Our constant attention to the changing social landscape – bureaucracy, politics, economics and law enforcement all belong to this landscape – offers an analytical framework enabling us to distinguish between what was urbanized and modernized, on the one hand, and what urbanized without really modernizing itself, on the other. The important issue of income equality merits further research. But relative equality, and the concomitant reduction of class differences and barriers among broad swathes of the population, were incontestable facts, fondly remembered even among many Russian emigres to, say, the USA, where economic inequality forms part of the system’s ethos.
Mironov’s positive assessment of this phenomenon contradicts his own conception of modernity, defined in terms of conformity to the Western model. Moreover, it leads him to regard the fading of the old Russian ‘community spirit’ (obshchinnost’), inherited from the rural past, as a sign of the country’s ‘maturity’. But what was the sense of equality and neighbourliness that had such a positive impact on the health, physical growth and moral well-being of Russian citizens, if not the ‘non-modern’ spirit of community? Is it really a good thing for modern societies to be rid of it? The common phenomenon of solitude amid milling urban masses is an unhealthy product of social atomization that can only be remedied by a ‘community spirit’.
If we have thus far dwelt mainly on ‘mechanical changes’ – i.e. continuous waves of migration, which are a complex phenomenon in their own right – it is important to appreciate that urbanization imparts a novel content to the term ‘mobility’. It does not merely involve changing address or workplace, or moving across space. In what was now an urban environment, we are dealing with social, cultural, economic and psychological mobility, which is best understood when juxtaposed to the traditional spatial sense of the term.
The complexity of urbanization and its transforming power consisted in generating masses of ideas that circulated via new channels of communication, exposed the population to a flood of information, put a premium on inventiveness, education and intellectual creativity, and, finally, engendered new conceptions of existence and new needs in people’s personal lives. All this was light years away from the rural rhythms of traditional Russia, where change was slow and the social world often just a village – hence easily mastered (everyone knew the details of their neighbours’ lives), offering a profound sense of familiarity with social reality and inducing fatalism about the vagaries of nature. Clinging to tradition, limited mobility and narrow horizons (frequently in the literal geographical sense) – these were the rule. Without proper schooling and transitional stages, this rural civilization was not equipped to face the large towns and urban settlements, where it was indispensable to have an education, to improve one’s professional skills, or to switch professions. The newcomer was exposed to a bewildering variety of creeds, personalities, fashions, information and values, which constantly disrupted traditional familiar social arrangements of all kinds. Atomizing influences, as well as incentives to enter into all sorts of networks of new and different relations – social, political, economic and cultural – challenged the traditional socio-cultural universe, wearing down its sometimes stubborn resistance.
But it was not just the rural world that came under challenge. Urban society also exercised enormous pressure on the state – to begin with, simply because it presented a new, utterly different entity to be governed. Moreover, this society was still rather young, inexperienced in the ways of self-regulation, and carrying quite a freight of older traditions. It is therefore appropriate – and maybe by now rather obvious – to regard the urbanization process as tantamount to the formation of a new society. For as long as the transition period made it possible to speak of a halfway stage, old rural and new urban worlds coexisted, earlier traditions and mentalities mixing with the commotion of capitals and the complexity of ‘scientific towns’. The state and its principal institutions were governing ‘different centuries’ simultaneously and under ideological and political pressure from utterly heterogeneous groups. The complex interplay of culture and mentalities, which at this stage was reflected in the sphere of politics and the state, yielded a mix of religious and secular elements that could be detected in the state’s symbolism and the way it exercised power, but also in the population’s reaction to state power. The cult of Stalin, the explosion of popular grief at his death, the acceptance deep down of an authoritarian government, the phenomenon represented by Nikita Khrushchev – not only the manner of his leadership, but also the widespread protests it elicited from the populace and the intelligentsia: all this indicated a social and cultural landscape undergoing massive changes. Urbanization was progressing and urban society was becoming the dominant way of life.
Whatever the survivals from past traditions and practices, urbanization transformed society and forced the government to adapt to this new entity, since otherwise the country could not be governed or developed. In other words, the state and system of government had to acquire a mobility of their own and respond to a quite different historical agenda. The changes we have already pointed to – particularly in the sphere of repression – were a reaction to the complexity of the tasks imposed on the state by new realities. The old methods of coercion and mobilization were no longer suitable: new means were required and novel, more thoughtful strategies had to be adopted. Problems often developed spontaneously and their resolution dictated flexibility and an ability to negotiate with the population. But the bureaucratic authorities were still neophytes when it came to handling the urban maze, which was often independent and intractable. Urbanization, which went hand in glove with modernization, generated new trends in social behaviour and a wealth of specific ‘resources’ that largely eluded state policy. This huge concentration of dynamic energy could not be controlled with the methods and apparatuses that had been employed to manage a predominantly rural population and a relatively small urban sector. In this particular instance, the ‘call of history’ required the state to adapt to the new reality and alter itself sufficiently to give rein to the dynamic forces of urban society and concentrate on the domains where it was actually competent.
In this regard, the changes made at the beginning of the Khrushchev period in the spheres of penal, labour, educational and social policy – surveyed in Part Two – were promising moves in the right direction. They betokened the system’s recognition of the transformation under way in society as a whole and gave rise to new forms of relationship between society and the state apparatus. This process proceeded in tandem with a ‘de-militarization’ of society and the regime. The imbrication of social and economic factors became extremely complex and the state strove to respond to it by adapting to new needs and moods. The relationship between the world of work and the state was often summed up from the workers’ standpoint by a quip we have already cited: ‘You pretend to pay us and we pretend to work.’ Some people took it for the literal truth, and although it was only a witty remark it did contain a grain of truth – i.e. the existence of a tacit social contract, never signed or ratified, whereby the relevant parties arrived at an understanding about running a low-intensity, low-productivity economy. Its consequences were multiple. The first was that it made for a relatively small number of conflicts in the workplace, and perhaps even in society at large. But it also meant a rather low standard of living, which encouraged people to find ways to supplement their income in various private activities, whether legal or semi-legal (private plots, part-time second jobs). And this in turn had consequences that were not necessarily negative for all concerned.
For their part, the administrative strata, who were now better educated and more firmly in the saddle, used a whole range of initiatives, whether tolerated or illegal, which were indispensable for the success of the official side of the operation. Sometimes they veered towards plainly criminal acts of corruption and black-marketeering. In order to get anywhere near meeting the targets fixed by the planning authorities, ministerial agencies and the management of firms learnt to protect themselves with a whole array of defensive measures. In fact, they established a system based on informal rules: building up unauthorized reserves of stocks, means of production, and labour; using tolkachi (‘pushers’, expediters) and other intermediaries to obtain the requisite supplies from outside official channels; sabotaging or disregarding official investigations and policies; and, finally, creating powerful networks of allies and lobbies at the top. These administrative bodies eluded any real control by the party (or any other instance) and were not far from being the actual holders of state power.
The reality of an urban society and a nationalized economy also accounts for the changes in the modus operandi of the party, which was supposed to be the system’s forcing house, and in its relations with upper echelons of the bureaucracy. Its lower ranks (‘employees’) were part of society at large, as well as of the administrative network they were employed in. As such, they were both a source and a recipient of social opinions, moods, practices and interests. Bureaucratic interest groups (the managers of economic branches, the military–industrial complex, the scientific community, the military), as well as the interests, opinions and rights of lower bureaucratic layers (trade-union members all of them), were de facto legitimized. Similarly, the right of specialists to bargain hard over terms and conditions was de facto recognized in a ‘specialists’ labour market’. The de jure and de facto existence of a labour market became part of Soviet reality, as did the complex relations between management, workers, unions and party.
Concern about public expectations and a desire to respond to them now frequently featured on the government’s agenda and altered its modus operandi to a degree that was unprecedented since the end of the NEP. Party and state documents published at the time, or subsequently discovered in the archives, contain ample information and warnings about the moods of different social strata: party or government bodies express their anxiety over some particular policy (or lack of policy) that risks creating discontent. Workers’ attitudes were a major concern for the authorities and were often discussed by the apparatus, especially when reports indicated that workers were not attending party meetings, were not opening their mouths, or were booing speakers – not to mention the more determined forms of action and different forms of protest they resorted to (the number of strikes was on the increase).
Trends and opinions among students, intellectuals and administrative cadres were likewise reported and widely discussed. Low morale among these strata was issuing in poor performance and, not infrequently, in hostility to the party. This was why when a policy did create massive discontent it was moderated, officially withdrawn, or effectively abandoned. If women refused to accept jobs unless there were crèches for their children, the authorities responded: they admonished those responsible for this state of affairs, reorganized things, took steps to improve social policy, and offered concessions. This amounted to de facto – even de jure – recognition of various rights on a massive scale. Taking account of public opinion and negotiating with citizens were henceforth part of the socio-political scene. And when this was interrupted by rash policy decisions (as occurred under Khrushchev from time to time) there was an immediate political price to pay.
Given the efforts undertaken to improve the civil and criminal codes and modernize the judicial system, can we speak of a Rechtsstaat? No. For this category to be appropriate, legality would also have had to apply, at least partially but unambiguously, to the top leadership. The system would also have had to extend rights to critics, or at least grant oppositionists the right to a fair trial. This was not the case. On the other hand, we certainly may speak of a vastly increased role for the law and legal system following the abolition of secret extra-judicial procedures and arbitrary executions.
‘Mass disorder’ of the Novocherkask variety haunted the KGB, because it did not know how to deal with it: in that particular instance, military intervention had produced a considerable number of casualties. A recent book based on archival research provides data about events of this kind, which were of such concern to Semichastny.1 In the Brezhnev period, there were nine cases of mass rioting, seven during the first two years. Under Khrushchev, the figure was two and a half times higher. Between 1957 and 1964, weapons were used in eight cases; under Brezhnev, in three (all of them in 1967). Under Khrushchev, the number of dead and wounded among the rioters totalled 264, as against 71 under Brezhnev. The total number of casualties during riots in the space of twenty-five years amounted to 335 – most of them wounded (but the number is not specified). Thus, the annual average was 13.4 wounded or killed (although many years witnessed no riots). It would be useful to have details about instances of rioting in other countries (incidence and casualties). Was the Soviet figure – 335 casualties in twenty-five years – exceptional, given the huge size of the country and a non-democratic regime?
The panorama of changes, innovations and reforms we have provided hopefully makes it possible for readers to appreciate the difference between the Stalinist and post-Stalinist models. The elimination of mass terror as a means of governing forced the authorities – and the party, in the first instance – to engage in what I have called ‘negotiation’ with the main social and bureaucratic actors, increasing the regime’s dependency on them.
‘Over-Stalinizing’ the whole of Soviet history, by extending it backwards and forwards, is a common practice that serves a variety of purposes – but not that of historical inquiry. We have no reason to ignore the extent and significance of the changes in the social structure, the strategic weight of particular social groups (large or small), the fusion between the state apparatus and the party, the end of mass terror – unless, of course, we are pursuing some ideological hypothesis, as opposed to trying to unravel a complex historical reality.
That said, we must not forget that this society and regime were not insulated against the emergence of reactionary ideological and political currents, including from within the state and among party leaders. Here we shall tackle this huge subject exclusively with respect to the difficulties of de-Stalinization and the pressure for a rehabilitation of Stalin. The continuing internal debates among the post-Stalinist leadership, and the opposition to Khrushchev’s de-Stalinization, were focused not on the continuation of Stalinism as such, but on the image of Stalin as state-builder and head of a ‘great power’ (derzhava); and a readiness to use drastic methods when state interests were at stake. Unquestionably, and not surprisingly, some among the leadership of a dictatorial regime defended this attitude. Nevertheless, it is important to note that, despite all sorts of trial balloons and half-measures towards restoring Stalin’s image as a great leader, rehabilitation did not occur because it no longer made sense. Even among the Stalinists, no one any longer defended the idea of bloody purges. Political arrests certainly continued. But they involved actual critics and real political activities, not imaginary or hallucinatory crimes that people were forced to ‘confess’ to. This did not have much in common, whether in character or scope, with the Stalinist period.
But this verdict on what the system no longer was would remain suspended in a vacuum if we did not offer a broad picture of what it had become. Seen from below, it was a veritable maze: masses of people and agencies acted as they saw fit, while a significant number of decrees and laws issued by the Central Committee or, more solemnly, jointly by it and the Council of Ministers, were not observed or were followed only half-heartedly. Mass phenomena like labour turnover remained just as pronounced. Officials did not actually lose their jobs even if they were sacked. Judges who disagreed with the severity of some laws sought to reduce charges when they felt that punishment made no sense; others did exactly the opposite, in the belief that the new policies were too liberal. What all this indicates is that a history restricted to government policy would be misleading. The historical events we are observing took the form of processes that depended on policy measures only in part. In fact, they mainly – even completely – derived from spontaneous developments (the stikhiia we have already encountered).
‘Those above’ were not just promoters of a voluntarist politics. The Politburo governed with the help of a 2–4 million strong layer of nachal’niki (‘bosses’ in the broad sense): around a million of them in top positions, a million in administrative positions of lesser importance, and a further million in charge of industrial enterprises. This amounted to a broad social stratum with its own history and sociology. Its members were conscious of their own interests – just like the workers, peasants and intellectuals who worked under their authority. Thus we find the managers of industrial enterprises setting up their factories in well-developed areas even if it was formally prohibited, and maintaining labour reserves and hoarding other stock – schemes that were also proscribed and, what is more, not financed. (So where did the money come from? Secret funds?) Even nomenklatura rules were circumvented to offer good positions and promotions, making it possible to constitute a network of cronies around a boss, with its attendant coteries, cliques and clienteles, as any sociologist would have expected.
Such spontaneous developments involve every social group, whatever the regime: the higher ups concentrate on their own affairs, while their subordinates do everything they can, licit or illicit, to further their own interests. Consequently, when a broad range of factors is involved, we can make out several interacting dynamics that render reality more complex than is portrayed by official cliches. The social changes that occurred during the hectic phase of urbanization ushered in a new stage in social complexity, expressed in the increased momentum of the ‘social factor’ (greater freedom of movement for labour, creation of a labour market for specialists which helped enhance the role of the intelligentsia). This degree of complexity was bound to test the limits of the political system severely.
Attending to the ‘social factor’, as we have done throughout this book, aids us in appreciating a complex social reality and the profound changes that accompanied it. The existence of the Soviet regime in the post-Stalin period was relatively short, but it was characterized by a historical experience of exceptional intensity. After Stalin’s death, we witness not only the abandonment of mass terror, but also the disappearance of other features pertaining to the ‘enserfment’ of the population. The changes consequent upon the end of this state of serfdom were especially significant: they marked an expansion in personal freedom that should be acknowledged, and not dismissed with contempt on the grounds that a democratic system offers much more. The subsequent fate of the regime would be unintelligible without this increased breathing space for popular and other classes. The improvement in social conditions, the greater attention to safety at work, the shorter working day, longer holidays in more readily accessible holiday resorts, higher wages (albeit not spectacularly so) – all these must be factored into our reflection on the system. Thus, as we indicated in Part Two, labour relations were now based on the labour code and legal guarantees granting workers the right to switch workplaces. The rights of workers and employees were more clearly defined and better protected: legal dispositions made it possible to challenge management decisions and pursue cases in tribunals or special chambers created to settle work disputes – tribunals where workers had a good chance of winning.
This was all certainly aided by the improvement in workers’ educational levels, due in part to an influx of secondary school graduates into factories. The latter put considerable social pressure on management and government when they realized the gap between their level of education and aspirations and the still relatively primitive working conditions in industrial and other concerns, which were slow to introduce the technological innovations young workers expected to see. Whereas many workers from the previous generation had adapted without difficulty to a low-intensity system, this educated section of the workforce was certainly disappointed. Dissatisfied with the monotonous, archaic and often even non-mechanized character of their work, they were ready to look for more interesting jobs elsewhere and now had the right to do so. To retain them, the technological level of enterprises had to improve. But for this to happen, the whole incentive system in industry (and the economy in general) had to be revised – a prospect that raised immensely complicated economic problems and became a real headache for the leadership.
The term ‘sociology’ is shorthand here for the set of interests, interactions, and practices of social groups, and also applies to the production and circulation of ideas, ideologies, political trends and moods, which were now of considerable intensity. This was bound up with the enhanced role of the intelligentsia, the growing weight of public opinion, and the attitudes that now pervaded the bureaucratic class, the party apparatus, the young, and the working population. Some seem to think that there can be no political history – let alone ideological history – in a country that does not recognize the right of other political opinions to exist, express themselves, and take organized form. However, ideological and political trends did indeed exist in the USSR and found ways to make themselves heard, even if they did not assume an organized form and seek to overthrow the regime. Those who pursued that course risked the attentions of the secret police, but the latter, however powerful, proved helpless when it came to ideas diffused among youth and large segments of the general population, the bureaucracy, the army or the intelligentsia. When such diffuse ideas emerge, history (or, if one prefers, political sociology) takes over, and the police are powerless, especially when these opinions are widespread among leading strata, even in their own ranks.
The party, too, was not only helpless, but succumbed to these ideas and trends: varieties of (sometimes virulent) nationalism or ‘statism’, deeply rooted in these circles, were almost openly expressed with impunity, even though they helped undermine the regime that tolerated them. But directly anti-regime forces were not able seriously to threaten it. The regime was not toppled: it died after exhausting its inner resources and collapsed under its own weight – a special case in the history of the fall of empires. Nuclei of individuals and forces who wished to overthrow it certainly existed, but they lacked sufficient popular support. We have seen that Andropov’s agencies put the number of potential opponents and plotters at some 8.5 million people, mainly located in south-east Russia and among the intelligentsia of the capitals. But these elements never managed to combine into a coherent political force.2
The presence of police controls and informers (stukachi) is insufficient on its own to explain the regime’s robustness. Citizens must have found something in the system to desire or appreciate, be it the country’s international status, the relative social homogeneity of its population, the considerable openings for social promotion for disadvantaged strata, or the relative novelty of the liberties that were granted, de jure or de facto, during the revitalization of the system after Stalin’s death and even in its declining phase. All these freedoms were bound up with a new urban reality that was probably still too young to allow for the crystallization of new, clear-cut political aspirations, with the capacity to attract broad popular support.
In the context of an expanding urban society, the emergence of sociology as a field of scholarly knowledge is a natural and yet highly significant development. Pressure to develop a hitherto banned discipline derived not only from academicians, but also from various officials and analysts at Gosplan, the Finance Ministry, the Central Statistical Office and the State Labour Committee – so many bodies whose sphere of activity was not restricted to a single branch, but involved the whole economy, society, and the machinery of government. Not to be outdone, the KGB, with the help of the Academy of Sciences, created an institute for the sociological study of various milieux – the student world, in particular – with an emphasis on behaviour that was anti-social and actually or potentially hostile to the regime.
Sociology underwent rapid development. Whether wittingly or otherwise, sociologists became a pressure group (supported by academic institutions and their members) and rapidly seemed indispensable for a better knowledge of society, workplaces, youth and its aspirations, the condition of women, and so on. Sociologists’ articles, and particularly their field studies, offered an image of reality that had little in common with the cliches and rhetoric of official ideology. They forced this reality on the consciousness of ordinary people, but also of party and state officials, attuning them to new realities, new tasks and new approaches. Government agencies soon began to commission sociological studies. Various sociologists stood out (Tatyana Zaslavskaya and her colleagues at the highly innovative academic centre in Novosibirsk, others in Moscow and Leningrad). Without mincing their words, they produced realistic studies on living conditions in the rural world, factories and offices. Economists from various centres, particularly those at the Central Institute of Mathematical Economics, engaged in intensive research, circulating studies, whether or not they were published, which were communicated to the government. Some of these were commissioned; others were carried out on the initiative of the researchers. Political scientists also gave their opinion, even when they had not been asked for it. They sent unsolicited memoranda to the leadership protesting against some particular policy (for example, the intervention in Afghanistan).
The government and party apparatus selected academic experts as permanent or occasional advisers. These academics formed the branch of the intelligentsia best attuned to urban reality in all its complexity and sought to develop a new type of analysis – one that was remote from official ideological discourse or conservative agitprop. In this respect, government circles were sometimes much more open than the party apparatus, which was packed with Brezhnevites, even if their influence was counterbalanced by the tendency on the part of some departments and secretariats to have their own brains trust. Andropov, who probably initiated this trend, introduced some very bright, forward-looking people into his department.3 Following the fall of the regime, many of them were to demonstrate an intellectual and moral capacity that imparts credibility to their accounts of the past.
This educated urban society harboured much more than the encouraging phenomena we have just referred to. Politically, it produced not only enlightened reformers but also reactionaries and hardliners of various hues. But we have chosen to focus here on the novelty and complexity of the urban reality that the regime had to confront, and not on any particular political current – especially given that such currents can readily switch direction.
The functioning and performance of the economy was becoming ever more of a problem. A fatal dichotomy seemed to be operative: as the new social structure expanded, economic growth rates went on declining. It suffices to indicate that the rate of growth of national income (according to Western estimates), having reached a respectable 5.7 per cent a year in the 1950s (almost as rapid as during the first five-year plan), dropped to 5.2 per cent in the 1960s, 3.7 in the first half of the 1970s, and 2 per cent in 1980–5.4
Robert Davies has confirmed this picture. From the mid-1970s, the Soviet growth rate fell so low that for the first time since the 1920s GNP was increasing less rapidly than in the USA, and much less rapidly than in several newly industrialized countries. Behind such data lay an ever more intricate reality that eluded all economic or political regulation. Economic agencies and scholars knew that the situation was becoming increasingly acute.
No wonder, then, that the man in charge of the whole edifice, Prime Minister Kosygin, had already asked the Academy of Sciences in 1966 to assess things from the standpoint of competitiveness with the USA. The Academy had a section responsible for ‘competition with capitalism’, and thus could be asked to do this without irking Gosplan or the Central Statistical Office, which regularly supplied the government with comparative data on the development of the Western economies. The report in question, commissioned by the Council of Ministers, was probably finished at the end of 1966 and presented to the government at the beginning of 1967. The study, which was wholly in the spirit of Kosygin’s economic reforms (officially launched in 1965 and the focus of heated debate), sought to impart a sense of urgency that might strengthen the reformers’ hand. The picture of the economy offered to the government and Gosplan was stark. Lack of access to Kosygin’s archives means that we cannot tell what he thought of the situation, but the text is the best clue we possess as to his own anxieties about the system’s vitality. Moreover, the report did not breathe a word about the burden of military expenditure, which was blocking economic development. It made do with arguing that higher wages and expanded production of consumer goods were a precondition for the whole economy embarking on a course of accelerated technological progress.5 But Kosygin certainly knew all this already from other sources.
We know that the Academy’s economists demonstrated that the USSR was lagging behind on all key indicators, except in what were regarded as the leading branches at the end of the nineteenth century. Conservatives hostile to Kosygin’s projects probably claimed that improving economic management would suffice to eliminate waste and increase resources, without interfering with the system. This was a way of suggesting that the waste was attributable to Kosygin … But if Kosygin was absorbed with the problem, he was not responsible for it: waste was the effect – not the cause – of the malady. Investigating its breadth and depth would help to identify the blockages more clearly. The task was entrusted to a Commission for the Elimination of Waste equipped with considerable powers, and certainly with Kosygin’s support, even if his opponents were also interested in such a commission (it might actually have been their initiative).
Appointed in 1966, after having been renamed the Commission for Economizing State Resources, it was composed of the heads of the inter-sectoral ministries and agencies (Gosplan, Finances, Statistics, Labour and Wages, Gossnab). With the help of other agencies, its task was to study the system’s key sectors (we do not know whether its remit extended to the huge military-industrial complex). The Commission’s labours yielded an enormous report examining the work of administrative bodies in most areas (including research, investment, economic branches, culture and public health). It almost resembled the medical examination of a gigantic body that was ailing all over, conducted by a hospital’s staff in its entirety. The facts and figures were surely known to Kosygin, but it may be (as we have suggested) that the initiative was a double-edged sword. Moreover, the ‘doctors’ had nothing to say about how to cure the patient.
Among other data, the commission had used material supplied by the State Control Commission, which detailed, for example, wastage and loss of raw materials; the enormous amount of damage suffered by materials as they were being transported; the waste of fuel and electricity; the accumulation of non-saleable products; the production of goods that were too heavy and/or too primitive on account of obsolescent production techniques and methods; and the costly use of coal from very remote regions when it was readily available nearby at much lower cost.6
Here are just a few examples. The importance of pipes and pipelines in the economy was enormous. Yet the Soviet economy was continuing to produce metallic pipes rather than reinforced concrete pipes (e.g. for water mains), even though the latter were between 30 and 40 per cent less expensive even taking account of the investment required to switch to this type of production. In addition, using them would make possible a saving in metal of 80–90 per cent and their lifespan was three times greater. Yet the 1966 plan anticipated the production of only a small quantity of modern pipes, as opposed to the requisite 1 million cubic metres.
Another costly anomaly was factories accumulating reserves of materials (raw materials and finished products) greatly in excess of authorized norms. These were often stored in unsuitable premises, sometimes in the open air, where they were vulnerable to bad weather and pilfering. Enterprises refused to sell them on to others in need of them, even though they had the right to do so. In defiance of the regulations, factories also often used considerable resources to pay wages for exceeding production targets in the case of goods for which there was little demand. Measures had been proposed to compel managers to reduce reserve stocks to an acceptable level.
Another problem was growing distribution costs, which represented 5.31 per cent of retail price sale in 1958 and 6.25 per cent in 1965. Furthermore, the cost of work canteens had risen sharply in the same period, on account of the loss of goods while they were being transported or stored, low-quality packaging, and the overpayment of personnel (and also because of the payment of high fines).
Many enterprises offered wage increases that outstripped improvements in labour productivity. In the first half of 1966, 11 per cent of industrial, commercial and transport enterprises had acted thus, running up a wage overdraft of 200 million roubles.
Because of the illegal dismissal of workers, the government was incurring serious costs. In 1965, in 60 per cent of the cases brought before them, tribunals had ordered the reinstatement of sacked workers; and paying the wages they had lost cost 2 million roubles every year, while the officials responsible for the illegal dismissals went unpunished.
Losses attributable to shortage of stock and misappropriation of goods in commercial organizations and the food industry were estimated at 300 million roubles. The culprits were referred to the courts, but the cases were long-drawn-out and the payment of damages very slow. Many enterprises were in no hurry to sue the culprits.
The situation in commerce was repeated in the fields of research and culture, where facilities were underused and heavily overstaffed. Moreover, enterprises took a considerable time to apply technological inventions to production. The report provided a list of products and equipment that had been developed years ago, but which were still not in use. Once again, the losses were staggering.
For its part, the Popular Control Committee had investigated a large number of industrial enterprises and added its contribution to the litany of complaints. In particular, it had discovered that the production costs fixed by the plan were invariably exaggerated. The determination of these costs did not take account of the fact that the costs in previous years, which served as a base-line, had already been overstated on account of waste, mismanagement, overproduction, and poor use of productive capacity. The Committee did not skimp when it came to listing inefficiencies and waste, but we should note the ‘gentility’ of its recommendations to the ministries that swallowed up resources. It merely drew ‘the ministries’ attention to the need to plan a reduction in production costs more carefully’. But what incentive did they have to do that?
As ever when a control commission or task force was appointed to look into a problem, it presented a picture of utter chaos where nothing worked. It must therefore be made clear that many enterprises functioned reasonably well: otherwise, the whole economy would have collapsed long ago. But the system was approaching the critical point where ‘waste’ was going to render it a historical aberration: a system that produced more costs than goods.
If it continued to limp along, it was because the country possessed immense resources. Hence another paradox: a very wealthy country with very low consumption. In sum, the commission suggested that everyone had to learn to be more thrifty. In fact, the problem did not stem exclusively from wastage. No less amazing was the fact that the planning system perpetuated, even exacerbated, inefficiency and waste in the production process, when by definition it should have prevented them.
By now, purely economic and technological measures would not do the trick. Some experts thought that reserves for economic development were to be found in the costly arms sector, since, according to Gosplan’s calculations, 40 per cent of all new machines manufactured in the USSR were intended for ‘special projects’. Was it not time for them to help revive the civilian sector? But this was another pipe dream. In the military-industrial complex itself, technological progress was rooted in waste and utter disregard for costs. Excessive secrecy (and the excessive power of this complex) aggravated the situation. Whatever the achievements (and they were numerous, but remained in the notorious ‘closed cities’ that took a lot without giving anything in return), the economic spin-off for civilian industry was non-existent.
On the other hand, the Soviet ‘planning’ system, whose targets were almost exclusively quantitative, failed to establish sufficiently well-thought-out correlations between these targets and the incentive system; or to ensure an overall balance between the main socio-economic factors conducive to scientific and technical progress and to the satisfaction of social needs that were changing and growing. Soviet planners knew full well that the most advanced Western economies established these correlations successfully – most of the time, at least. A formula for outperforming the West existed on paper in Gosplan’s offices; and things seemed to have worked out in the regime’s early years and during the war. But that simply meant that pathologies could be tolerated for a time. With the economy growing and changing, unaltered planning methods were becoming a fetter: they only perpetuated – even exacerbated – the pathologies. The planning system was in disarray and decaying together with the whole politico-economic statist model.
That is why, as far as Kosygin was concerned, the task was much more complicated than squeezing savings out of each agency (industrial, commercial, etc.). The real task was nothing less than Herculean.