The background to the changes we have sketched, particularly in the sphere of penal policy and what I have called the ‘de-Stalinization of the workplace’, was a momentous process of urbanization – the commanding factor in the history of the USSR. After the war – in stages, obviously – urbanization inevitably began to have a powerful impact on society, culture, mentalities, and even the state. An accelerated transition from a predominantly rural society to a mainly urban one involved, at halfway stage, a phase when the two types of society were basically intermingled. Frequently incompatible, they coexisted in an explosive mix and the historical distance between them remained very considerable. The Soviet Union became ‘semi-urban’ in 1960, but the Russian Federation had crossed this threshold earlier. Until 1958 there was no official definition of a ‘town’ or ‘urban settlement’ valid for the whole Soviet Union; each republic had its own. In 1958 the threshold was fixed at 12,000 inhabitants for a town and 2,000 for an ‘urban settlement’, provided at least 50 per cent of the population were not directly employed in agriculture.
So this intermediate phase could be considered a historical stage in its own right for the country and its regime. The rural population, which supplied the bulk of the new urban population, ‘ruralized’ the towns before the latter succeeded in urbanizing the rural folk. That would happen only in the post-Stalin period – and not without much friction and many ‘side effects’. Although not without government input, these processes were basically spontaneous. They oblige us temporarily to distance ourselves from the idea of a rigid party-state dominating and controlling everything, and to reveal something passed over by most studies: ‘spontaneity’ (stikhiia, a term of Greek origin). In any serious general history of the USSR, stikhiia should be a legitimate – and sometimes central – topic, although it seems unacceptable to analysts with an overly politicized view of matters.
Scarcely a smooth process, urbanization was the crucial novelty of the twentieth century in Russian history and may be reckoned to have been completed by the mid-1960s. By then, the majority of the population was composed of town dwellers in Russia, the Ukraine and the Baltic states. Some of the towns were old, but most were of recent construction. One randomly selected index is revealing about the conditions of this urbanization: in Soviet towns in the 1960s, 60 per cent of families lived in state-owned housing with communal kitchens and toilets. Indicative of low living standards, this statistic also points to excessively rapid and, we might safely add, ‘unplanned’ urbanization. Likewise largely unplanned, the consequences were many and various. Whatever the specificities of the process in the USSR, some of them are common to cases of precipitous urbanization elsewhere. We shall return to this point when we consider other data, but we can already venture that at this juncture in its history the country embarked on a novel stage: it became a new society whose interaction with the state assumed different forms. The juxtaposition of these two themes will lead us to consider parameters that proved decisive for the system’s vitality, longevity and mortality.
We have already dealt with labour mobility and an emerging ‘labour market’, which became an accepted reality. To extend the canvas to the whole society, we must signal an important manifestation of ‘spontaneity’ in action: namely, powerful migration flows, which the authorities could no longer control through the previous routine of sanctions and restrictions. In the new environment of massive population movements other strategies had to be conceived and applied. The following statistics for such population flows in 1965 can cut a long story short:1
All Towns in the USSR
| Arrived from: | |||
| Other towns | Countryside | Unknown | Total |
| 4,321,731 | 2,911,392 | 793,449 | 8,026,572 |
| Departed to: | |||
| Towns | Countryside | Unknown | Total |
| 4,338,699 | 1,423,710 | 652,478 | 6,414,887 |
| Balance in favour of towns from: | |||
| Towns | Countryside | Unknown | Total |
| –16,968 | 1,487,682 | 140,971 | 1,611,685 |
If these numbers do not seem particularly high, a clarification specific to the Soviet Union should be introduced: the data include only those who registered with the police. Yet many came to the towns, sometimes stayed for long stretches, and left without registering, while others settled for good without reporting to any administrative authority.
Population movements for the years 1961–6 for the Russian Federation alone were imposing: nearly 29 million people arrived in towns while 24.2 left them, yielding a total of 53.2 million migrants. In Western Siberia the total was 6 million; in Eastern Siberia 4.5 million; and in the Far East 4.5 million.
Some worrying phenomena emerge from these figures. It transpires that few people set off for the east of the country with the intention of genuinely settling there. Streams of people returned from these regions where they were badly needed, in part because of housing shortages, and often because wages were too low. According to numerous local inquiries, 82 per cent of single people and 70 per cent of married couples left on account of often lamentable housing conditions (they were renting rooms – sometimes just the corner of a room).
This situation created a countrywide problem. Changing the direction of such population movements necessitated an improvement in the housing conditions in deprived regions. Yet despite sustained efforts, the housing problem remained critical throughout the country. In 1957, average availability of housing per inhabitant in the Russian Federation stood at 6.7 square metres; in the Far East, at 5.9; in Eastern Siberia, 6.1; in Western Siberia, 6.3; and in the Urals, 6.3. Thus, in the eastern territories of the USSR, whither the government wanted to attract labour, there was less housing, central heating and running water than the Russian average, and even than the average for central Russia, itself poorly equipped.
The Soviet leadership and elites were very preoccupied with the problem of inducing labour to migrate to the east and settle there. The problem was not that such population movements were impossible to control by police or ‘totalitarian’ methods – no one seriously envisaged any such thing. Given the new social conditions and realities, the situation seemed utterly inextricable. On the one hand, Siberia contained enormous wealth that could ensure the system’s prosperity, and the requisite labour to exploit it existed in the populated regions of the country. On the other hand, it was impossible to attract this labour to the east and induce it to settle there. People from better-off European areas of the USSR would have to be guaranteed good wages and suitable supplies, while those from poorer regions with huge labour surpluses – e.g. the central Asian republics – would not move because of profound cultural attachments to their traditional environment.
We shall come across other such seemingly insoluble imbroglios, for they were to keep on emerging at a systemic level. For now, however, we shall stick to the problems bound up with urbanization, with particular attention to the issue of labour supplies between 1953 and 1968.
In the mid-1960s and for some years thereafter, the situation still seemed amenable to solution by better coordination and implementation of plans for manpower supplies – that is to say, correcting an excess here and remedying a deficit there by tapping the available reserves in some sector and place. The country was not as yet facing the generalized, acute labour shortage that we shall discuss in Part Three.
A good interdisciplinary institution, Gosplan’s own research institute was perfectly capable of studying and forecasting complex situations and knew the planning system well. It sought to understand the present in order to prepare for the immediate future. Intellectually, its researchers were better equipped than other planners and politicians to grasp an intricate socio-economic constellation; and they announced that the clouds were gathering. In February 1965, at the request of Gosplan’s leadership, they presented a report on the whole question of labour supplies and demography. The head of the institute, Efimov, had already ruffled feathers more than once and fuelled the ardour of economic reformers. But that was in internal, unpublished texts, which were often criticized by other planners and officials. Now, in a year already marked by a heated debate, Yefimov, who was probably a Kosyginite, produced a major report on Soviet industry, presenting weighty arguments in favour of change and offering a detailed view of the mechanisms involved in the complex business of managing labour supplies.2 Efimov tackled the problems encountered by the centre and the regions, without concealing the looming tensions; and offered various proposals – sometimes clearly formulated, sometimes merely hints – about ways to confront them. The text is empirically and analytically very rich. It contains both a good diagnosis and a warning as to the dire consequences to be expected in the absence of reforms.
Here is the picture sketched by Yefimov. To start with, he drew attention to a growing imbalance between the available labour force and its employment. During the years 1959–63, the working population had grown by 9 million, while manpower supplies had increased by only 1.7 million. In other words, the requisite workers had been obtained mainly by drawing on those working at home or on their private plots. Eighty-one per cent of the shortfall (or 7.3 million additional workers) had been covered thus. But the number of those working at home was continuing to fall and this source would soon dry up.
The national picture indicated areas experiencing labour shortages and others enjoying surpluses. In Central Asia, natural demographic growth had risen to 27–33 per cent in recent years – twice the Soviet average. From 1959 to 1963 the number of people employed in the state-owned economy, or still engaged in their studies, had grown at the rate of 2.2–4.4 per cent a year; and the percentage of workers employed outside the state sector was between 20 and 26 per cent, compared with an average 17.2 per cent for the whole Soviet Union. In most of the central Asian republics, the bulk of those who did not work in the state sector belonged to the ethnic majority. Demographic growth in Kazakhstan had been lower, but there too the percentage of people working privately was very high: 21.8 per cent. In many regions, rates of population growth and economic development were diverging.
These major disparities lay behind the poor utilization of labour resources. The central Asian republics, Armenia and Kazakhstan were continuing to accumulate surpluses, whereas the Baltic countries – especially Latvia and Estonia – posted the lowest population growth and a high employment rate, and were obliged to look elsewhere for workers. Significant natural population growth was also evident in Moldavia, Western Ukraine and the Northern Caucasus, in towns and countryside alike. At the same time, there was a considerable influx of people from Siberia into regions that already had a labour surplus.
Employment rates also varied according to the size of towns – large, medium-sized or small. The report – and this was no trifle – deplored the fact that when the regional distribution of industrial plant and output was planned, labour availability was not taken into consideration, resulting in utterly aberrant situations. (This is my gloss: the report’s author would obviously not have used such language when addressing senior officials.) Major labour-intensive industries had been located in regions where labour was scarce; while in other places where female employment could have been expanded, heavy industry with predominantly male employment had been set up.
In small towns, there were some 2.3 million people in search of a job. The real figure was probably closer to 3 million, since large enterprises tended to maintain a labour reserve. Most of those seeking jobs had minimal education and few skills; they needed professional training. In order to encourage women to seek employment, crèches would have to be created, because otherwise they would not be prepared to work outside the home. In the central Asian republics, interviews with unemployed people in small and medium-sized towns had indicated that they did not want to work away from home, even when jobs were available. Most of these were young women with children who had no education or skills.
Special attention should be paid to the creation of youth employment, not only for those who had reached working age (sixteen), but also for the many fourteen- to fifteen-year-old teenagers who had left school earlier for a variety of reasons. There was often no work for them and labour legislation prohibited the employment of young people who had just finished their compulsory education, when only 60 per cent of school-leavers went on to higher education. The Central Statistical Office had calculated that on 1 July 1963 some 2 million teenagers between the ages of fourteen and seventeen were neither at school nor at work. A further study conducted by the same body on 1 October 1964 had turned up an even higher figure.
The deteriorating employment situation of recent years was ‘due in part to miscalculations by planning and economic agencies, and in part to errors in economic policy’, concluded the report, which was not loath to identify the culprits. These shortcomings had reduced the effectiveness of investment, in particular as a result of faulty regional distribution of assets. Recent years had witnessed a major redirection of investment eastwards, into mining and electricity generation (particularly with the construction of large hydro-electric stations). But this policy had not been backed up by incentives to labour to settle in the east. At the same time, regions with surplus labour had experienced reduced investment – another mistake.
Job creation depended on capital investment, but the returns on the latter were falling because enormous quantities of material were ‘frozen’: uninstalled equipment and abandoned construction sites represented huge sums. Finishing such projects and starting up the new enterprises would alone create work for 15 million people, 10 million of them in industry. This was double the number of jobs created during the whole of the last five-year plan. Poor use of investment also stemmed from the fact that much of it was directed towards regional and republican centres, and what were already important industrial towns where spare labour was in short supply. The result was expansion of the latter at the expense of the countryside and small or medium-sized towns. The excessive growth of large towns entailed huge investment in infrastructure and housing, even though some towns with a lot of housing were not always in a position to maximize use of the local labour force or even squandered it.
The obstacles to a rational distribution of labour and employment had been compounded by Khrushchev’s restriction of private family plots in the countryside, which had led to the loss of 3.5 million jobs in this sector (Central Statistical Office), as well as to serious food supply problems in towns and countryside alike. Estimates indicated that simply to maintain existing levels of consumption of meat and dairy products by kolkhozniks deprived of their private plots, kolkhozes would have to increase their production of milk and dairy products by two-thirds, of meat and lard by three-quarters, of eggs by 150 per cent, of potatoes by 50 per cent, and of vegetables, melons and gourds by two-thirds. These figures underlined just how important a source of food and income private plots were (approximately half of what people received from the kolkhoz). The restriction of family plots by administrative measures, especially in small and medium-sized towns where they were very common, was exacerbating the labour supply problem. People deprived of the income they had derived from them needed work to replace it, but jobs were not easy to come by in towns. (Khrushchev’s reckless decision accounts for much of the popular discontent and instances of riot deplored by the KGB, which was ill-equipped to contain them.)
The unplanned, excessive influx of rural inhabitants into towns further complicated the state of the job market. Between 1959 and 1963, about 6 million rural inhabitants had arrived in towns. Most of them were young – under the age of twenty-nine. In itself this was a positive development, but not when it occurred in conditions of slow growth in output and labour productivity in the countryside. Most of these people from the countryside hailed from regions not where there was a labour surplus, but where it was in short supply and food production inadequate.
Another aberration: the spontaneous migration from countryside to town necessitated enlisting town dwellers to work in the fields, especially at harvest time. In some areas, this agricultural labour took the form of a ‘sponsorship’ of the rural zone in question; the phenomenon was becoming commonplace. The ‘sponsors’ (mostly factories) took on a significant share of the agricultural work in the farming units they were sponsoring – cultivation, harvesting, and so on. They supplied the state with its share of the crops and undertook the requisite construction and repair work. Industrial plants were therefore obliged to maintain a reserve labour force for this seasonal work. In some regions, the organization of such work was not increasing agricultural output, because the managers of kolkhozy and sovkhozy had grown dependent on outside help. At the same time, such collaboration was having a negative impact on industrial plants by hampering productivity improvements in them. In the final analysis, the consequences were negative all round.
The formation of labour reserves in urban enterprises for the purposes of agricultural work was promoting an abnormal process of labour exchange. Many kolkhozniks, accustomed to work in the fields, preferred to find a job in the factories of neighbouring towns. The reason was simple: the wages they could earn in industrial enterprises in the same region were 2.5–3 times higher than those paid by the kolkhozy.
One possible solution proposed by the Gosplan research institute is especially worthy of note. The central Asian republics, Kazakhstan and Georgia had high rates of population growth and possessed huge labour resources, but no economic assets – apart from agriculture, family plots and minor occupations. Moreover, their predominantly Muslim populations were reluctant to emigrate. This was where investment was required – not in more developed regions with low population growth and labour shortages.
Here a question suggests itself: What about the labour required to exploit resource-rich Siberia? The researchers probably assumed that their strategy of redirecting investment to central Asia and the Caucasus would generate enough economic growth to allow the state to offer the necessary wages to attract workers to Siberia.
One can image the debates that such a proposal must have sparked off. Just overcoming the opposition in Islamic areas to women working for a wage outside the home was far from straightforward. Language problems and professional training were additional major headaches. On the other hand, prioritizing the development of non-Russian regions, and postponing Siberia’s exploitation until better times, would provoke strong reactions among Russian nationalists, defenders of the central state, and other analogous currents that would be difficult to counter. Nevertheless, unperturbed, the author of the report pursued his survey of all the regions, in each instance proposing specific solutions that formed part of a comprehensive policy – as if saying to the Soviet leadership: ‘If you really want to plan, this is what you have got to do.’
Readers will by now have an idea of just how complex the labour issue was, as well as of the social and economic ramifications of the accumulating distortions. The whole venture demanded a set of coordinated measures, including material incentives, which were supposed to be the very essence of planning. Yet the Gosplan institute bluntly reported that ‘the problem is not so much a lack of information, as the fact that the employment factor is still not genuinely integrated into the formation of the national economic plan’. In other words, Gosplan did not know how to plan employment, its distribution and stabilization; and therefore did not plan it. It remained stuck in an age when manpower supplies were plentiful and it sufficed to fix investment and output targets for the labour to follow – or be forced to follow. That period corresponded to a stage of economic development and was not a matter of chance. But times were changing and the complexity of the task was increasing.
At this point we may venture a provisional conclusion. There was no question as yet of an imminent crisis. However, the government had to opt for a different method of planning that was not confined to fixing quantitative targets, but which would coordinate, anticipate and correct the efforts of productive units, which themselves knew what they wanted and needed to do. Gosplan and the government had been put on notice: labour supply and demand was an urgent issue. If it was ignored, or assumed to be self-regulating, as had been the case, the economy would stagnate, Gosplan or no Gosplan.
Following this analysis of problems with labour supply in 1965, we can now supplement our picture with data and analysis first from 1968 and then 1972.
On 16 September 1968, three years after the Yefimov report, the head of the labour force department in the Russian Federation’s Gosplan, Kasimovsky (who may have been attached to Yefimov’s research institute), delivered a speech to a selected audience of government experts. His main points were as follows. The extraordinary concentration of the population in towns over the last twenty years had significantly complicated labour supply problems (availability and distribution). The fastest growth had occurred in large towns; the share of the population in small towns was declining. Between 1926 and 1960, the population of towns with more than 500,000 inhabitants had multiplied by 5.9 (the figure for the Russian Federation was 4.5). In many instances, smaller towns and urban settlements that could play a vital role for the surrounding population had been destabilized by the uncontrolled pace of urbanization. Instead of becoming centres of support for the whole area, they often turned into a source of employment and demographic problems.
The number of small towns was not increasing and their population had dropped by 17 per cent in Russia (and, to a lesser extent, in the USSR as a whole). In the Russian Federal Republic, the share of the population living in towns with fewer than 10,000 inhabitants had declined from 9 to 1 per cent between 1926 and 1960, whereas towns of between 100,000 and 200,000 had increased their share of the total. The USA had experienced a different pattern: the number of small towns and their share of the urban population had remained stable; medium-sized towns (10–50,000 inhabitants) had grown; and the largest towns had experienced a population decline. The US pattern was unquestionably preferable, because exploiting a hectare of land was much cheaper in a small town. In Russia, it cost 45–47 roubles, as against 110–130 in large towns.
In the country’s twenty-eight largest towns, construction of new factories was banned. Yet in the current five-year plan, ministries, whether by obtaining exemptions or simply disregarding regulations, had set up enterprises there in order to take advantage of superior infrastructure, causing a serious labour shortage in those towns. Their population was growing fast, but the creation of new industries (and – I would add – not just industries) was outstripping it. In smaller towns, the reverse was true: enterprises were indeed being constructed, but there were still labour surpluses. This generated a set of related problems – in particular, the socially negative impact of imbalances between male and female labour.3
This complicated situation was analysed four years later in great detail by another labour expert. In small and medium-sized towns, worrying economic and social problems were accumulating, reflected in the use of the labour force. The imbalance between male and female employment was once again underlined.
In towns where new industries were located, the proportion of untapped labour was falling. In contrast, those that had not experienced economic development saw population outflows, to the point where some small and medium-sized towns were suffering from labour shortages. In addition, in many towns one-sided specialization led to predominantly female or predominantly male employment, resulting in imbalances between the sexes. In Russia alone, around 300 towns were experiencing more or less serious imbalances of this kind, impacting on the make-up of the population. The study referred to dealt with seventy towns in twenty large regions where this problem existed.
In towns where single-sex employment was prevalent, the other sex found itself without a job and turned to work at home or on a private plot. The impossibility of starting a family was fuelling labour mobility; a labour shortage was emerging, impacting in particular on the town’s most important economic enterprises and disrupting the distribution of professional skills and qualifications. Research indicated that in towns with high female employment, the percentage of men among the unemployed was between 27 and 57 per cent, whereas the national average was 13 per cent. Labour turnover was much greater there than elsewhere, and automatically accompanied by an exodus and shortage of labour. Many textile factories had to import female labour – mostly women as young as fifteen. Fewer and fewer female workers were of local origin: no more than 30 per cent, as against 90–100 per cent for males. But these young newcomers did not stay long, on account of the unfavourable demographic balance. This was the main reason for instability in the female labour force up to the age of twenty-nine, as evidenced by a sociological study in the large textile centre of Ivanovo-Voznesensk. Another irrationality observed in towns with predominantly female employment was that skilled workers had nothing to do except cultivate their private plot – work that required no skill. In the towns of the Vladimir region, 20–30 per cent of employees in commerce and the food industry were men, whereas the average for the Russian Federation was 15.1 per cent.
The sum total of these imbalances, particularly in the distribution of the generations and sexes, had a negative demographic impact: a low rate of natural population growth, high automatic population outflows, and a drop in overall population growth. Small towns had 125 women for every 100 men (118 for 100 for all the Russian Federation’s towns). On average, the female surplus mostly emerged from the age of forty, but in small and medium-sized towns it was already evident from fifteen onwards.
A consequence of the slowdown in demographic growth was an ageing population: twenty- to thirty-nine-year olds accounted for only 30 per cent of the population of Russian towns. As a percentage of the total population of the republic, including the countryside, they represented 33 per cent. The report also dealt with the problem of starting families and single-parent families.
According to the report’s author, the complexity of these phenomena was beyond the grasp of the republican authorities. The measures taken to rectify the situation had been found wanting. Among the obstacles cited were poor planning, a lack of incentives for ministries to locate industries in small towns, instabilities in their plans, and the weakness of their construction capacities. The government of the Russian Federation had tried to persuade the USSR Gosplan to help it eliminate these failures by a special plan for twenty-eight ‘feminized’ towns and five ‘masculinized’ ones – but to no avail. Gosplan had other priorities.4
As we can see, these complicated problems of labour supply and demographics attracted plenty of attention and anxiety; sociologists and a small team of social psychologists also joined in the debate. Their national and ethnic dimensions were further causes for concern.
Was the Soviet system equipped to deal with this kind of situation? It had certainly proved capable of determining priorities like the accelerated development of key economic sectors, defence (linked in numerous respects to the former), and mass education. But in each instance the specific task was fairly easy to define. What came to the fore in the 1960s were challenges of a quite different order, which required a capacity for articulating several plans. In other words, the task now was conceptualizing and managing complexity itself. Employment had become part of a social, economic, political and demographic puzzle and was regarded as such.
After Stalin’s death, important changes were made in the economy, with positive results. A sharp increase in agricultural investment (mainly in the ‘virgin lands’ of Kazakhstan and elsewhere), and an increase in the prices paid to agricultural producers, led to a doubling in the monetary income of collective farms between 1953 and 1958. Agricultural output grew by 55 per cent between 1950 and 1960; grain output alone rose from 80 to 126 million tons, with three-quarters of the increase deriving from the virgin lands. But the latter were not a stable source of grain in the longer run.
To improve living standards, investment in housing and consumer goods was stepped up. Between 1950 and 1965, the urban housing stock doubled and the gulf between investment in capital goods – priority of the Stalinist period – and in consumer goods narrowed.
Great improvements were made in health care. The mortality rate declined from 18 per thousand in 1940 to 9.7 in 1950 and 7.3 in 1965. Infant mortality – the best indicator of public health standards – dropped from 182 per thousand live births in 1940 to 81 in 1958 and 27 in 1965.
Educational levels also rose: the number of pupils continuing their education beyond the four years of elementary schooling rose from 1.8 million in 1950 to 12.7 million in 1965–6. As for numbers in higher education, they trebled from 1.25 million students to 3.86 million in the same years.
Extremely low in 1953, peasant incomes grew more rapidly than those of town dwellers. Within the urban population, a certain levelling set in: minimum incomes rose, as did pensions, while wage differentials narrowed.
But the old preference for heavy industry and armaments persisted, and in so far as an effort was being made at the same time to raise living standards and stimulate technological progress, problems were mounting. In these years, Japan caught up with Soviet growth levels and succeeded in both improving its living standards and modernizing its economy. By contrast, Soviet economists and planners knew and said – in secret but also in published works – that the country’s economic model, which remained basically Stalinist, contained dangerous disequilibria. Nevertheless, the Soviet Union enjoyed some spectacular successes, especially in aerospace, so that (in R. W. Davies’s words) ‘by 1965 the Soviet Union faced the future with confidence, observed by the capitalist powers with considerable alarm’.5 But as the archival material from Gosplan and other institutions indicates, the immediate future was much more complicated and worrying, and the planners began to grow seriously alarmed.
Regarding the targets of the eighth five-year plan (1966–70), certain failures were already evident. Gosplan’s collegium had warned the government that these shortcomings would impact on the subsequent plan.6 Although investment from all sources had increased by 1.7 per cent (10 million roubles), the central investment plan from which the bulk of new productive capacity derived (especially in heavy industry) had fallen short by 27 billion roubles (10 per cent). On top of this, an extra 30 billion had to be spent to cover increased construction costs for productive units, whose productive capacity had not thereby been enhanced. Thus, the plan’s targets for the coming on stream of new units had been met only to the tune of 60 per cent for coal and steel, 35–45 per cent for the chemical industry, 42–49 per cent for tractors and lorries, 65 per cent for cement, and 40 per cent for cellulose. All this would impact on the construction of plant in the course of the subsequent plan.
Gosplan attributed the responsibility to government ministries, which had to find the reserves required to expand output. But most of them did not include proposals for improvements in their respective sectors in their plans for 1971–5 – and this despite numerous injunctions from government to do so and to find reserves.
A yet more revealing diagnosis was offered, again by Gosplan’s research institute. On 19 November 1970 its director, Kotov, wrote to Gosplan’s deputy head, Sokolov, and had this to say: in its directive for the ninth five-year plan (1971–5), the Twenty–fourth Party Congress had postulated that economic success was based on intensive growth and the introduction of new technology (this also applied to agriculture). But the relevant data indicated, in agriculture in the first instance, that the expenditure already committed in terms of labour, wages and social funds was growing faster than output. This trend contradicted the imperative of economic development – namely, achieving relative savings in social labour.7
The far from favourable prospects for the next five-year plan were primarily caused by the signal reduction in the productivity of capital assets. The existing indicator for measuring returns on investment was inadequate and economists in the agricultural department lacked a reliable instrument for assessing these assets and planning the requisite amounts of capital.
Kotov then produced a series of calculations that we shall not reproduce here, but which served as a basis for his warning to Gosplan and the government: ‘Extensive factors are becoming stronger in the development of the Soviet economy, primarily because growth in basic capital assets is outstripping growth in output. This trend is even more apparent in agriculture than other sectors.’
If the experts were alarmed, it was because such a trend ran counter to modern industrial and scientific development. There is no doubt that some of the leaders involved in the development and implementation of economic policy were also aware of these trends and what they portended.