves any relaxation of the tempo, any scaling down of the tasks,” said Boleslaw Bierut, “since we cannot any longer tolerate the backwardness in the technical level of our industry, and also in the level of our productive forces. We cannot reconcile ourselves to our backwardness when the working people want to live better and in a more cultured way than they did before. We cannot spread the laying of the foundations of socialism over decades, since every delay places a trump card in the hands of our class enemies.

“Finally, we must ensure rapid rates of growth for our creative forces and for our technique, since this is demanded by the international situation, by concern for the defensive strength of our state, by concern for the increased strength of the camp of peace, battling against the imperialist aggressors.”

Considerable resources are needed to ensure the planned rates of industrialization. The new social system, as demonstrated by all the states of the socialist camp, can muster the resources needed for the speedy creation of heavy industry. Under socialism, new resources for industrialization, unthinkable under capitalism, emerge. They include first of all the means released as a result of the abolition of the class of the urban bourgeoisie and the landlord class, and the elimination of the rule of foreign capital. The parasitic consumption of the exploiting classes and the exported profits of foreign capital in the past swallowed up the lion’s share of the national incomes of the Central and South-East European countries. It is sufficient to point out that during the years 1924-44 foreign exploiters extracted 1,000,000,000,000 leva from Bulgaria, about 20 per cent of the national income for those years. Now the immense resources which previously went into the pockets of native and foreign capitalists and landlords can be used by the free peoples for industrialization.

The profits of state industry, growing all the time as a result of the steady industrial expansion and the rise in labour productivity, the profits of home and foreign trade, the resources accruing from the financial and credit system – all are new sources of accumulation for industrialization, sources which are inherent only in socialism.

In Poland, for example, during the first four years of the six-year plan (1950-55) 102,600 million zlotys were invested in the national economy; during 1952-53, 53-54 per cent of the total allocations went to industrial development. Investment per head of the population during this period was almost six times higher than that of 1938. During four years of the first Bulgarian five-year plan (1949-52), 13,000 million leva were allocated to capital construction, of which about a half was invested in industry.

The Communist and Workers’ Parties and the governments of the People’s Democracies are constantly striving that the resources allocated for capital construction shall be expended in the most economical and expedient manner, that they all be concentrated on the most important economic aims and yield the maximum economic results.

The huge capital investment, above all in industrialization, assures the European People’s Democracies of high rates of industrial development inconceivable in capitalist countries. This is indicated by the following figures:<>

These figures show that in the People’s Democracies, advancing confidently along the road of peaceful socialist economic development, industrial production at the beginning of this year was almost three and a half times greater than before the war. In capitalist countries of Europe, despite strenuous efforts to boost the economy by an intensified arms drive, industrial production during the same period grew by only 39 per cent. Hence the rate of growth of production in the People’s Democracies is several times higher than in capitalist countries of Europe. Better proof of the indisputable superiority of the economies of the People’s Democracies over those of capitalism can scarcely be found.

In the bourgeois press, which makes every effort to belittle the economic achievements of the socialist countries, it is often asserted that the rate of increase of industrial production is in itself not indicative, because the absolute production figures in these countries are allegedly small. The facts show however that this thesis will not stand up to the slightest examination. A comparison of the absolute growth of production in the People’s Democracies with that of capitalist countries is by no means to the advantage of the latter. Let us, for example, take Poland. The pre-war bourgeois-landlord Poland occupied one of the lowest places in Europe for industrial production. Today the Polish People’s Republic produces more industrial goods than a capitalist state like Italy and has almost reached the level of France: in output per head of the population Poland has equalled France. In steel output per head of the population Czechoslovakia has overtaken France and Sweden, and in electric power – France and Italy.

Economic co-operation between the People’s Democracies and between these countries and the Soviet Union is essential for the rate of industrial development and for the whole process of socialist industrialization in these countries.

On the basis of her own powerful and highly-developed economy, the U.S.S.R., in exchange for their commodities or on credit, supplies first-class equipment for the metallurgical, engineering, mining and many other branches of industry, as well as vital raw materials. An increasing role in Soviet exports to the People’s Democracies is played by deliveries of equipment for complete metallurgical plants, engineering plants, power stations and other industrial undertakings. The value of the complete aggregates exported by the U.S.S.R. to the People’s Democracies in 1953 totalled 800 million rubles. To Poland alone the Soviet Union sent equipment for 60 major industrial undertakings. Soviet experts are giving the People’s Democracies first-class technical aid, at the lowest possible cost, in the construction of new undertakings and in the operation of plants already at work; advanced Soviet production know-how and the achievements of Soviet science and technology are pouring into the People’s Democracies.

Economic links with the Soviet Union enable the People’s Democracies to erect and equip large-capacity plants and to put them into operation within the shortest possible time and to achieve a high technical level more rapidly. Soviet technical aid greatly enhances the effectiveness of capital investment and makes it unnecessary for these countries to expend resources on the solution of many major technical problems. Soviet credits placed at the disposal of a number of People’s Democracies are also used to aid industrialization. In this way co-operation with the Soviet Union accelerates and facilitates industrialization in the People’s Democracies.

The same end is served by the co-operation between the People’s Democracies themselves. Special note should be taken of the great importance of the role played in the economies of many People’s Democracies by exports of equipment from Czechoslovakia. As the economies of the People’s Democracies grow and their mutual economic ties become stronger, the importance of these ties in industrialization and the development of the whole national economy steadily increases. In addition to extensive trade relations, agreements have been concluded between many of the People’s Democracies providing for the production and subsequent exchange of particular rolled steel cross-sections, the linking-up of electricity networks and reciprocal deliveries of power, joint use of transport routes and joint exploitation of certain natural resources. In this way the best possible use is made of existing resources, the effectiveness of the equipment increased and the most favourable conditions created for uniting the efforts of several states for the joint fulfilment of major economic tasks. The eight-nation Treaty of Friendship, Co-Operation and Mutual Assistance signed in Warsaw on May 14, 1955, is an important landmark on the road to the further development and expansion of economic ties between the signatory nations.

The fact that these countries are building socialism not in isolation, but together with the mighty Soviet Union, that the camp of socialism and democracy is strong and united and that its forces are steadily increasing, that between all its member states there is fraternal, friendly co-operation m the fields of economics, politics, science and culture – all this greatly influences the industrialization of the European People’s Democracies and gives certain special features to this process. Unlike the Soviet Union, none of these countries has to safeguard its technical and economic independence vis-à-vis capitalism solely by its own efforts. This would be beyond the strength of the majority of East European countries. The problem of economic independence vis-à-vis the capitalist world, like that of defence against attack by the imperialist aggressor, is being solved by the united efforts of all the states of the socialist camp without exception. In practice this means that each European People’s Democracy, extending and strengthening its ties with the other socialist countries, can, in carrying out its industrialization programme, concentrate on the particular branches of heavy industry for which it has the necessary resources.

Which these branches shall be depends in the first instance on the economic strength of the country, on its human and natural resources. It is quite clear, for example, that Poland, with a population and area several times those of Bulgaria, will, correspondingly, have a wider front for developing heavy industry. The level from which each country starts out should also be borne in mind. For extremely backward, typically agrarian countries such as Bulgaria and Rumania were in the recent past, industrialization means firstly the creation of new branches of heavy industry. For countries industrially more developed – Poland and Hungary – it means not only the creation of new branches but also the radical reconstruction and extension of existing but weakly-developed branches like iron and steel, coal and engineering. This is true to an even greater extent of industrialized Czechoslovakia, where, in line with the policy of industrialization, the problem of speedily overcoming the extreme lack of balance between heavy and light industry inherited from capitalism and also the extreme unevenness in the territorial distribution of the productive forces has emerged in all its seriousness.

The state planning agencies of the People’s Democracies, taking into consideration the special features of their countries’ economic structure, are in the first instance devoting attention to those branches of heavy industry which are particularly important to ensure more expedient economic development. In Bulgaria, for example, a country with a hitherto extremely backward agriculture, first place in the first five-year plan was given to the creation of an agricultural machinery and chemical industry; it is precisely these branches of heavy industry which are of decisive importance for expansion of the productive forces of agriculture. In Bulgaria’s second five- year plan special attention was given to the development of power and raw material resources. Pre-war Hungary, with several well-developed branches of engineering, did not have any machine-tool industry; and since the machine-tool industry is of especial importance for the rapidly-developing economy of People’s Hungary, greater attention has been given to this branch.

It is quite clear that the Communist and Workers’ Parties and the Governments of the People’s Democracies are rallying the working people for the creation and development of those branches of heavy industry which are favoured by local circumstances, say, raw materials in the form of mineral deposits. This is well demonstrated by the example of the priority given to development of the oil industry in Rumania, to the coal industry and a number of branches of the chemical industry in Poland, the aluminium industry in Hungary and others.

Finally, the requirements of the other fraternal countries are another important factor guiding the People’s Democracies in their industrial development. The requirements of co-operation determine to a considerable degree, for example, the rapid development of heavy engineering in Czechoslovakia, coal mining in Poland, the aluminium industry in Hungary, etc. Each rightly counts upon receiving a number of important heavy industry products from another member state of the socialist camp. This relieves it of the need to organize the production of goods which would be unprofitable because of small demand or the absence of the necessary economic prerequisites. Poland, for example, in producing tractors of medium capacity both to satisfy her own needs and for export, counts upon being able to import tractors of small and large capacity.

Thus a socialist system of international division of labour is taking shape, with each country allocating a portion of its resources for the satisfaction of the needs of her fraternal countries, and relying, in its turn, on their friendly aid.

In estimating the successes of the European People’s Democracies during the ten years of their existence, including the five or six years in which they have been engaged in industrialization, it can be affirmed that the chief result of the economic development of these countries has been the creation of their own heavy industry. During the years of people’s rule scores of major industrial undertakings have been built. Many are large-scale combines, equipped with the most advanced machinery, ensuring high labour productivity. They include, for example, the V. I. Lenin Iron and Steel Works in Nowa Huta, Poland, and the Klement Gottwald Plant in Czechoslovakia, the Danube Iron and Steel Works in Hungary, the J. V. Stalin Chemical Works in Bulgaria, and many others. There are few plants in Western Europe which can compete with these in level of equipment or organization of production. Hundreds of old enterprises have been radically reconstructed, substantially extended and retooled and are now able to take their place alongside the new plants. All this has fundamentally altered the face of the European People’s Democracies. They have become advanced states, having at their disposal a developed iron and steel and engineering industry.

Poland and Hungary have become industrial countries. The share of industrial output in total production reached 78 per cent in Poland in 1953 compared with 48 per cent in 1937. At the same time the share of means of production in industrial output in 1953 was 55.8 per cent compared with 47 per cent in 1947. In Hungary in 1953 industrial production attained 77.1 per cent compared with 42 per cent in 1930. Instead of backward, agrarian countries, Rumania and Bulgaria are now industrial-agrarian states. Already in 1951-52 industry’s share in their total production exceeded that of agriculture.

During recent years Czechoslovakia’s industrial strength has grown sharply. In 1953, industry’s share in her over-all production reached 83.7 per cent compared with 58 per cent in 1937. At the same time, within industry itself, output of means of production has increased to 62.3 per cent from the pre-war level of 40 per cent.

One of the most important results of the socialist industrialization has been the creation of a sound domestic basis of iron and steel, coal and power.

This is indicated in the table [below], which shows the extremely significant growth in steel smelting, coal extraction and electrical power production in some of the European People’s Democracies in comparison with pre-war years.

Bulgaria’s V. I. Lenin Iron and Steel Plant went into production in 1953. Her coal production in 1954 was almost four times that of pre-war years, while the electric power generated was almost six times greater.

In Czechoslovakia 12 major power stations were built during the first five-year plan. Last year several others, including the Slapskaya station on the Vltava, went into operation. This year alone, electric-power production will go up by 1,350 million kilowatt/hours. Now more than 97 per cent of the country’s populated areas are supplied with electricity. In Poland last year the power station at Zeran and turbines and boilers at the Jaworzno-II,: Stalowa Wola, Laziska, Szomberki and Szczecin power stations went into commission.

* 1953 figures.

Experience has completely destroyed the “theory” conceived by imperialism’s scientific hangers-on that the countries of Central and South-East Europe “lack” raw materials and hence cannot develop their own heavy industry.

Rumania now produces for example about 10 million tons of oil – one and a half times more than before the war. It is now building its first coke and chemical plant which will use the country’s own raw materials. The use of natural gas is also being extended, together with that of natural resources hitherto neglected, like rock salt, lignite and brown coal. In Poland the extraction of copper and iron ore is making rapid strides, together with that of many chemical raw materials; during the last year the new Nowa Wies, Barbara and Henryk iron ore mines started operations; their capacity is equal to a quarter of that of all Poland’s pre-war mines. An aluminium plant at Skawina has gone into production. Chemical industry output is five times the pre-war figure. Bauxite extraction in Hungary is several times higher than before the war. A large aluminium plant has been built. In Czechoslovakia the extraction of iron ore, oil, non-ferrous ores and pyrites has increased considerably. Output of artificial fabrics, synthetic fuels, plastics and other substitutes for materials in short supply has increased substantially. In Bulgaria, side by side with the steady rise in output of the lead and zinc ore mines and the production of concentrates, the basis for a non-ferrous metals industry is being laid. The extractive industries in Albania have made great advances. Albanian miners and oil-workers have left far behind the pre-war production figures for oil, bitumen and non-ferrous metals.

During the socialist industrialization of the People’s Democracies many new and rapidly developing branches of manufacturing industry have been created, and many existing branches reconstructed on the basis of new machinery and technique. This is of great importance for the socialist reconstruction of the economy of these countries. The decisive role here belongs undoubtedly to the entire complex of branches producing machinery and equipment for the most varied sections of the national economy.

The Polish working people can legitimately be proud that during the years of people’s rule they have founded a shipbuilding industry, an automobile and tractor industry, a developed agricultural-machinery industry, a heavy-machine tool industry, plants producing equipment for the mining, iron and steel, power, chemical, textile and other industries, and factories making ball-bearings, precision and optical instruments. In industrial output Poland has moved up to fifth place in Europe, having overtaken Italy and is surpassed only by the U.S.S.R., Britain, Germany and slightly by France. The successes of Polish engineering are demonstrated by the fact that engineering production is nine times greater than before the war, including that of metal-processing machinery, which is 15 times greater.

Engineering has become a leading branch of the Czechoslovak economy. During the five-year plan its output went up 3.3 times, while its share in the total industrial production rose from 17 per cent in 1948 to 27.8 per cent in 1953. During the years of people’s rule the structure of the engineering industry has changed substantially: heavy machine-building industry has become its basis. During the five-year plan output of steam turbines went up 4.6 times, diesel engines 4.2 times, large transformers 12 times and cranes 9 times. The production of turbo-generators of 63,000 kilowatt capacity, with hydrogen cooling, giant presses of 12,000 ton capacity, steam boilers with a capacity of 220 tons of steam per hour, multi-bucket excavators and other equipment for mining, iron and steel and many other branches of industry and transport testifies to the maturity of Czechoslovak engineering. Machines with the trade marks of Czechoslovak factories can be seen in many enterprises in the socialist countries, and in a number of other countries.

The Hungarian engineering industry has undergone substantial reconstruction in the course of the industrialization. Such branches as machine-tool manufacturing, automobile and tractor manufacturing, and the plants producing up-to-date agricultural machinery, building and mining equipment have, in fact, been created anew. The machine-tool industry, producing modern gear-cutting and milling machines, including heavy types, has developed especially rapidly. Output of cars in 1953 was 6.5 times the 1948 figure. Hungary is also producing wheeled and caterpillar tractors and combine harvesters, while the shipbuilding yards are making ships, tugs and floating cranes.

Rumania and Bulgaria have also achieved big success in establishing their own engineering industries. In Rumania, once economically backward, 49.6 per cent of the equipment installed in the metal-processing and engineering industry and 57 per cent of that installed in the oil industry during the years 1948-53 was made by Rumania itself. Home industry now satisfies 90 per cent of Rumania’s agricultural machinery requirements.

Not only has the industrial might of the European People’s Democracies grown during industrialization; considerable changes have also taken place in the distribution of the productive forces. The switching of centres of production to the sources of raw materials and to the consumer areas is under way. Once backward areas without any industry are rapidly becoming industrialized. On this basis the friendship and co-operation between the peoples of the People’s Democracies are growing stronger and existing resources used more economically and rationally. In Poland a start has been made with the industrialization of the Eastern regions, formerly without any industry, and in Czechoslovakia the once backward Slovakia is becoming an industrial area. Many new industrial centres have appeared in Hungary, Rumania, Bulgaria and Albania.

Side by side with the growth of heavy industry, the working class of the People’s Democracies is growing and maturing, and the alliance between the workers and peasants is becoming stronger. There has for long been no unemployment in the People’s Democracies, nor has there been concealed agrarian over-population. In Poland, for example, the number of factory and office workers has more than doubled during the years of people’s rule, reaching 5,600,000. The number of workers in People’s Hungary has increased almost two-fold compared with pre-war, reaching by the beginning of 1954 the total of 1,660,000. The skill of the working class is rising steadily. With every day labour emulation for overfulfilment of the national economic plan, for better quality goods and for economy in production becomes more widespread.

The new machinery and technique enable the working people to increase the productivity of labour – a necessary condition for the successful building of socialism. In Czechoslovakia, for example, labour productivity in industry had risen 60 per cent by the beginning of last year compared with 1948, and by 52 per cent in building. Labour productivity in Polish industry rose by 60 per cent during the past five years. In Bulgaria labour productivity in industry in 1953 was double what it was in 1939.

On the basis of the advances in heavy industry, the People’s Democracies were able considerably to extend the capacity of the light and food industries; and re-equip them. In all these countries a considerable number of textile and footwear factories, meat and dairy products combines and other undertakings for the manufacture of consumer goods have been either built or reconstructed. At the present time branches of the second subdivision are producing several times more than before the war.

The steady growth of heavy industry plays a most important part .in equipping agriculture with machinery and in its socialist reorganization. With every year socialist industry is sending more tractors, combine harvesters and other machinery to the countryside and is increasing the supplies of fertilizer. Thousands of tractors and combine harvesters are now at work in the fields of the European People’s Democracies. Machine-and-tractor stations have become strongpoints of socialism in the countryside.

It would be incorrect to believe that the creation of the material basis for socialism in the People’s Democracies is taking place without any difficulties. The reconstruction of the entire technical basis of the national economy requires immense capital investment, skilled personnel and great experience. The main difficulties which have been encountered in greater or lesser degree by all the European People’s Democracies are now fairly clear. The difficulties manifested themselves above all in the emergence of much disproportion in the economy. But these difficulties have one special feature – they are difficulties of growth, of progress and not of decline. The new social system has at its disposal all the means to overcome them.

The decisions adopted by the Communist and Workers’ Parties in practically all the European People’s Democracies during the last two or three years point out that agricultural development is lagging considerably compared with the rapid tempo of industrial development. In Poland, for example, industrial production rose 118 per cent between 1950 and 1953, but agricultural production rose by only 10 per cent. In Czechoslovakia industrial production more than doubled during the five-year plan, while that of agriculture went up by only one-third, merely attaining pre-war level. By the beginning of 1954 Rumanian industrial production had gone up 2.5 times compared with pre-war, while agricultural production had only reached the 1938 level.

In such circumstances agriculture cannot adequately satisfy the rapidly growing demands of industry for raw material and of the population for food products.

In order more rapidly to overcome the lag in agriculture, the Communist and Workers’ Parties of the People’s Democracies are intensifying their work for organizing more co-operatives in the countryside, for the economic consolidation of the existing co-operatives and for better political and organizational work in the rural areas. The measures which the Communist and Workers’ Parties have adopted to ensure the rapid expansion of agricultural production also envisage a considerable increase in capital investment in agriculture and the reinforcement of the villages with skilled personnel. The supply of machinery and fertilizer is being substantially increased and the scale of reclamation and irrigation stepped up.

Poland’s production of agricultural machinery will this year have increased two-fold compared with 1953, and the production of fertilizer risen by 38 per cent. In carrying out the programme for agricultural expansion adopted by the Xth Congress of the Czechoslovak Communist Party, 8,900 tractors and 1,373 combine harvesters were sent to the villages last year alone; during the five-year plan 14,400 tractors were sent.

Nothing can demonstrate better than these facts that a radical expansion of agriculture is possible only on the basis of the development of heavy industry and that socialist industrialization corresponds to the interests both of the working class and of the working peasants in the People’s Democracies.

The lag in the development of the raw material and power basis in relation to the needs of industry is another growing-pain of the People’s Democracies. In this sphere also the popular governments and the Communist and Workers’ Parties have adopted and are successfully carrying through a series of measures designed to bring about a more rapid increase in the output of coal, oil, ores and ferrous and non-ferrous metals and to step up the tempo of power-station construction. The national-economic plans of the People’s Democracies in the coming years give priority to geological survey and increased production from existing sources.

One of the most vital problems at present confronting the European People’s Democracies is that of increased labour productivity and the closely linked question of the use of machinery and technique. In many of these countries labour productivity is lagging behind the growth in earnings, while equipment is being inadequately used. But in the present circumstances, when the flow of labour from the countryside is sharply decreasing, productivity of labour becomes the main factor in increasing output. The new social system has everything necessary to ensure a labour productivity higher than that of capitalism. Taking into account the superiority of their countries’ economies, the Communist and Workers’ Parties of the People’s Democracies are calling upon the working people for a nation-wide struggle for increased productivity of labour, for rapid technical progress, for better organization of production and for the strictest economy.

The economic plans envisage a substantial increase in the productivity of labour during the coming years. The extensive scale of socialist emulation and the mass movement of rationalizers and inventors show that the new workers are increasingly mastering know-how and making better use of the technique for the purpose of satisfying the needs of socialist construction. The supply of new machinery to the existing enterprises – which, of course, implies priority to production of means of production – is of great importance in solving the problem of increased productivity of labour.

In some of the People’s Democracies a certain redeployment of capital investment, undertaken in order to put an end to the disproportion which began to emerge, was interpreted by Right-wing opportunists and capitulationists as a repudiation of the policy of priority development for heavy industry and of socialist industrialization. These views, fundamentally incorrect and harmful to the cause of socialism, are undergoing serious criticism in the press and receiving a crushing rebuff from the public.

In Hungary, Right-wing opportunist elements who had managed to attain leading positions caused substantial harm to the country’s development. The plenary meeting of the Hungarian Workers’ Party Central Committee held at the beginning of this year resolutely condemned the “anti-Marxist, anti-Party, opportunist views” recently disseminated in the country, views, “under whose influence industrial development was halted, socialist accumulation reduced and state and civil discipline weakened.” The resolution adopted by the meeting underlined that for the successful advance of socialist construction “it is necessary to carry out consistently the general line of our Party, the policy of socialist industrialization ensuring a higher rate of growth for heavy industry in the national economy.”

The working people of all the People’s Democracies clearly understand that the development of heavy industry is important not only for their homeland. The socialist industrialization of the European People’s Democracies is of immense international significance. Every factory and mill, every mine and power station strengthens the forces and might of the whole socialist camp and its defensive capacity. The example of the European People’s Democracies, once backward and oppressed, now free and strong, points the true road to freedom and happiness for the peoples still under the yoke of imperialism.

Engaged in peaceful labour and linked by the bonds of indestructible friendship and co-operation, the People’s Democracies are vigilantly watching the intrigues of the enemies of peace. The determination of the free peoples to counter the armed forces of the aggressor-states with a force no less powerful and with their readiness for defence and the protection of peace is unshakable.

United behind their Communist and Workers’ Parties, and sure of the fraternal aid of the Soviet Union, the working people of the People’s Democracies are confidently and tirelessly creating their own heavy industry – the economic foundation of socialism.
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