Lessons of the Soviet Socialist Planned Economy Long ago German Chancellor Bismarck, after reading the “Communist Manifesto” by Marx and Engels, said the following: “This is very interesting. But now we must find a country on which we would have no mercy to carry out an experiment." Russia was to be the country where this experiment would take place. The main part of the experiment consisted of running a socialist planned economy defined as the state economy, in which all sectors of production are governed and owned by government institutions. Before the country could implement the planned economy, it had to adapt some policies. First the country had to begin industrialization, or as some economists call it the “big push” (industry first strategy). The ultimate goal was the growth of the industrial sector. But because the Russian economy was so backward, a transition period called state capitalism was necessary. In declared capitalism, through nationalization, the state would control major sectors of the economy and use this control to influence the remaining private sectors. Nationalization gave the state not only control of the means of production, but also ensured control over production. Another policy that had to be adapted was collectivization. After 1927, when voluntary grain production fell below the government's target, Stalin ordered the collectivization of agriculture by forcibly establishing collective farms. Millions of peasants who resisted collectivization were arrested and then executed or deported. Even in the post-Soviet era, the collectivization of agriculture was the sore point of the Soviet economy; he never achieved his economic goals. To hold all this together there had to be an organization large enough to balance what was now known as the input-output economy. In 1922 the Gosplan was created to deal exclusively and explicitly with planning. In the initial stages Gosplan provided the control figures and planned objectives. In 1925 Gosplan took on the responsibility of drawing up the five-year plans. The five-year plan envisaged industrialization at maximum pace with the idea that some major construction projects should be carried out. By the end of the 1930s, nationalization was completed, agriculture was collectivized, and the national planning mechanism was established. The Soviet economic system was one of the most complex organizational arrangements, especially between different levels of organization..