This book describes struggles of different countries and their development after World War II. It presents a panorama of different ideologies of accelerated development, which dominated the world just before the war and in the next 40 years. The author explains why in the 1970s global and local elites began to turn away from the state, exchanging statism for the belief in the «invisible hand of the market» as a panacea for underdevelopment. He focuses not only on the genesis of underdevelopment, but also on the causes of popularity of economic planning, and the advent of neoliberalism in the discourse of development economics. This book evaluates the power of state as a vehicle of progress and focuses in detail on the Soviet Union, China, Poland, Ghana, Tanzania, and South Korea.
Chapter 3. Internal colony
In 1931, a twenty year-old New Yorker named John set out for Magnitogorsk via Berlin and Moscow. He had finished three semesters at an experimental college and worked for a few months at a General Electric factory, where he had trained as a welder. America was approaching the lowest depths of the Great Depression. It appeared that capitalism was collapsing under the weight of that crisis. In New York, long lines formed in front of the charity kitchens offering soup for the unemployed.
Scott was not a stereotypical Western fellow traveller of the Communists. He was not an intellectual who supported revolution for ideological or aesthetic reasons. The son of a radical university professor and member of the Communist Party until he was kicked out in 1928 for views that deviated from the party line, he was an idealist, but not a blind one: he was well aware of the terror and misery that reigned in the Soviet Union. He never in fact became a Communist, though neither was he an ideological opponent of communism.280 He was fascinated by the scale of the Stalinist enterprise and its Utopian ambitions – wrenching an enormous, poor country out of centuries of backwardness.
In the Soviet Union there was no unemployment. There was, however, a war – for industry. Years later, Scott would recall:
In 1940, Winston Churchill told the British people that they could expect nothing but blood, sweat, and tears. The country was at war. The British people did not like it, but most of them accepted it. Ever since 1931 or thereabouts the Soviet Union has been at war, and the people have been sweating, shedding blood and tears. People were wounded and killed, women and children froze to death, millions starved, thousands were courtmartialed and shot in the campaigns of collectivization and industrialization. I would wager that Russia’s battle of ferrous metallurgy alone involved more casualties than the battle of the Marne. All during the thirties the Russian people were at war. […] In Magnitogorsk I was precipitated into a battle. I was deployed on the iron and steel front. Tens of thousands of people were enduring the most intense hardships in order to build blast furnaces, and many of them did it willingly, with boundless enthusiasm, which infected me from the day of my arrival.281←101 | 102→
The Magnitogorsk that Scott found (he arrived in 1933) looked different from the city that citizens of the Soviet Union could see in propaganda films and posters. Above all, it was not a city, but a gigantic, chaotic and dirty construction site, without roads or plumbing, and full of garbage and waste. Workers lived in long rows of hastily assembled barracks, huts and dug-outs. Only a colony of foreign specialists, mainly Americans and Germans, whom the Soviet Union was generously paying in hard currency, had better conditions. An American engineer in Magnitogorsk received as much as a hundred dollars a day, that is, more than a worker in America could earn for a month of hard work.282 A foreign specialist did not go hungry, unlike a great many citizens of the USSR.
In 1933 agriculture was in a state of utter collapse following the collectivization campaign. Food was also lacking in Magnitogorsk. The Party’s response was to introduce a brutal hierarchy in terms of access to food. Foreign specialists and local dignitaries ate best. Soviet specialists ate slightly better than most. In shops for workers even bread was often lacking. (Scott had access to a shop for foreigners; in his account, he obtained it only at the insistence of Russian friends, with whom he shared his food.) Sanitary conditions in Magnitogorsk were awful. People were dying on a daily basis in the process of building it.
There was nothing exceptional about this. A Soviet citizen in the time of Stalin’s Great Turn lived in crowded, cold, and dirty conditions – and often went hungry. After the great famine in the Ukraine and in southern Russia in 1932– 1933, there was also a less well-known, but very severe famine in the postwar years (1946–1947), which also encompassed areas not devastated by the war.283 Between 10 and 20 million people had poured into the cities in the 1930s. Factories were built, but not housing. In 1930, for each Muscovite there were 5.5 square meters of living space; in 1940, there were less than 4 square meters. In provincial industrial cities, the situation was even worse. In newly founded Magnitogorsk and quickly growing Irkutsk, there was less than 4 square meters of living space per person, while in Krasnoyarsk in 1933 the per capita norm was 3.4 square meters.284 In practice, many people had to fit into an even smaller space, since Stalin’s Soviet Union did not implement the egalitarian slogans that it proclaimed (though it proclaimed them with decreasing conviction over time, as Stalin was opposed to uravnilovki and believed in the power of material incentives).←102 | 103→
Power relations were transparent: they were visible even in the spatial organization of Soviet cities. In Magnitogorsk the local soviet was housed in a small building next to the main square. In the middle of the square stood a statue of Stalin. The council was overwhelmed by the enormous edifice of the factory administration and the NKVD building, located on the hill above the city. The factory chief lived in a fourteen-room villa.285 Half of the workers lived in barracks, and every fifth worker lived in a dug-out.286 While an expensive metro was built deep under the ground in Moscow, with stations decorated as Socialist Realist palaces, basic infrastructure was often lacking in the provinces. As late as 1933, Dniepropietrovsk, a city of 400,000 people, still had no sewage system. The Russian archives contain many letters from desperate citizens begging Stalin, Molotov or Kaganovich for help; one came from a six-person family in Moscow, residing in an alcove under the stairs of an old tenement house. The windowless room of about six square meters had one meter per person.287
A Polish reporter several years older than John Scott, Aleksander JantaPołczyński – decidedly less enchanted with Magnitogorsk than the American– wrote in a book on the USSR published in 1933:
You have not seen the dug-outs here yet. You should take a look at them,” one of the Germans told me yesterday. […] Beyond the hill one of these colonies spread across a meadow. Huts thrown together from a few boards or dug out of the earth stretched out in a long row over the swampy area of the meadows. They were densely packed: smoke was rising from the tin pipes stuck into the makeshift roofs. More often, fires were burning in front of the dug-outs, with some dubious food being prepared over them in a jagged pot. Dirty, half-naked children were running around. At the entrance to one of the huts sat an old woman, a second, younger woman rested her head on her lap. The old woman, sifting through the girl’s hairs one by one, searched through her black hair for bedbugs or lice with a monkey-like, precise movement, murmuring each time she caught a specimen. […] A half hour before, the police had passed through with an order for everyone to get out within three days, since after that the area would be cleared out, the huts “mechanically smashed,” and whoever did not leave voluntarily would be removed by force. Nothing was given in compensation, no other place or barracks were proposed; they were left to fend for themselves.288←103 | 104→
Differences in the standard of living among the citizens of the USSR were enormous. Equality existed only in slogans. The Party-state elite (including the security apparatus) not only had access to better shops and bigger apartments, but also earned considerably more. In 1946 the head of a department in the Ministry of the Interior, the recently renamed NKVD, earned 4200 rubles a month: this was many times greater than the average monthly earnings of a worker (475 rubles at the time, but many earned much less). Officers of the Cheka not only earned more and had better rations, they also had additional opportunities for improving their standard of living. Local NKVD offices were full of eatables and furniture given as “presents” by frightened factory and kolkhoz bosses. Seizing and appropriating goods, particularly apartments, from “enemies of the state” was also a daily occurrence. During the hunt for Polish Communists in 1938, an NKVD officer acquired an apartment by writing “Pole” instead of “Jew” in the nationality rubric for a Party member he was interrogating; he thus unmasked a dangerous counterrevolutionary, whose apartment he then received.289
Soviet industry not only produced goods of low quality, since it did not have to take into account consumer tastes. More importantly, it produced very few of them. In 1946 – a year, it is true, of rebuilding what had been destroyed by the war – the average Soviet citizen bought half a pair of leather boots, a third of a pair of galoshes and 1.5 kilos of soap; industry produced one fourth of an undergarment per citizen and less than one pair of socks.290 Not until the early 1950s did the level of consumption of a Soviet citizen significantly rise above what it had been in 1928, the last year of the quasi-capitalist New Economic Policy (NEP), and the last year before the great campaign of agricultural collectivization and the great Stalinist Five-Year Plans. A year before Stalin’s death, the average level of consumption reached three pairs of domestically produced socks and one pair of boots: more than during the difficult postwar period, but not much higher. Durable goods such as refrigerators and televisions were in practice unattainable.291 Even if someone managed to avoid dying of hunger (that is, he was not one of the millions of peasants who perished during collectivization) and did not get shot, imprisoned, or exiled during one of the waves of terror that shook Russia in the 1930s, his life was one of grim poverty.←104 | 105→
What was built at the price of famine, terror and poverty? The scale of Stalinist undertakings acted on the imagination even of observers who were unfavourably disposed toward them. Non-Communist and sceptic Janta-Połczyński wrote of the “record-breaking, in spite of everything, achievement of the construction of Magnitogorsk”:
On 25 June 1930, came the first strike of the shovel that began the building of the factories. On 1 February 1931, the construction of the first tall furnace began. And here, a small “but”. […] But the blueprints for Magnitogorsk – the basic blueprints – were only ready in May of 1931. So until then the work was done without any “general plan”!? Now, in mid-July 1932, Magnitogorsk has 230,000 inhabitants (divided as follows: 80,000 construction workers, 10,000 in the working parts of factories […] two great working furnaces, two active batteries of coking ovens, half of a power station in service. It produces fire bricks, and has its own repair workshops. Daily production comes to 2000 tonnes of brick. Not to mention the great number of works begun and finished. […] The hour was getting late when we finally went out to look at Magnitogorsk by night. The deep darkness in the valley is punctured by a thousand points of light. The air is transparent, and glimmers and specks of electric lights can be seen only through the hazy range of the trail of smoke rising from the factories. The bloody gleam of the cokery, the faraway clamour of the high furnaces mix with the sounds of a storm heading toward us from somewhere in the Urals. The whole span of the sky is lit up by piercing flashes of lightning. This view contains un-European dimensions, riveting with its expanse, enfolding with its perspectives, hypnotizing with its depth.292
“Was Stalin really necessary?” Historians who work on the USSR are still to this day attempting to answer this question, posed in the early 1960s by the eminent Sovietologist Alec Nove.293
At the time, it referred to the contemporary situation and had a clear political dimension. The motives behind Sovietologists’ research were to a large extent practical. They were trying to describe how the Soviet system functioned in order to assess how big of a threat it posed to the West and how it could be restrained at minimal cost. They relied on thin and obscure sources, and thus needed to expend considerable effort on establishing basic facts. Debates over the nature of the system took place against the backdrop of ideology and politics, to which the facts were subordinate. They debates were always accompanied, as ←105 | 106→another outstanding historian, Aleksander Gerschenkron, wrote in his review of Nove’s book, by a practical question: do changes in the USSR’s internal policies indicate that the regime is strengthening or weakening?294
Ideological disputes had some bearing on these discussions – for example on assessments of the Soviet dictatorship’s ability to act effectively. There was no shortage of Sovietologists inclined to judge that in the Soviet Union, the inherent evil of totalitarianism triumphed over the rational exercise of power (ruthless and genocidal perhaps, but still a form of rationality).295 From this point of view, the evil empire was founded on evil, and was a land of ideological insanity. That insanity, however, in fact hurt the system itself, which as a result could only be grasped in the categories of rational description with difficulty and only to a limited extent.
Today the subject of research for historians working on the USSR – a much smaller group than Sovietologists in days gone by – is the increasingly distant past. They undoubtedly have better sources than Alec Nove or Adam Ulam had. Though contemporary Russia guards the secrets of the Brezhnev and later eras closely, files from the Stalinist era are more easily accessible. Stalin’s correspondence with members of the Politburo; NKVD reports on the mood in Soviet society; real data on the results of the five-year plans (more precisely, data which the Party possessed and did not release) – all have become the subjects of detailed studies.296 We know more about the costs and achievements of Stalin’s Great Turn; we also know more about the lives of ordinary citizens of the USSR during Stalin’s time – not only in the cities, but in the provinces as well. The question posed by Nove remains current, but historians increasingly tend to look for answers in the sociology of Soviet institutions, the mechanisms by which information flowed within the structures of power, or in the channels for advancement.297 These authors do not deny that the pathological personality of Stalin left a mark on the system, like the tradition of Russian despotism and an ideology that proclaimed the need to radically rebuild the world at any cost. All of these combined to form a system that another excellent specialist, Stephen Kotkin, has called – notwithstanding the apparent contradiction in his formulation – an Enlightenment “theocracy.”298 In analyses made in the last two decades, ←106 | 107→the mechanics of the system have, through this description, assumed a more rational form. It has not become less inhuman or more economically efficient in the process; its internal functioning has simply become easier to explain.
Here it is worthwhile to pause for a moment and consider two questions posed in the past by Sovietologists, and now by historians. The first is: could Russia perhaps have developed more rapidly and at a lesser cost without the revolution? The second question relates to the nature of communism: perhaps the Jacobin (ascetic, ideological, and bloody) dictatorship of Stalin was not an inevitable development after the system was founded (contrary to what many of its critics have sought to assert, including, for example, Leszek Kołakowski299), but resulted from a historical coincidence? It would thus be possible to imagine a revolutionary Russia governed by a more liberal dictator – a different comrade of Lenin. It would no doubt have been an undemocratic Russia, but without mass terror, possibly more socially just and with an economy joining together elements of capitalism and socialism, without the catastrophe of collectivization and accelerated industrialization. From this perspective – usually favoured by authors with views more to the left of the spectrum – the reign of Stalin is seen as a betrayal of the ideals of the revolution, rather than a consequence of them.300
This is not the place for summary answers to these questions, especially since they are only indirectly linked with the subject of this book. It is worth noting, however, the most recent important voice in this discussion about Russia’s potential for capitalist development. The American economic historian Robert C. Allen, author of an influential book on the roots of the British industrial revolution and a comprehensive history of Soviet industrialization, in which he enumerates the arguments of historians who pronounce Stalinist industrialization to have been a failure.301
First, Soviet economic growth was not at all impressive; many capitalist countries developed just as quickly (for example, Japan). Stalin’s crimes, therefore, brought no economic benefits.
Second, before 1917 the Russian economy had already entered onto a path of rapid growth (the “take-off” in Rostow’s categories). If not for the revolution, it would have caught up with the West after a few decades.←107 | 108→
Third, the growth of production under Communist governments was limited to steel, machines and arms. Until the collapse of the USSR, its citizens’ standard of living grew very slowly because the country was ruled by a dictatorship focused on the preservation of its own power and international expansion. In practical terms, Capitalist governments would therefore have better served the interests of the Russian working class than the ostensible “dictatorship of the proletariat.” The collectivization of agriculture is an example that springs to mind here: several million deaths and gigantic material losses brought about, above all, by the will to consolidate power and achieve total control over society.
Fourth, Soviet socialism was economically irrational. It generated and then tolerated enormous surpluses of employment and waste. It created an economy unnaturally geared toward maintaining ineffective institutions (for example, the kolkhoz) and military production, rather than consumption. It was also incapable of innovation, except in military technology. It succeeded in building gigantic steelworks and tank factories, but could not compete with the West in the sphere of advanced technology; this led to economic stagnation throughout the entire Soviet bloc beginning in the mid- 1970s.
All of these arguments, Allen notes, are disputable, except perhaps the last.302 It is by no means certain that Russia would have caught up with the West if it had become a capitalist country. The experience of other countries at the same level of development at that time show it to be anything but a foregone conclusion. The countries that were developed in 1989 were already distinctly richer than the “rest of the world” in 1820; since then, the distance between the two groups has only increased, and transitioning from one to the other become increasingly difficult. On the other hand, even the poor areas on the periphery of Europe – for example, the countries in the Mediterranean basin – had a much more modern social structure in 1917 than did Russia, where peasants constituted 80 percent of the population. Likewise, the institutions of the modern state, such as the banking system, governmental structures, and judicial system, were either in their infancy in Russia, or were developing in a form distinct than their western counterparts.
Probably the most interesting argument Allen makes, however, concerns fundamental elements of the social structure: models of the family and the division of land in the countryside. By the twentieth century, rich and poor countries had already had different models of the family for centuries. In Western Europe (and in countries colonized by Europeans) women married late – sometimes ←108 | 109→well above the age of twenty – and many of them never found a life partner. In non-European countries, women entered into permanent unions considerably earlier. A higher birth-rate had not only cultural, but also economic significance, since faster population growth made it harder for non-European countries to extract themselves from the Malthusian trap. On the eastern outskirts of Europe, the line of division between European and non-European family structures ran from Petersburg to Trieste; Russia – with the exception of the Kingdom of Poland and the Baltic countries – found itself on the Asiatic side.
According to Allen, one factor in the tendency of Russian peasants to have many children was their particular method of farming land. In Russian rural areas, the land was not the private property of those who tilled it; every so often the community would divide the land anew among its members. This institution not only made peasants reluctant to invest personally in raising the standard of efficiency, it also inclined them to produce the largest possible number of children, since larger families could count on a larger apportionment of land at the next “distribution.” As Allen writes:
Russia’s large families were the result of the same traditional, patriarchal values that have led to large families in many poor, non-European countries.
In the twentieth century, countries where the non-European pattern predominated had population explosions that have frustrated development efforts and contributed to the divergence in per capita income. The demographic patterns c. 1900 suggest that Russia’s destiny was closer to India’s than to Germany’s.303
This digression has not answered the question of whether Stalin was really necessary. It does show, however, that answering this question is not so simple: left to its own devices, tsarist Russia was by no means fated to become another Japan.304
Historians agree, however, in their assessments that for the Bolshevik dictatorship, the modernization of Russia – understood by them to mean the rapid development of industry and urbanization – was, from the very beginning of their rule, the key political task from several perspectives: ideological, strategic and economic. It is also a known fact that simply nationalizing the whole economic life of a country – perhaps combined with currency devaluation – leads to catastrophic results. The policy of “war communism” in the years 1918–1921, during which time even one-person workshops were nationalized, led to a breakdown of production and made reconstruction after the war’s destruction more ←109 | 110→difficult. In 1921 industrial production in Russia still reached barely one quarter of prewar levels.
The Bolsheviks had no illusions: the road to the bright future could not be easy for anybody. In his book The Politics and Economics of the Transition Period, published in 1920, Bukharin – at that time one of Lenin’s closest colleagues and the leading Party ideologue – explained (polemicizing with Kautsky, who recommended a gradual transition to socialism):
The proletarian revolution is, however, a breach of the civil peace – it is civil war. And civil war reveals the true physiognomy of a society split into classes. The national fetish is destroyed in the fire of civil war and the classes take their places, weapons in hand, on either side of the revolutionary barricades. It is not surprising, therefore, that in the process of the proletariat’s revolutionary struggle, all these forms, establishments and institutions which bore the semblance of being “national” inevitably collapse. Once again this is an unavoidable and historically absolutely inevitable process, whether individuals, groups or even certain intermediate classes want it or not.305
Bukharin recalled Marx’s admonition that the workers would have to go through “15, 20, 50 years of civil wars and national struggles not only to bring about a change in society but also to change yourselves.” In the party program that he wrote together with Preobrazhensky in 1919, he imagined society as one great production organization, from which the anarchy of capitalist production would be eliminated.306 These lofty words were but words, however, and the task of rebuilding the country and putting it on the path of rapid development set challenges of a very practical nature. War Communism was revealed to have been a mistake; the pragmatic Lenin did not hesitate to admit as much. In October 1921, Izvestia printed his speech delivered at the 10th Party Congress in which he criticized himself and the Party for their premature frontal attack on capitalism in Russia. War Communism was a “mistake” and a “jump,” which arose “in complete contradiction to all we wrote” concerning “the transition from capitalism to socialism.”307
Economic planning offered an obvious solution to the problem of the “transition to socialism,” about which Marx himself, unfortunately, wrote very little. ←110 | 111→The Bolsheviks observed with admiration how the Germans were able to mobilize their resources during the First World War. One of them wrote in 1915:
Contemporary Germany has given the world a pattern of the centralized direction of the national economy as a single machine working according to plan. In contemporary Germany the keys of the machine are held by Siemens, Borsig, Gwinner, Bleichroder representatives of the biggest banks and the biggest accumulations of industrial capital in the country. He who holds the keys of the machine runs it according to his own conception; but the experience in the practical life of a vast country of the possibility of constructing such a unified machine within the complicated framework of modern civilization retains its theoretical interest and all its social scientific significance.308
The Germans submitted their economy to planning and control by degrees.309 The first laws limiting economic freedom went into force on 3 August 1914. The state gradually took control over citizens’ savings, foreign trade, production and the sale of food products, and set price limits on various goods, as well as introducing “raw-materials unions”, supervising the distribution of scarce raw materials according to the needs of the war economy.310 In November 1916, a ministry of planning was created and total mobilization of resources and manpower was implemented.311 Industry was organized into 170 “war companies”, based on the old trade unions. This program halted the decline in military-related production, though agriculture and the production of consumer goods continued to shrink. The prices of basic foodstuffs rose during the war eight-fold, and millions of Germans were forced to live on starvation-level rations, amounting to 700–900 kcal a day.312 Widespread hunger brought down morale.313 Nonetheless, contemporaries had no doubts regarding what a great achievement the Germans’ war mobilization was.314 Walther Rathenau, an industrialist and politician, wrote in ←111 | 112→1918, that it was “an economic development closely connected with the methods of socialism and communism,” and that “what came to fruition in the war years should have taken decades or centuries to come to fruition […] The economy went from being a private matter to a social matter.”315 Socialists considered the state’s control of the economy to be a solution based on principles that drew on their ideology.
From the perspective of these experiences, the “new economic policy” (NEP), declared by Lenin was a step backward – a tactical and temporary concession granted by the New to the Old, as Lenin himself admitted in his last public speech.316 In a socialist country, the private sector still existed – mainly in agriculture, crafts, trade and services. It was governed by the laws of the market. Alongside this there existed the state sector – industry, transport, banks, wholesale and foreign trade. In the era of the NEP, the private sector constituted only 9 percent of the Soviet GDP, but a disproportionately larger proportion of consumer goods.317 Currency regained its value; goods returned to the shops.318 The new Soviet rubles were backed by gold, and maintaining their value was a permanent concern of the Party comrades seated in the Politburo.319 Deliverance from the tyranny of market chaos and its replacement by rational (planned) management remained ever in the economy’s future. Bukharin formulated the problem as follows:
Only in a society where production is anarchic, and likewise the distribution of goods, do the economic factors governing the life of the community manifest themselves in the form of “natural” and “spontaneous” laws independent of the will of individuals and collective bodies, laws which function with the same blind necessity as the force of gravity […] Indeed, as soon as we take an organized social economy, all the basic ‘problems’ of political economy disappear: problems of value, price, profit and so on. […] The social economy is regulated not by the blind forces of the market and competition, but by a ←112 | 113→consciously followed plan. In this case […] there will be no room for a science which studies the blind laws of the market, since there will be no market320.
After a few years of the NEP, the Soviet economy was ripe for a change of course. The country was rebuilding itself from the devastations of the recent past: around the turn of 1925–1926, industrial production had returned to prewar levels, and agricultural production was almost caught up. Nonetheless, the Party continued to have serious trouble managing the economy; this presented a constant political threat to the Party’s power.
The first and most fundamental problem was food.321 Before the war, peasants had sold grain, tobacco, wool or leather in cities in order to buy industrial products: salt, sugar, matches, fabrics, tools. In the second half of 1922, that natural order of things began to be threatened by emerging “price scissors”: industrial goods were growing more expensive and peasants were able to buy ever fewer (or, more often, could not afford to buy any). They thus had no motivation to bring their foodstuffs to the cities to sell. In the autumn of 1923, the relative prices of industrial products compared to the prices for foodstuffs were three times higher than before the war and revolution.322 This was the subject of extremely anxious discussions in the Politburo (during which the word “scissors” was declined in every grammatical case; it was taken from the shape of a graph showing the diverging levels of prices for farm and industrial goods). Cities were threatened with famine, but the Party managed to lower prices on industrial goods through administrative means (orders and threats), and peasants began to sell their foodstuffs again. Towards the end of 1926, however, the prices of industrial goods began to rise again, and this time they could not easily be stabilized. In 1927, unlike four years earlier, Soviet industry did not have unused powers of production left from the war that were relatively easy to mobilize. The state was already then beginning to invest in heavy industry, rather than produce for the market; there was simply a lack of goods that might interest peasants.
In response, the Party abolished the market once again, this time for good. A stenograph of a Politburo meeting in January 1927 throws some light on the direct political and economic motivations for this decision. The discussion involved Nikolai Rykov, formal head of the Soviet state (removed a few years later ←113 | 114→and then condemned to death in a show trial) and Kosior, head of the Party in the Ukraine (likewise murdered during the Great Terror).
Rykov complained: “Does industrialization offer anything for price cuts this year? It doesn’t. Not even in the branches of industry, such as glass, that we have mechanized more than others. The STO [Council of Labor and Defense] was told recently that mechanization has been carried out in such a way that glass prices will rise this year.”
Rykov: I asked the same question myself, but I got no clear answer. Sergo [Ordzhonikidze, Politburo member, at the time head of the party control commission] is currently in correspondence with the glass factories on this issue. We’ve built factories that are better than “in Europe” but glass prices have become even more expensive. […]
Kosior reported that “the workers asked me: ‘Why are prices for baked bread not coming down, when we can buy grain more cheaply?’ I myself don’t know why bread prices are unchanged.”
Rykov: “It’s the ‘mechanization’ of baking.”
Kosior: “We see this sort of thing everywhere” […].323
Stalin then suggested an answer: the mechanization of industry combined with inadequate work norms were lifting wages faster than the workers’ productivity was increasing. In other words, as historian Mark Harrison remarks, according to Stalin, workers were seizing the benefits from industrialization at the state’s expense.324 This was at best an incomplete diagnosis, since the low output of Soviet industry resulted from many reasons, but Stalin undoubtedly believed it to be true. Soon he would take care to keep workers’ pay from rising too quickly.
However paradoxical it may seem today, it was easier for the Soviet leaders to control millions of small peasant producers – or at least they thought it was – than for the Party to manage the apparatus of industrial production from above. At a meeting in January 1927, Anastas Mikoyan, a faithful colleague of Stalin who was at that time responsible for trade, said as much.
We have reached a point such that peasant muddle and the peasant grain market are wholly and completely in our hands, we can raise or lower grain prices at any time, and we have all the levers of influence in our hands. But in relation to state trade and the cooperatives, we don’t have these levers for industrial commodities, or, more accurately, we utilize them badly. At present it is easier to raise or lower grain prices in a short period of time across the entire Union territory; and more difficult, and it demands unbelievably ←114 | 115→more effort, to cut prices for industrial commodities in the state-trading or cooperative sphere, because no one stands up for the peasant [muzhik] and gets in our way, whereas various organizations stand up for cooperation and state trade and defend them. Some comrade or other turns up from cooperation and state trade and says we can’t cut prices just like that, there has to be a profit, all are good guys—and the result is none of the necessary pressure and none of the necessary results325.
Mikoyan was being brutally frank: the peasants would have to pay, since they were politically weakest. The Party apparatus had to be reckoned with, while the peasants did not. For the time being, however, an effort was made to encourage them to sell foodstuffs.
After an intensive campaign conducted over ten months, the government was able to force producers to lower prices on industrial products by an average of 7 percent. (This was more than they had expected: Mikoyan had observed in January that it would only be possible to reduce them by 2–3 percent.) The result was empty shops, queues, and high prices on the black market, since goods were simply not available elsewhere. The peasants still did not want to sell grain to the state, since there was not much they could buy with the money they were able to earn. From the point of view of the members of the Politburo, this situation was creating a political threat. The Soviet authorities thus became hostage to the 25 million peasant families, small property owners who could starve the Soviet Union by stopping food deliveries to the cities.
That was unacceptable to the Party. The response to the poor results of the purchasing effort was a massive action carried out by the GPU in rural areas in autumn 1927 that forced peasants to cooperate. A campaign urging the collectivization of agriculture (beginning with propaganda) was close to follow.
The ruling elite in the USSR also had less extemporaneous reasons for confiscating the peasants’ land from them. At issue was not only the regime’s security, but also ideology. When the Bolsheviks sanctioned the division of large land holdings, they did so for tactical purposes in order to obtain peasant support for the revolution. The return of the land to the peasants created a caste of small landowners. As Rosa Luxemburg observed at the time (from distant Berlin), the Soviet authorities created “a new powerful layer of popular enemies of socialism in the countryside, enemies whose resistance will be much more dangerous and stubborn than that of noble large landowners.”326 Lenin would perhaps have been inclined to admit that she was correct, but he yielded to the demands of the ←115 | 116→moment. “Liquidation of the kulaks as a class” could be postponed, but it did not cease to be a long-term goal.
At the same time, Soviet industry was desperately in need of investment. Red Russia was cut off from Western sources of capital (in part by choice, as it had discontinued payment of the tsar’s debts) and the foreign investment that had to a large degree financed economic growth in the last decades of tsarist rule. In truth, production had returned to its prewar level, but machinery was aging. In the state coffers there was a constant lack of funds for investment. In 1925– 1926, the first heated argument over the course of investment policy broke out in the Politburo: Felix Dzerzhinsky (at that time supervising state industry) and his deputy Grigorii Piatakov clashed with People’s Finance Commissar Grigorii Sokolnikov, who advised a reduction in imports (and thus limiting investment) and a restrictive financial policy, leading to a stabilization of the economy and development surpluses in foreign trade. “The lack of hard currency is the fundamental noose that is strangling the development of industry,” Piatakov shouted during a Politburo meeting.327 To obtain hard currency, it was necessary to export; the USSR exported, among other things, gold and wood, but above all, grain. The peasants nonetheless did not want to sell it to the state.
Debates over how to get out of this pitfall went on in an atmosphere of constant menace. By 1921, hopes for revolution in the West had been decisively dashed and the Soviet Union was forced to build “socialism in one country”; it was an enormous and potentially rich country, to be sure, but at the moment a poor one surrounded by enemies. Stalin, who towards the end of the 1920s had attained all but absolute power, in particular, had an obsession with external threats (we should note that the German invasion in 1941 showed this obsession to be not entirely irrational). In the 1920s, it was estimated in the Politburo that an invasion would occur within five or, at most, ten years.328 In 1928, in a speech in which he settled accounts with so-called “right-wing deviationism” in the Party – meaning Bukharin and his allies – Stalin laid out this strategic thinking very clearly:
We have assumed power in a country whose technical equipment is terribly backward. Along with a few big industrial units more or less based upon modern technology, we have hundreds and thousands of mills and factories the technical equipment of which is beneath all criticism from the point of view of modern achievements. At the same time we have around us a number of capitalist countries whose industrial technique is far more developed and up-to-date than that of our country. Look at the capitalist countries ←116 | 117→and you will see that their technology is not only advancing, but advancing by leaps and bounds, outstripping the old forms of industrial technique. And so we find that, on the one hand, we in our country have the most advanced system, the Soviet system, and the most advanced type of state power in the world, Soviet power, while, on the other hand, our industry, which should be the basis of socialism and of Soviet power, is extremely backward technically. Do you think that we can achieve the final victory of socialism in our country so long as this contradiction exists?
What has to be done to end this contradiction? To end it, we must overtake and outstrip the advanced technology of the developed capitalist countries. We have overtaken and outstripped the advanced capitalist countries in the sense of establishing a new political system, the Soviet system. That is good. But it is not enough. In order to secure the final victory of socialism in our country, we must also overtake and outstrip these countries technically and economically. Either we do this, or we shall be forced to the wall329.
Stalin also reminded his listeners about Peter the Great, who had “feverishly built mills and factories,” and underscored that it was “in its way an attempt to break out of the grip of this backwardness.” It was a failed attempt, of course. Even Peter the Great could not accomplish this – only socialism could accomplish it, under his, Stalin’s, leadership.330 (This reference to Russian tradition, in which technical and economic modernization had for centuries served mainly military goals, was not accidental.331)
The technical debate over how to “catch up” continued in Russia throughout the 1920s and provided theoretical arguments to the proponents of rapid industrialization. From the start, however, it was entangled in Stalin’s adroit and cynical manoeuvring in his struggle for power within the Politburo. As would soon be revealed, what was at stake in these debates was not only economic policy, but also the health and life of its participants. The two most important authors of the theory behind Stalin’s economic policies, Grigorii A. Feldman and Yevgenii A. Preobrazhensky, would never receive any awards or honours for their accomplishments. Instead, Feldman spent many years in the Gulag, from which he emerged an ailing and broken man only in the year of Stalin’s death (he died five years later, in 1958). Preobrazhensky was arrested at the beginning of the 1930s, then released and sentenced to exile, only to be arrested again a few years later ←117 | 118→and finally sentenced to death as a Trotskyite during the Great Terror. (He had in fact worked with Trotsky in the early 1920s as a member of the Central Committee, and, briefly, the Politburo; however, suspicions of any kind of oppositional activity were almost certainly fabricated by the Cheka).332
In the 1920s, Soviet economists could not find many suggestions in the classic works of Marxism about what should be done. Marx had anticipated that revolution would break out in the countries where capitalism was most advanced. He had little to say about how a backward socialist country could catch up with the leading capitalist countries. Preobrazhensky therefore referred to the Marxian concept of primitive accumulation (which Marx, in turn, had taken from Adam Smith). Marx wrote that in capitalism the bourgeoisie reproduces its capital and takes possession of the surplus from the workers’ labour. The point of departure for this process is the accumulation of capital; however; this had to start somewhere.333 In this process, primitive accumulation plays “about the same part as original sin in theology,” Marx wrote.←118 | 119→
The legend of theological original sin tells us certainly how man came to be condemned to eat his bread in the sweat of his brow; but the history of economic original sin reveals to us that there are people to whom this is by no means essential. Never mind! Thus it came to pass that the former sort accumulated wealth, and the latter sort had at last nothing to sell except their own skins. And from this original sin dates the poverty of the great majority that, despite all its labour, has up to now nothing to sell but itself, and the wealth of the few that increases constantly although they have long ceased to work. […] In the history of primitive accumulation, all revolutions are epoch-making that act as levers for the capital class in course of formation; but, above all, those moments when great masses of men are suddenly and forcibly torn from their means of subsistence, and hurled as free and “unattached” proletarians on the labour-market. The expropriation of the agricultural producer, of the peasant, from the soil, is the basis of the whole process.334
Marx did not mince words: “conquest, enslavement, robbery, murder, briefly force” – these were the methods by which primitive accumulation was achieved. What form might it take in a socialist nation?
Preobrazhensky answered: the capital needed for major investments in industry must be “pumped” from the capitalist sector of the economy to the state’s coffers.335 In his most important work, The New Economics, he wrote:336
In the period of primitive socialist accumulation the state cannot do without the alienation of a part of the surplus product of the countryside and of artisan labour […] The idea that a socialist economy can develop by itself without touching the resources of the petty bourgeois, including the peasant, economy is beyond doubt a reactionary, petty bourgeois utopia.337
This process could not take place spontaneously. Nor would it be possible to wait until socialist industry developed a sufficiently high surplus, because that, in Preobrazhensky’s view, would mean extending the period of introductory accumulation indefinitely. It is worth underscoring here that Preobrazhensky rejected violence: the methods described by Marx, such as colonialism, plunder, and piracy, were unacceptable to him. He did, however, use a similarly sinister phrase ←119 | 120→in referring to the Russian countryside as an “internal colony.”338 Preobrazhensky was positively disposed towards foreign loans: he believed that even though they had to be paid back with high interest, ultimately, they were beneficial, since they made the import of technology and Western know-how possible.
The state would take possession of part of the “surplus value” produced by peasants using mainly indirect methods that did not call for the use of an expensive police apparatus. Preobrazhensky promoted controlled inflation (he knew that it would impoverish the petty bourgeoisie, operating as an additional tax) in addition to direct taxation of trade and crafts. All of this was secondary relative to the principal mechanism, however: the state was to buy grain from peasants cheaply and export it; the hard currency earned would be used to import machines needed for new state factories (under no circumstances for consumer goods). To that end, the state would need to establish a monopoly on the purchase of grain and a monopoly on foreign trade, allowing it to set prices.
This technique of “taking over the private sector surplus” would, naturally, have its limits. Preobrazhensky knew that purchasing prices could not be set too low, since farmers would then stop selling their grain. As an economist, he was nevertheless pleased with the elegance and low cost of this solution: the establishment of additional, high taxes would demand building an expensive treasury apparatus, whereas his idea, as he wrote, “does not require even a kopek to be spent.” Of course the peasants’ standard of living could be temporarily lowered, but the benefits of accelerated development would quickly compensate for that. Technologically advanced production would soon allow for the cheap production of industrial goods: their low prices would signify a de facto universal wage increase, for peasants as well. Taking a longer-term perspective, Preobrazhensky envisioned the moment when the socialist sector of the economy would be strong enough to function independently and cover the costs of investment with its own moneys. It could then stop siphoning off capital from peasant labour, as this would no longer be necessary.
Preobrazhensky thought that his method indicated a way out of backwardness, not only for the NEP-era USSR, but every backward country that wanted to tear itself out of that state in attempting to build socialism, and in which there existed a capitalist economy alongside the socialist sector. He wrote that the more “economically backward, petit-bourgeois and peasant” a country transitioning to a socialist organization of production was, the greater the degree to which ←120 | 121→socialist accumulation would have to be based on appropriating part of the surplus production of pre-socialist forms of economy, and the less accumulation would be based on its own production base. This meant it would rely less on surplus production created by workers in socialist industry, and more on the seizure of the surplus from the traditional production sector.
Though Preobrazhensky’s works did not enter into scholarly circulation in the West until after the Second World War, an interesting connection can be traced between Preobrazhensky and Rosenstein-Rodan, a pioneer of Western theory on the development of backward countries. There is no proof that Rosenstein-Rodan read the works of Preobrazhensky, but he was certainly familiar with developments in the Soviet Union. Paul A. Baran, a student of Preobrazhensky in Russia in the 1920s, later studied with Paul Rosenstein-Rodan at Harvard (Baran himself was also an important forerunner of dependency theory and was the author of the book The Political Economy of Growth, which created a stir in the late 1950s and early 1960s).339
Primitive socialist accumulation would not have been a painless process even if the state were not to use direct coercion. It should be remembered, however, that from the perspective of a Marxist and a careful reader of Das Kapital, who really believed that at the roots of primitive capitalist accumulation lay violence and force, the socialist state would still behave in a more humanitarian way than the protocapitalists.
Perhaps it would not be necessary to lower the general standard of living even temporarily. This was the view of growth taken by the second economist who had a major role in this debate, Grigorii A. Feldman. An electrical engineer by education, he worked for Gosplan (the central planning office) in the 1920s, and published an extensive, two-part article in its magazine in 1928 in which he proved the economic rationality of investing in heavy industry. Feldman was not interested in a situation where the state would buy machines from abroad in exchange for exported grain. He focused on domestic sources of accumulation – and tried to construct a mathematical model that would correspond to the question of whether accelerated investment necessarily demanded a lowered standard of living.340
Feldman came to the conclusion that in fact the two were by no means inextricably linked. (As a contemporary historian put it, that “one could have one’s ←121 | 122→cake and eat it too.”341) Paradoxically, investments in heavy industry, meaning the production of steel, factory machinery or locomotives, rather than clothing or furniture, would lead to a rapid rise in consumption (Feldman took this division of the economy into the manufacture of consumer goods and the means of production from Marx). The economist thought that the rate of production of consumer goods – furniture, clothes, or houses – was dependent on previous investments in the development of the means of production (and thus industrial and construction machinery, railway tracks and locomotives). The greater the investment in heavy industry in the first period of industrialization, the faster the growth of consumption later: Feldman constructed a mathematical model of this process.
But what did the word “later” mean for him? Feldman assumed a perspective of several, at most a dozen or so years. His model allowed for a certain decrease in consumption in the first period of industrialization, but by no means considered this inevitable: everything depended on the political decisions of planners, the amount of resources they initially earmarked for investment. A politician or planner in charge of making economic decisions would thus have a choice between two extreme scenarios resulting from his path (both of which assumed investment in heavy industry): in the first, consumption continued to rise steadily, very slowly early one, and later very quickly; in the second, it fell somewhat initially (during the jump in investment), then bounced back even faster than in the first scenario. In this way, the economist proposed to politicians a transparent trade off: the more we tighten our belt at the beginning, the better we will live later on.
In any case, Feldman considered huge investments in heavy industry to be necessary. Without them, the economy, left to run its natural course, would attain a low rate of investment, and thus the level of consumption would rise very slowly – more slowly over a period of a few years than in either of the “great leap” scenarios proposed by Feldman. A piatiletka (five-year plan) was crucial. The only alternative, he argued, was stagnation.
The ideas of Preobrazhensky and Feldman formed the basis of the Stalinist industrial revolution, although Stalin never acknowledged the debt of gratitude that he owed these two Soviet economists. Economic policies in many Third World countries after 1945 were also based on these ideas. Nehru’s chief planner, Prasanta Mahlanobis (whose ideas, as we saw, were bitterly mocked years later by ←122 | 123→one outstanding British expert on development), created Indian five-year plans according to Feldman’s model.342
The brutal and ruthless struggle for power in the Soviet Union after the death of Lenin was superimposed onto these theoretical conceptions. How it played out has been described in detail elsewhere, so there is no need to give an extensive account of it here. The main actor was Stalin, who masterfully played the members of Lenin’s Politburo against one another, simultaneously taking advantage of his power as head of the Party apparatus to build a base of faithful political supporters. In the course of these political battles, Stalin did not take a clear and unambiguous position on matters concerning economic policy: he usually expressed support for those members with whom he had entered into a political alliance.
From the early 1920s on, Trotsky and his adherents had pursued the aims of rapid industrialization and large investments in heavy industry at the expense of agriculture: Preobrazhensky expressed their thinking well. Bukharin, at that time the editor-in-chief of Pravda and the Party’s main ideologue, was propounding a more market-based and generally “softer” economic policy (Stalin appeared to support him at that time). Bukharin argued that the idea of sudden industrialization carried out at the peasantry’s expense would bring about serious political and economic difficulties in its wake. According to Bukharin, the peasants were not so stupid as to fail to grasp that the state was manipulating prices to its disadvantage. As a result, he claimed, they would not only be unfavourably disposed toward the Soviet authorities, but would stop selling their grain – without which it would be impossible to build up industry in starving cities.
Bukharin proposed a different solution – uniform development of industry and agriculture, that is, a reversal of the pricing system proposed by Preobrazhensky. Lower prices on industrial products would stimulate consumption, and therefore production as well, and greater profits from industry would permit financing of investment. Bukharin wanted, for example, to lift the ban on the hiring of agricultural workers by rich peasants. In the spring of 1925, he declared in a famous speech: “To the peasants, to all the peasantry, we must say: Enrich yourselves, develop your farms, and do not fear that constraints will be ←123 | 124→put on you.”343 He did not believe in the threat of a renascent capitalism in the countryside. He thought that trade cooperatives and state farms would be more productive than private farms: socialism would defeat capitalism in a fair fight. Moreover, Bukharin thought that major growth in production would require only small investments. According to his ally, Rykov, “the possibilities of increase in yields even by such relatively elementary devices as replacing the wooden hoe by plow, improvements in seeds, introduction of the simplest agricultural machinery and of fertilizers are tremendous at the present level in our villages.”344 Bukharin warned against forcing peasants to join kolkhozes (cooperative farms): he believed that this would merely lead to the rise of “parasitic Communist institutions” living on state subsidies, which would only strengthen the peasants’ conviction “that the private economy is a very good thing.” The road to the kolkhoz was supposed to lead through classical trade cooperatives that dispensed credit and bought grain, and whose efficiency would convince the peasants of the superiority of collective farming. They would come to believe in collective farming if they saw with their own eyes that it could make life more comfortable.345
The old Communists were taken aback by Bukharin’s views: his attempt to rehabilitate capitalism was too overt. The slogan “enrich yourselves”, with which the conservative Guizot had exhorted the French bourgeoisie in the nineteenth century, elicited a resounding protest. Stalin at that point defended Bukharin, but he would remember these accusations well and would himself use them against Bukharin a few years later.
At the Sixteenth Party Congress in July 1930, Stalin finally settled accounts with his last remaining political opponents. He now cited their economic prescriptions. In the political report of the Central Committee at the Congress, Stalin pronounced the NEP to be a “regrouping of forces.” Condemning “Right deviators” for its concessions to alleged “village capitalists,” he appeared to rehabilitate the ideas of the “left opportunists” against whom he had earlier fought. Their mistake was to have sought to implement the program of industrialization prematurely – when the dictator was not yet ready for it.←124 | 125→
When Stalin publicly condemned Bukharin for “right deviationism,” the campaign of industrialization and collectivization had been ongoing for over a year. The Soviet Union was preparing for the leap into modernity that would follow almost to the letter the prescriptions outlined by Preobrazhensky and Feldman. Stalin added one important new element to the program: violence. The peasants, as Bukharin had anticipated (but Preobrazhensky had not foreseen), in fact did not want to sell their grain. The Soviet authorities thus resolved to take it from them – forcing a mosaic of millions of small peasant farms into the framework of the kolkhozes which were fully under its control.
The direct impulse for starting collectivization was provided by the miserable results of efforts to purchase grain in 1928. According to official statistics, the amount purchased fell from 10.6 million tonnes in 1926 to 10.1 million tonnes in 1927 and 9.35 million tonnes in 1928. In that year, for the first time in history, Russia had to import grain.
In May 1928, Stalin presented to the comrades in the Politburo a report demonstrating that although grain harvests were at their prewar level, the amount of that yield that made it to market was barely half of the prewar level. He accused “kulaks” and owners of middle-sized farms of deliberately concealing grain in order to weaken the Soviet authorities. In reality, the state’s purchasing prices were so low that they did not cover the costs of production; in autumn of 1927 many peasants preferred to symbolically burn their grain rather than sell it to the state.346 This was now more than an economic problem: it was a political crime. The peasants had declared war on the Soviet state. The army and the Cheka were now enlisted into the buying campaign. Party dignitaries were informed that they were personally responsible for the results of the purchasing effort in their regions. Grain was confiscated at local markets, and checkpoints were set up on the roads to inspect peasants’ carts. The punishment for private trade in grain was a stiff prison sentence.
Stalin – in the assessment of a noted expert on Soviet archives, including the dictator’s correspondence – was far from economically illiterate, and often based his decisions not on Party reports or intelligence, but on his own intuitions. He was keenly aware of how markets work, and thus knew that raising the purchasing price would incline the peasants toward selling their grain.347 In August 1930, in a letter to Molotov – at that time premier of the USSR and one of Stalin’s chief ←125 | 126→colleagues – he wrote: “We have one and a half months to export grain: starting in late October (perhaps even earlier), American grain will come on the market in massive quantities, and we won’t be able to withstand that. If we don’t export 130–150 million puds of grain in these six weeks, our hard currency situation could become really desperate.” In another letter to Molotov, he wrote: “If we can beat this grain thing, then we’ll prevail in everything, both in domestic and foreign policies.”348 In all of Stalin’s preserved correspondence from that time – including, for example, telegrams to Kaganovich – agricultural matters play a leading role.349
The dictator prevailed, though the price of his victory was high. Beginning in 1929, an increasing amount of grain was flowing into the state reserves, though the harvests remained at a more or less fixed level. “The eyes of our rightists are popping out of their heads in amazement,” he commented with satisfaction in a letter written in the winter of 1929–1930. Up until the mid-1930s, Stalin took an interest in every detail of successive grain campaigns: he knew which region was not fulfilling its plans, and personally decided whether to raise or lower delivery quotas to the authorities. He knew that these plans could not be executed without the use of ruthless coercion. His correspondence with the Politburo members closest to him at that time, Kaganovich and Molotov, is full of wrathful recommendations to hunt down the “vermin,” “criminals and bandits,” and “enemies of the state” (he had in mind peasants who were allegedly concealing grain and those trading privately in foodstuffs).
Preobrazhensky, now under arrest, submitted a statement of self-criticism. In an attempt to save his own life, he beat his breast and paid tribute to the genius of Stalin: “Collectivization – this is the crux of the matter. Did I have this prognosis of collectivization? No, I did not.”350 In fact, he had simply lacked the imagination to foresee that the state could declare war on its own citizens, condemning them to hunger and almost unimaginable suffering. In 1929, according to secret statistics gathered for the supreme authorities of the USSR, over 1300 rebellions broke out in rural areas. In February 1930 alone, a quarter of a million peasants took part in 736 demonstrations. Twenty thousand were shot.
Nevertheless, the worst was still to come. In July 1929, only 4 percent of peasant farms had joined a kolkhoz. In November, the figure was 7.6 percent.351 ←126 | 127→Though Stalin publicly praised the pace of collectivization, in reality he was not satisfied and obliged his subordinates to accelerate it. In December 1929, he declared the official policy of “liquidation of the kulaks as a class”; in January 1930, the Politburo approved the relevant resolution. At that point there began the massive exile of alleged “kulaks” to the far north or the Asiatic steppes. There was not even a shadow of economic rationality in this: this pure orgy of terror had the result of shattering peasant support for the regime. Practically speaking, there were no kulaks left, since they had long since been driven to ruin; fewer than one in 100 farms hired even one worker. The average value of the confiscated property from a “kulak” family amounted to between 170 and 400 rubles (roughly equal to the monthly wages of a worker); the income of such a “kulak” was lower than the income of the government clerk sentencing him to deportation. As Robert Conquest, a historian of the Great Famine, observes, the costs of deportation itself were probably higher than 400 rubles.352
It is now difficult to harbour any doubts about the famine having been the deliberate result of Stalin’s policies, implemented with the consistency and ruthlessness fitting an oriental despot.353 The state confiscated grain, even the portion designated for sowing; it introduced internal passports and attempted to eliminate starving peasants from the streets of the cities where they sought help. The peasants, forced into a corner, had stopped sowing and were slaughtering their cattle en masse. Soviet archives contain reports by survivors who speak of slow death in the agonies of hunger, suicides, and even cases of cannibalism. In 1933, the OGPU intercepted a letter written by a boy deported from the Ukraine to Siberia:
What a wicked fate has befallen me, I still can’t believe that they did this to me, and why they are tormenting me this way, as if I were a rich man or hurt somebody, they are bunglers and bloodsuckers and nothing more. We are starving here, and there’s nothing to buy, nothing to eat. It’s incredible how they abuse us, prisoners have it much better, they get special work clothes, three pounds of bread, but we get nothing, that’s the kind of criminals we are, they’ll probably torture us to death, the snakes. A lot of people are already starving to death. The damned scoundrels, I feel sorry for the people, and myself as well. What are they tormenting us for, for our property? Is it really possible the scoundrels won’t come to their senses and let us live freely?354←127 | 128→
The greatest number of victims of famine died in the Ukraine and southern Russia. Reports from the small number of foreigners who witnessed the events are full of information about depopulated villages in which out of a few hundred inhabitants there remained at most a few dozen, wandering through the empty fields like shadows.355
In July 1934, Władysław Gomułka, at that time a low-level Communist Party activist, travelled by train to a sanatorium in Crimea. He was warned of possible attacks or robberies on the train. Years later, Gomułka would write:
In reality, these were serious and widespread occurrences. They grew in number and spread over the territory of the Soviet Union during the period of intensive collectivization of agriculture. The bands of marauders consisted mostly of peasants who had been kicked off their farms and dispossessed of their lands. As I later learned from certain workers at the Party school, the collectivization of agriculture, conducted using brutal administrative methods, had aroused resistance and opposition from the peasants everywhere, which was manifested in many different forms. In the period immediately preceding collectivization that had been previously announced by the authorities, one widely used form of opposition was the peasants’ restricting their cultivation of the land to an area whose harvesting would be sufficient to provide only for the needs of their own family. The peasants left the rest of the land fallow. If collectivization was being applied to areas already sown and cultivated, the peasants’ protest manifested itself in the form of limiting the harvest of crops to an amount that met their own food needs. The part of the crops in the peasants’ fields not taken would be destroyed.356
The future leader of Communist Poland was startled by what he saw and heard. For Gomułka, collectivization was “the original sin underlying all the evil that manifested itself on such a massive scale in the Soviet Union under Stalin.” He wrote: “Nobody can state the extent of the harmful consequences, particularly of a moral nature, that it had on Soviet society, and which weighed on its traditions.”357.
According to recent estimates by historians, using previously classified data from Soviet statistical bureaus, between 5.5 and 6.5 million people died of hunger in the Soviet Union in the years 1928–1934.358 Historian Timothy Snyder estimates the number of famine victims in the years 1932–1933 at 3.3 million.359 Overall, in the 1930s, according to the estimates of historian Robert Conquest, ←128 | 129→14.5 million citizens of the USSR died as a result of repression relating to collectivization.360
Stalin bought the Five-Year Plan – the Soviet ticket to modernity – at the price of widespread famine and millions of human beings. This assessment does not suggest that the transaction was praiseworthy, moral or even economically advantageous. On the contrary, there are many arguments in favour of the view that the Five-Year Plan was accompanied by colossal waste – not only of energy, health and human life, but also of the capital extracted from millions of peasants by the Soviet authorities at such an expenditure of sweat and blood.361 The collective farms turned out to be a great disappointment: in 1938 almost half of farm production came from private peasant farmsteads (one half hectare per family), which constituted only 3.9 percent of cultivated acreage.362 The Cheka and the GPU reported on the terrible state of state-run farms even before the beginning of collectivization, but Party discipline and ideology demanded that Communists believe such problems to be temporary.363
From the beginning, historians and Sovietologists have differed in their assessment of the results of Soviet industrialization: estimates of the rate of economic growth in the USSR during the period under discussion are highly divergent. No one doubts, however, that such growth was a fact.364 The goal that had been set was achieved. In the 1930s the USSR became an industrial power.
The transformation of Soviet society from an agrarian to an industrial society also looked quite different from the way the Soviet Utopians of the 1920s had imagined it. As late as 1929, on the threshold of the first Five-Year Plan, the economist and high-ranking Gosplan clerk L. M. Sabshovich published a booklet entitled The USSR in Ten Years: it was published in a mass edition and translated into a ←129 | 130→number of foreign languages. The Soviet Union in 1939 was to be a country where the “material and social base of socialism” had already been built: free of private ownership, free of classes, free of big cities, and even free of natural disasters. Industry and the populace were to be equally distributed throughout the enormous country in agglomerations of 50,000–75,000 inhabitants; the author believed these to be the optimal social and public health conditions for life. In here vision of the future, there were no longer any rural areas, and the “peasant mentality” had been utterly eliminated. Kolkhoz and sovkhoz farms would surround farming towns, and shared life in communes would replace private domestic farms, that “plague that deforms the life of adults and children.” Thanks to the commune, women would be liberated from family duties and the slavery of domestic life. Everyone would live in enormous hotel-houses, automated dormitories housing 1400–2000 persons each (children would be separated from their parents and raised collectively). The work week would be shortened to three days.365
By 1939 these visions had been entirely forgotten. The country was poor, hungry and cold. People often worked seven days a week, without a single day off. In place of Utopia, Dnieprostroi and Magnitogorsk had been built.
While the numbers do not fully convey the scale of these changes, it is useful to adduce them here. Between 1928 and 1937, industrial production rose annually by 11 percent. The share of agriculture in the GDP fell from 49 percent to 29 percent. Every fifth resident of the USSR had moved from working on a farm to working in industry, one of the largest migrations to cities in the history of the world. The share of consumption in the GDP fell from 80 percent to 53 percent; the share of investment doubled from 13 percent to 26 percent. During that decade, the prices of consumer goods rose by a figure of seven: the retail price of agricultural products rose by 539 percent.366 According to contemporary estimates (as opposed to overstated Soviet data) GDP growth in the years 1928–1955 amounted to an average of 5.2 percent annually; if we take into account the collapse in production brought about by the war, from which the economy of the USSR only recovered in the late 1940s, estimates would run still higher. During the first two Five-Year Plans (1928–1937), the Soviet GDP doubled.
There is no doubt that in the early years of the first Five-Year Plan – at least until 1932 – the standard of living dropped substantially. There is no shortage of experts, however, who state that consumption grew minimally throughout the ←130 | 131→first two Five-Year Plans.367 If true, that would mean that Feldman was right – a simultaneous jump in investment could coincide with a rise in consumption, though the abrupt growth in prosperity he predicted in the later phases of the Great Leap materialized late and at best incompletely in the era of Khrushchev, the golden age of the Soviet economy. Specialists continue to engage in a long and very technical debate on the level of official and black-market prices and wages, and the caloric value of food per Soviet citizen.368 The question thus remains open. Regardless of statistical discussions, however, both Russians and foreigners remember the 1930s in the USSR as a time of universal misery.
New industrial projects provided reasons to be proud, but their work on them too was not proceeding entirely according to plan. The technology was usually imported from the West, together with the specialists needed to start up operations. The USSR provided raw materials, capital, and manpower. Magnitogorsk was just such an industrial enterprise. It was designed in 1928 by the Leningrad construction company Gipromez, but the McKee Company from Cleveland, Ohio, which received a contract for 2.5 million dollars in gold, was responsible for the greater part of its construction. The model for the works and the city was supposed to be Gary, Indiana, in which a gigantic metallurgical works had been built by U.S. Steel. Magnitogorsk appeared to be an ideal location to the planners: placed almost exactly on the border between Europe and Asia, it was secure from foreign invasion. The factory was erected right near the “magnetic mountain,” a gigantic deposit of high-grade iron ore estimated to hold 228 million tonnes.
The plan placed unrealistic obligations on the shoulders of the builders, which proved impossible to meet, thus providing the authorities with a pretext for the use of repression and constant replacement of personnel. In 1932, the first operating furnaces in Magnitogorsk fulfilled only 44.9 percent of the plan: the plant’s ←131 | 132→managers were replaced three times.369 Similar problems plagued all of the great construction Five-Year Plans. The building of Dnieprostroi, a gigantic dam on the Dnieper, had begun in 1927 even before the announcement of the first Plan. Lenin thought that electrification would change and modernize Soviet Union; the plan for electrification in the early 1920s was the Soviet state’s first large, coordinated economic enterprise. Dnieprostroi was to provide energy for industry as well as hasten the implementation of Lenin’s vision.
From the outset, its construction was plagued by problems. Assessments by foreign engineers and Party overseers found the efficiency of the work to be low, largely as a result of the workers’ wretched living and housing conditions and poor diet. Thousands of people came to build the dam and thousands quickly left. Work was often halted due to a lack of raw materials and crucial construction elements: for example, in 1931 electric turbines that had been ordered for the dam were lent to another factory. although thousands had been hired (17,000 in 1929, 30,000 in 1930) local Party members complained of a lack of hands for work. In 1930 the plan was nearly completely executed, but only because its targets had been lowered.370
The plans were highly flexible. What would have most shocked proponents of rational, planned industrialization in the poorest countries in the 1950s and 1960s would have been to learn that Soviet planning in the Stalinist period was primarily a ritualistic and propagandistic enterprise. Firstly, its degree of precision left much to be desired. In 1951, more than 20 years after the start of the first Five-Year Plan, a detailed version of the plan was broken down into no more than 127 products. Secondly, the numerical values inscribed in the plan were based – as one historian specializing in this area writes – “on experience, intuition, and bargaining,” and sometimes simply the arbitrary decisions of a dictator.371 In the 1930s, Stalin often dispatched decisions about investment costs and production goals from Crimea, where he was vacationing, without consulting anybody. Sometimes he guessed right – he was usually well-informed – but sometimes he made faulty decisions.
Thirdly, the Five-Year Plans did not translate directly into short-term planning: they merely designated the general direction of economic development. As a rule they also were not executed in full. The goals of the first Five-Year Plan (1928–1933) were met, on average, at a level of 60 percent; those of the ←132 | 133→second – rather lower – at a level of 70 percent. Almost all of the plans were approved many months after their formal initiation: the first (1928–1933) was approved in the spring of 1929, and the fifth (1950–1955) in August 1952.
Every Five-Year Plan carried a propaganda message.372 In November 1929, Stalin wrote about the first:
We are advancing full steam ahead along the path of industrialization—to socialism, leaving behind the age-old “Russian” backwardness. We are becoming a country of metal, a country of automobiles, a country of tractors. And when we have put the U.S.S.R. on an automobile, and the muzhik on a tractor, let the worthy capitalists, who boast so much of their “civilisation,” try to overtake us! We shall yet see which countries may then be “classified” as backward and which as advanced373.
It was announced at that time that industrial production – then equal to 5 percent of the USA’s industrial production – would catch up in the early 1940s. Planned production results were arbitrarily changed (usually from above): from April to December 1929 the planned amount of iron to be smelted was increased fivefold, from 1.3 million to 6.1 million tonnes.374 The cult of steel production surpassed even the cult of Stalin: there was not a great deal of “rationality” in this.375 In 1937, during work on a subsequent Five-Year Plan, a wave of purges swept through the Gospłan: among those shot were two successive heads and many workers (they shared the fate of statisticians and demographers). There could be no talk of “rational, scientific” planning in such conditions.
In practice, the Soviet economy was managed by means of short-term operational plans that were not published and could be changed at any moment (and very often were). This involved a great deal of steering by hand. The Politburo could at any given moment change allocations of materials and production goals. It could also give orders for a change in the production profile. It did both of these things constantly. It was, at least in theory, all-powerful.
Every authority has its limits, however. The men governing the USSR were permanently overworked. Their lives consisted of endless meetings, at which hundreds of decisions were taken on various matters, often very insignificant ones. The drive toward total control over the life of society remained in irremediable ←133 | 134→contradiction with the need to delegate tasks to lower levels of the hierarchy. When attempts were made to do so – inconsistently and timidly – the clerks at the lower level were afraid to make decisions, and therefore sent them back to their superiors. In January 1930, the whole Central Committee apparatus amounted to barely 375 people, Gosplan – only 900, counting clerks and cleaning women. The Energetics Department at Gosplan, one of the most important departments, then had 30 essential workers. In the 1930s the Politburo was making from 2300 to 3500 decisions a year, but this was turning out to be too few to run a huge country. Stalin – aside form his obsession with controlling everyone and everything and his tendency to micromanage policy – realized that such a system could not be maintained for long. In 1932 he proposed limiting the list of matters dealt with by the Politburo to 15 per meeting. This rule was quickly broken: in the mid-1930s the agenda for some meetings encompassed over 100 points.376
The dictator’s letters to his closest colleagues allow us a glimpse of his daily work style. He took most of his decisions during meetings with a small group of associates; these were not recorded in shorthand. There were no drastic differences between what he said publicly and privately. Stalin appears truly to have believed that he was surrounded by enemies, saboteurs and troublemakers, and that the system’s (and its rulers’) survival depended on the development of industry at any cost. He had a good memory for crucial economic data – the size of the investment budget, the current state of the largest projects, production figures for grain and steel, transport capacity. Stalin often evaluated the effectiveness of economic plans based on intuition, and when he took a decision, it was difficult afterwards to dissuade him from it (and few had the courage to attempt to do so).377 Regional Party leaders had some influence over decisions about where to build a factory or power station, but not as much as under Stalin’s successors, whose position was weaker and who had to exert more effort to gain support for the Party apparatus.
In economic affairs – according to economic historian Paul R. Gregory – Stalin was “well informed and consistent. He had well-defined goals, he gathered his facts carefully, and he listened to advice and sometimes changed his mind as a consequence of such advice.”378 Rationality went hand-in-hand with an obsession with threats that bordered on paranoia. These two dimensions of his personality are illustrated nicely in a letter to Molotov (written on or around 6 August 1929):←134 | 135→
1. Transfer Comrade Mirzoian to the Trade Union International. 2. Purge the finance ministry and state bank of wreckers despite the wails of dubious communists and definitely shoot two or three dozen wreckers from these apparaty, including several dozen common cashiers. 3. Kondratieff, Groman and a few other scoundrels must definitely be shot. 4. A whole group of wreckers in the meat industry must definitely be shot. 5. It is a mistake to issue nickel coins now. 6. It is a mistake to import shoes from England. 7. It is good that the United States has allowed the importation of our timber. 8. How are things with German credits? 9. Force grain exports; credits will come. 10. Pay attention to the Stalingrad and Leningrad tractor factories. Things are bad there.379
Stalin’s obsessions frequently conflicted with rational economic calculation – and they usually won. Coercion and control, ubiquitous in the system the dictator built around himself, were unbelievably costly, in part because they affected educated specialists whom the economy needed.380 Millions of people whose qualifications would have been useful to the Soviet economy were murdered in the purges and exiled to work camps (between August 1937 and November 1938 alone, at the height of the Great Terror, 700,000 people were shot).381 The response to the crisis in the Soviet economy and decrease in the rate of growth was more repressions.382 The number of security guards and Chekists, who were very costly to employ, continued to grow in number. In 1939, among the masses of citizens working in the USSR, officially estimated at 78.8 million people, there were as many as 2.1 million security guards keeping watch over factories, offices, railway stations and bridges: this was four times the number of miners, and more than twice the number of railwaymen (and these figures do not include those working in the ranks of the NKVD).383 The response to accidents at work or failure to adhere to a plan typically consisted of accusations of espionage and sabotage. When in the late 1930s, the Soviet railways, due to underinvestment and overuse, were besieged with accidents and breakdowns, which occurred on average every five minutes, Lazar Kaganovich, Stalin’s faithful subordinate and ←135 | 136→colleague, announced that he had uncovered a “Trotskyite-Japanese” diversionary network in the transport industry. He thus gave the signal for a purge of the railways to begin. It began at the top, with the People’s Transport Commissariat: in August 1937, ten high-ranking officials were arrested, accused of sabotage, and shot. Next, regional railway chiefs were advised to track down saboteurs: on a single line in southern Russia, 1700 out of 45,000 railwaymen were arrested – so many that temporary prisons were organized at railway stations.384 If a director failed to unmask sabotage, it usually meant that he himself would be found guilty of sabotage and end up in a camp, if not shot, and his family would also likely meet with repressions.
In such an atmosphere of espionage mania and an obsession with “wreckers” and sabotage, Communist managers protected themselves the only way they knew how. The numbers imposed on them by planners were usually unrealistic, but admitting failure meant immediate arrest. By necessity, they played a kind of game with the planners: they would lower production capacity, conceal reserves, and falsify statistics in order to fulfil the plan. When the chasm between the official figures and reality became too great, the factory leadership would end up in work camps. But their successors had to do the exact same thing. The system allowed them no choice.
The placement of millions of people in work camps also did not make economic sense, and not only because their skills would have been more beneficial elsewhere. In 1940 there were two million prisoners in the Gulag system. In 1950, despite the very high death rate during the war (when food rations were cut drastically) there were 2.5 million. That meant that every twentieth Soviet worker was a prisoner.385 Towards the end of the 1930s, the Gulag was the largest construction enterprise in the USSR; the prisoners also cut down trees for export and excavated gold, which provided an important source of hard currency for Soviet industry. Stalin judged that unpaid prisoner labour, and the apparent ease with which they could be moved from place to place, made it possible to cheaply carry out large-scale construction projects – gigantic canals and railway lines built in the heart of the Russian wilderness. In practice, the situation was different, a fact of which the NKVD was particularly well aware: prisoners worked considerably less efficiently than free labourers, the camps regularly failed to fulfil production norms, and maintaining them cost a fortune (only the terrifying gold mines in ←136 | 137→Magdan turned a profit).386 Stalin clearly overestimated the economic efficiency of forced labour. Starting from the end of the Great Terror, the administrative leadership experimented with a system of material incentives, including, among other things, paying prisoners, which was supposed to motivate them to work harder. From 1949 onward, the deputy to Beria, head of the Ministry of Internal Affairs – the newly-renamed postwar incarnation of the NKVD – three times proposed a radical revision of the system in extensive reports: freeing 75 percent of the prisoners and replacing work camps with a system of forced deportation. He received a hearing a few weeks after Stalin’s death.387 (In an ironic twist of fate, the author of this proposal did not benefit from its mercies: as a collaborator of Beria’s, he was sentenced to 15 years in a camp after his boss’s downfall and execution. He served out his entire sentence.) Contrary to what seems intuitively obvious, the security apparatus did not have an interest in building up a system of work camps; on the contrary, it was particularly conscious of the system’s inefficiency and strove for its liquidation, primarily out of economic motives, as documents reveal.
The problem of motivation beleaguered the economy beyond the Gulag as well. Towards the end of the first Five-Year Plan, employment in industry was rising, but work efficiency was falling – poor living conditions, hunger, queues and a high turn-over among workers had their price. If wages were not sufficient to ensure survival, people would sooner or later rebel; Stalin was aware of this fact. Documents from the 1930s show that he devoted a significant amount of time to providing workers with necessities, sometimes publishing precise directives as to what quantity of goods to send to a particular city or region. In the first quarter of 1930 alone, 92 strikes were recorded, and the efficiency of industrial work fell by 10 percent compared to the previous year.388 In reality, the Politburo was trying to carry out a very meticulous and difficult operation in the realm of social engineering – establishing a level of wages high enough for workers to survive on, so the state would not be threatened with widespread revolt, but that would simultaneously force them to their work more efficiently.
Stalin also involved himself with the system for motivating people to work. In 1931, in a speech to “economic activists,” widely publicized by the propaganda service, he severely condemned the idea of an uravnilovka or levelling of wages, deeming it a harmful leftist fantasy. Instability in the work force, negligence, the ←137 | 138→low quality of products – the reason for all of these things, he claimed, lay in the need “to organise wages properly”:
The cause is the wrong structure of wages, the wrong wage scales, the “Leftist” practice of wage equalisation. In a number of factories wage scales are drawn up in such a way as to practically wipe out the difference between skilled and unskilled labour, between heavy and light work. The consequence of wage equalisation is that the unskilled worker lacks the incentive to become a skilled worker and is thus deprived of the prospect of advancement; as a result he feels himself a “visitor” in the factory, working only temporarily so as to “earn a little money” and then go off to “try his luck” in some other place.389
Equality of wages, Stalin taught, had nothing to do with Marxism-Leninism: “whoever draws up wage scales on the ‘principle’ of wage equalisation […] breaks with Marxism, breaks with Leninism.”390 Wages would become equalized when communism arrived, in the distant future. A demanding system of norms and piece work pay rates quickly began to be introduced that provided incentive for competition between workers and overfulfilment of plans.
Psychological incentives were soon added to material ones. From the early 1930s “shock brigades” were organized and workers exhorted to intensify their efforts, but the real propaganda campaign was yet to come. Its kicked off by the achievement of miner Aleksei Stakhanov, who during his night shift from 30–31 August 1935 managed to excavate 102 tonnes of coal, amounting to 1400 percent of his norm.
There is no doubt today that Stakhanov had been chosen by Party bosses and his record achievement preceded by careful preparations, assuring him assistance and comfortable work conditions on which he could not have counted under normal circumstances. His success was publicized by Pravda, which had been entrusted a few weeks earlier with discovering “New Soviet Men” by the commissar for heavy industry himself, Sergo Ordzhonikidze (“In capitalist countries, nothing can compare with the popularity of gangsters like Al Capone,” he was quoted as having told journalists. “In our country, under socialism, heroes of work […] must become the most famous.”)391 Ordzhonikidze probably saw some small piece on Stakhanov’s success in a trade paper and called the offices ←138 | 139→of Pravda to point them toward this potential hero. On 8 September 1935, Pravda began issuing calls for a massive work competition under the slogan “From Competition of Individuals to Mass Competition”. Two days later it used the expression “Stakhanovite movement” for the first time.392
It is difficult to find persuasive proof that the Stakhanovite movement actually raised the level of labour efficiency or work discipline. It certainly aroused opposition from among workers, which was carefully kept secret.393 It was useful to the authorities for many reasons, among others because it allowed them to exert additional pressure on the middle management (to which Stakhanovites were often promoted) and induced workers to learn new production techniques (which brought measurable improvements). It also motivated people financially: on his record-setting night, Stakhanov earned 200 rubles instead of the 23–30 he received on an average shift. He was then awarded an apartment and a prize.394 On the other hand, it stood in contradiction to the ideals of collective effort (and collectively accomplished innovation) proclaimed by the system. Stakhanovites often caused disruption in the work of their colleagues, as the work of an entire department would be reorganized in such a way as to assure the best possible conditions for beating successive records. These leading workers were also unpopular because their successes made the authorities raise the norms for everyone. Since the late 1930s, the authorities had begun to use more traditional methods for increasing efficiency and maintaining work discipline; for example, miners were offered a five-year contract with high premiums for uninterrupted work to keep them from switching to neighbouring mines.395 At the same time, the state’s drastic punishments were aggravated – one could be sent to a work camp for a quarter of an hour’s tardiness. The difficulty of motivating workers towards more efficient work represented one of many defects in the system that time would reveal to be ineradicable.
The answer to the question of how rational the system built by Stalin was is both commonplace and far from obvious. It is a commonplace to speak of how criminal and inefficient it was, how badly it wasted the time and effort of Soviet ←139 | 140→citizens, and how gray and miserable it made their everyday lives. To the extent that we accept the criteria for rationality, based on its classical dictionary definition, to include the expediency of the means adapted toward a desired end, the answer becomes more complicated. Stalin wanted to make the Soviet Union an industrial and military power in the lifetime of one generation and to protect its system from external intervention. There is no doubt that he achieved both of these aims.396 It would be naive to think that this dictator, who personally approved long lists of persons condemned to death during the Great Terror, was not aware of the price demanded by that success. In this sense, his choices can be considered rational – although, obviously, marked by the stain of his pathological personality, which allowed him to overlook the cost in human life while making his calculations.
In the 1990s, two contemporary adherents of the classical school of political economy, Mancur Olson and Ronald Wintrobe, described the system of the dictatorship within the categories of rational choices made by individual actors in public life. Each makes a rational decision in the sense that he looks after his own security and strives to gain maximal advantage (power, prestige, material goods), simultaneously lowering costs (for example, taking care to reduce the scope of external control, to keep down the payments made to bosses in the hierarchy, and so on). From this perspective, immoral behaviour (that is, publicly condemned behaviour, often in conflict with the interest of the political community as a whole) can be – and often is – very rational from the point of view of individual or group interests. For example, a director of a Soviet factory in the 1980s behaved rationally by lobbying for a reduction in the plan in the capital city, concealing his production capabilities and reserves from inspection (in order to receive an award every year for exceeding the plan), and buying the good favour of his colleagues in the power apparatus with a variety of goods (to which he, as a director, had access). At the same time – and using precisely these same incentives – he could alternately bribe and intimidate workers in his factory who rebelled against their low wages and long work hours and his authoritarian management style.
A tyrant who feels insecure in power only looks after his short-term gain, since his long-term perspective for wielding power is doubtful. From his perspective, therefore, confiscations, very high taxes or ordinary plunder begin to pay off even if they hurt the long-term interest of the community; he thus behaves like a “roving bandit” who robs the people over whom he temporarily holds power ←140 | 141→by every possible means at his disposal, as he is indifferent to their fate. The “stationary bandit” – a hereditary monarch or a dictator firmly in control of the reins of government – has an interest in the largest possible gains from a longterm perspective: he therefore restrains his tendencies toward quick plunder.397
Olson postulated that a dictator’s interest demands he “extract” the largest possible amount of resources from his subjects. He wrote that Stalin was no different in this sense from the rulers who built the Egyptian pyramids or Versailles.398 Though a comparison (even an implicit one) with cattle is of course insulting to the citizens of the USSR, there is no lack of historians who find Olson’s metaphor to make sense.399 Those were precisely the intensions of “Team Stalin” – to extract the largest possible surplus from the Soviet economy and to concentrate it in their own hands, allocating it on military expansion and spectacular construction projects. Stalin differed from Rameses XIV in that he had more effective tools at his disposal: Communist ideology and the new totalitarian technique for managing the economy. The selective modernization of the country coincided with his own interests, but only in part: Stalin’s interests included Magnitogorsk and the atom bomb, but not refrigerators or plumbing in every citizen’s flat (those would only weigh down the budget).400
From the perspective of the criteria he adapted, he was successful; it also seems fairly plausible – although this remains open to question – that Stalinism may have brought social advancement to millions of people who had no such chance before the revolution. He moved them to the cities and gave them an education, though they were forced to live in poverty and cramped quarters, and their schools were of low quality.401 The flaws in the system of the Soviet economy – permanent trouble with quality standards, a low level of innovation, waste, the planners’ disconnect from reality – were already clearly visible during Stalin’s rule. Repression and terror allowed for short-term mobilization: this potential had to be exploited. When Stalin died, the USSR found itself plunged ←141 | 142→into a profound crisis.402 The Party leadership realized that a change of course was necessary.
The death of Stalin brought a paradigm shift in the exercise of power. When his colleagues took power, they became both representatives and hostages of the bureaucracy Stalin had created. The “new class” (to use Milovan Djilas’ term) was above all interested in the security and financial benefits associated with power. The system lost its dynamism – irreversibly, as it turned out.403
Soviet leaders were perfectly aware of this fact; as a contemporary specialist in Soviet history writes, nobody was more critical of the bureaucracy than they were.404
In spite of everything, average Russians lived better than they had in Stalin’s time. The second half of the 1950s was the golden age of the Soviet economy: it grew considerably faster than the American economy and at a pace comparable to those of Japan and Germany, while a somewhat stabilized investment policy brought goods back into stores. Every Soviet citizen was employed – the Party knew that this provided the foundation for internal stability. It also promised a rising standard of living: radios, televisions, washing machines and refrigerators began appearing in homes. In the late 1950s Khrushchev could truly believe that the Soviet Union, developing at its current pace, would surpass not only the GDP but also the consumption level of the United States (in a few decades, admittedly, but then permanently). Many Western analysts believed so, as well. According to CIA estimates from 1999, the Soviet Union came closest to achieving this aim in the year 1970: its GDP at that time amounted to 57 percent of America’s.405
American intelligence was shocked by the pronounced decrease in the pace of economic growth in the USSR after 1975: in the later years of Brezhnev’s rule the Soviet GDP practically stood in place.406 Although the plan for the years 1976–1980 assumed the lowest rate of growth of any Five-Year Plan (4.1–5.1 percent ←142 | 143→annually), even that was just wishful thinking.407 From the mid-1970s onward, the USSR’s imperial ambitions were financed through profits from oil, whose prices on world markets rose fourfold after the energy crisis of 1973. American intelligence only took official note of the economic stagnation in the USSR in the year 1977.408
In a speech given on 11 June 1971, Brezhnev admitted publicly that “without major defense expenditure we should have moved our economy forward faster”: in real terms arms spending was growing more rapidly than the GDP. A CIA report in May 1976 estimated that Soviet defence spending had risen from 40–50 billion rubles in 1970 to 55–60 billion in 1975 (at 1970 prices).409 This meant it had expanded from 8 percent to 11–13 percent of the GDP. When Gorbachev took power, defense spending was probably more than 15 percent of the GDP.
Every year the USSR spent about 2 percent of its GDP on aid to Soviet bloc countries, including Cuba. Since the first loan extended by Khrushchev to the Hungarians after the 1956 uprising and designated for the stabilization of the economy, the USSR’s client states had become an ever greater burden on its budget (2 percent of GDP was a more than twice the level of development aid provided by the most generous capitalist countries to the poorest ones).410 These expenses had a negative effect on the level of investment, and thus on economic growth.
The system’s biggest Achilles’ heel, however, remained the way sectors of the economy were structured within the Soviet bureaucracy inherited from Stalin’s times.411 In 1989 there were 36.4 million people working in Soviet industry, and their number grew each year. At the same time, the United States had been reducing the number of industrial workers since the 1970s (to 18.4 million in 1989), while production continued to rise. Although the world had changed, the power relations within the Politburo promoted the preservation of the Stalinist investment structure; the method that had assured Stalin’s strategic success had become a burden on his successors. The USSR imported a significant part of its modern technology, purchasing it or stealing it from the West: economic success began increasingly to depend on the country’s ability to compete in a race for ←143 | 144→advanced technology, for which – despite having educated the masses – it was ill-prepared to win.412
A second fundamental and irremovable weakness in the system was the poor flow of information. In a dictatorship everyone lies, and the greater the dictator’s power, the more he is surrounded by lying. In his classic book on dictatorships, Ronald Wintrobe describes the problem thus:
The more threatened they are by the ruler, the more the subjects will be afraid to speak ill of or to do anything which might conceivably displease him or her. Therefore, it would seem, the less the dictator knows what they are really thinking, and the more reason for him or her to be insecure! Hence the paradox: The greater the dictator’s power, the more reason he or she has to be afraid. Finally, and most important, the problem is two-sided. The dictator’s dilemma could equally be called the subject’s dilemma: As much as dictators want to be loved, the subjects want them to believe that they are loved, for only then are the people safe from them. If they can make their dictator believe that they truly worship (or even that they support) him or her, then he or she need not fear them; and if in turn the ruler does not fear them, they need not fear him or her.413
Low-level officials protected themselves against pressure from the “centre” by creating what Winrobe calls “horizontal trust networks” (what were called “cliques” in the language of Communist Party members). They cooperated with one another not only in order to safely take advantage of the privileges associated with power – homes and apartments, cars, and other goods provided to public servants – but also in order to protect themselves from the centre’s planning control. In short, they made a pact to deceive the dictator together (if we treat the post-Stalinist Politburo as a collective dictator). That weakened the system and reduced its effectiveness.←144 | 145→
These inner systems often originated, paradoxically, in plans imposed from above that could not be carried out by legal means. During the first Five-Year Plans (and later on) there was an enormous black market in the USSR, not only for consumer goods but also for unofficial trade (mainly in the form of exchange) between enterprises. In 1933, in Stalingrad as many as 40 percent of registered cars disappeared – according to official data, they “were not repairable.” In practice, as a commission appointed by the Party discovered, organizations that did not officially have the right to be issued a car would buy it on the black market or build one from replaceable parts they were able to somehow “organize” by unscrupulous means.414 In diaries from the 1930s, there are many descriptions of unofficial “trade representatives” from Soviet enterprises – people whose (state) companies sent them out with suitcases full of rubles to obtain parts or raw materials essential to production that were not available through official channels. The connections thus formed turned into close and permanent collaborative relationships, which weakened the authority of the Politburo and pushed an ever greater portion of the USSR’s economy into the gray market. One diarist, head of the planning department at a large Russian sawmill in the 1930s, described how this system arose:
Once I dropped in on Neposedov and found an unfamiliar, impressive looking man in a leather coat in his office. Neposedov was enjoying himself: “Well, what do you propose? A tank? Or machine guns? Those we do not need; we are peaceful people. Cannons we don’t need either. Or maybe we could organize an army in the factory?” Laughing, Neposedov turned to me. The man in the leather coat was the representative of a large munitions plant near Moscow. They had a shortfall in lumber and needed several traincar loads in order to complete an important construction job. They had sent dozens of couriers to various factories. Perhaps one of them would get lucky. “Why a tank or bullets?” retorted leather-coat. “We can give you makhorka [cheap tobacco], manufactured items. We have them.” This representative concluded an agreement to the effect that we would give them two or three carloads of lumber in return for several crates of makhorka, a cask of vegetable oil for the dining room, and other products. Our deal with the munitions plant was quite providential. Another factory, which made parachutes, balloons, and dirigibles for the military, gave us several hundred yards of percale – a silky, thin, and surprisingly durable fabric used in balloon making – in exchange for lumber. The bolt was so wide that you could get a whole man’s shirt out of little more than a yard of fabric. Everyone in the factory was supplied with percale shirts and blouses.415
One could be sent to the camps for such transactions, but circumstances made them an unavoidable necessity. After Stalin’s death, however, they could be ←145 | 146→conducted for profit (no longer by necessity), and relatively safely.416 Stalin maintained competition within the bureaucracy by means of purges that shook the system and broke up informal communication networks within elite circles. He smashed their mutual solidarity in an unspeakably brutal fashion – with shots in the back of the head. When that method ceased to be applied, the system began to ossify, until it became the fossil of the final Brezhnev years.
Historians of Stalinism often write that Stalin destroyed the Party, that it ceased to exist as an independent ideological movement, becoming not only the Party of Stalin, but his podium and footstool, as well.417 If Wintrobe is correct, that means that the Party’s failure – the destruction of true, disinterested Communism and its replacement with Stalinist doctrine – was a condition for the USSR’s successful leap to modernity: if Stalin had not destroyed the Party, the system would have changed sooner into a lethargic oligarchy.
In an essay written in 1997, economist Paul Krugman put forward a somewhat less cynical explanation for the collapse of the Soviet system:
Were the supposed productive triumphs of the Soviet Union under Stalin merely a hoax? Tell that to the soldiers of Germany’s Army Group Center – the few who survived. The fact is that Stalin did transform Russia into a massive industrial power – a power tested in the most unambiguous way imaginable. And his successors did achieve real technological triumphs – not just showy triumphs like sending cosmonauts into orbit, but the creation of a highly sophisticated scientific and engineering establishment. True, Russia was never any good at producing high-quality consumer goods. But it was not always the bumbling, incompetent system we now imagine.418
Krugman (like many historians) finds that the decline and collapse of the system resulted primarily from the fact that the ideology at the source of its dynamism had withered. Like any great enterprise, the Soviet state was organized, according to Krugman, on the model of a great industrial syndicate; what the USSR needed to continue its existence was a purpose. That purpose was provided by its ideology. When people stopped believing in its ideology, the system fell apart. He argues that “the basic problem was not technical, but moral,” continuing:←146 | 147→
A market system, of course, works whether people believe in it or not. You may dislike capitalism, even feel that as a system it will eventually fail, yet do your job well because your family needs the money you earn. Capitalism can run, even flourish, in a society of selfish cynics. But a non-market economy cannot. The personal incentives for workers to do their jobs well, for managers to make good decisions, are simply too weak. In the later years of the Soviet Union, workers knew that they would be paid regardless of how hard they tried; managers knew that promotions would depend more on political connections than on performance; and nobody was offered rewards large enough to justify taking unpopular positions or any sort of serious risk.419
Capitalism, Krugman concludes, won because egoism and cynicism are written into its system.
In the 1950s and 1960s, that victory nonetheless looked very distant. Third World countries were creating planning commissions and dreamed of building up heavy industry, since it was widely thought that the USSR had triumphed. From the perspective of the 1990s, it is very easy to forget that Western experts long believed in the Soviet system’s competence and its economic results. People knew, of course, that the standard of living in the USSR and Eastern bloc countries was lower than in the West, that goods were often lacking in shops (or, if available, were poorly designed and produced). That, however, did not overcome their belief in the basic effectiveness of the system. In the fifth edition of a popular American university economics textbook from 1961, Nobel laureate Paul Samuelson published a chart demonstrating that GDP in the USSR was significantly higher than in the USA (the same author suggested that the gap between the two countries would remain permanently).420 As late as 1989, just before the collapse of the system, Samuelson wrote that “the Soviet economy is proof that, contrary to what many sceptics had earlier believed, a socialist economy can function and even thrive.”421 In 1987 another respected and at that time widely quoted specialist, Gur Ofer, estimated the average rate of growth in the Soviet economy in the years 1928–1985 at 4.2 percent annually – “among the best for such an extended period.”422←147 | 148→
We could easily find dozens more such quotations. In the USSR itself, opposing economic views were practically non-existent until the very end.423
Given that celebrated experts shared these views, it is easy to understand how they were embraced by the political leaders of poor, newly-independent countries, who dreamed of creating modern, powerful states, of catching up with and surpassing the West. The Soviet Union showed them a path they could take, even if they were not Communists and rejected elements of the system.
280 He did not become a Communist, but it has not been ruled out that he may have been an agent for Soviet intelligence after his return to the United States in 1942; his name appeared on lists of “Communist sympathizers” and agents of the USSR.
281 J. Scott, Behind the Urals…, op. cit., p. 5.
282 Ibid., p. 71.
283 J. Fürst, Stalin’s Last Generation. Soviet Post-War Youth and the Emergence of Mature Socialism, Oxford 2010, p. 43 ff.
284 S. Fitzpatrick, Everyday Stalinism. Ordinary Life in Extraordinary Times. Soviet Russia in the 1930s, Oxford 2000, p. 46.
285 S. Kotkin, Magnetic Mountain. Stalinism as a Civilization, Berkeley–Los Angeles 1997, p. 289.
286 S. Fitzpatrick, Everyday Stalinism…, op. cit., p. 49. Data from 1938.
287 Ibid., p. 47.
288 A. Janta-Połczyński, W głąb Z.S.R.R., Warszawa 1933, quoted in Spojrzenie na Rosję, ed. J. Kochanowski, Warszawa 1994, p. 73.
289 P. R. Gregory, Terror By Quota. State Security from Lenin to Stalin (An Archival Study), New Haven–London 2009, pp. 72–74.
290 D. Filtzer, Soviet Workers and Late Stalinism. Labour and the Restoration of the Stalinist System after World War II, Cambridge 2004, p. 43.
291 D. Filtzer, Soviet Workers and De-Stalinization. The Consolidation of the Modern System of Soviet Production Relations, 1953–1964, New York 1992, p. 1.
292 A. Janta-Połczyński, W głąb Z.S.R.R…, op. cit., pp. 69–70.
293 A. Nove, Was Stalin Really Necessary? Some Problems of Soviet Economic Policy, New York 1964, p. 33 ff.
294 A. Gerschenkron, review (untitled), The Economic History Review, 1965, no. 3.
295 Cf. e.g. D. W. Lovell, From Marx to Lenin. An Evaluation of Marx’s Responsibility for Soviet Authoritarianism, Cambridge 1984
296 It is worth mentioning here the works of S. Fitzpatrick, L. Siegelbaum, S. Kotkin, D. Filtzer, O. Klhevniuk and P. R. Gregory.
297 Cf. e.g. P. R. Gregory, The Political Economy of Stalinism, Cambridge 2003.
298 S. Kotkin, Magnetic Mountain…, op. cit., p. 286 ff.
299 Cf. L. Kołakowski, Main Currents of Marxism, London, 197.
300 S. F. Cohen, Bukharin and the Bolshevik Revolution. A Political Biography, Oxford– New York 1980, p. 186 ff.
301 R. C. Allen, Farm to Factory. A Reinterpretation of the Soviet Industrial Revolution, Princeton 2003.
302 For an extensive summary of this discussion, see R. C. Allen, Farm to Factory…, op. cit., Chapter 1.
303 R. C. Allen, Farm to Factory…, op. cit., p. 13.
304 G. Tanquary Robinson, Rural Russia under the Old Regime, Berkeley–Los Angeles 1969, p. 116.
305 N. Bukharin, Politics and Economics of the Transition Period, London–Boston 1979, p. 42.
306 P. J. Boettke, The Political Economy of Soviet Socialism, vol. 8, London–New York 2001, p. 86. Marx quote from Revelations Concerning the Communist Trial in Cologne, Part I, “Preliminaries.” Marxists Internet Archive. https://www.marxists.org/archive/marx/works/1853/revelations/ch01.htm.
307 Quoted in A. Kaufman, “The Origin of ‘The Political Economy of Socialism’”, Soviet Studies, 1953, no. 3.
308 Quoted in E. H. Carr, The Bolshevik Revolution 1917–1923, Harmondsworth 1972, p. 359.
309 A. Ritschl, “The Pity of Peace. Germany’s Economy at War, 1914–1918 and Beyond”, [in:] The Economics of World War I, ed. S. Broadberry, M. Harrison, Cambridge 2005.
310 H. Strachan, The First World War, vol. 1, Oxford 2001, p. 1039 ff.
311 T. Hunt Tooley, “The Hindenburg Program of 1916. A Central Experiment in Wartime Planning”, The Quarterly Journal of Austrian Economics, 1999, vol. 2, no. 2.
312 B. J. Davis, Home Fires Burning. Food, Politics and Everyday Life in World War I Berlin, Chapel Hill–London 2000, p. 180.
313 D. Welch, Germany, Propaganda and Total War, 1914–1918, New Brunswick 2000, p. 124.
314 R. Bessel, “Mobilization and demobilization in Germany, 1916–1919”, [in:] State, Society and Mobilization in Europe During the First World War, ed. J. Horne, Cambridge 2002, p. 212 ff.
315 Quoted in E. Nabiel, Gospodarka wojenna Niemiec, 1914–1918, Warszawa 1959, pp. 27–29, 324–325. See also W. O. Henderson, “Walther Rathenau. A Pioneer of the Planned Economy”, The Economic History Review, New Series, 1951, vol. 4, no. 1.
316 M. Lewin, Lenin’s Last Struggle, Ann Arbor 2005, p. 66.
317 V. Shlapentokh, A Normal Totalitarian Society. How the Soviet Union Functioned and How it Collapsed, Armonk–London 2001, p. 103.
318 A. B. Ulam, The Bolsheviks. The Intellectual and Political History of the Triumph of Communism in Russia, Cambridge – London 1998, p. 449 ff.
319 D. M. Woodruff, “The Politburo on Gold, Industrialization, and the International Economy, 1925–1926”, [in:] The Lost Politburo Transcripts. From Collective Rule to Stalin’s Dictatorship, eds. P. R. Gregory, N. Nalmark, New Haven–London 2008, pp. 199–200.
320 N. Bukharin, The Politics…, op. cit., p. 57.
321 S. Pirani, The Russian Revolution in Retreat, 1920–24. Soviet Workers and the New Communist Elite, London–New York 2008, p. 139.
322 M. Harrison, “Prices in the Politburo, 1927: Market Equilibrium Versus the Use of Force”, [in:] The Lost Politburo Transcripts…, op. cit., pp. 225–226.
323 Quoted in M. Harrison, “Prices in the Politburo…”, op. cit., p. 231.
324 Quoted in M. Harrison, “Prices in the Politburo…”, op. cit., p. 231.
325 Ibid., p. 238.
326 Quoted in L. Siegelbaum, Soviet State and Society Between Revolutions, 1918–1929, Cambridge 1994, p. 40.
327 D. M. Woodruff, “The Politburo on Gold…”, op. cit., p. 200.
328 A. Erlich, The Soviet Industrialization Debate, 1924–1928, Cambridge 1960, p. 28.
329 J. Stalin, Industrialisation of the Country and the Right Deviation in the C.P.S.U.(B.). Speech Delivered at the Plenum of the C.P.S.U.(B.), November 19, 1928, https://www.marxists.org/reference/archive/stalin/works/1928/11/19.htm
330 Ibid., p. 257.
331 W. J. Blackwell, The Beginnings of Russian Industrialization 1800–1860, Princeton 1968, p. 169 ff.
332 Another victim of the purge was the Soviet economist most widely known in the West, Nikolai D. Kondratiev, one of the authors of the theory of long-term conjuncture cycles (lasting 50–60 years) in capitalist economies. The Institute of Conjuncture founded by Kondratiev in Moscow – maintaining contacts with many Western scholarly centres– was dissolved in 1928, though its head had not participated directly in the debate on Soviet industrialization. The actual reason for the liquidation of the institute, according to historian of Soviet economic theory Vincent Barnett, was its market approach to problems of investment and development. As early as January 1928 there was a discussion of the national economy’s interest at an institute meeting that treated it as the sum of interests (that is, profits) of individual actors on the economic stage. Kondratiev’s institute, devoted to rigorous and methodical study of the market economy, Barnett writes, “existed in a context where the stated political objective was the complete elimination of markets and hence cycles from all aspects of economic life, whether this be in the short or medium term. Members of the Conjuncture Institute must have realised that their personal positions within the Soviet economic bureaucracy were inextricably connected to the fate of the actual markets which they studied and analysed in such an enthusiastic and original manner.” V. Barnett, “A Long Wave Goodbye. Kondrat’ev and the Conjuncture Institute, 1920–28”, Europe-Asia Studies, 1995, no. 3, p. 417. Kondratiev himself was arrested in 1930 and sentenced to 8 years in prison in a show trial of one of the opposition groups invented by the NKVD. Though he served out the sentence, he was then shot in 1938.
333 A. Erlich, “Preobrazhenski and the Economics of Soviet Industrialization”, The Quarterly Journal of Economics, 1950, vol. 64, no. 1.
334 K. Marx, Capital. A Critique of Political Economy, https://www.marxists.org/archive/marx/works/1867-c1/ch26.htm
335 The best analysis of Soviet debates of that time, still widely cited to this day, is found in A. Erlich’s The Soviet Industrialization Debate, 1924–1928, Cambridge 1960.
336 Originally published in Moscow in 1926 as Novaya Ekonomika, the book came out in the West many years later; see E. A. Preobrazhensky, The New Economics, Oxford 1965.
337 Quoted in E. H. Carr, A History Of Soviet Russia Socialism In One Country: 1924 1926, New York 1958, pp. 203–204.
338 R. Conquest, The Harvest of Sorrow. Soviet Collectivization and the Terror Famine, New York 1986, p. 65.
339 M. Hatziprokopiou, K. Velentzas, Preobrazhensky and the Theory…, op. cit., p. 191.
340 Feldman’s two-part 1928 article appeared in English as “On the Theory of Growth Rates of National Income”, I & II, [in:] Foundations of Soviet Strategy for Economic Growth, ed. N. Spulber, Bloomington: Ind. 1964, pp. 174–199, 304–331.
341 R. C. Allen, Farm to Factory…, op. cit., p. 54.
342 Colin Clark’s views on Mahlanobis’s economic planning were quoted in Chapter 2. This model of growth is sometimes called the Feldman-Mahlanobis model in the literature. It should be noted that Mahlanobis, like Feldman, had not been educated as an economist: he was a physicist (he studied at Calcutta and Cambridge), and later worked as a statistician. See also Chapter 6.
343 Quoted in R. W. Davies, “Grain, Class, and Politics During NEP. The Politburo Meeting of December 10, 1925”, [in:] The Lost Politburo Transcripts…, p. 183. The speech was printed in Pravda on 14 April 1925.
344 Quoted in R. C. Allen, Farm to Factory…, op. cit., p. 59.
345 S. Cohen, Bukharin and the Bolshevik Revolution. A Political Biography, 1888–1938, Oxford–New York 1980, p. 195.
346 P. R. Gregory, The Political Economy…, p. 32.
347 Ibid., p. 36.
348 Quoted in P. R. Gregory, The Political Economy…, p. 37.
349 R.W. Davies, “Stalin as Economic Policy-maker. Soviet Agriculture, 1931–1936”, [in:] Stalin. A New History, ed. S. Davies, J. Harris, Cambridge 2005, p. 124.
350 Quoted in P. R. Gregory, The Political Economy…, p. 40.
351 R. Conquest, The Harvest of Sorrow…, op. cit., p. 112.
352 Ibid., p. 117.
353 Memoirs of Nikita Khrushchev, Commissar 1918–1945, ed. S. Khrushchev, University Park 2005, pp. 63–64.
354 Cf. The War Against the Peasantry 1927–1930. The Tragedy of the Soviet Countryside, ed. L. Viola, V. P. Danilov, N. A. Ivnitskii, D. Kozlov, New Haven–London 2005, 319 ff.
355 R. Conquest, The Harvest of Sorrow…, p. 244.
356 W. Gomułka, Pamiętniki, vol. 1, ed. A. Werblan, Warszawa 1994, p. 341
358 R. W. Davies, S. G. Wheatcroft, The Years of Hunger. Soviet Agriculture, 1931–1933, New York 2002, p. 401.
359 T. Snyder, Bloodlands. Europe Between Hitler and Stalin, New York 2010, pp. 44–46.
360 R. Conquest, The Harvest of Sorrow…, op. cit., p. 306.
361 The scope of this transfer is disputed. According to some studies, the value of the farming machines sent to the countryside, necessary for the replacement of the draughtanimals slaughtered by the peasants, was equal to or greater than the value of the agricultural products “extracted” from the villages. The Great Leap would thus have been achieved by a lowering of living standards everywhere (not only in the countryside). See P. R. Gregory, J. Sailors, “The Soviet Union during the Great Depression. The Autarky Model”, [in:] The World Economy and National Economies in the Interwar Slump, ed. T. Balderston, New York 2003, p. 206.
362 M. Lewin, The Making of the Soviet System, New York 1994, p. 180.
363 V. Brovkin, Russia After Lenin. Politics, Culture and Society 1921–1929, London–New York 2005, pp. 168–169.
364 Cf. e.g. A. Bergson, The Real National Income of Soviet Russia Since 1929, Cambridge 1961.
365 R. Stites, Revolutionary Dreams. Utopian Vision and Experimental Life in the Russian Revolution, New York – Oxford 1989, p. 199.
366 P. R. Gregory, J. Sailors, The Soviet Union during the Great Depression…, p. 200.
367 This is the opinion of R. C. Allen, among others; Allen writes that consumption in the late 1930s was considerably higher than in the late 1920s, judging from, among other sources, tables of the caloric value of the food eaten by a citizen of the USSR (Farm to Factory…, p. 132 ff.); P. R. Gregory and J. Sailors (who estimate annual growth in consumption at a level of 0.8 percent; see The Soviet Union During the Great Depression…, p. 201) concur.
368 S. G. Wheatcroft, The first 35 Years of Soviet Living Standards…; the author, analyzing discussions of wages and prices in the USSR conducted since the 1950s by western scholars and the findings of his own archival research, reaches the conclusion that the standard of living in the USSR in the late 1920s was not reached again until a few years after the Second World War.
369 J. Scott, Behind the Urals…, op. cit., p. 71.
370 A. Rassweiler, The Generation of Power. The History of Dneprostroi, New York – Oxford 1988, pp. 3, 132–134, 173.
371 P. R. Gregory, Political Economy…, p. 114.
372 M. Lenoe, Closer to the Masses. Stalinist Culture, Social Revolution, and Soviet Newspapers, Cambridge–London 2004, p. 66.
373 J. Stalin, “A Year of Great Change. On the Occasion of the Twelfth Anniversary of the October Revolution”, Pravda, November 7, 1929, https://www.marxists.org/reference/archive/stalin/works/1929/11/03.htm
374 Examples taken from P. R. Gregory, Political Economy…, pp. 118–120.
375 S. Fitzpatrick, Stalin’s Revolution, Oxford 2008, p. 131.
376 P. R. Gregory, Political Economy…, pp. 127–129.
377 E. Belova, P. R., Gregory, “Dictator, Loyal, and Opportunistic Agents. The Soviet Archives on Creating the Soviet Economic System”, Public Choice, 2002, p. 113.
378 P. R. Gregory, Political Economy…, p. 14.
380 R. T. Manning, “The Soviet Economic Crisis of 1936–1940 and the Great Purges”, [in:] Stalinist Terror. New Perspectives, eds. J. A. Getty, R. T. Manning, Cambridge 1993, p. 116 ff.
381 O. Khlevniuk, “The Economy of the OGPU, NKVD, and MVD of the USSR, 1930– 1953”, [in:] The Economics of Forced Labor. The Soviet Gulag, eds. P. R. Gregory, V. Lazarev, Stanford 2003, p. 49.
382 M. Harrison, Soviet Planning in Peace and War, 1938–1945, Cambridge 2002, pp. 5–34.
383 R. Conquest, The Great Terror. A Reassessment, Edmonton 1990, 275; see also J. Arch Getty, Origins of the Great Purges. The Soviet Communist Party Reconsidered, 1933– 1938, Cambridge 1985.
384 R. Conquest, The Great Terror…, pp. 276–277.
385 P. R. Gregory, “An Introduction to the Economics of the Gulag”, [in:] The Economics of Forced Labor…, p. 19.
386 M. Parrish, The Lesser Terror. Soviet State Security, 1939–1953, Westport–London 1996, p. 46.
387 A. Tikhonov, “The End of the Gulag”, [in:] The Economics of Forced Labor…, p. 73.
388 P. R. Gregory, Political Economy…, pp. 94–95.
389 J. Stalin, New Conditions–New Tasks in Economic Construction. Speech Delivered at a Conference of Business Executives. June 23, 1931. https://www.marxists.org/reference/archive/stalin/works/1931/06/23.htm
391 L. Siegelbaum, Stakhanovism and the Politics of Productivity in the USSR, 1935–1941, Cambridge 1990, p. 73.; see also D. Filtzer, Soviet Workers and Stalinist Industrialization. The Formation of Modern Soviet Production Relations, 1928–1941, London 1986.
393 S. Davies, Popular Opinion in Stalin’s Russia, Cambridge 1997, p. 32.
394 L. Siegelbaum, Stakhanovism…, p. 70; see also L. Siegelbaum, A. Sokolov, Stalinism as a Way of Life, New Haven–London 2000, 161 ff.
395 L. Siegelbaum, Stakhanovism…, pp. 292, 302.
396 A. Nove, Stalinism and After. The Road to Gorbachev, London–New York 1992, p. 67.
397 M. Olson, “Dictatorship, Democracy and Development”, American Political Science Review, 1994, 3. I use Olson’s terms “stationary bandit” and “roving bandit”.
399 See, e.g. E. Belova, P. R. Gregory, “Dictator, Loyal, and Opportunistic Agents. The Soviet Archives on Creating the Soviet Economic System”, Public Choice, 2002, p. 113.
400 M. Harrison, Communism and Economic Modernization, Centre for Competitive Advantage in the Global Economy, University of Warwick, working paper no. 92, 2012.
401 S. Fitzpatrick, Education and Social Mobility in the Soviet Union, Cambridge 2002, p. 239 ff.
402 See especially Late Stalinist Russia. Society Between Reconstruction and Reinvention, ed. J. Fürst, London–New York 2006.
403 A. Ogushi, The Demise of the Soviet Communist Party, London–New York 2005, p. 10.
404 S. Fitzpatrick, Everyday Stalinism. Ordinary Life in Extraordinary Times. Soviet Russia in the 1930s, Oxford 2000, p. 28.
405 S. Morewood, “The Demise of the Command Economies in the Soviet Union and Its Outer Empire”, [in:] Economic Disasters of the Twentieth Century, eds. M. J. Olivier, D. H. Aldcroft, Cheltenham–Northampton 2007, p. 275.
406 M. Harrison, “Economic Growth and Slowdown”, [in:] Brezhnev Reconsidered, ed. E. Bacon, M. Sandle, Houndmills–New York 2002, 38 ff.
407 V. Mau, I. Starodubovskaya, The Challenge of Revolution. Contemporary Russia in Historical Perspective, Oxford 2003, p. 230.
408 CIA’s Analysis of the Soviet Union, 1947–1991, ed. G. K. Haines, R. E. Leggett, Washington 2001, p. 173.
409 S. Morewood, “The Demise of the Command Economies…, op. cit., p. 277.
410 Ibid., p. 278.
411 P. Gregory, Restructuring the Soviet Economic Bureaucracy, New York 1990, p. 123.
412 During the times of the USSR, economists and Sovietologists offered extremely diverse interpretations of the slowing of economic growth that began in the second half of the 1960s. Among the reasons proposed were capital-absorptiveness and the low efficiency of work in the Soviet economy (see e.g. M. L. Weitzman, “Soviet Postwar Growth and Capital-labor Substitution”, American Economic Review 1970, no. 4); difficulties in managing an increasingly complicated economy (see G. Schroeder, “The Slowdown in Soviet Industry, 1976–1982”, Soviet Economy 1985, no. 1); lifelong guarantees of employment, which lowered the motivation to work (D. Granick, Job Rights in the Soviet Union. Their consequences, Cambridge 1987); lack of rewards for innovation (J. S. Berliner, The Innovation Decision in Soviet Industry, Cambridge 1976). The role of problems with the flow and coordination of information is underscored by P. Rutland, The Politics of Economic Stagnation in the Soviet Union, Cambridge 1993.
413 R. Wintrobe, The Political Economy of Dictatorship, Cambridge 2000, p. 22.
414 P. R. Gregory, Political Economy…, p. 147.
415 G. Khomiakov-Andreev, Bitter Waters. Life and Work in Stalin’s Russia, Boulder 1997, pp. 74–75.
416 S. Alasheev, “Informal Relations in the Soviet System of Production”, [in:] Management and Industry in Russia, Formal and Informal Relations in the Period of Transition, eds. S. Clarke, Edward Elgar, Aldershot–Brookfield 1995, p. 28 ff.
417 See, e.g. J. Arch Getty, O. V. Naumov, The Road to Terror. Stalin and the Self-Destruction of the Bolsheviks, 1932–1939, New Haven–London 1999.
421 Quoted in M. Skousen, The Making of Modern Economics. the Lives and Ideas of the Great Thinkers, Armonk 2015, p. 424.
422 R. Wintrobe, The Political Economy of Dictatorship…, p. 199.
423 P. Sutela, “Soviet Economics after Stalin. Between Orthodoxy and Reform”, [in:] Economics in Russia. Studies in Intellectual History, eds. V. Barnett, J. Zweynert, Aldershot–Burlington 2008, p. 162.