The Great Break (which took place between 1928 and 1929) involved the phasing out of the New Economic Policy (NEP), and its replacement with a planned economy. It resulted in a shift towards rapid collectivization and industrialization, as a means of increasing the USSR's standing in the global economy. The framework of the NEP (with its emphasis on market forces and the continuation of private ownership in certain sectors) was considered insufficient to achieve these ends. As sociologist Simon Clarke put it in one article on the topic:
The institutional and structural barriers to Russian economic development were now compounded by the unfavorable circumstances of the world economy, so that there was no prospect of export-led development, while low domestic incomes provided only a limited market for domestic industry. Without a state coordinated investment program, the Soviet economy would be caught in the low-income trap typical of the underdeveloped world.
The tense international situation contributed to the development of what some have termed "siege socialism," characterized by a defensive and competitive mentality. As Stalin put it in a 1931 speech at the First Conference of Workers:
We are fifty or a hundred years behind the advanced countries. We must make good this distance in ten years. Either we do it, or we shall be crushed.
The success of Stalin's economic policy is disputed. It certainly resulted in rapid economic growth; as economic historian Robert Allen put it one paper on the topic:
The Soviet economy performed well... Planning led to high rates of capital accumulation, rapid GDP growth, and rising per capita consumption even in the 1930's. [...] The expansion of heavy industry and the use of output targets and soft-budgets to direct firms were appropriate to the conditions of the 1930's, they were adopted quickly, and they led to rapid growth of investment and consumption.
Economist Elizabeth Brainerd refers to Soviet growth rates as "impressive," noting that they "promoted the rapid industrialization of the USSR, particularly in the decades from the 1930's to the 1960's." She also states:
Both Western and Soviet estimates of GNP growth in the Soviet Union indicate that GNP per capita grew in every decade in the postwar era, at times far surpassing the growth rates of the developed western economies.
The standard of living also increased; Robert Allen notes that "consumption per head rose 27 percent from 1928 to 1937." Brainerd confirms this:
The conventional measures of GNP growth and household consumption indicate a long, uninterrupted upward climb in the Soviet standard of living from 1928 to 1985; even Western estimates of these measures support this view, albeit at a slower rate of growth than the Soviet measures.
However, there were downsides as well. Allen notes that the gains of the 1930s "were confined to the urban population and to those moving from the country to the city." And of course, collectivization of agriculture involved tremendous violence and potentially contributed to the Soviet famine, and the gains to industrial efficiency were modest at best. As Allen put it, "Collectivization and political repression were human catastrophes that brought at most meager economic returns."
In addition, it could be argued that the Great Break was unnecessary, and that a modified version of the NEP could have allowed for a similar rate of growth. All in all, the necessity of Stalin remains one of the great "what-ifs" of modern history.
Sources