Russia:
The Communist Economic System
(See: pp. 122-123.)

Also, you may want to review our lecture on structural adjustment (economic change).
http://www.harpercollege.edu/~mhealy/g101ilec/intro/eco/ecochg/ecochgfr.htm

Objectives of Economic Planning

In 1917 the communists took over control of the Russian empire from their monarch (Czar Nicholas II). The USSR (Union of Soviet Socialists Republics) was created seven years later. Following the economic theories of Karl Marx, the Communists embarked on a series of 5-year economic plans designed to bring Russia's agriculture-based economy into the industrial age.

The objectives of economic planning were to speed industrialization and to collectivize agriculture.  This was done by implementing the National Planning Commission (called Gosplan).  The entire country would be organized around Marxist-Leninist principles.

Communists believed agriculture would be more efficient if private farms were collectivized into large state-run farms. Initially they farms were organized into a Sovkhoz (a grain and meat factory) whose mechanization and minimum labor requirement would result in maximum efficiency. Or so they hoped. The sovkhoz's were adismal failure. Any farmers who resisted were killed.  But starvation, either caused by the government or as a result of loww agricultural productivity killed millions.

A later, small,version of the collective farm, called Kolkhoz, did not work either because incentives did not exist to encourage farmers to work the land and there was again harsh treatment of farmers. 

Also, planned agriculture resulted in ecological disasters include draining of Aral Sea and  redirection of Siberian Rivers.  There was ignorance of weather and proper agricultural techniques, i.e., leaving land dormant.

Collectivization of agriculture with mechanization was to free labor to work in factories.  Energy development was given priority.  There was extensive development of transportation networks [rutransp] [wwtrans].  The result was a large initial increast in the industrialialcapacity which helped produce weapons for defeat of the Germans during WWII.  But, by assigning production of manufactured goods to specific places, ignoring the locational considerations of economic geography, the program was doomed to fail.  Once a region was assigned the produciton of a product, no other region was allowed to make that particular product, railcars in Latvia, for example, even if was cheaper to produce in them in other regions. 

Furthermore, the absence of competition made managers complacent and workers less productive than they could be.  As a result of this economic philosophy, the economic geography of the republics were tightly bound to the Russian SSR and each other.

[The text of the above was written by Scott Girhard, San Antonio College from his online course GEOG 1301 World Geography. Used with permission.]