Economy of the Soviet Union

The economy of the Soviet Union was based on a system of state ownership, administrative planning, socialist competition and not free labour. The Soviet Union created the modern world's first centrally planned economy. The first major project of economic planning was the GOELRO plan, which was introduced in 1920 and basically fulfilled by 1931. It included construction of a network of 30 regional power plants, including ten large hydroelectric power plants, and numerous electric-powered large industrial enterprises. The GOELRO Plan became the prototype for subsequent Soviet five-year plans. From 1928 to 1991 the entire course of the economy was guided by a series of Five-Year Plans. Within about 50 years, the nation evolved from a mainly agrarian society and became one of the world's three top manufacturers of a large number of capital goods, heavy industrial products and weaponry. However, the USSR lagged far behind in the output of light industrial production and consumer durables, mostly because of inability of Gosplan to predict the demand for such products.