Established in 1921 and remaining in existence until the dissolution of the Soviet Union in 1991, Gosplan had as its main task the creation and administration of a series of five-year plans governing the economy of the USSR.

The Soviet government's Council of Workers' and Peasants' Defense rushed from economic bottleneck to economic bottleneck in a frenzied effort to sustain what remained of Russian industry on behalf of the Red Army, locked in a life or death struggle with the anti-Bolshevik White movement, backed by the foreign military intervention of Great Britain, France, Japan, the United States, and other countries.

In the midst of such chaos the mere idea of long-term economic planning remained a utopian dream during these first years of existence of Soviet Russia.

[6] With the ongoing turn to a market-based system of production as part of the New Economic Policy (NEP), very real constraints existed on the possible extent of central planning during the initial phase of Gosplan's institutional life.

Gosplan quickly became a centre point for central planning and expanded investment in heavy industry, with Leon Trotsky one of the leading political patrons of the agency.

[8] An administrative rivalry ensued between Gosplan and the People's Commissariat of Finance (Narkomfin), the latter the agency most in favor of currency stabilization and expansion of the general economy through the regulated market.

[8] Gosplan had no power of compulsion in this early interval, but was forced to work through Sovnarkom, STO, or the People's Commissariats to have its suggestions implemented by decree.

With the introduction of five-year plans in 1928, Gosplan became responsible for their creation and supervision according to the objectives declared by the All-Russian Communist Party (Bolsheviks).

The introduction of the first five-year plan in 1928 led to a re-examination of the roles of Gosplan and VSNKh, the supreme state organization for management of the economy at this time.

Gosplan calculated the sum of the country's resources and facilities, established priorities for their use, and handed down output targets and supply allocations to the various economic ministries and through them to every branch and enterprise in the entire economy.

To be sure, the system had its limitations, including the absence of meaningful price and cost information and the difficulty of extending planning to all the special commodities and enterprises in a modern economy.

Not only individuals but state enterprises as well engaged in these practices, often out of necessity, when extra-legal influence or illegal operations appeared to be the only way to fulfill the demands of the plan.