The advent of the Depression was one of the major propaganda coups for the nascent USSR and Stalin's dictatorship. The global scale of the Depression appeared to validate the Marxist-Leninist that capitalism was inherently unstable and the mass unemployment would finally lead to the long-predicted uprising by the proletariat. The USSR was relatively well-positioned to weather the Depression itself. The economic cordon around the USSR was fraying in the 1920s, but one of its legacies was that the USSR was not all that connected up into global markets in 1929. The Soviet Union was insulated from the effects of the Depression, however, the global downturn in the economy did not leave the Soviets unscathed.

One of the immediate reactions of the major world economies to the Depression was preotectionism and tariffs. The rise of protectionist tariffs made it much less profitable for the Soviets to export grain, timber, and other raw materials to acquire foreign goods that could not be produced within the Soviet Union. The Soviet's solution to this problem was typically Stalinist: simply export more. The exports of wheat grew from 200 000 tons to two million tons between 1929-1931. This increase in agricultural exports came at an acute time in Soviet agriculture and added yet more hardship to the Soviet public. These export policies were a contributing factor to famine conditions in Ukraine between 1931-32. The state also sold art treasures and Torgsin shops sold special consumer items to Soviet citizens for precious metals which would be in turn the state would use to pay for foreign imports.

The most acute period of Soviet agricultural export (1931) coupled with the nadir of the global Depression, so the detrimental effects exports had on the Soviet economy appeared relatively slight to outsiders. As a whole though, the Soviet economy exhibited a great deal of growth during the Depression. The Soviets were able to import technical experts and specialists from the West that they might not otherwise in a better global economic climate as many Western firms were desperate for scarcer funds. The Ford Motor Company helped set up a state of the art automobile factory in Nizhnii-Novgorod and other American firms aided the massive tractor factories in Stalingrad and Kharkov. Modern foreign machinery also greatly assisted the Stalinist crash industrial drive and helped to create a truly massive heavy industry sector within the USSR. Foreign specialists became a more common sight in the various Stalinist projects. The massive steel city town of Magnitogorsk had a small American enclave, termed Amerikanka, for American steel engineers. The presence of these foreign specialist provided fodder for a number of conspiratorial-minded types in the Cold War that capitalists had funded the USSR, but the reality was more mundane. The foreign specialists provided a degree of initial guidelines, but the Soviets proved to be apt pupils. Soviet engineers easily took over the foreign expertise and the importation of expertise was more of a hothouse incubator for the development of Soviet heavy industry.

In this retrospect, the Depression helped render the Soviet economy much more efficient. There were significant human costs to the Soviet government's response to the Depression, namely both in higher grain requisitions and reinforcing the Stalinist drive to go all in on the development of heavy industry. But these human costs did not eclipse the great propaganda value the USSR gained from the Depression. Soviet growth rates in GNP far exceeded the growth exhibited by their capitalist counterparts. This considerably helped the Soviet's ideological appeal and added luster to the Soviet experiment.

Sources

Davies, Robert William, S. G. Wheatcroft, and Mark Harrison. The Economic Transformation of the Soviet Union, 1913-45. Cambridge: Cambridge Univ. Press, 1994.

Nove, Alec. An Economic History of the USSR, 1917-1991. London, England: Penguin Books, 1992.