section_path: Consolidation of power/1927–1931: Dekulakisation, collectivisation, and industrialisation/Economic policy
section_name: Economic policy
paragraph_text: Economic policy
  
  We have fallen behind the advanced countries by fifty to a hundred years. We must close that gap in ten years. Either we do this or we'll be crushed.
  
  This is what our obligations before the workers and peasants of the USSR dictate to us.
  
  — Stalin, February 1931
  
  The Soviet Union lagged behind the industrial development of Western countries, and there had been a shortfall of grain; 1927 produced only 70% of grain produced in 1926. Stalin's government feared attack from other countries. Many communists, including in Komsomol, OGPU, and the Red Army, were eager to be rid of the NEP and its market-oriented approach; they had concerns about those who profited from the policy: affluent peasants known as " kulaks " and small business owners or " NEPmen ". Stalin turned against the NEP, which put him on a course to the "left" even of Trotsky or Zinoviev.
  
  In early 1928, Stalin travelled to Novosibirsk, where he alleged that kulaks were hoarding grain and ordered them be arrested and their grain confiscated, with Stalin bringing much of the grain back to Moscow with him in February. At his command, grain procurement squads surfaced across West Siberia and the Urals, with violence breaking out between these squads and the peasantry. Stalin announced that both kulaks and the "middle peasants" must be coerced into releasing their harvest. Bukharin and other Central Committee members were angry they had not been consulted about this measure. In January 1930, the Politburo approved the liquidation of the kulak class who were exiled to other parts of the country or concentration camps. By July 1930, over 320,000 households had been affected by the de-kulakisation policy. According to biographer Dmitri Volkogonov, de-kulakisation was "the first mass terror applied by Stalin in his own country."
  
  In 1929, the Politburo announced the mass collectivisation of agriculture, establishing both kolkhozy collective farms and sovkhoz state farms. Stalin barred kulaks from joining these collectives. Although officially voluntary, many peasants joined the collectives out of fear they would face the fate of the kulaks. By 1932, about 62% of households involved in agriculture were part of collectives, and by 1936 this had risen to 90%. Many collectivised peasants resented the loss of their private farmland, and productivity slumped. Famine broke out in many areas, with the Politburo frequently ordering distribution of emergency food relief to these regions.
  
  Armed peasant uprisings against dekulakisation and collectivisation broke out in Ukraine, the North Caucasus, Southern Russia, and Central Asia, reaching their apex in March 1930; these were suppressed by the army. Stalin responded with an article insisting that collectivisation was voluntary and blaming violence on local officials. Although he and Stalin had been close for many years, Bukharin expressed concerns and regarded them as a return to Lenin's old " war communism " policy. By mid-1928, he was unable to rally sufficient support in the party to oppose the reforms. In November 1929 Stalin removed him from the Politburo.
  
  Officially, the Soviet Union had replaced the "irrationality" and "wastefulness" of a market economy with a planned economy organised along a long-term and scientific framework; in reality, Soviet economics were based on ad hoc commandments issued often to make short-term targets. In 1928, the first five-year plan was launched, its main focus on boosting heavy industry; it was finished a year ahead of schedule, in 1932. The USSR underwent a massive economic transformation. New mines were opened, new cities like Magnitogorsk constructed, and work on the White Sea–Baltic Canal began. Millions of peasants moved to the cities, although urban house building could not keep up with the demand. Large debts were accrued purchasing foreign-made machinery.
  
  Many of major construction projects, including the White Sea–Baltic Canal and the Moscow Metro, were constructed largely through forced labour. The last elements of workers' control over industry were removed, with factory managers increasing their authority and receiving privileges; Stalin defended wage disparity by pointing to Marx's argument that it was necessary during the lower stages of socialism. To promote intensification of labour, medals and awards as well as the Stakhanovite movement were introduced. Stalin's message was that socialism was being established in the USSR while capitalism was crumbling amid the Wall Street crash. His speeches and articles reflected his utopian vision of the Soviet Union rising to unparalleled heights of human development, creating a " new Soviet person ".