AngeloSegrillo

THEDECLINEOFTHESOVIETUNION

AnAnalysisoftheCauses

1stedition

FFLCH/USP

SãoPaulo(Brazil)

2020

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Copyright©2020byAngeloSegrillo Allrightsreserved. PrintedinBrazil

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FaculdadedeFilosofia,LetraseCiênciasHumanasdaUniversidadedeSãoPauloMariaImaculadadaConceição–CRB­8/6409

S455Segrillo,Angelo.ThedeclineoftheSovietUnion:ananalysisofthecauses/Angelo

Segrillo.­­SãoPaulo:FFLCH/USP,2020.315p.

ISBN978­85­7506­377­4

1.Politicsandgovernment–SovietUnion.2.SovietUnion(economy,historyandsocialcondition).3.Socialism.I.Title.

CDD947.085

Textdesignandedition:LaboratóriodeEstudosdaÁsia(USP) Cover:LaboratóriodeEstudosdaÁsia(USP). LaboratóriodeEstudosdaÁsia(LEA) DepartamentodeHistória­FFLCH UniversidadedeSãoPaulo Av.ProfessorLineuPrestes,338 CEP:05508­900SãoPaulo–SP Tel:(55)(11)30913760 e­mail:laboratoriodeestudosdaasia@usp.br Brasil

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THE DECLINE OF THE SOVIET UNION An Analysis of the Causes

Abooksponsoredby: LaboratóriodeEstudosdaÁsia(LEA)

(Coords.AngeloSegrillo/PeterDemant)

DepartmentofHistory

(Head:JoãoPauloGarridoPimenta)

FFLCH

(Dir.MariaArmindadoNascimentoArruda

Vice­Dir.PauloMartins)

UniversityofSãoPaulo

(Rector:VahanAgopyan

Vice­Rector:AntonioCarlosHernandes)

SãoPaulo–Brazil 2020

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Foreword

his is thesixthbookpublishedunder theauspicesof theCenterfor Asian Studies (Laboratório de Estudos da Ásia ­ LEA) of theUniversity of São Paulo; the third one in English for an

internationalaudience. Thetextisanelectronically­basedEnglish­languageversionofthedoctoral dissertation defended by Angelo Segrillo at the UniversidadeFederal Fluminense (Brazil) in 1999. The Portuguese­language originalcanbereadonlineathttp://lea.vitis.uspnet.usp.br/arquivos/angelosegrillotesededoutorado.pdf This book is dedicated to Professor Daniel Aarão Reis, AngeloSegrillo’sPh.D.dissertationsupervisor. Theauthorstrongly recommends the readingof theendnotesofthebookbecausetheyprovideusefultechnicalinformation..

Wehopeyouenjoythereading.

T

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CONTENTS Foreword Listoftables 10Listofabbreviationsandacronyms 12 Partone:Whatwerethemaincausesofperestroika? 1Introduction 151.1Preamble 151.2Apparentandprofoundcausesofperestroika 16 2Technologicalrevolutions 262.1Introduction 262.2 Characteristics of the capitalist production systemduringthesecondandthirdtechnologicalrevolutions

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2.2.1Secondtechnologicalrevolution 312.2.2Thirdtechnologicalrevolution 33 3TheconceptofScientific­TechnicalRevolution(STR)intheactuallyexistingsocialistcountries

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3.1Generalconcepts 423.2Automation,STRandsocialism 46 4TheSovietproductionmodel 494.1Introduction 494.2Val 514.3Centralplanningandnesbalansirovannost’ 524.4Pricestructure 554.5Workeralienation 564.6Vertical,authoritariancommandstructures 574.7Consumersovereigntyandpermanentbuyers’market 584.8Vedomstvennost’ 604.9Zatratnayasistema 614.10Extensivegrowtheconomy 63 5 Soviet production model, fordism, toyotism andScientific­TechnicalRevolution

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5.1Introduction 67

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5.2FordismandSovietproductionmodel 705.2.1Flexibility 715.2.2Information 755.2.3Quality 775.2.4PositiveaspectsoftheSovietsystemfortheSTR 78 6ThenatureoftheSovietmodelanditsorigins 826.1Conceptionsaboutthenatureofthesovietmodel 826.2Conclusion 92 Parttwo:otherfactorspressuringthesovietsystem 7Theburdenofmilitaryexpenditures 95 8TheproblemofSovietagriculture 1068.1Introduction 1068.2Origins oftheproblem 1078.3Small­versuslarge­scaleagriculture 1118.4Resultsofcollectivization 1128.5Stalin,Khrushchev,Brezhnev 1148.6Conclusion 118 9TheSovietnationalitiesproblem 1199.1Problemoutline 1199.2AbriefhistoryofrelationsamongnationalitiesintheURSS

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9.3Conclusion 128 10Thenomenklaturaasexploitativeclass?Perestroikaasrebellionoftheexploitedmasses?

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11Finalthoughts 145 12Sources 14912.1Archivalsources 14912.2Periodicals 15012.3Primaryandsecondaryprintedsources 154 13Appendices 18413.1Appendix1:CPSUpowerstructureandtheeconomyintheUSSRontheeveofperestroika

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13.2Appendix2:growthtrendsintheSovieteconomyindifferentdecades

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13.3Appendix3:economicgrowthrates:USSR,USAandjapan

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13.4Appendix4:productivityindices:USSR,USA,japan 19813.5Appendix5: intensiveandextensivegrowth factorsintheSovieteconomy

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13.6Appendix 6: price andwages indices in theUSSR,USAandJapan

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13.7Appendix7:Toyotism,Fordismandmacroeconomicgrowthcompared

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13.8Appendix8:Sovietmilitaryspending 20813.9Appendix9:agricultureintheUSSR 21613.10Appendix10:nationalitiesintheUSSR 223 ENDNOTES 225

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LISTOFTABLES

Table 1.1 ­ Average annual growth of the nationalincomeofCOMECONcountries,1950­1985

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Table1.2­AverageannualgrowthofnationalincomeintheUSSR,1951­1975

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Table1.3 ­Numberof industrialrobots inuse in JapanandintheUSA,selectedyears

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Table1.4­Cumulativeannualgrowthrateinthevolumeofworldtrade,1820­1967

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Table 1.5 ­ Cumulative annual growth rate of worldproductionpercapita,1865­1938

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Table1.6 ­Annual average economic growth ofOECDcountries,1960­1993

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Table1.7 ­Comparisonofproductivity incar factories:ToyotaTakaokaandGeneralMotorsinFramingham

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Table1.8­annualrateofgrainproductionintheUSSR,1975­1986

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Table1.9–GDPGrowth:USA,OECD­EuropeandJapan,1990­1996

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Table2.1–Average ratesofannualgrowthofNMP inthe USSR, 1928­1985 (according to official Sovietstatistics)

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Table 3.1 ­ average annual growth rates in the USSR,USAandJapan,1928­1985(varioussources)

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Table3.2­AnnualeconomicgrowthoftheUSSR,1928­1985

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Table4.1­laborproductivityindexintheUSSR,theUSAandJapan,1913­1986

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Table4.2 ­Laborproductivitygrowth intheUSSR,USAandJapan,1920­1986

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Table4.3 ­AverageannualgrowthoflaborproductivityintheUSSR,1928­1985(differentestimates)

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Table 5.1 ­ Western calculations of extensive andintensivegrowthsourcesintheUSSR,1928­1985

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Table6.1 ­IndexofnominalaveragewageintheUSSR,1960­1986

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Table 6.2 ­ Consumer price index in the USSR (CIAestimates)

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Table 7.1 – Comparison of GNP per capita: Japan, theUSAandGermany,1950­1988

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Table 7.2 ­ GDP per hour worked, several countries,1870­1987

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Table7.3­GDPperhourworkedrelativetotheleadingcountry,1820­1987

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Table 8.1 ­ Soviet military spending, 1950­1985(differentestimates)

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Table8.2 ­Sovietmilitary spendingasapercentageofGNP,1950­1985

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Table 8.3 ­ Military spending: USSR, USA, NATO andWarsawPactcountries

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Table8.4 ­Averageannualgrowthofmilitaryspendinginthepostwarperiod,USAandUSSR

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Table8.5 ­Sovietmilitary spendingasapercentageofGNPbeforeWorldWarII

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Table 8.6 – Percentage of annual average growth inmilitaryspending:USSRbeforetheSecondWorldWar

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Table 9.1 ­ Income generated through agriculturalinvestmentsintheUSSR,1918­1985(annualaverage)

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Table 9.2 ­ Index of gross and marketed agriculturalproductionintheUSSR,1913­1945

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Table 9.3 ­ Nemchinov­Stalin Table: agriculturalproductionintheUSSRandTsaristRussia

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Table 9.4 ­Agriculturalproduction andproductivity inseveralcountries

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Table 9.5 ­ Agricultural productivity growth index inseveralcountries,1920­1986

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Table9.6 ­Structureof investments in theUSSR,1918­1955

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Table10.1 ­Relativedistributionofnationalities in therepublicstheUSSR:years1959,1970,1979and1989

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Table 10.2 ­ Major criminal organizations active inMoscow

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LISTOFABBREVIATIONS,ACRONYMSANDSYMBOLS

%=percentage(of)c.=columnd.=delo(Russianarchivalunit=“file”)f.=fond(Russianarchivalunit=“collection”,“fonds”,“recordgroup”)GARF=GosudarstvennyiArkhivRossiiskoiFederatsii(“StateArchiveoftheRussianFederation”)gorkom=gorodskoikomitet(“citycommittee”)GosplanSSSR=GosudarstvennyiPlanovyiKomitetSovietaministrovSSSR(“StatePlanningCommitteeoftheCouncilofMinistersoftheUSSR”)GossnabSSSR=GosudarstennyiKomitetpoMaterial'no­TekhinicheskomuSnabzhenyu(“StateCommitteeforMaterialandTechnicalSupplyoftheUSSR”)kraikom=kraevoikomitet(“regionalcommittee”)l.=list(Russianarchivalunit=“page”)obkom=oblastnoikomitet(“regionalcommittee”)ob.=obratnayastorona(“reverseside”[page])op.=opis'(Russianarchivalunit=“recordseries”or“series”)p.=pagept.=partraikom=raionniykomitet(“districtcommittee”)RGAE=RossiiskiiGosudarstvennyiArkhivekonomiki(“RussianStateArchiveoftheEconomy”)RTsKhIDNI=RossiiskiiTsentrKhraneniyaiIzucheniyadokumentovNoveisheiIstorii(“Russia’sCenterforthePreservationandStudyofDocumentsofRecentHistory”)SMSSSR=SovietministrovSSSR(“CouncilofMinistersoftheUSSR”)SPSSSR=SobraniePostanovleniiPravitel'stvaSSSR(“CollectionofDecreesoftheGovernmentoftheUSSR”)TsKhSD=TsentrKhraneniyaSovremennoiDokumentatsii(“CenterforPreservationofContemporaryDocumentation”)v.=volumeVSSSSR=VerkhovnyiSovetSSSR(“SupremeCounciloftheUSSR”)VVSSSSR=VedomostiVerkhovnogoSovetaSSSR(“RegisteroftheSupremeCounciloftheUSSR”)

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“Letme firstexplain the far­from­simplesituationthathaddevelopedinthecountrybytheeighties and which made perestroika necessaryandinevitable[...]Analyzingthesituation,wefirstdiscoveredaslowingeconomicgrowth.Inthelastfifteen years the national income growth rateshad declined by more than a half and by thebeginningoftheeightieshadfallentoalevelclosetoeconomicstagnation.Acountry thatwasoncequickly closing on theworld’s advanced nationsbegan to lose one position after another.Moreover,thegapintheefficiencyofproduction,quality of products, scientific and technologicaldevelopment, the production of advancedtechnology and the use of advanced techniquesbegantowiden,andnottoouradvantage[...]Andall this happened at a timewhen scientific andtechnologicalrevolutionopenedupnewprospectsfor economic and social progress.” (Gorbachev,1987c,pp.18­19)

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FIRSTPART:

WHATWERETHEMAINCAUSESOFPERESTROIKA?

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1INTRODUCTION1.1PREAMBLE Thewordperestroika,inRussian,literallymeans“reconstruction,”thusassociatingitselfwiththeideaofreformulation,reorganization,initsfigurativesense.Inthe contextoftheSoviethistoricalexperienceofthemid­1980s,thebesttermfortranslationmaybe“restructuring”. It would not be an exaggeration to affirm that the unleashing,unfolding and denouement of the Soviet “restructuring” from themid­1980’s onward felt like a political, social and economic hurricane. Theconsequences of this process were immense, causing reverberationsthroughout theworld. Great changes in the balance of power and thefurther rise of neoliberalism inmanyparts of the globe took immensemomentumtherefrom.InBrazil,forexample,theideologicaldebateinthe“post­perestroika” presidential election, especially with regard toprivatizationissues,wasmarkedbyreferencestothesituationinEasternEurope.Forthisreason,thedeepeningofthetheoreticaldiscussionaboutthecausesandconsequencesoftheseeventsseemsveryimportanttous. We had the opportunity to be on­site observers of the eventsduring the timewewerepursuingourmaster’sdegree inMoscow from1989to1992.Oneofthefindingsthatastonishedusuponarrivalwastonote that the confusion about the origins and course of this “sudden”hurricane was so great among Russians (even the intelligentsia) asamongusforeigners“outthere.”ThechangestookplaceatsuchaspeedthattheSovietshaddifficultyadaptingtothem.Justastheworldhadbeentakenbysurprisebythepaceofchange,thenativeswerealsoperplexed.In the scientific and intellectual community we found a scenario ofperplexity in face of the situation.Different opinionswere aired aboutwhat had led Gorbachev and the CPSU leaders to unleash reforms soradicalandprofoundas to jeopordize theirownmonopolyonpoliticalpower in thecountry.As forwhatwouldhappen in thenear future, theprognoseswerealsovaried. Over time, experience in loco, personal contacts with nativecitizensandintelligentsia,andreadingofthefirsttheoreticalanalysesoftheprocess,helpedusformourownvisionofthemechanismsinvolved

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in the transformations, corroborated later with archival and primary­source research gathered inRussia and theUSA. It is this Perestroika­Anschauungthatweintendtodisplayhere.1.2“APPARENT”AND“PROFOUND”CAUSESOFPERESTROIKA In 1989,whenwe arrived inMoscow to begin our studies,wewere involvedwith thequestionofnotonlywhyperestroika tookplacebutalsowhy itbegan exactlywhen itdid (in1985)andnotbefore;orlater...Whydidthe“restructuring”begininthemid­1980’sandnotinthe1970’sor1990’s,forexample? Several causes had been pointed out as the ones that ledGorbachev to initiate that process. At that time, some theories wereadvancedinthepress.Forexample,perestroikahadoccurredatthattimebecause of political pressure for greater democratic openness. Or thatGorbachevhad to“dosomething”becauseof thedecreasingstandardoflivingoftheSovietpopulation,whichhadsupposedlyfallenintheperiodoftheso­called“Brezhnevian[economic]stagnation”. Asforthefirsthypothesis,infact,aftertheendoftheStalinistera,withtheKhrushchevian"thaw"andtheBrezhnevperiod(especiallyafterthe1975HelsinkiAccords)therewasarelativeslackeningofCommunistParty control over the Soviet society, allowing for a certain degree ofopposition to be expressed, either in the passive form of alienation athomeor in theworkplace vis­à­vis theofficial ideology,or in theactiveformof thedissidentcriticismof thesystem (clandestinepublication ofsamizdatandtamizdat,openoppositionby importantpublic figures likeSakharov, Solzhenitsyn etc.). Under Stalin, any articulated form ofoppositionwasregardedasbetrayaloftheSovietstateandpunishedwithextreme severitywhich included even thephysical eliminationof thoseinvolved.Theperiodthatfollowed—upto1985—wascharacterizedbycycles of greater or lesser openness that did not allow systematic andorganizedinternaloppositiontothreatenthestructureofpowerbutleftroom for clandestine or semicandestine dissemination of ideasantagonistic to those of the party. Problems in the supply of goods,corruption indifferent echelonsof thepartymachine, and theobviousbureaucratizationofthesystemasawholereachedsuchadegreethatitwasvirtuallyimpossibletoconcealthemfromthenation’sowncitizens.This, coupled with the increase in the intellectual level of Russia'spopulation— which from, basically rural, with a high percentage ofilliterates before 1917, had undergone immense improvements in thefieldofeducation—madeaspirations forgreaterdemocratizationmore

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natural,more in linewith the new cultural status of the country. Thesigningof the “HelsinkiAccords”onhuman rights, theopenoppositionfrompublicfiguressuchasAndreiSakharov,Solzhenitsynandothers,theincreasingspreadofsamizdat—somewhatrestricted,however,mainlytothe layers of the intelligentsia — were symptoms of undergroundpressure foropening thepoliticalsystem.But ifon theonehand theseforms of cultural resistance were taking root among the Russianintelligentsia, this “opposition” movement was not organized andsystematic enough to spread to other sections of the population.(Leonard, 1977, p. 155) Amongworkers and peasants, for example, iftherewas“resistance,”itcamemainlyinthe“unconscious”formofworkalienation (low productivity, high absenteeism, low responsibility forpublic assets, etc.). Thus, when Gorbachev came to power in 1985,despitetheoutbreaksofdissent,theCommunistPartystillhadimmense,almostglobalcontroloverthecountry’spolitical,economicandsociallife.Theideathatin1985theinternalpressuresforgreater“aeration”ofthesystemwere reaching such a level as tomake inevitable a democraticopeningseemsflawedtous.Therewassuchpressureonthesystembut,otherfactorsremainingstable,itwouldnothavebeenpowerfulenoughinthemid­1980’s to compel the CPSU to a change of course that couldjeopardizeitsstatemonopoly. ThethesisthatthestandardoflivingoftheSovietpopulationwasdecliningintheso­called“yearsofstagnation”underBrezhnev—atleastthat iswhatwas inferred frommany foreign journalistic accounts thataccompanied theonsetofperestroika— isalsoquitecontroversial,andshould be qualified. Indeed, “stagnation” referred more to themacroeconomicgrowth ratesof theSovietsystemasawhole—whichwerefallinginthe1970’sand1980’s—thantothestandardoflivingofthecitizensthemselves.Asweheardinourinterviewsandconversationswithmembers ofdifferent sectionsof thepopulation, theRussianshadneverlivedsowell(intermsofmaterialeconomicstandardofliving)asduring exactly the Brezhnevian “stagnation years.” This apparentcontradictionisexplainedbythehistoryoftheUSSRinthelast30yearsandthepeculiarnatureofitseconomicsystem.Itshouldbenotedthatatthe end ofWorldWar II, the Soviet Union was devastated. Economicreconstructionwasadauntingtaskthatrequiredenormousconcentrationof efforts and capital in the construction of industries, with theconsequence that wages and the consumption sector had to be keptunder restraint. The comfort level of the Soviet peoples until the late1950’s was rather low (compared to advanced capitalist countries),sometimes with families having to share the same apartment(komunalka)inbigcities,littlevarietyinthesupplyofgoods,lowindicesofprivatecarownership,etc.FromtheKhrushchevianeraonward,with

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the post­war reconstruction already assured, the prioritieswere againturned to the consumer sector. Khrushchev initiated the massconstruction of high­rise, cheaply­manufactured buildings to houseindividualhouseholdsandreducethehousingdeficit.(Burlatskii,1988,p.42) Wage levels, as a whole, began to rise. If during the 1960’s thematerial standard of living of the Soviets still seemed rather primitivecompared to thatof theadvancedWesterncountries, itwasduring the1970’s(preciselyattheheightoftheBrezhnevian“stagnationera”)thatRussians,especially those inurbanagglomerations, saw the emergenceand spread of a series of consumer goods previously considered“luxurious”ordifficulttogetbutthatnowbecamemoreaccessible,suchas cars, color television sets, refrigerators. The prices (in relation tosalaries)andthetimeinthewaitingqueuesforsuchgoodsfellsharply.Ifintheearly1970’saprivatecarwasastatussymbol,inthe1980’sitwasnotuncommon in the big cities to see families (especiallymiddle­agedcouples) owing their small “Ladas” (or equivalent). This greaterabundanceandsophisticationwasaccompaniedbyapolicyofrealwageincreases.Table6.1ofAppendix6 shows theupward trend innominalwagesoftheSovietsuptothe1980s.Takingintoaccountthatconsumerinflation in the USSR in this period was very low— in the form ofoccasional “make­up” of products for sale at higher prices or seasonalincreases in food products, especially in the winter — 1 the rise innominal wages in that period translated into a real increase in thepurchasing power of the citizens. In table 6.1we see that the rates ofincreaseofnominalandrealwagesintheUSSRintheperiod1960­1985followedasimilarpattern.Thiscanbechecked fromother independentsources.Forexample,theeconomistMichaelEllman(whocouldhardlybedenouncedaspro­Soviet)notedinhis1979bookSocialistPlanning:

In the USSR, the past 25 years have seen anenormous increase in real incomes.Thehousingsituation has greatly improved, the quantity,quality and availability of food has greatlyincreased, as has that of clothing and othermanufactured consumer goods. Except for theeffects of bad harvest (such asmeatless days in1976) there has been a continuous, and verysubstantial,increaseinrealincomesforaquarterofacentury.(Ellman,1979,p.185)

ThiswasnotarosydescriptionofSovietreality,nordid itmeanthat the Russians’ standard of living was close to that of WesternEuropeans, forexample,butratherevidence that theRussians’standard

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of living, as they entered the 1980’s,was not decreasing asmight bededuced from some journalistic accounts in the early period ofperestroika. Thanks to centralized planning, the deceleration inmacroeconomicgrowthratesintheBrezhnevian“yearsofstagnation”didnotimplyaproportionalfallintheleveloflivingstandardsinthecountry.The use of government subsidies, the rise in the price of some rawmaterialsproducedbytheUSSR—suchasgold,naturalgasandoil,whoseprice increase after the 1970’s “energy shocks” brought higher exportrevenues—2andthepossibilityoftransferofresourcesfromonesectorof the economy to another via the control of central agencies such asGosplan andGossnab resulted in this strange combination of decliningmacroeconomicgrowthratesand increasing(inthe1960’sand1970’s)orstabilized/“stagnant”(early1980’s)livingstandards.(Checinski,1987,pp.33­34) It iseasytonotethatthisparadoxicalsituation isnotsustainableinthelongrun.Intheearly1980’s,anumberofSovieteconomistsbeganto sound the alarm that the rising standard of living of the populationcouldnotbemaintainedforlongiftheratesof macroeconomicgrowthintheUSSRdidnotrecover.(Aganbegyan,1984,p.8;idem,1988,pp.10­17) Thequestionis:whywastheSovieteconomyhavingadownwardcurve ofmacroeconomic growth in the so­called “years of stagnation”(late1960’sto1984)? If we record the increase in national income of the socialistCOMECONcountries from1950until theeveofperestroika,weget thefollowingaverageannualpercentages:Table 1.1 ­ Average annual growth of the national income of theCOMECONcountries,1950­1985_________________________________________________________1951­195510.81956­19608.51961­19656.01966­19707.41971­19756.41976­19804.11981­19853.2____________________________________________________________Source:StatisticheskiiEzhegodnikStran­ChlenovCEV,1988,p.25 Wecanobservethat,untilaround1960,therewerehighgrowthrates. Thereafter, however,we enter a more or less regular downwardcurveuntilwereachrelativelylowlevelsofincreasefromthemid­1970s

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onward. The economic evolution of the Soviet Union followed a similarpattern:TABLE1.2 ­Averageannualgrowthofthenational incomeoftheUSSR,1951­1975.___________________________________________________________1951­6010.3%1961­707.2%1971­755.7%___________________________________________________________Source:table2.1ofappendix2. After 1975, the negative trend continued and worsened: in noyear, from then onward, theUSSR achieved growth substantially above5%. What changes occurred in the national or internationalconjuncture that led to this fall in the growth rates of the socialistcountries(andtheUSSRinparticular)fromthe1960sonward?Orwerethe causesmore structural (embryonicproblems embedded in the verynatureoftheSovietmodel)? Even before perestroika, different authors pointed to several“structural problems” in the seemingly thrivingmodel of the so­calledactually existing socialist countries. Some theories even had a“catastrophic”character,predictingthedownfallofthesysteminanottoodistantfuture.InviewoftheeventsinEasternEurope,itisurgenttore­examine such theories and analyze how right theywere and towhatextentthe“disintegrative”factorspointedoutbythemhadabearingonthedevelopmentoftheprocessleadingtothereformsand,subsequently,tothedisintegrationoftheformersocialistbloc.Amongothers,wecouldmention the following authors and the “problematic” areas named bythem: — The French SovietologistHélène Carrère d'Encausse had foryears been pointing to the “nationalities question” as an area ofpotentiallyexplosiveproblemsfortheintegrationoftheUSSR. — Various authors (Milovan Djilas, Voslensky, Bettelheim andothers) emphaticallypointed to the formation of the bureaucracy as anew exploitative class,which could lead to the internal division of thecountryinto“enemy”fields. — Themilitary issue was placed as central by several authors(Holloway,Lee,Gaddy,Castels&Kiselyovaetc.).Wasthearmsrace,with

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its frantic growth in military spending, one of the causes of thedecelerationingrowthratesoftheSovietUnion(adeliberatepolicyoftheUnitedStatestoweakentheenemy)? Wewill give amoredetailed account of these and other relatedtheorieslater.EachofthempointstoseveralfactorsthatcouldleadtotheneedforradicalchangesintheSovietsystem. Wewillpresentanother causalhypothesis that seems tous themainonetounderstandnotonlyperestroikaitselfbutwhyithappenedinthemid­1980’sandnotbeforeorafter. Aswementioned, itdoesnotseem tous that theexplanationofwhy Gorbachev had to launch the reforms in 1985 were irresistibleinternalpressures for greaterpoliticalopenness,orpopulardiscontentwith a noticeable fall in the Soviet standard of living. The key tounderstandingtheRussiandilemmawasintheeconomy. Fromthe1930’stotheearly1960’s(aftertheSecondWorldWar),the USSR had impressive economic growth rates. According to Sovietofficialdata,theaverageannualgrowthrateoftheNetMaterialProductwas16.1% in the first five­yearplan (1928­32),317.1% in the second(1933­37),4 15.1% in the fourth (1946­50) and of 11.4% in the fifth(1951­55).The sixth six­yearplanwas interrupted byKhrushchevandreplacedbyaseven­yearplan(from1959to1965). However, following the generalpatternof the socialist countriesalready indicated in the previous tables, from the 1960’s onward, thegrowthratesoftheUSSRbegantodecline.Theseven­yearplanendedin1965withanannualaverageof6.8%,followedbyotherfive­yearplans:theeighth(1966­70withaveragesof7.8%),theninth(1971­75,annualaverageof5,7%),thetenth(1976­80and4.3%average).Intheeleventh,from1981to1985,theaveragewas3.2%.(Notkin,1948,p.11;Narkhoz1988,p.8;table3.2ofappendix3) Once againwe face a certain barrier around the 1960’s.Whatwouldbethefactor(s)tocluttertheeconomyofthesocialistcountriesinthatparticularperiod?Whatwouldbedifferentabout it incomparison,forexample, to the1930’s,1940’sand1950’swhen theUSSRsustainedveryhighgrowthrates? In these three decades, the USSRmade its pioneering five­yearplans,builthuge(sometimesquasimonopolistic) factoriesandmills thatproducedmillionsof tonsofmetalandproductiongoodsandemployedgreat amounts of labor (both specialized and non­specialized) tocompensate for the technological backwardness vis­à­vis theWest etc.Thus,therewasanextensivegrowthoftheeconomywithalargeuseoflaborpower,oftheenthusiasmofthemasses(especiallyintheperiodsofpost­war reconstruction, taking advantage of the patriotic fervor of themoment) and an intense concentration of resources in basic industries

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(heavy industry, aerospace, armaments, applied research, etc.) to thedetriment of sophistication in the consumer sector. The result of thisconcentration of resources is that, at least in thementioned areas, theSovietsstoodonaparwith themoreadvancedWest(despite failures intheconsumerandsupplysectorsandaproblematicagriculture).Somuchsothattheywerethefirsttoputamaninspace(Gagarinin1961),cametohavethesecondlargestGNPoftheworldetc. However, if the first half of the century allowed this extensiveplanned growth strategy to “succeed,” taking its first baby steps in the1950’s, growing in the 1960s and maturing (reaching its basiccompletion)inthe1970s,anewphenomenonthatwouldchangethefaceofworld economic relations took place: the so­called “Third IndustrialRevolution”or“Scientific­TechnicalRevolution”. In the 1950’s, the development of computer systems alreadyforeshadowedmajorchangesinthespeedofdataprocessing,butwiththeinaugurationofthefirstindustrialrobotin1961anewerawasopenedinthe world industrial production circuit. In the next fifteen years, thefusion of computing with robotics and later with telematics (throughmicroelectronics in the 1970s) led to a real revolution in productionprocesses.5 The pace of electronical technological developmentaccelerated sharply. If before the progresswas arithmetic, now it hasbecome geometric.Nowadays, a computermodel is created and, in lessthantwelvemonths,itisalreadysurpassedbyanewerandmoreefficientone. If until the 1960s theUSSRwas able to “compete” on an equalfootingwith the advancedWest in those strategic areas, in this “ThirdIndustrial Revolution” things changed. The extensive growth modelexhausted itself. The technological gap with the West grew steadily,reachingacriticalpoint in themid­1970’sandbecomingahugegap inthe1980’s.WhiletheadvancedWesthadalreadyembarkedon thepathoftheSTR(Scientific­TechnicalRevolution),theSovietUnionhadagreatdealofdifficultyinembarkingonanintensivecourseofdevelopment,stilladheringtooldextensivepatterns. Duetotheverynatureofthecentralizedplanningmodel(withitssubsidies, possibilities of transferring resources from one sector toanother by administrative means), this “technological gap” and thisdeclineinthe“competition”withtheadvancedcapitalistcountriesdidnotreflectdirectly in aproportionaldecrease in the living standards of thepopulation,aswehaveseenpreviously.However,suchasituationcouldnotcontinueadeternum. ThiswasGorbachev'sdilemma!Ifby1975itwasalreadyclearthattheUSSR had practically lost the technological racewith the advancedWest,one can imagine the situationat the timeofhis rise topower in

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1985. To illustrate thesedifficulties, there isnothingbetter thangivingthefloortoGorbachevhimself.InhisbookPerestroika:NewIdeasforMyCountryandtheWorld,writtenshortlyafterassumingthepostofGeneralSecretaryoftheCPSU,hestated:

Letmefirstexplainthefar­from­simplesituationwhich had developed in the country by theeighties and which made perestroika necessaryand inevitable. At some stage — this becameparticularlyclearinthelatterhalfoftheseventies— something happened that was at first sightinexplicable. The country began to losemomentum. Economic failures became morefrequent. Difficulties began to accumulate anddeteriorate,andunresolvedproblemstomultiply.Elements of what we call stagnation and otherphenomenaalientosocialismbegantoappearinthelifeofsociety.Akindof“brakingmechanism”affecting social and economic developmentformed. And all this happened at a time whenscientificand technological revolutionopenedupnewprospects foreconomicandsocialprogress.(Gorbachev,1987c,pp.18­19)

Thephrase “Andall thishappenedata timewhenscientificandtechnologicalrevolution…” indicates thatGorbachevwasclearabout therelation between the slowdown in economic growth and the Scientific­TechnologicalRevolution(ThirdTechnologicalRevolution),seeingamongthem a relationofparallelism in time.Our thesis is that therewasnotonly this temporal parallelism— as the STR deepened, growth ratessloweddown— but also elementsof causality: growth rates felldue tocausesrelatedtotheScientific­TechnicalRevolution. Wewilldealmorecloselywith thisrelationshipbetween the twophenomenaalittlefurther.FornowweshallreturnthefloortotheformerGeneralSecretaryoftheCPSU:

Something strange was taking place: the hugefly­wheel of a powerfulmachinewas revolving,while either transmission from it toworkplaceswas skidding or drive belts were too loose.Analyzing the situation, we first discovered aslowingeconomicgrowth.Inthelastfifteenyears

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thenationalincomegrowthrateshaddeclinedbymore than a half and by the beginning of theeighties had fallen to a level close to economicstagnation. A country that was once quicklyclosingontheworld'sadvancednationsbegan toloseonepositionafteranother.Moreover,thegapintheefficiencyofproduction,qualityofproducts,scientific and technological development, theproductionofadvancedtechnologyandtheuseofadvanced techniquesbegan towiden,andnot toouradvantage.Thegrossoutputdrive,particularlyinheavyindustry,turnedouttobea“top­priority”task, justanend in itself.Thesamehappened incapitalconstruction,whereasizableportionofthenationalwealth became idle capital. Therewerecostiyprojects thatnever livedup to thehighestscientificandtechnologicalstandards.Theworkeror theenterprise thathadexpended thegreatestamount of labor, material and money wasconsidered the best. [...] Accustomed to givingpriority toquantitative growth inproduction,wetried tocheckthe fallingratesofgrowth,butdidsomainlybycontinuallyincreasingexpenditures:we built up the fuel and energy industries andincreased the use of natural resources inproduction.As timewenton,material resourcesbecamehardertogetandmoreexpensive.Ontheotherhand,theextensivemethodsoffixedcapitalexpansion resulted in an artificial shortage ofmanpower.(Gorbachev,1987c,pp.19­20)

The situation of the “pre­perestroika” USSR is very similarlydescribedbyAbelAganbegyan,aneconomistadviser toGorbachevandconsideredoneoftheintellectualmentorsoftheeconomicreforms.

With thedevelopmentofproductive forces, theunfolding of the scientific and technologicalrevolution, the strengthening of socio­economicfactors in economic development, theadministrative system of management began tostandinevergreatercontradictiontothegrowingneeds of the development of society and finallycame into sharp and protracted conflict with

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them.Thesituationworsenedatthebeginningofthe 1970’s, when the potential of extensivedevelopment through growthof resourcesbegantodecline,whenanewstageof thescientificandtechnological revolution began and the needs ofthe population grew significantly. In this periodthe [command­administrative] system ofmanagement of the economy began to act as aserious brake on development. As a result,towards the end of the 1970’s and beginning ofthe1980’scrisisarose.(Aganbegyan,1987,p.31)

Aswehave seen, the Soviet leaderswere aware of theneed foreconomicreform.AparallelwasalsodrawnbetweenthedifficultiesthattheUSSRfacedinthisfieldandthenewdemandsoftheSTR.Buthowcanweestablishthecausalrelationbetweenthem?Tothisend,itisnecessarytoexaminetheprocessofhowthetechnologicalrevolutionsoccurred intheadvancedcapitalistWest,howtheScientificandTechnicalRevolutionin the USSR took place and build a theoretical bridge between theseprocesses throughananalysisof theSovietmodel inorder tovisualizehow the connection between the economy of the actually existingsocialistcountriesand therestof thecapitalistworldsystemwasmade.This is what we will do in the following chapters, and then we willexaminehowtheoccurrenceofall theseprocesses inparallel led to the(political)onsetofperestroikainthemid­1980’s.

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2TECHNOLOGICALREVOLUTIONS2.1INTRODUCTION Thischapterwillserveas the foundationuponwhich toconductthe discussion of perestroika as a process that occurred within (anddeeplyinfluencedby)theScientific­TechnicalRevolution.6 By “technological revolutions”we understand, asMandel (1985,pp.78and81),radical(qualitative)changesinthetechnicalbasisoftheproduction system of a society, which take place in a given period ofhistoryandaffecttheproductionsystemasawhole—i.e.,“revolutionsintechnology as a whole” (as distinguished from technologicalimprovementswhichaffectonlycertainbranchesoftheeconomy). The concept of such general substantive changes occurring in(and decisively affecting) certain historical periods is used by manyauthors(R.Richta,V.G.Afanasev,J.Finkelstein,S.Kheinman,I.M.Hymes,etc.).Thenumberofsuch technologicalrevolutionsand the terminologyused to describe them varies from author to author. In the followingpages, we will try to locate our position in this debate about thespecificationandexplanationofsuchphenomena. AmomentonwhichrestscertainunanimityamongthespecialistsistheIndustrialRevolution.7TheIndustrialRevolution—whichbeganinEnglandinthelateeighteenthcentury—isacceptedasamarkofradicalchangeinthemethodsofproductionuseduptothattime.However,howmanytechnologicalrevolutionshaveoccurredsincethen? Atthispointwewanttointroducetheauthorwhomweconsidertohavethemostconsequentialpositiononthisquestion:ErnestMandel.Inthefollowingpages,wewilltrytogiveasuccinctideaoftheMandeliantheory of technological revolutions and to explainwhywe considerhispositionasthemostproductive.8 Writinginthemid­1980’s,Mandelconsideredthatsincethemiddleof the eighteenth century in capitalism there was one IndustrialRevolutionandthreetechnologicalrevolutions—whichwerethemselvesinsertedwithin thecapitalistparadigmofmodern industry, inaugurated

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bytheBritishIndustrialRevolution.TotheIndustrialRevolution,withitsintroductionofsteampower,steamenginesandmodern industrybasedonmachinerythatwasitselfmostlycraftproduced,thenfollowed: —TheFirstTechnologicalRevolution,beginninginthelate1840’s,inwhich themachineryofmodern industrybegan tobeproducedwiththeaidofothermachines.Thiswasastep thatnotonlyprovidedgreatdevelopmenttotheproductiveforces,butrepresentedthedesideratumforthepossibilityoffullyautomatedproductioninthefuture.Machine­madesteamenginewastheprincipalmotivemachine. —TheSecondTechnologicalRevolution,whichoccurredaroundthe last decade of the nineteenth century and the beginning of thetwentieth century,which saw the generalizationof electricand internalcombustionengines,andthebeginningofproductionforamassmarket. —TheThirdTechnologicalRevolutionhad itsbeginnings in thepost­World War II period and marked the emergence of automatedprocessesbasedonelectronicsandtheuseofnuclearenergy. This explanationwillbe furtherdetailedbelow.Wenowwant tointroducesomeofthereasonswhywechosetheMandelianapproach. One immediately notices the differences between this approachandtheonesthatadvocatetheexistenceofaSecondandThirdIndustrialRevolution (which correspond to the Second and Third MandelianTechnologicalRevolutions). The first difference is that the concept of a second and third“industrial revolutions” obliterates Mandel's First TechnologicalRevolution (from the 1840’s onward, which saw the beginning ofmachines being made by means of other machines or machine­mademachinery).9Thiswasaveryimportantmoment,whichmadeitpossibletomoveaway fromthe limitationoftheneed forspecialist fitters inthehandcraft of machinery to gradually move to mass production(simplification ofprocesses, standardization of parts, etc.)Without thisqualitativeleap,notonlywouldthebeginningofproductionforthemassmarketattheturnofthecenturynotbefeasiblebutalsothepossibilityofautomated production (today). For this reason, no classification oftechnologicalrevolutionsshouldleaveoutthisspecificmoment.10 The other important reason for following Mandel is that heanalyzes the Technological Revolutions by establishing their linkswiththe movement of capital within its historical period. Thus, thesetechnological revolutions are not fortuitous, the result of historicalaccidents or random conjunctures. Mandel sees a close relationshipbetweenthemovementsofcapitalandthechangesinthetechnicalbasisofproductionofsociety,withinthehistoricalcontextinwhicheconomiccyclesoccur. Withprofitbeingthecentralobjectiveofcapitalists,Mandel11sees

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inthe(average)rateofprofitthe“seismograph”thatsignalstheevolutionof economic activity in capitalism.Within economic cycles (with theirsuccessive phases of /1/ expansion, /2/ crisis, /3/ recession and /4/recovery)momentsoccur,after the“rockbottom”ofrecession inwhichactivityreturnsintherecoveryperiod.Thus,inthelastphaseofrecessionofthepreviouscycle,someofthecapitalisidle(underutilized)andsomeproducersevengobankrupt(duetolackofdemand).Asthisprocess(andother factors)deepens, littleby little,supplyanddemandbegin toenterinto a better equilibrium and demand rises again. Prices and profitsaccompany thisupwardmovement.Weare thenmoving from the finalphase of recession of the previous cycle and entering the first phase(economic recovery) of thenext cycle.Marx (1961­1971c,p.185)hadnoticedaperiodicityofabout tenyears for these cycles.This coincidedwith theaverageperiodofdepreciationof fixedcapital (replacementofmachinery and equipment of factories) at that time.12 The period ofeconomicrecovery thatrepresents theentryofanewcycle,withbetterpricesandprofitsandgreaterdemand forgoods,provides the incentiveforcapitaliststoinvestinthereequipmentoftheirproductionunits.Andthere is an effort for this reequipment to be carried out at highertechnological levels because this represents the opportunity to gettechnologicalrentsandsurplus­profits.13 Thus, it is observed that, with each new stage of fixed capitalrenewal,thetechnologicallevel,ingeneral,tendstorise.ButMandeldrawsattentiontothefactthattherepetitionoftheseeconomiccyclesdoesnothappeninauniformway.Therearemomentsinhistorywhenthefactorsthat cause the rate of profit to rise are so strong that they cannot beneutralized by the subsequent increase in the mass of accumulatedcapital,astheyusuallyareduringthe“ordinary”cycles.Atthispoint,theaverage rateofprofit is sohigh (and formuch longer) that itprovidesadditionalimpetussothatamuchlargeramountofpreviouslyidlecapital— which could not achieve valorization during the underinvestmentperiodthatcharacterizesthelaststageofthepreviouscycle—isthrowninto the technological renewal of fixed capital (i.e., machinery andequipment).Having theperspectiveof comparativelyhigherprofit ratemakes the capitalistsmore “daringly” invest in innovations, inventions(and even research) than theywould in lesspromising times.Notonlywill the average profit be higher, but the technologically advancedsurplus­profits of those “bolder” capitalists who achieve trulyrevolutionarymethodsofproductionwillbeextremelyhigh. Mandel sees technological revolutionsnotashistoricalaccidents,orasaresultofthe“activityofcertainisolatedinnovatingcapitalists,”butasaresultofexceptionally favorablecircumstancesduringthehistoricalmovement of capital. The economic cycles of about 10 years, already

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detectedbyMarxinhistime,hadthefunctionofmarkingtherenewaloffixed capital at a technologically superior level. But not just that. Eachcyclebringswithitanaccumulationofcapital.However,notallcapitalcanachieve valorization in the phases of crisis and recession— a certainamount of commodities cannot be sold. In these phases ofunderinvestmentofeachcycle,partofthecapitalremainsidle,notbeingable to receive theaverage rateofprofitbut,atmost, the interest rate.Thisidlecapitalwillthenconstituteakindofreservefund.Therepetitionof several cyclesmay increase this reserve fund until such timewhenexceptionally favorable conditions of higher and longer­lasting averageprofitratesprovidetheincentiveforthisidlecapitaltobethrownintotheeconomy in a generous way, necessary for not only a quantitativeincreaseintheproductivityofindustry(asisusuallythecaseinordinarycycles) but a qualitatively different revolution of the technical basis ofproductionasawhole(“revolutionintechnologyasawhole”). At thispoint,weneed tomakeanobservation.Mandelanalyzesthe occurrence of technological revolutions linked to a sudden andespecially prolonged rise in the rate of profit in society. As we havediscussed, he regards the profit rate as the “seismograph” that signalseconomic changes in thehistory of capitalism.However,why does thisrate risesomuchatcertain times?Mandel (1985,pp.25­26)considersthatchangesintherateofprofitaremainlyaresultoftheinteractionofsix fundamental variables: 1) organic composition of capital; 2)distributionof constant capitalbetween fixed and circulating capital;3)developmentof the rateof surplusvalue;4)developmentof the rateofaccumulation (i.e., relationship between productive surplus value andsurplusvalueconsumedunproductively);5)developmentoftheturnover­timeofcapital;6)relationsofexchangebetweenDepartmentI(producerofcapitalgoods)andDepartmentII(producerofconsumergoods)oftheeconomy. ForMandel,thesesixvariablesarethemostimportantfactorsregulating theprofitrate.Whatoneshoulddo, then, is toexaminewhathistoricalfactorsledtochangesinthesesixvariablesontheeveof(andduring)eachperiodoftechnologicalrevolution. Mandelobservedtheoccurrenceof long“cycles”(called“periods”byhim)ofapproximately50yearsthatcoincidedwiththeoccurrenceoftechnological revolutions. Each of these “periods”was divided into twolong “waves.”The initial longwave (of the first25 yearsor so)had an“expansive tonality.”14 In it, the “rising tide” of capital accumulationprovidedby theprolonged rise inprofit rates leads to the technologicalrevolution. This, in turn, provides surplus­profits for the holders of thenew “revolutionary” technologies and the average profit for the othercompanies.Itisbasicallyaphaseofprosperity(fromthepoint ofviewofaveragingthecharacteristichighsandlowsofminorcycleswithinit).The

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last25 years (approximately)of eachperiod form a “longwavewith astagnant tonality.” Therein the new production techniques of thetechnological revolution of the “long wave with expansionist tonality”cease to be new (andmonopoly of a few firms) and are generalizedacross the economy. This results in a fall in profit rates (the surplus­profitsdisappear,leavingonlytheaverageprofitswhich, inturn,alsofallasnew capitalists, stimulatedby the rates of thepreviousphase, jumpinto themarket, increasing competition and creating overproduction).Theresultisatendencytowardsstagnation. TheperiodsobservedbyMandelwere the following:1793­1847;1848­1893; 1894­1939; 1940/45 until the 1990's. We can see thattechnological revolutions coincide, roughly,with the initialpart of eachperiod.Subdividingeachperiodintotheir“longwaves”weget:151793­1825: It is the long wave with expansionist tonality of the IndustrialRevolution itself,whose technical basiswasman­made steam­poweredmachines and engines.The expansionof the rateofprofit and surplusvalueisrealizedonthebasisoftheexpansionoftheindustrialproletariatandthe industrialreservearmy.There isagreatexpansionoftheworldmarketwiththecoloniesinSouthAmerica.1826­1847: Longwavewithastagnanttonality.1848­1873: It is the long wave with expansive tonality of the FirstTechnological Revolution in which the machinery used in productionbegins to be produced bymeans of othermachines (instead of beinghandcraftedlikebefore).Thereisagreatexpansionoftheworldmarketdue to the generalization of this new type of heavy industry, theconstructionofexpensiverailroadsinNorthAmericaandEuropeandtheincreaseofthegoldproductioninCaliforniaandAustralia.1874­1893: Longwavewithastagnanttonality.1894­1913: The exportof capital to the colonies in the imperialistperiodofmonopoly capitalismmarks a vigorous expansion of theworldmarket,withtheincorporationofareasinAsia,AfricaandOceania.This(andtheconsequentloweringofthepriceofrawmaterials)raisedtheprofitrate.ItisthelongwavewithexpansionisttonalityoftheSecondTechnologicalRevolution, which created the electromechanical technical basis ofproduction. This period marks the development of electricity as theenergy source, the introductionof the internal combustion engine, andsees the birth of mass­production techniques (Fordist system). The

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organizational techniques of FrederickWinslow Taylor and the Fordistassembly line on an electromechanical basis are themain features oftheseradicalchangesinindustrialproductionmethods.1914­1939: Long wave with a stagnant tonality. The outbreak of war, thebreakdownofworldtrade,the1929crisisandthevictoryoftheRussianRevolutioncreateddifficultiesfortheexpansionofcapitalandtheworldmarket.1940/45­1966: Thiswas the longwavewith an expansive tonality of theThirdTechnological Revolution. Fascism and World War II created theconditionsforincreasedratesofsurplusvalueandprofit,whichfavoredcapitalaccumulation. Itwas firstlyused in theproductionofarmamentsand then in the innovationsof theThirdTechnologicalRevolution.Thenew technical basis of the industrial systemwas electronic.Theuse ofcomputers, initially inscientifictasksandthen inproduction itself(withnumericalcontrolmachine tools, industrialrobots,etc.)enabledgains inproductivity.Nuclearenergywasintroducedasenergysource.1967­... Longwavewith a stagnant tonality. The slow absorption of the“industrialreserve army” inthecentralcountriesactedasanobstacle toanadditionalincreaseinsurplusvalue.Theintensificationofcompetition,with theuseof less labor­intensive techniques to thepointwhere fullyautomatedsystemsalreadyexist,createdcontradictoryconditionsforthevalorizationofcapital,epitomizedintheinternationalcrisisofthe1970’sand1980’s.162.2 CHARACTERISTICS OF THE CAPITALIST PRODUCTION SYSTEMDURINGTHESECONDANDTHIRDTECHNOLOGICALREVOLUTIONS For the purposes of our work, we need to analyze thecharacteristics of the Second and Third Technological Revolutions inmore detail, as itwas under the influence of these paradigms that theSoviet Unionmade its development effort (in a context of competitionwiththeindustrializedWest).2.2.1SecondTechnologicalRevolution The era of imperialism in the late nineteenth century led toincreased export of capital to the colonies, brought about a significant

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expansionof theworldmarket(with the incorporationofareas inAsia,AfricaandOceania)andproducedapricereductionofrawmaterialsandfoodstuffs,causingastrongandprolonged increase in theratesofprofitthat led to the longwavewithanexpansive tonality from1893onward.This was the long wave of the Second Technological Revolution thatintroduced the use of electricity and internal combustion engines. Theindustrialsystemhadanelectromechanicaltechnicalbasis. What did this electromechanical technical basis consist of? Theuseofelectricityprovidedamuchmorecontinuousandreliable formofenergy for the operation of machinery than previously existing ones(steam energy, for example).This extended the capabilities ofmachinetools. The way was open for the inauguration of the era of massproductionintheearlytwentiethcenturybymeansoftwonewmethods:TaylorismandFordism. TheengineerFrederickWinslowTaylor(1856­1915)proposedinhis 1911 book The Principles of ScientificManagement a new type offactorymanagement.Working at the Bethlehem Steel Company in theU.S.,he realizedhow “porous” (wasteful)was a typicalworkday:manyunnecessarymovementswereperformedbyworkers—not tomentiondeliberate “soldiering”and slowwork—andwasteof energyand timeseepedinduringtheexecutionofmanufacturingtasks.(Taylor,1911,pp.13­15)Toreduce thisporosityatwork,Taylor (ibid.,pp.77­80)dividedeach task into its basic componentmovements and set out to seek theidealway of performing eachmovementwith the leastpossible loss oftimeandenergy.Healsoproposedthepaymentofindividualbonusestocompensatefortheincreasesinproductivity.(ibid.,p.121)ThehallmarkoftheTayloristsystemwas,asCoriat(1994,p.67)put it,the“allocatedtimes.” If before eachworker carried out the routine in his ownway,Taylor(1911,p.36)nowproposedthatmanagementshouldscientificallystudy thebest (mostefficient, leastexpensive)wayof carryingout themovementsandobligetheworkertoworkonlyinthisway(“replacementof the individualcriterionofeachworkerbyascientificmethod”).Thetechniques, the way of working, passed from the worker to themanagement(“allocated times,” increasingseparationofconceptionandexecution).FrederickWinslowalsolaiddownanumberofotherrulesformanagement,whosekeynote, inhisownwords,wouldbe “the intimateco­operationof theadministrationwith theworkers,”so that they labortogetherinaccordancewithdevelopedscientificlaws,ratherthanleavingthesolutionofeachproblem,individually,tothediscretionoftheworker.(ibid.,pp.14,36and70)Itis(un)necessarytosaythatthis“intimateco­operation”musttakeplaceunderthesingleandunequivocaldirectionofmanagement. Taylor’s method improved productivity through a qualitative

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(“scientific”) increase in intensityanddecrease in “porosity” (waste)ofwork. Together with Fayol’s theory (in the field of administration), itrepresented thegreatchange inorganizationalmethodsofwork in theSecondTechnologicalRevolution. In addition to organizational­managerial methods, the physicallayoutoftheshopfloorunderwentanotherrevolutionarychangewiththeintroductionof theFordistassembly line.Whatdid itconsistof?At theendoftheeighteenthcenturyandmuchofthenineteenth,themachineryin the factories was divided according to functional principles (i.e.,according to their functions). (Best,1990,p.52)Thus the lathesweregrouped together inonearea, inanother thedrillsetc.Theparts tobeworkedonwerecarriedinbatchesfromonesectiontoanother,tobecuttogether,polished,drilledetc. In thenineteenthcentury, thereappearedtheconceptof flowproduction inwhichthemachineswerearranged inorder of sequence of operations. In one area, an exemplar of eachdifferentmachinewasgrouped,sothattheentireprocess(ormuchofit)couldbedoneinonearea,avoidingthewasteoftimeandenergyofpartshavingtobetransportedthroughdifferentareasanddepartments.Flow­linemethods and flow­through processes began to be employed in therefininganddistillation industriesat the endof thenineteenth century.Ford’s great breakthrough was to introduce flow methods in themetallurgical industries with the help of conveyor belts. If before theworkerscarriedthepartsfromonemachinetoanother,theynowsimplysat,workingon theparts thatcame to themautomaticallybymeansoftheconveyorbelts.(Ford,1922,p.80)Itisunnecessarytoemphasizetheincreaseinproductivitythatthisbroughttotheproductionprocess.Nowthepaceofworkwasdefinitelyoutofthecontroloftheworkman,andinthefullcontrolofmanagement,whichimposedthedesiredspeedontheconveyorbelt.17 Theperiodof the SecondTechnologicalRevolution in capitalismwould then bemarked by an electromechanical technical basis, usingTaylorist and Fordist methods. The productivity gains were huge,18usheringintheeraofmassproductionfor amassmarket.2.2.2ThirdTechnologicalRevolution AfterWorldWarII(followingtheinventionofcomputers),anewrevolutiontookplace:theelectromechanicaltechnicalbasisofproductionbegantobereplacedbyanelectronic technicalbasis.NumericalControl(=controlbypre­programmedcomputertapes)wasattachedtomachinetoolsformingtheNCMT(=NumericalControlMachineTools).Ifmachine

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tools, though electrically operated, were previously handled by anoperator who intervened at every single work operation, now thisconstant intervention by the operator became unnecessary. To themachines were attached a numerical control cabinet or tape whichcontained,pre­recorded,the“instructions” fortheoperationsso thatthemachine could carryout thewholework automatically.The taskof theoperator is often to just observe the equipment to make sure thateverything runs according to the program, intervening only in case oferror.Anotherdevelopment, initiallyused inautomotive industries,wastheTransfertline(“Detroitautomation”).TheTransfertlineconsistedofaseriesofcuttingandpolishingmachinesconnectedbyaconveyorline.The engine blocks were automatically transported from machine tomachine and automatically cut, polished etc. without humanintervention. The productivity gainswere huge. The Transfert line, forexample,madethecycleofworkoperationsonthe engineblockdropfrom9hoursto14.6minutes!(Coriat,1990,p.40) The Third Technological Revolution is characterized by greatadvance in the possibility of using electronic computing to reach fullyautomatedsystems.19 ThegreatinitialfoundationoftheThirdTechnologicalRevolutionwasthedevelopmentofelectronicsandcomputingaftertheSecondWorldWar.Fromthisbase,the“skeleton”of theScientific­TechnicalRevolutionwas expanded when the 1950’s computing (mostly used for scientificpurposes) allied with robotics in the 1960’s — the creation of theprototypeof the first commercial industrial robot in1961 inauguratedthe entry of computing into the industrial sector— and the telematics(remote data transmission) via the microelectronics of personalcomputers in the1970’s.Thus,by themid­1970’s thebasic frameworkforaninformationsocietywasformed. As for the actual technologicaldevelopments in the factories,wecanhighlighttheNCMT(NumericalControlMachineTools),theTransfertLine (“Detroit automation”), CNCMT (ComputerizedNumerical ControlMachineTools),FMM(FlexibleManufacturingModules)andFMS(FlexibleManufacturing Systems), CAD (Computer­Aided Design) and CAM(Computer­AidedManufacturing).20PARADIGMSOFFLEXIBLESPECIALIZATIONANDTOYOTISM The purely technological changes were accompanied byrevolutionary changes in organizational­managerial methods ofproduction. Just as Taylorism and Fordism characterized the secondtechnological revolution,21 new organizational patterns, called “flexiblespecialization”, by Piore & Sabel (1984) proved to be superior in

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efficiency at the time of the Third Technological Revolution. ThemostfamousoftheseflexiblespecializationparadigmswasToyotism.22 Before we examine the origins of this new paradigm, it isimportant to note that Fordism was a rigid form of production. Theassembly lineshad the functionofproducing largeamountsof identicalobjects, without variation between them.23 Fordism was based oneconomiesofscale:thegreaterthequantityofthesameobjectproduced,the lower themarginalcostofeachextraunit.Once themachinerywasinstalled in a factory, it was assumed that it would function in anuninterrupted and identical way: it would be very complicated, forexample, tostop thesystem tochange themachine inorder toproduceotherwise.Butthisrigidity,thislittleflexibilityformodifications,posednoproblemat that time.Fordismwasbornalongwith themassmarketattheturnofthecentury.Themarketexpandedandsodidthedemandforconsumergoods.Fordismandthemassmarketwerecomplementary:thecheapening of costs caused by the standardization of parts and Fordistmassproductionstimulatedconsumption;andexpandedconsumption,inturn, provided the incentive for factories to scale up production. Therigidity24(=lackofflexibilityformodificationsandvariations)wasnotaproblemthen:itwastotallywithinthelogicofthehistoricalperiod,thatis,standardizedmassproductiontosupplyagrowingmarket.Economiesof scalewere the logic of themoment (andwould continue to be longthereafter). HowdidToyotismcomeabout? Unlike Fordism, which emerged to meet the needs of a massmarket(andhencebasedon economiesofscale),theJapanesedomesticmarket immediatelyafterWorldWarIIwas inshambles.Thepriorityofstatepolicieswastodirecttheflowofcapitaltothebasicareasofheavyindustryandcapitalgoodsfornationalreconstruction.AccordingtoCoriat(1994,p.40),“thenumber ofmotorvehiclesmanufacturedin1950wasonly32,000,andmostof thesevehiclesconsistedof trucksdestined forpublic works.” In 1949, Toyota was experiencing an overwhelmingfinancial crisis fromwhich it emergedonlywith thehelpof abankinggroupwhich, inexchange for thehelp,demandeddrasticchanges in thecompany’smodusoperandi. In1950,aftera longandhard­foughtstrike,2,146ofthe8,140employeeswereforcedtoleavethecompany(throughaprogramof “voluntary” layoffs)andPresidentKiichiroToyodahimselfretiredfromthepresidency,beingreplacedbyTaizoIchida.(Toyota,1988,p.110)Atthispoint,theroleofproductionengineerTaiichiOhnobecamecrucial. Gradually, he implanted new organizational and productionmethods that soon proved to be revolutionary— hence some authorsevenusetheterm“Ohnism”insteadofToyotism. Ohnohadtoseekoutsolutionstohismainproblem.Howtomake

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gainsinarestrictedmarket?(Coriat,1994,p.42)Fordismcouldnotgivehimfullysatisfyinganswersbecauseitwasbasedoneconomiesofscale,cheapening goods through mass production for a large market. Inaddition, with the KoreanWar (1950­1953), Toyota began to receiveordersforproductsofvarioustypes(insmallseries),withheavyfinesincaseofnon­compliancewithdeadlines.ForOhno,thequestionwas:howtoachieveeconomiesofscope, i.e.,how toachieveproductivitygainsbyproducing serieswhich are both restricted (small lots) and diversified(variety of products)? (Ohno, 1984, p. 199; Coriat, 1994, p. 32) It isimportanttorememberthatToyotahadthesizeofitspersonnelreduceddue to the layoffs caused by the 1949 financial readjustments and the1950 strike. The scene was ready for the appearance of a flexible(adaptable) solutionwhich increased productivity by cutting costs evenwithproductioninsmallseries.KAN­BAN SYSTEM, JUST­IN­TIME PRODUCTION, AUTONOMATION(JIDOKA),ZEROINVENTORIES,KAIZEN... Ohno, impressed with American supermarkets and how theystocked inventory,searched foraway to lower the levelof intermediateand final stock of parts and products (the ideal of “zero inventories”).(Ohno,1984,p.220;Toyota,1988,p.143)This isachievedby reversingtheorderofflowofproductionofthetraditionalFordistfactory.Insteadofproducing large quantities and stocking them in order to always havewhattoofferwhenthereisdemand,theToyotistfactorywillnowproduceonlywhathasalreadybeenordered.Needlesstosay,thiswillcreategreattension.Ordersofallkindscanbedeliveredatanytimeandtheassemblyline must be ready to adapt to them quickly. Thus, unlike Fordism,machinesandworkerscannotbedestinedforasingletask:theymustbeflexible andmultipurpose. If in “classical” Fordism theworker usuallydevotes himself to a single task on a singlemachine, in “Ohnism” theworker iscalledupon tooperateseveraldifferentmachines,sometimesatthesametime(takingadvantageofthehighlevelofautomationofthenew electronicmachines,which requiremore supervision thanmanualoperationproper).(Ohno,1984,pp.205and211;Toyota,1988,p.142)Productionceasestoberigidandbecomesflexible.TheinnovationsoftheThirdTechnologicalRevolutionhelped in this regard.Numerical controlcoupled tomachine tools (NCMT) gives thepossibility of automaticallyperformingdifferent taskswith thesemachines, throughchanges in theprogram of the tapes. This requires operators with a certain level ofeducationortraining,preparedtomultitaskwiththesemachines. In theKanban system, production is now governed by demand.This is reflected in the very communication between workers on the

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assembly line. Insteadof theworkers finishing theirworkandpassingthepartstothenextworkerinline,anoperatornowonlystartsworkingonhispartsafterreceiving theKanban (= “signboard”or “billboard” inJapanese),acard inwhich theworkers“downstream”place theirordersofparts.Thus,unlike theFordist “push”system, inwhich theupstreamworkstationscommandtherhythmaccordingtowhichthedownstreamworkstationswillwork,inToyotismtheflowofcommandgoesupstreamfromtheendpositionsto thepreviouspositions(“pullsystem”).(Ohno,1984,p203­204,Toyota,1988,p.143)Kan­bancardsgoupstreamwithordersofparts from thedownstreamworkstation to thenextupstreamwork stationand returnwith thepartsordereddelivered from the saidupstream station to thenextdownstream station.The result is that theneed for inventories isdramatically reduced.Production is activatedbyimmediate demand. “Zero inventories” means large savings, becauseinventories represent “idle”money, capital advancedbutnot realized.25(Toyota,1988,p.69)“Zero inventories”alsohasthe functionofkeepingthe factory “lean,”26 without unnecessary employees or performingsuperfluoustasks. AnotherfundamentalchangewaswhatOhnocalledjidoka,or“self­activation”ofproduction.27(Toyota,1988,p.143;Coriat,1994,pp.51­52)It is the idea that theworkershaveautonomy tostop theproduction incaseofananomalyorerrorthatcannotbeimmediatelydiagnosed.Thisis one of thepillars ofTotalQuality. In the event of such an error, theassemblylineisinterrupteduntilthesourceoftheproblemisfoundandsolved.ThisalsogoesagainsttheprinciplesoftheclassicFordistassemblyline.Thereworkstopping issomething tobeavoidedatallcosts,sinceidlemachinesmeanmoneybeingunused.Ohnostarted fromadifferentprinciple. Insteadofhaving,as inFordism,qualitycontrolbeingdoneattheendoftheassemblyline(andseparatedfromit,sothateachdefectiveproduct is returned to the assembly line to be reworked), at Toyotaqualitycontrolbegantobeexercisedduringtheassembly,concomitantlyto it,andcarriedoutby theworkers themselves.What is lost in timeofmachinesbeing idle issaved in the followingdimensions:1)noneed tomaintainasectionexclusively forqualitycontrol(intheToyotist factory,qualitycontrolisperformedintheassembly,simultaneouslytoit,bytheworkersthemselves);2)oncetherootoftheproblemisfound,itwillnolongerbe repeatedandnomore thanone itemhasbeenaffectedby it(whereas in the Fordist factory, where quality control is done afterassembly,anerrormayrepresentalargequantityofdefectivepartsbeforeits existence is detected); 3) the workers becomemore aware of thequalityissueand,therefore,fewermistakesaremade.28 In Taylorism, the worker is just an executor of the “scientific”routines established by the administration. The control of the work

38

process planning is the exclusive attribution of the administration, notadmitting the interference of workers. In Ohnism, workers areencouraged to participate by giving suggestions on how to makeproductionmoreefficient.HereisanotherfeatureoftheJapanesepatternthatdiffers from traditionalmassproduction: long­term (often lifetime)employment.Large Japanesecompaniesinvestheavilyinthetrainingandretrainingoftheirmultiskilledworkers,andarethereforekeentoseethishumancapitalremaininthecompany.Knowingthathewillnotbefired,the Japanese worker feels more comfortable when giving cost­savingsuggestionsthanaworkerinaFordistfactory—wheresuggestingcost­saving methods can mean losing one’s job in the long run. Lifetimeemployment29(alongwithsenioritywageincreasesandbonuseslinkedtoprofitability)alsomakes theworker feelpartof thecompany’s “family.”Aokiemphasizesthat“J­firms”(i.e.,Japanese,Toyotistcompanies)differfrom“A­firms”(American,Fordistones),amongotherthings,becausethelatter have extremely vertical information flow, whereas the J­firmemphasizes more horizontal30 and cooperative relations, with someautonomy.(Aoki,1986,pp.972­973) This statement of the J­firm as a cooperative firm has a doublecharacter.Itfitsintoaframeworkthatemphasizesgreatflexibilitywithinahighlycompetitivecontext.Emphasis isalwaysongreaterprofitabilitybyreducingcosts.Butthegoalisnotmerelytoincreaseshort­termprofit,but rather to conquer ever­increasing market slices in the long run.(Kagono,Okumura&Komatsu,1984,p.36)Forthispurpose,theToyotistfirm employsautomaticandexpensive flexibleequipment.Theworkersare“polyvalent”:notonlyisthererotationofstations,buttheyoftenhavetooperatemorethanoneextremelyexpensivemachineatthesametime.TheJapanesecompanyinvestsalotofmoneyintrainingitsemployeestomakethemversatileenoughforsuchresponsibility.Lifetimeemploymentsafeguardsthisinvestimentinhumancapitalandensuresthecooperationoftheworkers’suggestionsforcost­reducingchangesinproduction.Thestimuluselementthroughcompetitionisgivenbythefactthat,inadditionto the fixedpartof the salary—which increaseswith seniority in thecompany,thusdiscouraginghighturnover—theretherearesubstantialbonuses for profitability and productivity. These bonuses31 have anindividualized part, the amount of which is established through theevaluation of individual work performed. To avoid this leading to anexaggeratedindividualism,theabilitytodogroupworkisoneofthemostimportant items in thisevaluation.(Watanabe,1995,p.7)Theemphasison cooperative group effort ranges from this assessment to the verydisposition ofwork,with its rotation of functions, positions intimatelyintegratedwith each other, and so on.Thewage egalitarianism is alsostronger than in theWest. In 1985, the pay differentials between the

39

grossearningsof theupper tierofmanagementand its lower tierwere5:1 in Japan, while in the U.S. they were 33.5:1 (ibid.) However, oneshouldnotthinkthattheJapanesecompanyhasphilanthropicorsocialistcharacteristics in its conception. Everything is within the logic ofincreasing business profitability. Investments in human capital are asimportant to a Japanese firm as investments in fixed capital. It isimportant to recall that at the basis of Toyota’s reformulation in 1950(whichpavedthewayforitsfutureorganizationaldevelopments)wastheconfrontationwiththestrikemovementthatledtothemassdismissalofabout¼of thecompany'semployees. In1953,afterseveralbattles, thecombative Japanese trade unionmovement in the automobile industrywasvirtuallydestroyed,beingreplacedenterprise­based(company)tradeunions, which kept cozier relations withmanagement. (Toyota, 1988,p.145;Coriat,1994,pp.45­46)Thiskindofcompanyunionsisalsooneof the foundations of the Japanesemodel. The economic health of thenation has allowed a sharp salary increase since the 1960s, whichsomehow legitimizes thesystemandbrings theworkerscloser to theircompanies. (Coriat, 1994, p.94; OECD, 1995a, p. 98) This aspect of apriorinon­conflictualrelationsbetweentradeunionsandcompaniesissogreatthatworkingforawhileinatradeunionisconsidereddesirableformanagersbeforetheyreachhigher levels inthecompany.(Coriat,1994,p.46) The real subsumption of labor to capital, conceptualized byMarx(1975­1995a,v.34,pp.93­121), takesonnewdimensions in Japan,byvirtueofthisoutlookofthecompanyasa“family.” The cooperation in theToyotistmodelmust alsobe analyzed atanotherlevel:thatoftheinterfirmsubcontractingrelations.ThedegreeofsubcontractinginJapaneseindustriesisgenerallyhigherthaninWesternfirms.Onaverage,onlyabout25%ofthecomponentsaremanufacturedinternally by the J­firm itself, the other 75% being purchased fromsuppliers.(Aoki,1986,p.93;Coriat,1994,p.123)Butthemaindifferenceis in the quality of the relationship between the main company andsuppliers.WhileinthetraditionalFordistfactorytherelationshipwiththesupplier is cold, limiting itself to the buy­sell­delivery triangle, Japanesefirmshave special relationshipswith their subcontractors.A long­termagreement is generally establishedwith the supplying firms bywhich,morethanmerelylowerprices,thefirm’sreliability(withinTotalQualityand Just­in­Time standards) is taken into account. Toyota, for example,often works together (monitoring, evaluating, advising) with itssubcontractors,inordertoreducecosts.Despiteperiodicpricerevisionsofthepartssupplied(usuallyeverysixmonths),Toyotaleavesthesavingsfrom the reduction of costs by the supplying firmswith them for theperiodofoneyear.(Coriat,1994,p.126)Thiscreatesanextrastimulusfor technological innovationandcost reductionsbysubcontractors.The

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pressure of delivery times and theneed for just­in­timeperfect qualityrequiresthisclosecooperation.This isanotherreasonforthesuccessofJapanese companies in reducing costs: cooperative relationswithin thecontextofcompetition.************************ The secret of the Japanese production paradigm is its flexibility.Fordism was based on production in large series of fewmodels. Thisprovidedeconomiesofscale.Howcanasystembasedontheproductionin small series (small lots) of many variable models become morecompetitive?Accordingtotraditionallogic,thiswouldbeverycostly!Thekey lies in the flexibility of the Toyotist factory.While in Fordism theremodelingofmachinery foralteredproductionofotherproductmodelsisaprocessthatinvolvesalotoftimeandeffort,the Japanesefactory isreadytomakethesechangesquickly,withoutmuchdifficulty.Polyvalent(multipurpose,multiskilled)machines andworkers;U­shaped layout ofassemblylinewithvariable,integratedandinterchangeablemodules(andposts) (insteadof the3 traditionalFordist layouts: in a row, in isolatedislandsor inclosedcages);quick retooling techniquesetc.make iteasyfor the assembly line to bemodified to produce othermodels quickly.(Coriat,1994,pp.61­63and72­74) The impositionof thesuperiority32of the Japaneseparadigmonthe market was gradual. The system was formed in the 1950’s. The1960’swere the yearsof consolidation.While the internationalmarketwas growing, Toyotism seemed an alternative to Fordism but did notunequivocally surpass it. The oils shocks and economic crisis of the1970’s changed the situation and the Japanesemodel imposed itself asthemostappropriateforthenewconditions.Withhigheroilprices,themarket forcarswasmorerestricted.Theworld’smanufacturerswere inthesamepositionastheJapaneseinthepost­warera:howtoobtaincostsavingsandprofitablysellinalimitedmarket?The Japanesemodelwasmuchmoreadaptedtothechallenge.Havecommoditypricesgoneup?A“zero­inventory”, “lean” factory,which usesmaterials only for productsthathavealreadybeenordered, ismuchmoreeconomical in thissense.Thevery factthattheJapaneseonlyworkedwithpre­orderedpartsandproductsmade the effectsof the crisis less serious for them.With theirincredible flexibility, they couldadaptquickly tonewdemands,diversifyproducts etc. In addition, leanproductionhad alwaysbeendedicated tointensivecost­cuttinginrestrictedmarketsandnot,asinFordism,gearedtowardseconomiesofscale(usingproductionofanevergreaternumberof units of the same product). It was therefore a question of furtherintensifyingproductioninordertoreducecostsandtogetthemarketto

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buythegoodsandnotsimplytobetonalargermarket. The1970’s crisis sparked studies of the Japanese phenomenon.And itsadaptationand “transferability” to theWestwasnoteasy in thebeginning because it seemed to contradict traditional industrial logic.Afterall,isn’tlifetimeemploymentconducivetopassiveaccommodation?Don’tstopsoftheassembly linemean losingmoneywhilethemachinesareidle?Aren’tinventoriesessentialforsuply? Themainpointthat wewanttoemphasizehereisthat,justastheFordist­TayloristmodelwastheonethatbestadaptedtotheconditionsoftheSecondTechnologicalRevolution, the Japaneseparadigm (Toyotism)imposed itselfas thebestproductivesubsumptionof thenewelectronictechnicalbasisoftheThirdTechnologicalRevolution.Theutilizationrateof thenew technologiesof the electronic technicalbasis in theToyotist“leanproduction” industries ismuchhigherthanintraditionalindustries—atendencythatbecamestrongerafter1971,theyearoftheinventionofthemicroprocessor,whichinauguratedtheeraofmicroelectronics.Forexample,thenumberof industrialrobots inuse in theUSAand Japan intheeightiesandninetieswasasfollows:Table1.3 ­Numberof industrial robots inuse in Japanand in theUSA,selectedyears1981USA

1981Japan

1986USA

1986Japan

1992USA

1992Japan

6,000 21,000 25,000 116,000 47,000 349,458Source:WorldIndustrialRobots1995,p.14. Asforthepercentageofmachinetoolsthathavenumericalcontrol,whilein1982itwasalready53.7%inJapan,intheUSAitwasstillonlyabout5%.33(Gregory,1986,p.317) TheToyotistmodelsuited thenewcomputer­based technologies,since,aswehaveseen,theytendtobeflexibleaswell.Numericalcontroland computing have increased the potential for movements andoperationsthatcanbeperformedbymachine tools.Themachinesweremademore flexible,with greater capacity to adapt to other operations(greater variety). But these new sophisticated, numerically controlled,flexible machines (NC, DNC etc.) tend to be more expensive thantraditional machines. They become more “viable”, less costly, if used“flexibly,”forvariousoperationsandmodels.Forstandardizedoperationsof one or a few types (aswas common in Fordism), the use of theseflexiblemachinesmaynotbesomuchmorecost­effective.34

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3 THE SCIENTIFIC­TECHNICAL REVOLUTION (STR) IN ACTUALLYEXISTINGSOCIALISTCOUNTRIES3.1GENERALCONCEPTS While in theWest the termsThird IndustrialRevolutionorThirdTechnologicalRevolutionwereused todescribe theprocesses that tookplace,especiallysinceWorldWar II,with the introductionofcomputing,automation, increasing computerization of society, transition from theelectromechanicaltechnicalbasistoelectronics,etc.,inEasternEuropeancountriesthemostcommontermtodescribethissetofphenomenawasScientific­TechnicalRevolution(STR).35 Justas in theWest theprecisedeterminationof the conceptsofThirdIndustrialRevolutionandThirdTechnologicalRevolutionissubjecttodebateand theirutilizationacquiresdifferentnuanceswhenusedbydifferent authors,36 in the countries of Eastern Europe the concept ofNauchno­Tekhnicheskaya Revolyutsiya touched off discussions about itsnature, its constitutive characteristics and the time frame of itsoccurrence. P. N. Fedoseev, former vice­president of the USSR Academy ofSciences,triedtosummarizetheessenceofSTR:

The Scientific­Technical Revolution is basicallythe radical, qualitative reorganization of theproductiveforcesasaresultofthetransformationofscience intoakey factorinthedevelopmentofsocialproduction.Byeliminatingmanuallaborbymeans of technology, and substituting the directparticipationofmanintheproductionprocessbythe operation ofhismaterializedknowledge, theScientific­Technical Revolution radically changesthe structure and components of the productiveforces and the conditions,nature and contentof

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work.While embodying the growing integrationof science, technology and production, theScientific­Technical Revolution influences allaspects of life in today’s society, including theareas of industrial management, education,everydaylife,culture,people’spsychologyandtherelationship between nature and society.(Fedoseev,1977,p.88)

Thus,oneof thecentralcomponentsof theconceptofScientific­Technical Revolution — and the origin of the term itself — is “thetransformation of science into a direct productive force,”whichmakespossible the “scientification” (onauchvanie) of production. (Marakhov,1970,pp.94­95;Gukov,1976,pp.159­168)Itdoesnotreferheretothemere growing use of scientific methods for increasing productioncapacity,whichisanotsorecenttrendofcapitalism—modernindustryhad already been studied by Marx in Das Kapital in the nineteenthcentury, for example. (Marx, 1961­1971b, pp. 382, 407, 636 and 674)However,inthetwentiethcentury,especiallyafterWorldWarII,science,accordingtosomeofthoseSovietproponentsoftheconceptofSTR,wasbecoming a productive force itself; science, through its principles,wasbeginningtocontrolandguideproduction.37(Marakhov,1970,p.97)Oneofthemainreasonsforthisqualitativeleap intheprocessofintegratingscience into theproductionprocesswas the emergence of automation.Someauthors see thedeepermeaningof the transformationof scienceintoadirectproductiveforceatthemomentwhentheworkerleavesthescene,replacedbyautomaticprocessesofproduction:

The automation of production is the way inwhich the transformationofscience intoadirectproductiveforcematerializes[...]Sciencebecomesa direct productive force in those productionprocessesthatwillbeabandonedbytheworkers[... In the future communist society] productivefunctionsperformedbypeoplewillbereplacedbytechnicalmeans,groundedintheachievementsofscience [...] The release of people from thefunctions of immediatematerial productionwillenableanincreaseinthenumberofscientistsandengineers [...and]undercommunismpeoplewilldevelop fully, becoming highly qualifiedprofessionals capable of working in the newconditions of fusion of intellectual and physical

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work.(Shukhardin etal.,1970,p.164­166) Theautomationprocess,basedon electronics, is reflected in thenature of themachines at the time of STR,whichwas emphasized byseveralSovietauthors.

Inautomatedsystems[fromthetimeoftheSTRonward], inaddition to the threeclassicelementsthat make up machines [of the time of theIndustrial Revolution, i.e., motive machine,transmission machinery and tool or labormachines] there is a fourth element, the controlmechanism [i.e., automatic self­control viafeedback, by whichmachines self­regulate] thatfreesmanfromimmediatecontact,notonlywithtools, but with the machines themselves.(Medvedevetal.,1990,p.103)

These analyses have led Shukhardin et al. (1970, p. 124) toconcludethattheessenceoftheScientific­TechnicalRevolutionconsistsinthe “substitution of the direct productive functions of the worker(including his logical functions and control­regulation) by technicalmeans.” The direct integration of science into production, at thisqualitatively higher level, greatly increases and accelerates thepossibilitiesoftechnologicaldevelopment.

Atomic and thermonuclear energy [...],automation ofproduction [...],modern chemistry[...], cybernetics, exploration of outer space, [of]new means of influencing the processes oforganiclife;hereisaratherincompletelistofthecreativepotentialopenedbytheSTR.(Kheinman,1981,p.5)

Thus, the STR encompasses the vast majority of the newtechnologicalprocessesthathavedevelopedsinceWorldWarII,38puttingscience as a link that, increasingly embedded in production, guides,accelerates,andinterconnectsallthesefields. Itiseasytoseehowthisfindingcouldbeidentifiedwiththeideaof a scientific communism, whose ideal would be the radicaltransformation of the social structure towards conscious planning ofproduction and social mechanisms. The fact that science becomes a

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decisive, conscious (“scientific”) influence in the sphere of productionwould greatly facilitate the task of overcoming the chaotic, anarchic,unconscious relations that regulatemany of the socialprocessesundercapitalism. Theoretically, the Scientific­Technical Revolution wouldfacilitateorevenforcethetransitiontoamoreplanned,moreconscious,productivestructuresuchascommunism.(Kheinman,1981,p.6) Nowonder the concept of Nauchno­Tekhnicheskaya Revolyutsiyafound official recognition in CPSU documents and policies. The Sovietsrealized that a qualitatively new era in the technological field wasunfolding after World War II. At the plenary meeting of the CentralCommittee in July1955,N.A.Bulganin,commentingonthepossibilitiesofatomicenergy,stated:

We are on the threshold of a new scientific­technical and industrial revolution that will farsurpassthe industrialrevolutionsassociatedwiththeappearanceofsteamandelectricity.(Bulganin,1955,p.2,c.1)

But this “intuition”of thepossibilitiesof theSTRwasembodiedand tookmore definitive forms in the 1960s.The new CPSU program,adoptedattheXXIICongressin1961,officiallyadoptedtheSTRconcept.

Humanity isentering theperiodofascientific­technical revolution linked to the control ofatomic energy, the conquest of space, thedevelopment of chemistry, the automation ofproduction and other great achievements ofscience and technology. But the relations ofproduction of capitalism are too narrow for thisScientific­Technical Revolution. Only socialism iscapableofrealizingthisrevolutionandusingitintheinterestsofsociety.(KPSS,1983­1989h,p.99)

The concept of STR was incorporated by the Brezhnevadministration as a basis for the claim that the USSR had entered thestageofdevelopedsocialism.39In1967,inthesame50­yearanniversaryspeech of the Russian revolution inwhich he had announced that theUSSRwasnowadevelopedsocialistsociety,Brezhnevassumed the ideathatsciencewasbecomingaproductiveforceinitself.

Humanity has entered an era of revolution inscienceandtechnology.TheSovietUnionisproud

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of the splendid feats of her scientists. The greatsuccesses of physics and chemistry reveal newsources of energy, enable the creation of newmaterials and extend the horizons of all keyindustries. Discoveries in biology create newpossibilitiesinagricultureandmedicine.Thefeatsofcyberneticsincreasetheproductivityofmentalworkandautomatevarioustypesofbusinessandadministrative activities. Science is becoming adirectproductive force, in the literalsenseof theword.(Brezhnev,1970­1982a,pp.102­103)

The optimistic tone of the Soviet declarations in the 1960’sshowed great confidence in the possibilities of the USSR in the STRperiod.Thiswasreflectedinthe growinguseofthediscourseofpeacefulcoexistenceandthetransferofcompetitionwiththeWesttothestrictlyeconomic, scientific and technological field. As Khrushchev put it in alecturetoAmericanbusinessmenonhistriptoAmericain1959:

[...]we are offering you economic competition[...]YoucanbesurethattheSovietUnionwilldowell in it: we will overtake you and leave youbehind[...](Khrushchev,1959,p.128)

Much of this optimism was explained by the contradictionbetween thepossibilities opened in the STRperiod and the limitationsimposed by the capitalist system of production. These contradictionswerestronglyemphasizedbySovietideologists,especiallywhenlinkedtothe phenomenon of increasing automation of production processes,whichbroughtnotonlyproblemsofadaptationinamarketeconomybutalsodeeper theoretical questions about the adaptability and survival ofthedifferenteconomicsystems.3.2AUTOMATION,STRANDSOCIALISM The high level of productivity provided by computer­basedmanufacturing systems, whose levels of automation are increasinglyapproachingtheconceptoftotalautomationinitsbroadestsense,bringswith it important theoretical issues regarding capitalist and socialistmodesofproduction. It isestimated, forexample, thatatcurrent levelsofproductivity,

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about10%oftheAmericanpopulationwouldbesufficienttoproduceallthegoodsneeded for itsmaintenanceand forthatoftheother90%.40Ifthistrendisextendedatthegloballevel,questionsariseabouttheissueofappropriationofthiseconomicsurplusproduced.Whowillbeentitledtowhichpartofthe“cake”andbasedonwhatprinciples?Withoutgreaterdistributivism, unemployment41 and the exacerbation of social conflictsarealmost inevitable in thiscontext.But theadoptionofsuchprofounddistributivism (in terms of unemployment wage or minimum incomeschemes)forsuchalargeportionofthenonproductivepopulationwouldcertainlyconflictwiththeverycoreofsocialrelationswithincapitalism:privateproperty.Anexacerbateddistributivismwouldbesoclose to theidea of socialism that one might ask if the time had not come for aqualitativeleaptowardadifferentmodeofproduction. Such perspectives had already been observed in the formeractuallyexistingsocialistcountriesofEasternEurope.In1968,agroupofresearchers fromtheCzechoslovakAcademyofSciences, ledbyRadovanRichta, published an influential theoretical study claiming that theScientific­Technical Revolution and automation, on the one handdramaticallyincreasestheproductivityoftechnicalmeansofproduction,andontheotherhand,sharpenstheinternalcontradictionsofcapitalism,to the point of questioning the latter’s ability to lead the STR to itsultimateconsequences. (Richta etal.,1972,pp.48­9)Thecontradictionbetween the increasingly interconnected relations of cooperation inproductionandtheprivateformofappropriationoftheeconomicsurplusin capitalism intensified with the passage of time. Socialism(communism) would be better able to deepen STR without provokingunbearabletensionsinthesocialfabric.(ibid.) This was a widespread idea in the realm of actually existingsocialist countries.Huge increases inmachine productivity by the STR(i.e., thedevelopmentofproductive forces) incapitalismconflictedwiththe social relations of private property: who would buy this growingoutput if the new machines employ fewer and fewer workers? Thisproblem would not exist in socialism, since production is planned.42(Kheinman,1981,pp.38e48) The authors of the actually existing socialist countries whoemphasized the ideaof the STRasadistinctepochofhumanprogressargued that the new developments of the STR enlarged the conflictingrelationswithincapitalismand thatsocialismwouldbe the “way”moresuitable to take theSTR to itsultimateconsequences, throughaplanneddevelopmenttheproductiveforces.(Kheinman1981,45,51­52;Richtaetal., 1972, pp. 45­46) Only a planned economy could then prevent theincreasing automation of STR leading to unemployment and economicchaos,andtochannelthisautomationandgreaterproductivitytocreate

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more free time for themembers of society (instead of increasing thedegreeofexploitationoftheworkforce,asincapitalism).(Dalin,1972,p.174) If automation seemed to actually require socialism (a plannedeconomy)foritsfulldevelopment,whatdidthedisintegrationofactuallyexisting socialism in Eastern Europe (exactly during the epoch of theSTR) and the permanence of capitalism thereaftermean?Would it beindicative that those authors who identified socialism as the mostadequatemodeofproduction for theSTRwerewrong?Orperhaps theywereright,andthedisintegrationoftheUSSRindicatedthat,infact,theSovietmodel was not socialist (or at least not Brezhnev’s “developedsocialism”)? Totrytoanswerthisquestion,weneedtolookmorecloselyattheSovietmodelofproduction.

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4THESOVIETMODELOFPRODUCTION4.1INTRODUCTION WewilldealherewiththeSovietmodelofproductionimplantedinthe 1930’s which, in general terms, lasted until the beginning ofperestroika in themid­1980’s. Obviously, the system underwent somechanges,adaptationsandattemptsatreform,43butonecanconsiderthatits basic structuremaintained the essential characteristics throughoutthis period, that is to say, statization (“socialization”) of themeans ofproduction and centralized planning, under the leadership of theCommunistParty.There isanextensive literatureon the functioningofthe Soviet economy44 and therefore we need not give a detaileddescription of the functioning of thewhole system until 1985.WewillpointoutonlyafewessentialaspectsoftheeconomyandtheproductionprocessthataffectedthebehavioroftheSovietsystematthetimeoftheSTRandtheemergenceofapost­Fordistmodelofproduction. Werefersimultaneouslytotheproductionmodelandtheeconomyasawholebecause intheUSSRmacroandmicroeconomicaspectsweremore intertwined than ina freemarketeconomywithprivateproperty.Due to centralized planning and the nationalization of the means ofproduction,changes in thegovernment’smacroeconomicpolicieshadapreponderant influence on state­owned enterprises. Therefore, in ouranalysis we will frequently merge these two aspects insofar as theyjointlyaffectthedevelopmentofthesystem. Thestatizationofthemeansofproductionhaditsgreatimpetusinthe1930sandcontinued thereafter.The initialrapiditywithwhich thisnationalizationoccurredin industryandagriculturecanbemeasuredbythefactthatStalin,inhisreporttotheXVIICPSUCongressin1934(i.e.,only six years after the first five­year plan began), could boast that99.93%of the large industriesand84.5%of theagriculturalareawerealready socialized (in the hands of the state or cooperatives). (Stalin,1946­1951,pp.313and323)Bythemid­1980s,ontheeveoftheonsetofperestroika,officialstatisticsdidnot include theprivateownershipofurbanandagriculturalenterprises,orevenindividualprivateproducers.

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Instatisticalterms,virtually100%offirmsandworkerswere“socialized”(i.e.,linkedtostate­ownedenterprisesorcooperatives).45(NarkhozSSSRza70let,1987,p.11) Central planning in the Soviet case indicated that most of theproduction was carried out, not based on the individual decisions ofprivate producers, as in free­market economies, but issued from thedirectivesby thegovernment,mainly throughGosplan (GosudarstvennyiPlanovyiKomitetSovietaMinistrovSSSR,“StatePlanningCommitteeoftheCouncilofMinistersoftheUSSR”)tostate­ownedenterprises,basedonlong­termplans(15or20years),mediumplans(5years)and short­termplans (1 year and quarterly). The 20­, 15­ and 5­year plans gave thegeneral direction to followwhile the annual and quarterly planswereoperative.Throughtheseplansanddirectives,thestatecompaniesweregiven the amount of raw material to be received, the articles to beproduced,towhichcustomerstosellthisproduction,etc. The Communist Party’s leading role, both politically andeconomically,46was important in understanding the functioning of theSoviet economy.Sovietmacroeconomicsandmicroeconomicswerenotguided primarily bymarket signals, as in capitalist countries, butwereconsciouslydirectedtowardstheobjectivesandprioritiesestablishedbytheCPSU.47This is essential in order tounderstand the logic of certaindecisionstakenbytheupperechelonsoftheadministration,whichoftenfrontally opposed the type of reasoning considered more productivewithin amarketperspective.After a confused initialpost­revolutionaryperiod, inwhichmembersoftheparty interferedeven intheday­to­dayrunning of the enterprises, Lenin’s48 (and later Stalin’s49) orientationsweretograduallymoveawayfromcollegiality(participationofpartyandtradeunionrepresentativesincorporatedecisions)towardedinonachalie(responsibilityofa singleperson, that is, thedirectorof the company).Partybodieswereurgednottointerfereintheday­to­dayadministrationofcompanies,seekingtolimittheroleofthepartytotheestablishmentofthemacroeconomicprioritiesand generaldirections,50 theoversightofhow these policieswere being implemented, and thework of politicalindoctrination.51 This type of mechanism allowed a great initial growth of theeconomy in the decades of the 1930’s,1940’s and 1950’s,52 because itallowed concentration of resources and efforts in areas considered aprioritybytheSovietleadership. Even in that period of high economic growth, some problemsbecamesalientandwereexploredinthespecializedliterature.

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4.2VAL Tounderstand theacceleratedeconomicgrowth thatmarked theSovietmodelforseveraldecades,theconceptofval(valovayaproduktsiya,“gross production”) is extremely important. The economy of the USSRwasguidednotbymarketsignalsbutbycentralplansestablishedbythegovernment. In capitalist countries, the vast majority of firms worktowardmaximizingprofits.ThiswasnotthecasewiththeSovietUnion.Theretheproductionunitssimplyaimedtofollowtheinstructionsoftheplan.These instructionswerequantified in thepokazateli (“indicators”)thatcompaniesshouldachieve inorder tosucceed in fulfilling theplan.Duringmost of the Soviet period, themain indicator, in practice,wasgross production (val). (Valovoi, 1989, p.23) Stalin’s primary objectivewiththefirstfive­yearplanswastocreateastrongindustrialbasecapableof competingwith advanced capitalist countries, evenmilitarily. (Stalin,1946­1951f, p. 172) Thus, it was necessary to rapidly increaseproduction, especially of production goods,metals, energy sources, etc.Withinthiscontext,itwasnaturalthatvalbecamethemainindicatorofsuccessfortheenterprises.Theadministratorspursued,byallmeans,theincreaseofgrossproductionasawayoffulfillingtheplanandsatisfyingtheirsuperiors. Thisstrategycanbeconsideredsuccessful,sincethefirstfive­yearplans actually achieved their main objectives, greatly increasing thecountry’s GNP and creating a strong industrial (and military) base.(Gorbachev,1987a,p.413) However, this strategy of prioritizing val had side effects. Theproblem is that the emphasis on val meant that enterprises werepursuing the increase in quantity at all costs (even to thedetrimentofquality). Downsideswere also excessivewaste; excessive use of inputs(sometimes just tomake the products “heavier” and therefore havinghigherpricesorvalue);unwillingnessbyfactorymanagerstoadoptnewtechnologies that, by requiring reorganization in the workplace, coulddisrupt short­term production, etc. (Goldman, 1987, p. 51; Bornstein,1987,p.98;Smirnitskiietal.,1987,pp.125,139e173;TsKhSD,f.2,op.1,d.805,l.6) Theseside­effectsofvalinthe1930’s,1940’sand1950’s(timeofrelativeabundanceofreservesoflaborandrawmaterials)wererelegatedto the background because of the apparent success in industrialdevelopment at that time.However, they became serioushandicaps forthecontinuationofSovietdevelopmentfromthe1960’sonwardwhentheabove­mentioned inputs were no longer so abundant and the

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developmentoftheworldeconomytookaqualitativelydifferentcourse.534.3CENTRALPLANNINGANDNESBALANSIROVANNOST’ The problem thatmight have beenmore inherent in the Sovietsystemwouldbecentralplanningitself.SeveralWesterncriticspointedtothe difficulties of planning all themajor aspects of a complexmoderneconomy. (Campbell, 1974, p. 33) It is estimated that in a moderneconomymorethantwenty­fivemillionproductsareproduced.Asearlyasthe1960’s,therewereWesterncriticspointingtothefactthattheSovietUnion’s economywas growing and becomingmore complicated to thepoint that, even with the best available computers, it would not bepossible tocentrallyplanefficiently thedetails required for thecreationand circulation of all these products. (Richman,1965, p.17; Yun’,1986,p.140)Thebureaucraticapparatustoattemptsuchataskwouldneedtohave an exceedingly gigantic size.What happened in the USSR, then,according to these critics, is that because of the impossibility ofperformingsuchatask,thereweregreatimbalancesintheeconomy. Howwas thiscentralplanning taskcarriedout in theUSSR?Forthe preparation of the annualplans, each company sent theministriesreports specifying their production capacity, costs, necessary rawmaterials,etc.Withthisinformationsortedoutbytheministries,Gosplandrafted theannual (production)plan inaggregate terms,andGossnab54planedthedistributionofthesuppliesnecessarytotheproductionunits.This informationwasdisaggregatedandpassedonby theministries totheproductionunits.With all thesedirectives, for themainproducts, itwas specified howmuch the state­owned enterprises should produce,fromwhom theywouldreceiverawmaterial, towhichothercompaniesthey should supply components, etc. This scheme can be consideredcharacteristic formost of themain products of the USSR and (with agreateror lesserdegreeof independence to theproductionunitswithinthe periods of Soviet economic reforms and paying attention to thechanges in the denomination and role of the different organs of thegovernment55)as the typicalmodel from the1930’s to thebeginningofperestroika.(Ioffe,1989,pp.71­76) How, then,was the question ofhow toplan the production anddistribution of the “millions” of products of the modern economyresolved?Hewett(1988,pp.184­190)drewattentiontothreestrategiesusedby the Soviets to accomplish this seemingly “impossible”mission:(1)(dis)aggregationofgoodstobeproducedandsuperviseddelegationofpowerstootherstatebodies;2)planning“fromtheachievedlevel”;3)

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correctionofplansinprogress. The firststrategy isthatGosplandidnotdirectly takecareoftheproductionofallgoods.Gosplanfocusedonaggregategroupsofthemainproducts and provided instructions on how these groups should bedisaggregatedand fit inproductionanddistributionplans thatGossnaband theministrieswoulddevelopwithin theparametersand indicatorsrequired by Gosplan. Thus, for example, in the early 1980’s, Gosplanworkedwith2,000aggregategroupsofproducts,Gossnabdividedtheseaggregate groups into 15,000 subgroups, which in turn were furthersubdividedintoanother50,000byministries.Inaddition,whenitcametothe actual wholesale distribution phase, Gossnab’s departments, whiledesignating supplier and recipient companies, further detailed theproductnomenclature(in10to15subitemseach).56(Yun’,1986,p.140)Thecenterthenconcentratedonthemostimportantproductaggregatesand left to the other instances (mainly ministries and regionalauthorities) the task of achieving these production quotas through thecompanies under their jurisdiction. 57 As Hewett (1988, pp. 129­130)described, “the center tries to focus only on the most importantcommodities and leaves the other parts of the planning to the lowerechelons. Inaddition,plannersworkwithgoods inaggregatecategories,notwitheachindividualcommodity,leavingthedetailsofthebreakdownof theseproducts to the lower echelons.” For example, aministry couldreceive from the center the quantity of different types of steel to bemanufactured, but it would be up to theministry to decide by whichfactories these typesofsteelwouldbeproduced,howmucheachwouldproduceof themetc.However,all this “subplanning”wascarriedout instrict accordance with Gosplan’s instructions and subject to itssupervision. Thus, from the 1930’s to the mid­1980’s, Gosplan wasultimately responsible for coordinating all production in the Sovieteconomy. The second strategy concerned the problem of determining thegrowthratesofproduction.TheimportancegiventothegrowthofgrossproductionwithintheSovietmodelwasnotorious.Buthowcana“single”center determine the production growth rates for thousands ofproduction unitsinverydifferent financialandtechnologicalconditions?Wehavealreadymentionedthatforthepreparationoftheannualplans,companies sent reports to the ministries showing their productioncapacity, costs, rawmaterials, necessary inputs, etc. But these reportswere screened and put into aggregate terms byministries before theyreachedGosplan.BasedonwhatcouldGosplansetthegoalsfortherateofgrowth of production of the different industries, for example? IgorBirman,a formerSovietémigréplanner,wroteanarticleexplaininghowthiswasdone.(Birman,1978,pp.153­172)Thetechniqueemployedwas

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commonlyreferredtoasplanning“from theachieved level”(iskhodya izdostignutogo urovnya),58 i.e., the center took from the last productionreportofthefirmsthegrowthrateofthepreviousyearandrepeateditoraddedafewpointstoit.Thisprovidedasimplemethodfordeterminingthe rates of increase of production in companies of themost diverseconditions.59 Finally, the third and final strategy was used when it becameobvious,withintheactualperiodoftheannualplan,thatsomeindicatorswouldnotbereached:thecorrectionofplansinprogress.Objectivesthatproved to be unrealistic were then modified and adapted within theperiod of the plan. As noted by O. Ioffe, a former professor of law atLeningradStateUniversity,thiswasaprocedurewhich,bylaw,shouldberestrictedtoexceptionalcases,60butwhichinpracticewasoftenusedbyplannerstoescapedisproportionsanderrorscommitted.(Ioffe&Maggs,1987,p.113). Evenwithalltheseplanningtechniquesand“safetynets”againstmajor errors, therewere severalproblemswithplanning.Onewas thedifficultyofaccomplishingsuchataskeffectively.Anydelaysinsubmittingenterprisereports,correctingdata,etc.leadtoaseriesofdistortionsandimbalancesalongtheproductionchain.61 Another problem related to technological development. It wasalreadyagigantictasktosimplyplanthebalancedfunctioningofastaticeconomy,operatingat thesame technological level.But in themiddleofthe process, the emergence ofmore advanced technological processesnecessitatestotallydifferentprocedures,withotherinputsandprocessesbeingused, etc. Itwasdifficult for theplanners, centralized inMoscow,awayfrommostoftheproducingcompanies,withoutknowingdetailsoftheirproductionprocesses,tocontrolor“predict”theseunfoldings.Thisled to bureaucratic complications for rapid decision­making ontechnologicalinnovation.(Amman&Cooper,1982,p.17) Sinceitwasintheinterestofthegovernmenttoforcethepaceofeconomicgrowthinthecountry,Gosplantried,fromoneyeartothenext,tomakecompaniesproducemoreandmore,basedonthedataobtainedthepreviousyear.Sincenon­compliancewiththequotasledtothelossofbonuses, there was a natural tendency for companies to try not toproduce“toomuch”(i.e.,remainequalorslightlyabovetheplanquotas,butnotmuchhigher),asproductionsurplusinoneyearcouldleadtoanexcessiverise inquotas for the followingperiod.Withmostof theextraprofit not staying with the firm but rather going to the centralgovernmentcofers,anattitudeofintentionalslowworkorunderreportingwasmaintained inorder toavoidexcessivedemands the followingyear.(Ioffe &Maggs, 1987, p. 108) Besides, due to supply problems in theUSSR, many companies tended to overestimate their need for raw

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materialsintheirreportstothecentralgovernment,inordertostockfortimeswhen supply became particularly bad. All this created a viciouscircle,inwhichthereportsdeliveredtoGosplanoftendidnotcorrespondto reality, causing this body to issue directives that, also notcorrespondingtoreality,reinforcedtheimbalances(nesbalansirovannost’)in the economy. (Lewin,1988,p.135)Deficiencies in supply, causedbypoorallocationof resources, led several state­owned enterprises tousethe services of tolkachi (expediters) which, in a sometimes semi­clandestinemanner,at theborderbetween legaland the illegal,obtainedmaterialsthatacompanywasinneedofandwasnotgetting.624.4PRICESTRUCTURE The price structure in the USSR was also problematic and,accordingtosomecritics,central inexplainingmuchoftheinefficienciesof the Soviet economic system. (Shmelev&Popov,1989,p168;Gaddy,1996,pp.11­13)Priceswerenotdeterminedby the relativescarcityofproducts butwere established administratively by the government andtendedtobefixedforlongperiodsoftime.Forexample,asubwayticketinMoscowcost5kopecks(=cents) forseveraldecadesbeforeperestroika.Despitetheconsumer­friendlysideofverylownominalinflation(orevendeflation) over a long period of time, this created macroeconomicfinancial imbalances. Sometimes the selling price63 did not cover theproduction price(which led totheexistenceofsubsidiescoveredbythenationaltreasury).Butthiswasnotthemainproblem.Themainproblemwas that if prices did not reflect the relative scarcity of products, theycould not serve as a guide to the search for optimal allocation ofresources.Forexample,ifplannershadtodecidewhichoftwoprocessesofenergyproduction(say,electricityorcoal)wouldbethecheaper foranewplant tooperate,perhapsprices indicated theadvantageofoneofthem. But if that “good” were being subsidized, it might have beencheaper for society to invest in the other source of energy. Since theproduction chain consists of a huge number of products that serve asinputstooneanother,fromacertainpointon,itwasdifficulttocorrectlycalculatethe“realcost”ofthefinalgoods.Thisledtocertaindistortionsinterms of optimal allocation of resources, to nesbalansirovannost’(disequilibrium)inplanning,andto whatsomecritics(includingSovietsones) called “economic system of expenditure and waste” (zatratno­rastochitel’nayasistemakhoziaistvovaniya).64

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4.5WORKERALIENATION One problem — difficult to analyze objectively because itcontainedaverylargesubjectivecomponent—wasthelackofindividualincentives for production and care of state property. The ideologicaldefenders of capitalism generally impute this to the absence of privateproperty in the economy. (Hayek, 1975, p. 239; Friedman, 1981, p.14)This argument is not sufficiently consistent to explain a possibleadvantageof capitalism in this field, sincemostof thoseworkingundercapitalism do so without being owners of themeans of production.65Indeed, the apparent greater “care” and diligence of workers in theprivate capitalist sector is due to a factor of economic coercion linkedpreciselytothelackofprivateproperty,i.e.,tothefactthatthemajorityofthe population, because they do not have themeans of production, isobliged to act under the constant constraint of the boss,who does sodiligently to ensure that the work is done in the most efficient waypossible.ThelackofeconomiccoercionofthiskindledtheSovietmodeltoadoptstatepoliticalcoercion(theviolenceof“Stalinism”, forexample)as a substitute. (Wright, 1980, 114) Indeed, there are reports in botheconomicliteratureandeveninthefieldofliteratureitself,showinghowthe Stalinist “terror” in some ways kept the wheels of the productiveregimerunningatanextremelyrapidspeed, ifwetake intoaccount thedifficultiesthattheUSSRexperiencedinthe1930s.66 In the post­Stalin decades, with the use of extreme politicalrepressionbeyondthereachofSovietleaders,thisproblemof individualeconomic incentives remained acute. Especially in Brezhnev’s time, abalancewasstruckbetweenmoralincentives(medals,symbolicrewards,etc.)andeconomicincentivesinthe formofbonusestobeincorporatedintowages,buttheresultsdonotseem tohavebeensatisfactory,eitherbecausebonusesdidnotraisewagestoasufficientlevelorbecausethemonetaryfundfromwhichtheywerewithdrawnwasgenerallysharedbyallworkersofthefirm(therebydilutingindividualmotivationalcapacity).Inanycase,oneofthemaindifficultiesdescribed,both in theeconomicliteratureand inthebiographicalaccountsof formerSovietcitzens,wasto change the attitude of “They pretend to pay us andwe pretend towork,” depicted in the Western economic literature literature (Nove,1990,pp.367­368)67Thisproblemofstateownershipintheviciouscircleof“whatbelongstoeverybodybelongstonobody”wasalsoattheheartofthediscussionofprivatizations in the capitalist countries in the1980’sand1990’s.68

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4.6VERTICAL,AUTHORITARIANCOMMANDSTRUCTURES Due to thecircumstances inwhich itwascreatedafter the1917revolution (surrounded by enemy capitalist nations, with deficientdevelopmentoftheforcesofproduction,etc.),theSovietregime,fromitsbeginnings, had a centralizing and authoritarian character. With theimplementation of the Stalinistmodel in the 1930’s, vertical commandstructures in the economy took definite priority over horizontalstructures.(Lewin,1988,p.131)State­ownedenterpriseshadto,atleasttheoretically,69carryouttheirtransactionswithoneanotherattheordersof higher structures, through the plans established by Gosplan andGossnab (instead of making independent horizontal arrangementsdirectlybetweenthem).(Ioffe,1989,p.72). Theprincipleofedinonachalie(“responsibilityofasingleperson”)set as the standard for government, party, and state enterprises alsotremendously strengthened vertical ties of command over horizontalones. Soon after the implementation of the Soviet regime, a lack ofdefinitionofpoweraroseas to the formofmanagementofstate­ownedenterprises. Segments linked to unions advocated a collegial form ofmanagement,withtripartiteparticipationoftheunions,thepartyandthecompany directors. (Antonyuk et al., 1983, pp. 155­156). This lack ofdefinition led to a certain disorganization of the economy, with thedifferentsectorsoftennotagreeingonwhatdirection firmsshouldtake,with a dilution of responsibility for failures, and a certain chaoticatmosphere in the production sphere. (Rubin, 1969, pp. 32­33) Thissituation ledLenin touphold theprinciple of edinonachalie, inwhich asinglepersonwouldbe responsible for themanagementofenterprises,evenintheperiodof“warcommunism.”(Lenin,1967­1970a,p.200)TheIXCongressoftheCommunistPartyadoptedtheideainitsresolutions:

[...] to establish complete and absolute one­personresponsibilityonthefactoryfloor,tomovetowards one­person responsibility for theadministration ofproductionunits and to reducetheactionofthecollegialformofmanagementatthe intermediate and higher levels of theproductive­administrative apparatus [.. .] Thecollegial form of leadership,which takesplace intheprocessesofdiscussionanddecision­making,should give place to responsibility of a singleperson in theprocessofexecution. (KPSS,1983­1989b,pp.247­248)

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At thebeginningof the five­yearplan,Stalinofficiallyestablishededinonachalie as the basis for the administration of state­ownedenterprisesthroughadecreeoftheCentralCommitteeoftheCommunistParty of September 5, 1929.70 From then onward, directorswould besolely responsible for the routine administrationof enterprises therebypreventing undue interference by party factory committees or tradeunions. This principle of edinonachalie allowed a great increase in thediscipline of work, but it reinforced the authoritarian features of thesystemand the tendency that theverticalconnectionsofcommandhadpriorityoverthehorizontalones,whichledtoproblemsinrelationtothemotivationforinitiatives“comingfrombelow”.4.7CONSUMERSOVEREIGNTYANDPERMANENTBUYERS’MARKET One of the aspects that increased the imbalances in the Sovieteconomy was the lack of what Western economists call “consumersovereignty,”thatis,theorientationofproductiontothesatisfactionoftheneedsanddemandsoftheconsumers inthemarket.(Campbell,1974,p.57) This is an automatic mechanism of the market economy inequilibrium, because the realization of the goods is a sine qua nonconditionfortheprofitabilityofproducingagents. Bolstered by its quasi­monopolistic position as owner of stateenterprises,theSovietgovernment,sincethe1930s,prioritizedtheareaofproductionoverconsumptionandheavy industryover light industry.(Antonyuketal.,1983,pp.195and211)Thisstrategyhas itsorigins inMarx’sownschemesofcapitalreproduction,describedinBookIIofDasKapital, which divided the economy into “department I” (productiongoods) and “department II” (consumer goods). (Marx, 1961­1971c, pp.195­211)AccordingtotheSovietstrategy,foracontinuousgrowthoftheeconomy,department I shouldgrowat rateshigher thandepartment II:sincedepartmentIprovidestheinputstodepartmentII,fastergrowthofthe latter could lead to bottlenecks in the system and slow economicgrowthduetodeficiencyinthemore fundamental(heavyindustry)basethat sustains and provides the inputs needed tomaintain light industryandconsumergoods.(Stalin,1946­1951f,pp.181­183) The difficulty of adapting production to demandwas not only aresultofobstacles in theplanning task itselfbutalsoof the structureofprices thatdidnotcorrespond to therelativescarcityofproducts.Onceprices are established for some products that are not related to their

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relative scarcity, a chain reaction of disproportion in the economy iscreated, since someproducts serveas input toothers.Totalwagemassandtheamountofmoneyheldbythepopulationmustalsocorrespondtothe total level of goods and services available in the market to avoidinflationorlackofproducts. Theseproportionswerenotalwaysmaintainedproperlyand theresultwas often overproduction in some areas and lack of products inothers.71(Shmelev&Popov,1989,p.88) Themostcommonsituationwasthattherewasadeficitofgoodsinrelationtothepurchasingpowerofthepopulation.Withlowinflation,no official unemployment, rising real wages of the population and aproduction system based on the extensive use of inputs and giganticoligopolistic enterprises, the Soviet economy was characterized by aseller’s market.(Schroeder,1972,p.97) HungarianeconomistJanosKornaiusedtheconceptof“shortageeconomy”tostudyandcharacterizetheconditionsoftheadministrativemodel of the command economy. (Kornai, 1979, v. 1, pp. 3­7) Stateoligopolistic ormonopolistic firms also had little incentive to improveproductquality,sinceinaseller’smarket,likethatoftheUSSR,practicallyanyproduction,even low­quality,would findbuyers.Thepresenceofanalmost permanent seller’smarket was also an inhibiting factor in theintroductionoftechnologicalinnovations.(Amann&Cooper,1982,p.12)Afterall,whybotherwithnewtechnologiesifthearticlesare“passedon,”anyway?72 Thus, the lackof “consumersovereignty”wasalsopresentwhengoodswereonstoreshelvesinsufficientquantity,butnotinthequality,model,color,size,etc.desiredbyconsumers.Again,thepressuretomeetthequantitativeobjectivesoftheplan in termsofgrossproduction(val)led the factories to try toproduce the typesofproductsandmodels thatwouldbestsuitthemintermsofplanfulfillment.Thequestionofqualitywasbehindintheorderofpriorities.Thelackofqualityproductsandfirst­class services to ordinary shoppers has beenwell documented by theauthorswhodescribedtheSovietsystem.(Aganbegyan,1988,p.36) ThissituationwasdescribedbyeconomistAbelAganbegyan(oneof the “intellectual architects” of perestroika) in the second half of the1980sthus:

[In a system like the Soviet one] The mainobjective of the producer is to get rid of hisproduction,pushingitaway.Thequestionofhowandwherethisproductwillbeusedandhowlongit will work is not the responsibility of theproducer [...]This leads to a separation between

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productionandtheneedsofsociety.Takeaclassicexample: the production of tractors. The USSRproduces 4.8 timesmore tractors than the U.S.,butweare farbehind in grainproduction. Ifwebring this fact to the equation, we see thatweproducesixtimesmoretractorsthantheUSA.Dowe really need all these tractors? Ifwe put thisquestionunder the logicof theoldadministrativesystem,wewould get the following answer: notonlydoweneedthem,butweneedmore.ThefactisthattheUSSRdoesnotproduceenoughmodelsof high­powered tractors or small tractors forsmall areas of cultivation [...] This type ofmassproductionnaturallyaffectsquality.Thus, insteadof lasting for 12 or 15 years, a large number ofSoviet tractor brands barely reach six, and areoften broken or “being repaired.” (Aganbegyan,1989a,pp.35­37)

Thisalienationinthedailypracticeofproductioninrelationtotheconceptof“consumersovereignty”wasasourceoftensionintheSovietmodel,becauseitcreatedacontradictionwiththe ideologicalnotionthatthe purpose of socialism in the USSRwas to satisfy the needs of thepopulation.734.8VEDOMSTVENNOST’ Oneof thedifficulties in implementingthegeneralpoliciesofthegovernmentwastheexistenceofwhattheSovietscalledvedomstvennost’(“departmentalism”).Theoretically,allproductionunitsshould follow thedirectives of the governmentplans,putting the interestsof the countryaboveallelse.Inpractice,therewasstrong“corporatism”ingovernmentagencies,witheachagencytryingtopromoteitsowngoals,sometimestothe detriment of others. In economics this was felt in relation toministries.Duetothecountry’sperennialsupplyproblems,eachministrytried to be as self­sufficient as possible— creating its own materialsupplysector, trying tomanufactureall thenecessary inputs to itsmainline of articles— and avoided divertingproduction to other ministries.This led todifficulties in integrating thedifferentpartsof the country’seconomic organism and to waste of resources due to unnecessaryduplicationofefforts.Examplesofthisformofwastewereexposedbythe

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Sovieteconomiststhemselves:

Ministrieshaul theirownproducts to theotherendofthecountryfortheirenterprise,refusingtoprocure goods from “outsiders” and “unrelatedsuppliers,”eveniftheyareconvenientlylocated.74(Shmelev&Popov,1989,p.122)

AfactoryinVladivostokismorewillingtosignasupplycontractnotwithaneighbornextdoorbutwithacompanyinMinskthatisfromitsministry.Thismakesthesupplymoreassured.Ifsomethinggoes wrong, you may complain in your ownministry, but with your neighbor you wouldprobably have to endup oiling someone’spalm.(Selyunin,1981,p.181)

In theUSSR, economicmanagementwas traditionallyorganizedalong branchesofproduction. (Rubin,1969, pp.174­175,188­189 and218­219;TsKhSD,f.2, op.1,d.805,l.9ob.)Thus,manyministriesweredesignatedasimilarproduct line,orevenasinglearticle:Minnefteprom(MinistryofPetroleumIndustry),Mingazprom(MinistryofGasIndustry),Minavtoprom(MinistryofAutomobileIndustry)etc.Thisrigiddivisionbybranch of production, in a context of vedomstvennost’, made it moredifficulttocarryoutprojectsthatdidnotfitwellintothemodelofanyoftheministries.Thisbecame amore seriousproblem in the STR era, inwhich technological developments often link heterogeneous fields ofactivity.IntheUSSR,ifaprojectdidnotfitwellintheprofileofaministryordepartment,thereweregreaterdifficultiesforitsimplementation,dueto the low inertia with which the ministries frequently agreed tocollaborate with each other. (Castells & Kiselyova, 1995, pp. 19­20;Amman&Cooper,1982,p.21)4.9ZATRATNAYASISTEMA... Like val, the Russian word zatraty (= “expenses”) representsanother fundamental concept for understanding the functioning of theSoviet economic mechanism. The term zatratnaya sistemakhozyaistvovaniya (“system of economic administration based onexpenses”) was used to describe the fact that the planning of theefficiencyof theSovieteconomywasbasedoncosts(expenses),noton

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the results. (Lewin,1988, p.134;Valovoi,1989, p.4)According to thecritics, thecentralplanners—due to the fact that theycouldnot followthedetailsofalltheproductionprocessesfortheirestimatesoftheneedsandpossibilitiesofeachproductionunit—hadtoplanbasedonthecostestimates that came to them from the enterprises themselves (via theministries).Basedonthesereportedcosts—andontheirexperience inpreviousyears’plans—Gosplandeterminedthesuppliesthatcompanieswouldreceive,whichindicators(pokazateli)ofsuccesstheyhadtomeetetc.Gosplan then carriedout the so­called “planning from theachievedlevel,” that is, establishing production goals a little above the (absolute)goalsfromthepreviousperiod,thusensuringeconomicgrowth.(Birman,1978,p.161)Theproblemisthat—duetothelackofpricesthatactuallyindicatedthemarginalproductivityofresources—nobodycouldbesurethiswas really the optimal result from the available resources. In theimpossibility of objectively verifying the optimality of the solutionspresented by the enterprises (the result), the center evaluated theirsuccessthroughcalculationsbasedonthecosts(expenses)involved.Thiscausedwaste. Forexample,beforethe1982pricereform,businessprofitswerecalculatedasapercentageofthecostofproductionofeachmaterialusedinthe finalproduct.This ledtoatendency for the factoriestotrytouseexpensivematerials of higher costwhenever possible since thismeanthigherprofitsintheendresult.(Bornstein,1987,p.99) Writingduringperestroika,SovieteconomistsShmelevandPopovcriticizedthezatratnayasystema.

The“costapproach”isreflectedinoureconomicconsciousness.Whenwe describe the results ofworkinvariousspheres,moreoftenthannotwethinkintermsofoutlays,notresults[...]Whatdidthe farmersdo?Theysowedsomanyhectaresofspringwheatandincreasedtheheadoflivestock[...]Oilmendrilledsomanykilometersofwells[...]Evennowthegrowthoftheseinputindicatorsisoften presented as testimony of economicsuccess. And not long ago we were proud ofproducingmoresteelandcementthananyothernation.(Shmelev&Popov,1989,p.132)

Howmanyof thesehectaresofspringwheatanddrilledoilwellswill actually translate into wheat flour and gasoline available to theconsumer is what reallymatters, according to the authors. Along thesame lines,AbelAganbegyan stated that “theUSSR produces4.8 times

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more tractors than theUSA,butweare farbehind in theproductionofcereals.”(Aganbegyan,1989a,p.36) “That is, the [zatratnaya systema]privilegeswasteandbecomes,bydefinition,uneconomical.”(Lewin,1988,p.134)Thisaspectofwastewas enhanced by other tendencies of the Soviet model in the samedirection.Thepricesystem,notreflectingtherelative scarcityofproducts,sometimes led to a non­optimal allocation of resources. The excess ofcentralism and vertical flows of information and command to thedetrimentofthehorizontalonescausedalienation in the lowerechelonsoftheproductionchain,diminishing individual initiative.Thisalienationandtheattitudeof“whatbelongstoeverybodybelongstonobody”causedgreatlossesintermsofpoormaintenanceofequipment(andsometimesdiversionofmaterial from state toprivate activities).The emphasisonthe numerical, quantitative objectives of the plan ledmanagement andworkers to try toalways(quantitatively)“keepup theplan”,evenat theexpenseofqualityoreconomicrationality.Aspricesoftendidnotreflectreal costs, this “compliancewith theplan at all costs” led to theuseoftechniques that might not be the most appropriate — includingsometimes avoiding technological innovations that could disruptproduction intheshorttermwiththeinstallationofnewequipment,newunfamiliarpracticesetc. Profits (above a certain level)or the lossof the enterprisesof aparticularbranchofproductiondidnotremainwiththatenterpriseattheendof the year: theywent toa central fund, fromwhich, the followingyear,theywereredistributedbacktothebranchofproduction,inthewaythegovernment thoughtbest.Companieswhichhad lossesdidnotriskgoingbankrupt.Onthecontrary,oftencompaniesinfinancialdifficultiesinacertainbranchofproductionreceivedmoremoneythefollowingyearthanthosewhichhadmadeaprofitsothatwiththehelpofthis“fraternal,socialistaid”theycouldrecover.Thatis,sometimesthelessefficientwererewarded (with greater allocation of resources) and themore efficient“punished.”75 This led to bureaucratic accommodation, inefficiency andwaste.4.10EXTENSIVEGROWTHECONOMY Extensivegrowthoftheeconomyisoneinwhichtheincreaseofproductionisaccomplishedthroughtheincreaseininputs(capital,labor,landandrawmaterials,etc.).Intensivegrowth isone inwhich,withthesame volume of inputs, greater production is achieved, that is, it isachieved by means of a higher, more productive technological level.

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(Wilczinski,1970,pp.15­16)Forexample, if inahypotheticalsituationweneedtodoubletheproductionofautomobilesinacountry,thiscanbeachievedbydoublingthenumberofexistingautomobileplants(extensivegrowth), or technologically increasing the capacity and efficiency ofexistingplantssothat,withthesamenumberofproductionunits,twiceasmanyvehiclesareproduced(intensivegrowth).Inreallifeusuallythereisamixofboth,but,ceterisparibus, themoreeconomicallyadvancedacountryisthehigheristheproportionofintensivegrowth. One of the striking features of the Sovietmodel, acknowledgedequallybyWesterneconomistsandformerSovieteconomists,isthatthehigh economig growthof theUSSRhad a strong extensive component.(Wilczynski,1970,p.15)Benefitedbyamineral­richnatureandhavingcontroloverthecostofthecountry’slaborforce,theUSSRhadoneofthehighestpercentagesofGNPinvestmentintheworld—almost30%ofitsGNPinthe1980s,accordingtoOfer’scalculations.(Ofer,1987,p.1.788) The extensive character of the Sovietmodelwas confirmed byofficialdata.AccordingtotheEconomicStatisticalYearbookoftheUSSR,ifwecount thenational incomeof theyear1913as index1, thenationalincome in 1985 reached index 82, whereas the capital investmentreachedindex154.(Narkhozza70Let,1987,p.7)Ceterisparibus,thefactthat capital investmenthas grownmore than thenational income as awholepointstoanextensivegrowthoftheeconomy. DuringtheearlydecadesofSovietindustrialization,thestrategytoachieverapidgrowthwas throughmassive investments incapital, labor,and land. An intense rhythm of labor mobilization (compulsory labor,incorporation of surplus rural labor and female labor,76 forced labor ofprisoners, etc.), expansion of the agricultural frontier (themost typicalexamplewasKhrushchev’s “virgin lands” campaign) and ahigh rate ofinvestment fed high rates of economic growth until the 1960s. (Ofer,1987,pp.1782­1785) However,afterWorldWarII,inthe1950s(andevenmoresosincethe 1960s), labor and land inputswere no longer abundant due to thephysical limits of the frontier of agricultural expansion, the loss of aconsiderablepartofthepopulationabletoworkasaresultofWorldWarII,thedepletionofsurplusrurallaborforce,lowdemographicratesoftheethnicRussianpopulation,amongotherfactors.Capitalinvestmentswerethenoftheessence. The problemwith extensive growth based on increased capitalinvestment is that,mathematically, it has a limit. If the rate of capitalinvestmentisgreaterthanthegrowthoftheeconomyasawhole(ceterisparibus, extensive growth), increasing national investment rates arenecessaryfornationalincometogrow.Inthe1960s,investmentratesintheUSSRwerealreadycloseto30%ofGNPandcontinuedtogrow.(Ofer,

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1987,p.1788)Itwasoneofthehighestintheworld.Untilthen,amongindustrialized countries, only Japan and Norway had, for long periods,higheraveragepercentages than this. (ibid.,p.1787) JapanandNorway,however,didnothavetheimmenseburdenofdefensespendingtheUSSRdid.Thismeant that in order for theUSSR to continue growing inherratherextensivemodel,her investmentrateswouldhavetorise tomorethan 30% of GNP,which,with theweight of defense spending,wouldconstitute immense sacrifice for the (low­priority) consumer sector.Obviously,theeconomicgrowthofthecountrycouldnotgoonlikethis. Thiswas the Soviet dilemma. From1960until the beginning ofperestroika, the Russians had not been able to change to an intensivegrowth path as needed. According toOfer, “the relative contribution ofinputs to [economic] growth rose to 80% in the post­war period andbecame the only component from 1970 onward, when productivitystagnated[...]”(Ofer,1987,p.1782)TheproductivitygrowthintheUSSRhad declined since the 1960s due to the exhaustion of the extensivefactors of production and the difficulty of adapting to intensivedevelopment. Since the1960s (oreven in the late1950s)anumberofSovieteconomistsandpoliticianshadbeenpointing to the fact that theUSSRwouldhave to change to an intensive growthpattern ifhigh economicgrowthwastocontinue.(KPSS,1983­1989h,p.130)Attemptstoreformtheeconomicsystemsince then—notably theKosyginreforms (in themid­1960s), the industrial reorganizationof1973­74, thedecreeof July1979andAndropov’seconomic experiments (in1983)—77allhad theultimate goal of providing economic stimuli to achieve an increase inlaborproductivitythrough“intensive”methods.However,theseattemptsatchangedidnotreachtheirultimategoal.AsNötzoldputit:

In the1970s,Soviet industrialpolicywasmoreconcentratedthaneverinmodernization,butitisclear that investment policy, which should havegenerated new productive processes, has notyielded the desired results. The average stock ofmachines and production facilities in Sovietindustryincreasedevenmore,from12.2yearsin1960to14.2yearsin1980.Thiswasbecausethenewmachinesproducedweremostlyassignedtonew factories, rather than replacing theobsoleteor aged stock of the old factories.As a result, itwas not possible to change the traditionalindustrial pattern in the 1970s. The investmentwas used for the creation of newmodern units

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andnotfortherationalizationoftheexistingone.However,iftherationalizationofexistingfactoriesis low, the increase in labor productivity iscorrespondinglylow.(Nötzold,1987,p.70)

This failureof theefforts tomodernizeand“intensify” theSovieteconomyat the timeof theSTR leddirectly to thenecessityofamoreradical“restructuring”after1985withGorbachev.However,thequestionremains:why have these efforts ofmodernization and “intensification”failed? ItisnecessarytounderstandthespecificitiesoftheprocessesthatoccurredintheUSSRandinadvancedcapitalistcountriesafterthe1960s.Afterall,thegreatmajorityoftheproblemareasoftheSovieteconomicmodelmentioned in this chapter (the question of prices not reflectingrelative scarcity, imbalances in planning, vertical and authoritarianstructures, zatratnaya ekonomika etc.)were also present in the 1930s,1940sand1950s,butevenso,theUSSRachievedhighratesofeconomicgrowth then. That is, even with all apparent imbalances betweendifferentsectorsoftheeconomy,despitethegreatwasteincertainareas,theeconomygrewandbecamestrongerinthefirsthalfofthetwentiethcentury.Thus, itwasnot these factors,by themselves, thatcanexplainaslowdownafter the1960s.Weneed toanalyze, then, thenewvariablesthatcameintoplay,bothinthecapitalistcampandintheactuallyexistingsocialist countriesafter the1960s.The reasonswhy theUSSR failed toadapt toanew typeofdevelopment from the1960sonwardare, inourview, related to the new paradigms of production of the period of theScientific­TechnicalRevolutionandwillbeanalyzedbelow.

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5SOVIETMODELOFPRODUCTION,FORDISM,TOYOTISMANDSTR5.1INTRODUCTION We have already noted that Fordism was the paradigm ofproductionthat imposeditselfasthemostefficientinthefirsthalfofthetwentieth century and that, in the post­World War II period, a neworganizationalmodelwasformedandturnedouttobemoreefficientandproductive.Toyotismbegantotakeshapeinthe1950s,founditsdefinitiveform in the 1960s, and from the 1970s onward, it demonstrated itsgreater efficiency compared to the traditional Fordist pattern in thecontext of shrinkingworldmarkets.Themid­1970s clearly showed thesuperiorityintermsofefficiencyandratesofproductivityoftheJapanesemodelovertheAmericanandalsomarkedthetimewhenthecul­de­sacoftheSovieteconomybecameevident.TheSovietdeclineseemedinverselyproportionaltothesuccessofJapanesetoyotism.Itseemstousthatthiswasnotmerecoincidence,fortherewasacertainparallelismbetweenallthese processes: in a certain way the Sovietmodel was linked (by acompetitionintermsof“copyingandsurpassingthecapitalistWest”)toFordism.TheSoviet industrializationmodelof the1930swasbuiltatatimewhenFordism78wastheworld’smostefficientproductionparadigm.TherewasanaturaltendencytoincorporatesomeofitselementsintothemodelofSovietindustrialization. Fromthebeginningsofthe1917Revolution,itwasclearfromtheofficialMarxist­Leninistideologythat,sincetheSovietUnionwasstartingfromalowereconomiclevelthanthatoftheadvancedcapitalistcountries,itwouldhavetocatchupwiththeproductivestageofthesecountriesandthenovertake them.79Thiswould include copying,whenevernecessary,the most productive aspects of the organizational models of thesecountries.For example,Lenin, inhis article The ImmediateTasks of theSovietGovernment(published inPravdaonApril28,1918), inwhichhediscussed theproblemofhowtoraise laborproductivity inRussia, thuswroteinrelationtoworkmethods:

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The task that the Soviet governmentmust setthe people in all its scope is: learn to work[efficiently].The Taylor system, the lastword ofcapitalism in this respect, like all capitalistprogress,isacombinationoftherefinedbrutalityof bourgeois exploitation and a number of thegreatest scientific achievements in the field ofanalysingmechanicalmotions during work, theeliminationofsuperfluousandawkwardmotions,the elaboration of correctmethods ofwork, theintroductionofthebestsystemofaccountingandcontrol,etc.TheSovietRepublicmustatallcostsadopt all that is valuable in the achievements ofscienceandtechnologyinthisfield.Thepossibilityof building socialism depends exactly upon oursuccess in combining the Soviet power and theSovietorganisationofadministrationwiththeup­to­date achievements of capitalism. We mustorganise inRussia the studyand teachingof theTaylor system and systematically try it out andadaptittoourownends.80(Lenin,1967­1970a,p.189­190)

Russian economists Vladimir Popov and Nicolai Shmelev drewattentiontotheimportanceofthearrivalofWesternworkersinRussiainthe1920sfortheassimilationofFordist­Tayloristtechniques:

[In the 1920s, during the NEP] The [foreign]capitalflowingintotheUSSRwasaccompaniedbya flood of immigrantworkers from all over theworld. Thousands of workers from Westerncountries offered assistance, knowledge andexperiencetotheyoungSovietRepublic[...]Morethan ahundred skilledmechanics from theFordfactories arrived in 1921­22 at the MoscowAutomobile Factory to set up production.MembersofanAmericangarmentworkers tradeunion founded a cooperative called the “ThirdInternational Tailoring Workshop” and thenequipped Moscow’s first mechanized shop for600laborers,usingtheprinciplesofTaylorism[...](Shmelev&Popov,1989,p.11)

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Thus,fromtheoutset,Sovietfactorydevelopmentwasmarkedbyan attempt to copy inorder to catchup (and thenovertake)whatwasconsideredasuperiorproductionparadigm. With the beginning of Stalinist “forced” industrialization in the1930s,thisparadigmofcatchingupandovertakingwasnotabandoned.On the contrary, Stalin— especially in view of the instability of theinternationalsituationand thepossibilityofa futurenewworldwar—wasquiteemphaticabouttheneedtofulfillthistask.In1931,fightingtheargumentsofthosewhofearedthatthepaceofindustrializationwastoofast,hesaid:

We are fifty or a hundred years behind theadvanced countries. We must make good thisdistanceintenyears.Eitherwedoit,orweshallbe crushed.81(Stalin,1946­1951e,p.39)

Atthetimeofthefirstfive­yearplans,thepatternoftryingtocopywhatwasmostadvancedintheWesternFordistmodelcontinued.UnliketheNEPperiod in the1920s—when innostrannye kontsessii (“foreignconcessions”, i.e, enterprises with full or partial foreign capital) werecommon—inthe1930sthedirectabsorptionofWesternorganizationaltechnologies and methods was achieved mainly through technicalassistance contracts. (Sutton, 1971, p.1;Hardt&Holliday, 1977, p.194)The example par excellencewas that of FordMotorCo.A contractwassigned between the Soviet government and Ford inMay 1929 for thecreation of the Gorky car factory. Through it, the American companywouldprovideitsmostadvancedtechnologyandproductionmethodsformanufacturing, in theUSSR, the Gaz­A passenger cars and the Gaz­AAlighttrucks(SovietversionsrespectivelyoftheFordModelAcarandtheAAtruck).Theagreementheldvalidduringthe firsttwo five­yearplans.Duringthisperiod,FordtrainedSovietengineersbothintheUSSRandatits River Rouge factory in the USA. Thiswas not an isolated example.SimilarcontractsweresignedwithotherWesterncompaniessuchastheAustinCompany,Tinken­DetroitAxleCompany,BrownLipeGearCo.,andothers.(Hardt&Holliday,1977,pp.194­196)Throughthem,theSovietsgainedaccesstomodernWesternFordisttechniques. TheSovietmicroeconomicmanufacturingmodel,inspiteofallthedifferences inmacroeconomic relations at state level, developed Fordisttraits.Andthiswasnotaccidental:itstemmedfromtheneed,embodiedinthestatementsaboveoftheSovietleaders,toreachtheproductivitylevelsofthesuperiorparadigmoftheadvancedcapitalistcountries.82 Thisstrategyofcopying83theWesternFordistmodelmadelogicalsense within the context of the 1930s, for it was the most efficient

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production paradigm of the time. Soviet industrialization, under theinfluenceofthisparadigm,achievedgoodresults(atleastinquantitativeterms)withhighgrowthratesinthe1930s,1940sand1950s. 84Sensitiveproblemsbeganinthe1960swhentheworldeconomyenteredaperiodofdeepeningof theScientific­TechnicalRevolution thatbroughtaseriesofnewdemandsonproduction.Fordismwasnotadequatetomeetthesenewdemands.Aneworganizationalparadigm(Toyotism)was imposingitself as themost appropriate for this new era.85 The USSR, however,could not fundamentally change its paradigm of production, keeping afactorymodelthatoperatedonFordist­Tayloristlines.ItisthisdifficultyoftheSovietmodeltoadapttothenewhigherparadigmsofproductionthatlie at the heart of the problems that led to the need for a radicalperestroika in themid­1980s.Wewillanalyze thesedifficulties, firstbylookingathowFordism influenced theSoviet industrialization from the1930sonwardsandthenwewillmoveontospecificproblemsoftheSTRera.5.2FORDISMANDTHESOVIETMODELOFPRODUCTION Let us review some of the main characteristics of Fordism(subsuminginthisconcepttheTaylorist­Fayolistcharacteristicsthat wereattached to itat the timeof theSecondTechnologicalRevolution): rigidproduction, specialization of tasks, imposed (by management, by thecadence of the conveyor belt) rythms, separate quality control section,strictseparationbetweenmanagementandworkers’tasks,verticalflowsof information and control taking precedence over horizontal flows,emphasis on large quantities (with a “good enough” quality) andeconomiesofscale. We see that the characteristics above describe what washappeningintheSovietmodelquitewell.Themaniaofgigantismintheprojects of theUSSR,withher immense factories,86hydroelectricplantsetc. fit inwellwith the emphasison largequantitiesand economiesofscale. 87 The separation between administration and execution, i.e.,betweenplannersandexecutors,betweenmanagementandworkerswaswelldefined,notonlyby theprinciplesof edinonachaliebutalsoby theadmittedlyverticalandauthoritarianstructuresaccordingtowhichSovietmacroeconomics andmicroeconomicswere run.88 Quality control wasseparatefromproduction,89andunlikeWesternFordism,productqualityoftenfellshortof“goodenough”(thisbeingpartlyduetothepressuretokeepupwiththenumerical,measurabletimedimensionsoftheplan, tothe detriment of quality). (Smirnitskii et al., 1987, pp. 164­166). The

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excessiveemphasisonlargequantitiesandeconomiesofscale(aFordistcharacteristic)broughtwithitanextremedegreeofstandardizationinthefinalconsumerproducts,withrelativelylittlevarietyfortheconsumer. 90 Thus, in relation to theproduction chain itself, the SovietmodelfollowedapatternclearlyorientedbyaFordistperspective.9192 Now, letus review themain characteristics ofToyotism: flexibleproduction, in small series with great variety, economies of scope,desespecialization of tasks (= worker polyvalence), shared times(assignmentofmodularandvariabletasks),qualitycontrolsimultaneouswithproduction,enhancedimportanceofhorizontalflowsofinformationandinteraction,greaterinvolvementoftheworkerintheorganizationofproduction, and emphasis on total quality and cooperation (amongworkers, between workers and management, and in relations withsubcontractors). Letusanalyze these severalpoints inmoredetail, especially thethree characteristics (concepts) that we consider fundamental tounderstandthedifficultiesthattheSovietmodelencounteredtoadapttothenewparadigms thatwere imposedas themostefficient in theSTRera:flexibility,informationandquality.5.2.1Flexibility OneofthebasiccharacteristicsofFordismwasitsrelativerigidity.(Coriat,1990,pp.19­20)TheparadigmofproductionthatreplaceditasthemostefficientinexploringthepossibilitiesoftheThirdTechnologicalRevolution, Toyotism, has as one of itsmost striking characteristics, acomparatively largedegreeof flexibility.Itwasduetothis flexibility, inaperiodofrestrictedmarkets—fromthe1970sonward—thatToyotismwasable toclearlydemonstrate itssuperiorityoverFordism in termsofproductivitygrowthandefficiency. Inorder toanalyze the reasonswhytheSovietUniondidnotachievethesamerelativesuccessinitsstrategyof“catchingupwithadvancedcapitalistcountries”withToyotism,93asithaddonewithFordism,wemustanalyzethispointinmoredetail. Fromthelate1960sonward,theSovietUnioncontinuedtofollowthe principles of a production paradigm (Fordism) that was beingsurpassed by a more efficient one (Toyotism). This is why the USSRwould then be doomed to fail to reach the most productive part ofcapitalism.The Sovietmodelhad, from itsbeginnings, characteristicsofextremerigidity.(Gorbachev,1987a,p.5)Thiswaslargelyduetothefactthat ithadembarkedonacourseof“copying(inorder tocatchupandovertake)”theFordistparadigm.ThetypicalSovietfactorywasFordistin

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many of its essential aspects: emphasis on large quantities, serialproduction, economiesof scale,priorityof vertical flowsof informationandcommand,stronghierarchicalprinciples,etc.ThesewereexactlytheaspectsofFordismthatwerecriticizedandmodifiedbytheproponentsofToyotism.RigiditywasoneofthemostvisiblefeaturesoftheSovietmodeland one of the most criticized as a source of inertia in the system.(Goldman, 1987, p. 101) This rigidity, partly stemming from the verychoiceofa“Fordist”patternofdevelopment,wasmademoreseriousbythe fact that it was a central planning economy, which increases thepotential for rigidity. Centralism means that the “center” takes oninnumerable tasksanddecisions that, inothercontexts,wouldbe left toindividual production units in the periphery. This does notmean thatcentralplanninghastobe,bydefinition,rigid;onlythatthereisagreaterpotentialforthis,dependingonhowthisplanningoccurs(mandatoryormerely indicative objectives etc.). In the case of the Soviet Union thispotential forrigiditymaterialized.Fromthetimeofthe formationofthecommand­administrative system in the 1930s, the principle ofedinonachalie (= command and responsibility of a single person) wasfirmlyestablishedinbusinessadministrationandgovernment.Fromthehighest to the lowest echelons of management, responsibility for thecourseofactionshouldrestononeperson,movingawayfromtheideaofcollegialmanagement.(KPSS,1983­1989e,pp.556­562) Thislongdistancebetweendecisioncentersandthoseperformingtasks lead to theneed fora longerperiodof timebetween thedecision­makingprocessand its implementation inpractice.Andnot just that. Inorder to make decisions, the center has to be supplied with all thenecessaryinformationtobeabletodecidethemostappropriateroutetotake. Here excessive centralism can take longer to get the necessaryinformation to the center (increasing thepossibility of erroneous data,false information,etc.).Allthistendstomakethecenterrathercautiousin making its decisions, to avoid errors, and to become extremelydemandingthatallitspoliciesbeimplemented“totheletter”—sinceallthemembers of the production process are connected by the center,failureinoneofthepointscanjeopardizealargenumberofotherlinksofthiscomplexchain. WhileFordismwasstilltheprevailingparadigmofproduction,thisrigidityof theSovietmodelwasoffsetby itsability toconcentrate largeamounts of resources and efforts in priority areas (especially heavyindustry),thusachievinghighratesofeconomicgrowthintermsofgrossoutput in the initial take­off period of the system.94 The hierarchical,verticalstructureoftheSovietmodelfitrelativelywellwiththeprinciplesof the Fordist­Taylorist­Fayolist mode of production (also vertical andhierarchical).

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The functioning of the Soviet system was based on completeobedience to the dictates of the plan. Deviations from this were notallowed,astheycouldcause“bottlenecks”intheeconomy.Thiscreatedanextremerigiditythatpreventedagreaterdegreeofexperimentationinthelower echelons of the production chain. Any experimentation thatdeviated fromtheoriginalplanrequiredspecialpermission fromabove,whichaddedevenmoretimebetweentheappearanceofanewideaanditsimplementationinpractice.ThiswasespeciallyfeltinthetechnologicalfieldofResearchandDevelopment(R&D).Despitethehugeamountofinvestment in this area, the gap between science and productionremained.Thedistancebetweentheplannersandtheshopfloormadeitevenhardertotaketherightdecisionsaboutthemostefficientprocesstobeadopted.(AmmanandCooper,1982,p.17)Allthisprovedtobefatalina timeofScientific­TechnicalRevolution,whichbydefinitionmeans thetransformationofscienceintoaproductiveforce(suppressionofthegapbetweenscienceandproduction). One should not think that the Soviets were unaware of theselimitations and of these new needs brought about by the ThirdTechnologicalRevolution.Inthe1970s,S.A.Kheinman,theSovietauthorof the book Nauchno­Tekhnicheskaya Revoliutsiya: cegodnya i zavtra(“Scientific­TechnicalRevolution:PresentandFuture”),drewattentiontothe vital link between technical progress under STR, flexibility andinformationsociety.Hebeganbystating thatduring theSTRperiod, theperiod of renewal of fixed capital (machinery and equipment) isshortened. At the present time, with the accelerated development ofprogress, the equipment tends to be outdated in shorter and shorterperiods,andiftheyarenotrenewed,theproductionunitthatusesthemrunstheriskofusingobsoletetechnology.Thiscreatesanextraproblem.With the new machines (normally sophisticated and expensive)operatingwith a shorter “life span,” there is the risk that the cost ofproductionwill become too high, unless the growth in productivity ofthese machines also becomes progressively higher and higher(“geometric” progression). Based on the table he built in his book,Kheinmanstated:

In the eventofa reduction in theuseful lifeoftheequipmentfrom15to14years,themagnitudeof the depreciation in general and per unitproduced, given a fixed production quantity,increasesby7.2%;inthereductionfrom11to10yearsin10%;andthedecreasefrom6to5yearsby20%. In this case, inorder tokeep invariablethe amount used in the depreciation per unit

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produced, it isnecessary that theproductivityofthemachinesbeincreasedby50%inthecaseofareduction in the useful life from 15 to 10 yearsanddoubledinthecaseofadecreasefrom10to5yearsofusefullife.(Kheinman,1977,p.245)

This creates a concrete limitation to the possibility of thedevelopmentoftheproductiveforceswithinproductionmodelsbasedonrigidmachinesandeconomiesofscale,sinceoneofSTR’scharacteristicsisitstendencytowidentherangeofproductsofferedtosociety(throughthecreationofpreviouslynon­existentarticlesorthroughtheincreaseinvarietyandstyleofcurrentproducts).This,inamarketthatisnotintheprocessofgrowth,canleadtoareductionin theproductionscaleforrigidmachinesthatproduceonlyoneofthedifferentcurrentmodelsoftheoldstandard products. The solution, according to Kheinman, to continueaccelerating thepace of scientific and technicalprogress,wouldbe theintroductionofflexiblemachinesthatcouldbeadaptedfortheproductionof several different models, thus increasing the scale of use of eachmachine.

This dialectical contradiction of currenttechnical progress is resolved through thesynthesis of functional and productspecializations of production machines, that is,the creation of flexible technological equipment.[…] The most important requirement fordesignersisthatthenewmachines,inadditiontobeinghighlyprogressiveandproductive,mustbeflexibleatthesametime,thatis,theycanbeeasilyreorganized to be used with new and moremodernproductsandmodels, toadapt to theuseofnewtechnologies[…](Kheinman,1977,p.64)

Thus, it is important tonote that in themid­1970s, at the verytimewhen theWestwasbeginning togravitate toward thestudyof theJapanesemodel,someSovietscholarswerealreadydrawingattention tothe need for flexibility in this new stage of STR. It is also strikinghowsomeofthecharacteristicsquotedbytheseexpertshadsimilaritieswithcertainassumptionsof theToyotistmodel.From the theoreticalstudyofthe functioningof technicalprogressunder theSTR, theSovietauthorswerecomingtotheconclusionthatflexibilitywouldbethemaintrendofthenewera.ThisharmonizeswithouranalysisoftheToyotistparadigmas being the one that best subsumed the technical basis of the Third

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TechnologicalRevolution.Aswehadpreviouslynoted(seeourchapterontechnological revolutions), the organizational aspects of toyotismprecededitsadoptionofnewSTRtechnologies,butitwasonlyamatteroftime before these new STR technologies — which, according toKheinman, had to be flexible to make their use economicallyadvantageouswithinthesmaller“scales”createdbythe largervarietyofmodelsof a singleproduct— find their “naturalpartner” in the flexibleToyotistmodel. Wemustemphasize that theSovietswerenot totallyunawareofthese new technological trends. As in the 1950s—when Khrushchev,Bulganin (1955, p.2, c.1) and other Soviet leaders, attached greatimportancetothenewscientificdevelopmentsintheareasofcybernetics,computingandelectronics— in the1970sand1980s, therewasalsoalarge gap between the theoretical awareness of the need for changetowardsnewpatternsoftechnologicaldevelopmentandthechangesthatcouldbeimplementedinthesysteminpractice. In short, flexibility95 is a key concept to understand the maindifference between Fordism and Toyotism and also to understand thedifficulty that the Soviets had to adapt to the new times of a superiorproductionparadigm.5.2.2Information TheauthoritarianformofSovietcentralismcameintoconflict,notonlywith the need for flexibility but alsowith the need to propagateanother fundamental pillar of the Third Technological Revolution:information. We had previously mentioned that one of themost importantcharacteristics of the Third Technological Revolutionwas the fact thatcomputerized systems, numerical control, etc. invaded not only thesphereofmaterialproductionbutalsoseveralotherdomainsofhumanactivity and life. Computer systems are based on the transmission oforganized and reorganized signals in a given pattern (binary, forexample).Butthesebitsandbytesarenothingmorethansmallpiecesofinformation that, arranged and rearranged in different ways, producecertainpatternsofcyberneticbehavior.Thus,information,inthisbroadersense, assumes unprecedented importance at the present time for thedevelopmentof theproductive forces. Information todaydoesnotmeanmereaccumulationofintellectualrepresentationsofrealityusedtoguidebehavior but separate from it. Information, with the advent ofcybernetics and computing integrated into the productive sphere, has

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becomeanessentialcomponentofthematerialproductionprocess(nottomentionitsinfluenceonotheraspectsofmodernlifeingeneral). 96Itisnowonderthat,especiallyinthecountriesoftheindustrializedWest,theconceptsof“InformationSociety”and“InformationRevolution”areusedto describe several of the new developments in social and economicrelationsduringtheSTRperiod.(Castels&Kiselyova,1995,p.4) Thisspecialimportanceof information,initsnewenlargedsense,wasalsorecognizedintheSovietUnion.AsKheinmanwrote:

Togetherwithmatter and energy, informationbecomes increasingly importantandbecomesaninstrumentofworkandaproductoftheworkofanever­increasingnumberofpeople.(Kheinman,1977,p.110)

However, the conditions for the advent of a true InformationSocietyconflictedwithsomeofthepillarsoftheSovietmodel. The USSR systemwas based on strict centralism that not onlyemployed edinonachalie but also repressed (at least partially) the freeflowofinformationwithinsociety,inordertoensurethepreponderanceof the state in the ideological sphere. From direct censorship of pressorgans torestrictionson theuseofphotocopyingmachinesbycitizens,differentmeanswereemployedtomaintaincontrolofcivilsociety,evenifthis implied restrictions on the free flow of information. This patternconflictedwiththegrowingneed forthepropagationof information(inits general sense and in its “cybernetic” sense) for an “intensified”development within the new STR paradigms. Take the example ofpersonal minicomputers. This fourth generation of computers had itsstrategic importance recognized in the scientific circles of the USSR.However,while in the industrializedWest the trend in the 1970s and1980s was the spread of increasingly portable and individualizedcomputers, Soviet leaders were reluctant to adopt this new approach,insistingoncollectivecomputercenters,wheretheuseofcomputerswasdonecollectively(andwherecontrol fromabovewaseasier toexercise).As oneWestern critic put it, the possibility of adopting a network ofpersonalcomputersinterconnectedacrossthecountrywasfrighteningtothetopleadershipoftheSovietUnion.97 This ambiguous positioning regarding the information problem,ontheonehandrecognizingtheimportanceofinformationflowsand,ontheotherhand,reluctanttoreleasethesesameflows fromthecontrolofthestate,showedthedilemmathattheUSSRfaced.Thusthequestionofinformation (in itsbroadest sense)becomesakey tounderstanding thedifficultiesthattheSovietUnionhadinadaptingtothenewparadigmsof

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greaterefficiencywithintheSTR.5.2.3Quality Theconceptof“TotalQuality”(as inTotalQualityControl[TQC]and

in Total Quality Management [TQM]) also became difficult toimplementundertheconditionsoftheSovietsystem.Thepressuretofulfillthenumericalobjectivesoftheplanpreventedthepossibilityof“interrupting the production line until the origin of the defect isdiscovered,”asadvocatedbyTotalQualitysystems.Onecan imaginethepressure(fromsuperiorsandworkmates)thatwouldbefeltbyaSovietemployeewhodecidedtointerrupttheproductionlineduringatimeofshturmovshina!98

TheconceptofqualityassumesagreaterrelevanceduringSTRthanthe mere manufacture of products without defects. One of theparadoxes that haunts economists today is that, while newinformation technologies and microcomputers are evidentlyincreasingthespeedofinformationflowandenablingthecreationofmoreproductivemachines,theseproductivitygains,soobvious“withthenakedeye,”havenotbeensoobviousinmacroeconomicstatistics.Thus, increases inproductivity indicesofall industrializedcountries(includingJapan)werelowerintheperiod1973­95(microcomputerswere developed in the 1970s) than in the 1960­73 period. Oneexplanation for this apparent contradiction is that informationtechnologytendstocreateanentireserviceareainwhichitismuchmore difficult to measure productivity than in traditionalmanufacturing.(Griliches,1994,p.11)Besidesthat,

Inmanyservices it isdifficulteven toestimatea

“unit”ofproduction, inpartbecause thegreater“production” appears in the form ofimprovementsinquality.Inareassuchasfinance,health and education, statisticians assume that“production” increaseswith thenumberofhoursworked. The paradoxical effect is that themeasuredproductivityincrementis,bydefinition,equal to zero. Also, the “production” oftelecommunications is measured in minutes ofcall, omitting the incredible increase ofinformation transmittedby faxormodem.Or thecase of a carrier that introduces a computer

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system that helps its drivers choose shorterroutes, thus providing better service tocustomers.If,asaconsequence,thetotalmileagedecreases, the statistics will show a fall inproduction.(Survey,1996,p.15)

Increasingly, therefore, the productivity gains of the new STR

technologiesshow themselves in the formofquality improvements,whichisdifficulttomeasureintraditionalstatisticalterms.Thisisanextra reason why the Toyotist model, with its emphasis on TotalQuality,hasmadeiteasiertoassimilateSTRpotentialities.TheUSSR,with its emphasis on numerical increase in production, prioritizedquantity rather than quality, which posed another obstacle to itsdevelopment at this stage of qualitatively new increases in theproductivityofSTRtechnologies.

5.2.4PositiveAspectsoftheSovietSysteminRelationtoSTR Withouttheadvantageofhindsightthatwehave today,itwouldbedifficulttoaprioripredict,inthe1950sorearly1960s,theSovietUnion’sdifficulties in adapting to the specific requirements of the ThirdTechnologicalRevolution.Asthe1960sbegan,themoodwasoptimisticintheSovietcamp.TheUSSRhadreachedthesecondGNPintheworld,hadlaunchedthefirstsatelliteandthefirstastronauttospace,hadcreatedascientific and educational base that would later lead U.S. PresidentKennedy— inaclimateofapprehensionandcompetition— toreviewand reorganize the American educational system. (Kennedy, 1966, p.101)TheboastfuloptimismofNikitaKhrushchev’s1961claim that theUSSR,in20years,wouldleavetheU.S.behindinindustrialproductiondidnotseemsomisplacedatthetime.99(KPSS,1983­1989h,p.130) Obviously therewere criticismsof theway theSoviet economicmodelworked,butmostWesterncriticismsweredirectedat the lackofmarketmechanisms(privateproperty,competition,etc.)intheeconomy.(Hayek,1975,p.229;Friedman,1981,pp.14and17)These criticismswould not apply specifically to the time of the STR, having a generalcharacterandvalidityforothertimesaswell.Somuchsothat,althoughthistypeofcriticismhadbeenappliedtotheUSSRpracticallysinceherinception, this did not prevent that country from having high rates ofeconomicgrowthinthe1930s,1940sand1950s. Another type of criticism that might have had a more directapplicationtothetimewhentheSTRbegantobeclearlydelineated(from

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the1960sonward)was that the centralplanning systemhad achievedveryhighinitialratesofgrowthbecausetheSovieteconomythenwasofaverybasicand simple type, typicalof early stagesof industrialization.Whenyoustartfromaverysmallbase,initialprogressisveryrapid.Thedifficulty is tomaintain these high growth rates later, as the economybecomesmorecomplex,thefactorsinvolvedaremorenumerousandtherisksofbottlenecks andoperationalproblems increase.Thisproblem ispotentialized in a planned economy. It allows a great concentration ofeffortsandresourcesinthepriorityareas,thusenablingaveryfasttake­off. In this initial period, the number of variables (products) to becontrolled by planners is relatively small and “manageable.” But as theeconomybecomesmorecomplex,thenumberofmanufacturedproductsgrows exponentially. Therewere observations in the 1960s that evenwith the best existing computers it would be impossible to plan andcontrolallaspectsofmanufacturing,stockpiling,transporting,andsellingthe millions of items produced by a highly industrialized society.(Richman,1965,p.17) In thiscase,anaturaleconomicslowdownwouldbeexpectedovertime. Thistypeofcriticismprovedtobequiteserious,especiallywithinthenewconditionsoftheSTR,whichbroughtinitsveryexistenceagreatvarietyinthenumberofmodelsandproductsexistinginmodernsocieties.If,ontheonehand,STRbroughtwithitatremendousaccelerationinthenumberofmodels,productsandserviceslaunchedonthemarket,ontheotherhand,development in computer systems increases thepossibility,not only of the calculations necessary for production planning but alsocreates the possibility of automatic inventory controls, which wouldfacilitatethecentralizedplanningtask.100Thediscussionaboutwhetheraplanned(balanced)administrationoftheeconomythroughtheresourcesof modern computing is possible remains a perennial controversybetweenproponentsandcriticsofcentralizedplanning. We emphasize that it was not easy to a priori predict thedifficultiesthattheUSSRwouldhavetoadapttothenewSTRtimes.101Inourprevious analysis,we saw that the “actually existing” Sovietmodelhad fundamental contradictions with three basic pillars — flexibility,informationandquality—of thenew,moreefficientparadigmsof theSTR era.However, ifwe leave aside for amoment these characteristicsandanalyzeotheraspectsofToyotism,weshallsee thatsomeof theseaspectswould not at firstbe incompatiblewith the Sovietmodel or, atleast,with the ideaofcentralplanning ingeneral (andmightevenhavesomeaffinitywiththelatter). Themost important of these aspects is at themacroeconomiclevel: the close relationship between Japanese conglomerates and firmsand the Japanese central government. In a sense, the role of central

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governmentplanningandcontrolwasalsoextremelyimportantinJapan.Usingthecharacteristicsofconsensus102andgroupthinkingofJapaneseculture,centralgovernmentplayedanactiveroleinsteeringtheeconomytoward itsownpriorities.103 Inaway, thatdemonstratedhowmuch theJapanesegovernmentwantedtoinfluencethemarketandnotbemerelyguidedbyit.(Rastogi,1995,p.245)Thisexhibitscertainsimilaritieswiththenotionofcentralplanning.104 The idea of the above paragraph is reinforced if we take intoaccount that the type of development nowadays requires hugeconcentrationofresourcesinResearchandDevelopment(R&D).Evenincapitalistcountries like theUnitedStates,privatemarket forcesarenotenoughforthistask.Stateinvestmentisrequired,especiallyintheareaofbasic research.105 Moreover, it is not enough to provide financialresources.Acoherentandharmoniouspolicy isneeded ifresearch is tobecarriedoutalsotakingintoaccountthelong­termobjectives ofsociety(or state) and not just short­term objectives linked to corporateprofitability.ThisisaconsensusamongmostofthetheoristswhostudyR& D. (Shibata, 1984, pp. 33­35) In this respect, at least in principle, acentral planning economy could have advantages over a plain marketeconomy,linkedmoredirectlytoimmediateprofitability. Enhanced central government interference is a feature of themoderneconomyitself.Despitetheideologicalbattlewagedinthe1980swith proponents of the deregulated market and small government(Reagan, Thatcher, the Chicago School, etc.), the truth is that inmostcountriescentralgovernmentinterferencehasbecamestandardpractice.(Kornai,1979,v.2,p.1003) In concrete terms of the STR, the more flexible paradigm(Toyotism) realized its potentialities in close collaboration with thecentralgovernmentof Japan.There, theministries involved inplanning,finance and production have always had a conspicuous coordinating(sometimes even interventionist) role.106 Japanese development wasleveragedbyastrategyofclosecollaborationbetweenprivatecompaniesandMITI(MinistryofIndustryandInternationalTrade).107Theassertionthat Japanese development was under the aegis of national economicplanswouldnotbe far from the truth.108Theelementsofplanningwerestrongly linked to the success of themodel.Theoretically, then, centralplanningcouldturnouttobeacomparativeSovietadvantageinthefieldofeconomicsingeneral,andinR&Dinparticular. The Toyotist characteristics of cooperation (of workers,managementandworkers,andrelationswithsubcontractors)wouldalsohavea “naturalally” inaplannedeconomy.Theoretically,whereshouldone have a greater degree of cooperation than in a centrally plannedeconomy, where all (or almost all) components function (or should

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function)accordingtoapredefinedcoordinatedscheme? OnecouldevensaythatmostaspectsoftheToyotistmodelcouldtheoreticallyalsobeincorporatedbyacentralplanningmodel(oratleastnotaprioribeincompatiblewithitsessence):desespecializationoftasks(= polyvalence ofworkers), shared times (assignment ofmodular andvariable tasks), quality control simultaneous with production, greaterinvolvementofworkers in theorganizationofproduction,emphasisontotalqualityand cooperation.Theseareaspects that could theoreticallyalsobeincorporatedbyacentralplanningmodel. As we see, the incompatibility between a centralized planningmodel andmany of the principles of Toyotism, at least at the level oftheoretical abstraction, is not so obvious. Some aspects of this(cooperation, greater involvement of theworker in production)wouldseem tobeevenmore intrinsically linked to centralplanning than toafree market economy. In practice, even these characteristics proveddifficult tosuit theStalinist (andpost­Stalinist) “actuallyexisting”Sovietmodelof centralplanning.Whywas this so?Whyhas theSovietmodelbeenunabletoadapttotheneedsofhigherproductionparadigms?Whydid it fail to transform itself into amore flexible central planning thatwouldallowgreaterparticipationofworkersandbetteruseof thenewtechnologiesoftheThirdIndustrialRevolution? Toanswer thesequestions,weneed toanalyze thenatureof theSovietmodel,itsoriginsanditsinsertionintheWorldEconomy.

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6.THENATUREOFTHESOVIETMODELANDITSORIGINS6.1CONCEPTiONSABOUTTHENATUREOFTHESOVIETMODEL That capitalism is a contradictory system and subject toinstabilities is apoint onwhich the overwhelmingmajority of scholarsagree.Theboneofcontention isabout thedepthofsuchcontradictionsand their consequences for the survivalof this social formation. In thesecondhalfofthenineteenthcenturytherewasagreatdebatebetweenMarxism and the so­called “bourgeoispolitical economy.”For the latter,capitalismwas self­reforming, capableofmanaging its internal conflictsandsurvivingadeternumthroughadaptations.ForMarx’s followers,thecontradictionswithinthesystemweresogreatthattheywould,soonerorlater,leadtoitsdestructionandreplacementbysocialism. Wewill usesomeMarxistconceptstoinvestigatetheeventsinthefinalperiodoftheSovietUnion“fromwithin,”thatis,regardingtheUSSRasalinkinthehistoricaltransitionfromcapitalismtosocialism.109 Tounderstandwhathappened to theUSSRduringand after thewhirlwindofperestroika,wemust firstunderstandwhat itwasbefore.The first question that arises, then, is about the nature of the Sovietsystem.Afterall,couldoneclassifyitassocialist? Departing from thesimpleanddirectdefinitionofsocialismasaformation inwhich themeansofproduction are socialized rather thanprivate, there isastrong initial tendency toqualify the formerUSSRassocialist.Afterall,theoverwhelmingmajorityofthemeansofproductionwereinthehandsofthestate—which,intheabsenceofprivateowners,claimeditsstatusasrepresentativeoftheinterestsofthecommunity. TakingintoaccountMarx’swordsintheprefacetoAContributionto theCritiqueofPoliticalEconomy (“InbroadoutlinesAsiatic,ancient,feudal,andmodernbourgeoismodesofproductionmaybedesignatedasprogressiveepochsintheeconomicdevelopmentofsociety”),110itwouldseem that the Soviet Union was really the beginning of the socialistsocietythatwouldreplacethecapitalistone. However, we should recall another passage from the same

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preface:

A social order never perishes before all theproductiveforcesforwhichitisbroadlysufficienthavebeendeveloped,andnewsuperior relationsofproductionneverreplaceolderonesbeforethematerial conditions for their existence havematured within the womb of the old society.(Marx,1961­1971a,p.9)

Thispassagedrawsattention to the fact that,according toMarx,the elevation of the level of productive forces played a central role inhistoricaldevelopment.Themeresocializationofthemeansofproductionwouldnotalonesufficetocharacterizesocialism,asTrotskyhasnoted:

[...] for the Marxist […] this question is notexhaustedbyaconsiderationofformsofpropertyregardlessoftheachievedproductivityoflabor.Bythe lowest stage of communismMarxmeant, atanyrate,asocietywhichfromtheverybeginningstands higher in its economic development thanthemostadvanced capitalism. (Trotskii,1936,p.61)

Thusitwouldnotbepossibletocreateafullysocialiststructureonaproductivebasisinferiortothebourgeoissystem,111forthensocialismwouldbeinchargeoftaskswhichbetterfitcapitalismandrepeatmuchofitsfeatures. Marx’smain idea was that the socialist revolution would comefromtheadvancedcapitalistnationsandthereforewouldinheritthelevelof theirproductivebasis,and laterbuildon it.TheGermanphilosopherhadalsocontemplatedthepossibilitythattherevolutionmightfirsteruptinmorebackwardcountries,suchastsaristRussia,butlinkedthesuccessof this first revolt to the need for subsequent revolutions in themoreadvancedregions.112 What would be the regime created by the Bolsheviks then?AccordingtoTrotsky,

The Soviet Union is a contradictory societyhalfway between capitalism and socialism, inwhich:(a)theproductive forcesarestill far fromadequate to give the state property a socialistcharacter; (b) the tendency toward primitiveaccumulationcreatedbywantbreaksoutthrough

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innumerable pores of the planned economy; (c)norms of distribution preserving a bourgeoischaracter lieat thebasisofanewdifferentiationofsociety;(d) theeconomicgrowth,whileslowlybettering the situationof the toilers,promotes aswiftformationofprivilegedstrata;(e)exploitingthe social antagonisms, a bureaucracy hasconverteditselfintoanuncontrolledcastealientosocialism; (f) the social revolution, betrayed bythe ruling party, still exists in property relationsandintheconsciousnessofthetoilingmasses;(g)a further development of the accumulatingcontradictions can as well lead to socialism asback to capitalism; (h)on the road to capitalismthe counterrevolution would have to break theresistance of the workers; (i) on the road tosocialism theworkerswould have to overthrowthebureaucracy.Inthelastanalysis,thequestionwillbedecidedbyastruggleoflivingsocialforces,both on the national and the world arena.(Trotskii,1936,p.287­288)

What prevented the USSR from being socialist was not theproblemofpropertyrelationsbuttheproblemofthelevelofdevelopmentof the productive forces.113 The revolution, taking place in a relativelybackward country like tsarist Russia, would need the outbreak ofrevolutions inmoreadvancedcountries.Sinceafter1917 thesedidnotoccur,BolshevikRussiawasisolatedinitseconomicbackwardnessand,tosurvive,usedrepressivemechanismstoraiseherlevelofdevelopment. Thus, our theoretical framework shares the view of thosewhoregarded the USSR as a “proto­socialist” (Bahro)114 or “transitional”societybetweencapitalismandsocialism(Troskii) 115.Ourpositionisduetotheproblemofthelevelofdevelopmentoftheproductiveforcessetoutaboveandalso to thequestionofdemocracy(didstate­ownedproperty,underSovietconditions,reallymeansocializedproperty?). OuranalysisofperestroikaisbasedonthisnotionoftheUSSRasa“proto­socialist” or “transitional” society. We tried to analyze whichprocesseswereatplayinthatcountrywithinthelargerMarxistcontextofthepassage(orconfrontation)betweencapitalismandsocialism.116 The considerations above about the discrepancy between thesocial relations of production (formally already socialized) and therelativelylowlevelofdevelopmentoftheproductiveforcesmayconstitutea first step in the investigation of what processes like perestroika

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represent.Afterall,Marxhimselfhadalwayspointedoutthattheconflictbetweenthesocialrelationsofproductionandtheproductiveforceswasthe signal for the necessity of a social revolution. If we start from apositionof theUSSR as “proto­socialist,”butwith this kind of internalcontradiction, there ispotential forsocialconvulsion.Wouldperestroikafitintothispicture? To answer this question we need to use one more Marxistconcept: that of permanent revolution. According to it, the revolutioncannot stop in just one country. Especially if the first country torevolutionize iseconomicallybackward,therevoltwouldhavetospreadtotheadvancednationsunderpenaltyofbeingrepressedordegenerate. Theconceptcomes fromMarxandEngels.IngivingdirectivestothecommuniststrategyinGermany,theywrote:

While the democratic petty bourgeoiswant tobring the revolution to an end as quickly aspossible[...]itisourinterestandourtasktomaketherevolutionpermanentuntilallthemoreorlesspropertied classes have been driven from theirruling positions, until the proletariat hasconquered statepower anduntil the associationoftheproletarianshasprogressedsufficientlyfar—notonly inone countrybut inall the leadingcountries of the world — that competitionbetweentheproletariansofthesecountriesceasesandat least thedecisive forcesofproductionareconcentrated in the hands of the workers [...]Their battle­cry must be: The Revolution inPermanence! (Marx & Engels, 1961­1971a, pp.245­248e254)

In the twentieth century, Troskii was the one who mostpropagandized the concept of permanent revolution. Contrary to theStalinisttheorythatalong­termoccurrenceof“socialisminonecountry”waspossible,Trotskypreached that for itsownsurvival (especially if itoccurred in a backward country), the revolutionwould have to spreadworldwideuntilthecompleteextinctionofclasssociety.

The permanent revolution, in the sensewhichMarxattachedtothisconcept,meansarevolutionwhich […] can end only in the completeliquidation of class society. [...] it is necessary todistinguish three linesof thought thatareunited

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in this theory. First, it embraces the problem ofthe transition from the democratic revolution tothe socialist [...] The second aspect of the“permanent” theory has to dowith the socialistrevolution as such. For an indefinitely long timeand in constant internal struggle, all socialrelations undergo transformation. Society keepsonchangingitsskin.Eachstageoftransformationstems directly from the preceding. This processnecessarilyretainsapoliticalcharacter, that is, itdevelops through collisions between variousgroups in thesocietywhich is in transformation.Outbreaksofcivilwarandforeignwarsalternatewithperiodsof “peaceful”reform.Revolutions ineconomy, technique, science, the family, moralsand everyday life develop in complex reciprocalaction and do not allow society to achieveequilibrium. Therein lies the permanentcharacterof the socialist revolutionassuch.Theinternationalcharacterofthesocialistrevolution,whichconstitutesthethirdaspectofthetheoryofthepermanentrevolution,flowsfromthepresentstate of the economy and the social structure ofhumanity. Internationalism is no abstractprinciplebuta theoreticalandpolitical reflectionof the character ofworld economy, of theworlddevelopment of productive forces and theworldscaleoftheclassstruggle.Thesocialistrevolutionbeginsonnationalfoundations—butitcannotbecompleted within these foundations. Themaintenanceoftheproletarianrevolutionwithinanational framework can only be a provisionalstateofaffairs,eventhough,astheexperienceoftheSovietUnion shows,oneof longduration. Inan isolated proletarian dictatorship, the internalandexternalcontradictionsgrow inevitablyalongwiththesuccessesachieved.Ifitremainsisolated,the proletarian state must finally fall victim tothesecontradictions.Thewayout for it liesonlyin the victory of the proletariat of the advancedcountries.Viewedfromthisstandpoint,anationalrevolutionisnotaself­containedwhole;itisonlyalinkintheinternationalchain.Theinternational

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revolution constitutes a permanent process,despite temporary declines and ebbs. (Trotskii,1972,p.40­44)

This theoretical position emphasizes the existence of a WorldEconomy. Itwould not then be a question of some socialist countriesstruggling against some capitalist countries, but of a single locus, theWorldSystem,inwhichcapitalismandtheembryosofsocialismbattleforlife.(Kelly,1985,p.60) Thisisconceptuallydifferentfromthetraditionalpositionsoftwosystemscoexistingtogetherforalongtime.Whatwouldexist,then,wouldnotbe twohermetic systems,buta singlearena: theWorld System stillhegemonized by capitalism, but with the emergence of embryos ofsocialism. The victory of socialism would be assured, not with theoutbreakofisolatedrevolutionsinseveralcountries,butwhensocialismbecamehegemoniconaworldwidescale.117 Thisconceptoftheworldeconomyasasinglearena,thepartsofwhichare intrinsically linked, is important tounderstandwhytheSovietUnioncouldnotcontinuetofallindefinitelyinthetechnologicalracewiththeWest from the 1960s and 1970s onward. The fate of her proto­socialist format was intrinsically linked to her relation to the stillhegemoniccapitalistregimeattheinternationallevelandtotheremnantsof capitalism (or other modes of production) in her own internalstructure.Fromherbeginnings,118theUSSRplacedherselfinapositionofconstantcompetitionwithcapitalism,firsttocatchupwithitandthentowrenchfromitthehegemonyoftheWorldSystem.Attheideologicallevel(asthemodeofproductionthatwouldprovetobetheonethatbestmeetsthe needs of its population) and also at the level of the military andeconomicrivalry,theUSSRcouldnottoallowherselftofallfurtherinthetechnologicalandeconomiccompetitionwith theadvancedWest in themid­1980s.Sinceitsinception,theraisond'êtreoftheSovietregimewastooverthrowcapitalism.Therefore,anypossibilityofnon­reformof thesystembythemid­1980swasexcluded.119FortheUSSR,withintheabove­mentionedview,itwasexcludedtoisolate,toavoidanyattemptatreformand to continue to slowly fall in the technological competitionwith theWest.120 The concept of a World System121 of non­homogeneous partsintrinsically linked to eachother givesus a theoretical framework thatsupports the view of perestroika as a process (in a part of theWorldEconomy) that was itself embedded in the context of the Scientific­TechnicalRevolution(STR).TheSTRwouldthenbeadevelopmentoftheWorldEconomy thathaddifferent consequences indifferentpartsof it(i.e.,partswithuneven levelsofdevelopmentofthemodesofproduction):

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in the “proto­socialist” part (i.e.,, in the actually existing socialistcountries),iteventuallyendedupinadisintegratingperestroika,whileinthe advanced capitalist countries it also created elements of pressure,such as excessive concentration of income, increase of worldwideunemployment,andsoon. RobertKurzinhisbookTheCollapseofModernizationpresentedaconceptionwithsomepointsincommonwithours.Accordingtohim,themelancholic end of perestroika, with the disintegration of EasternEuropeancountries,wasnotasimplevictoryofcapitalismover“actuallyexisting socialism.” Kurz called this global process “crisis of thecommodity­producing world system.” This crisis had already hit thecountriesoftheThirdWorldintheearly1980s,engulfedtheoldSecondWorldinthelate1980sandearly1990sandmoveddangerouslytowardthe heart of central capitalist economies in the form of risingunemployment, concentration of income, impoverishment of the oldmiddle classesof thepopulationandan imminent crisisof the externaldebt.(Kurz,1993,pp.206­213) AlthoughwedonotagreeineverydetailwiththeoverlynihilistictoneofKurz’sanalysis,webelievethatittouchesonafundamentalpoint:thattheEasternEuropeancrisisdidnotaffectonlythatpartoftheworldbutwasanaspectofamoreglobalcrisisof theWorldEconomy(Kurz'swarenproduzierende Weltsystem or “commodity­producing worldsystem”).And thiscrisis iscloselyrelated to theoccurrenceof theSTR,especiallysincethe1960s.Wehavealreadyseenthat,sincethatdecade,the growth rates of the USSR (and of the actually existing socialistcountriesingeneral)hadbeenfalling.Butitwasnotonlyintherealmofactually existing socialism that STR was causing difficulties. In theadvancedcapitalistcountriesthemselves,growthrateshaddeclinedsincethe 1960s. As we can see in Table 3.1 of Appendix 3, the Japaneseeconomy,whichgrewatanannualrateof10.4%intheperiod1960­69,grewby4.7% in1970­79and3.9% in1981­85.Likewise,theU.S.grewannuallyby4.3%in1960­70,but3.2%in1970­79and3.0%in1981­85.Worsestill,ratesofproductivitygrowthincapitalistcountriesthemselvesdeclinedafterthe1970s(seetable7.2inAppendix7).Thus,evenwithincapitalism, there is a contradiction between the enormous potentialtechnologicalincreasethattheSTRmakesavailabletothesystemandthecapacityofthesystem(market)toabsorbandutilizethispotential.TheSTR involves investments in expensive technologies.This increases theconcentrationofwealthinoligopoliesandincentralcountries,sideliningbackward sectors of production and causing unemployment. Thisconcentration of income, however, creates a contradiction between thepotentialproductioncapacityandthedemand thatwillactuallyexist fortheseproducts.

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In this sense, it can be said that this “Third TechnologicalRevolution”reallyhada “revolutionary”character (inMarxist terms). Itcaused thedisintegrationofanew (proto­socialist)modeofproductionthatwasbeing “forced to the limits”andmade the capitalist systemgothrougharealtestofresistance,asitelevatedtechnologicalcompetitionand increased the levels of income concentration, unemployment andpoverty(eveninthecentralpowers)initsheydayinthetwodecadesafterthe1960s.ItisinthissensethatweseeKurz'sinterestingcontributiontothe perestroika debate, shifting the focus of discourse from themereconstatation of the “victory” of one social system over another to thedebateofalargerprobleminaplanetaryscale. It is interesting tonote thatsuchahistoricaldevelopmentof theforcesand relationsofproductionwithin the fieldsof the capitalistandactuallyexistingsocialistcountrieshadbeenenvisagedasapossibilitybynone other than Stalin (author who starts off from a theoreticalframework quite different from that of Kurz’s). In his 1952 book,Economic Problems of Socialism in the USSR, the Soviet leader, afterreaffirming that socialism in generalhad already been achieved in theSoviet Union, criticized Yaroshenko for considering that the futureharmoniousdevelopmentofforces(andrelations)ofproductionwouldbeautomatically guaranteed by the fact that they have entered this newphase. He claims that, even in socialism, relations of production mayconflictwiththeproductiveforces.

Comrade Yaroshenko is mistaken when heassertsthatthereisnocontradictionbetweentherelationsofproductionand theproductive forcesofsocietyundersocialism.Ofcourse,ourpresentrelationsofproductionareinaperiodwhentheyfully conform to the growth of the productiveforcesandhelp toadvance them atseven­leaguestrides.Butitwouldbewrongtoresteasyatthatand to think that there are no contradictionsbetweenourproductiveforcesandtherelationsofproduction. There certainly are, and will be,contradictions,seeingthatthedevelopmentoftherelations of production lags, andwill lag, behindthedevelopmentoftheproductiveforces.Givenacorrectpolicyonthepartofthedirectingbodies,these contradictions cannot grow intoantagonisms, and there is no chance ofmatterscoming to a conflict between the relations ofproductionandtheproductiveforcesofsociety.It

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wouldbeadifferentmatterifweweretoconductawrongpolicy [...] In thatcaseconflictwouldbeinevitable, and our relations of productionmightbecome a serious brake on the furtherdevelopmentof theproductive forces.The taskofthe directing bodies is therefore promptly todiscern incipient contradictions, and to taketimelymeasures toresolve thembyadapting therelations of production to the growth of theproductive forces. This, above all, concerns sucheconomic factors as group, or collective­farm,property and commodity circulation. At present,of course, these factors are being successfullyutilized by us for the promotion of the socialisteconomy, and they are of undeniable benefit tooursociety.It isundeniable, too,thattheywillbeofbenefitalso inthenear future.But itwouldbeunpardonable blindness not to see at the sametime that these factors are already beginning tohamper the powerful development of ourproductive forces, since they create obstacles tothe fullextensionofgovernmentplanning to thewhole of the national economy, especiallyagriculture.There is no doubt that these factorswill hamper the continued growth of theproductive forcesofourcountrymoreandmoreas time goes on. The task, therefore, is toeliminate these contradictions by graduallyconverting collective­farm property into publicproperty,andby introducing—alsogradually—products­exchange in place of commoditycirculation(Stalin,1952,p.52)

In thequotationabove,Stalinhadbasically inmind the kolkhozyand thequestion of theownership and circulationof commodities,buttheconceptsetoutinthefirstparagraph(thatis,thatthepossibilitythat,evenin socialism,relationsofproductionwillcome intoconflictwiththeproductive forces), can provide an insight into what happened to theUSSR in the period of the Third TechnologicalRevolution or Scientific­Technical Revolution. Between the 1930s and 1960s, the productionrelations of the Soviet proto­socialistmodel (based on a rigid verticalhierarchicalmodel)werebasicallyinagreementwiththedevelopmentofthe productive forces, not only in the USSR but, more importantly,

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accordingtotheparadigmofproduction(Fordism)thathegemonizedthemostadvancedpartoftheWorldEconomyandwhichwasalsobasedonpatterns of relative rigidity, vertical and hierarchical information andcommand flows, and so on.Within our view of theWorld System as asingle andunifying arena, this alignment of Sovietproduction relationsnotonlywiththeinternalproductiveforcesoftheUSSRbutalsowiththemoreadvancedpartoftheworld’sproductive forcesbecomesextremelyvital.While its labor productivity was inferior to that of the advancedWest, the Soviet Union could not afford to lose sight of the mostproductive paradigm of theworld system: aswe saw earlier, howevermuchSovietleaderspursuedeconomicautarchy,theperformanceofthelawofvalueconstantlyconfrontedthemwiththisproblem.Whenthenewflexibleparadigms(Toyotism,etc.),whichhadbeeningestationsincethepostwar period, bloomed and successfully challenged Fordism, thesituationchanged.JustasintheWestalargenumberofenterprises(andeven governments) had to make major modifications in their modusoperandi toadapt to the flexible standardsof thenew era, in the Sovieteconomy the traditionalrigidhierarchicalproductionrelationsbegan tobecome incompatible with the development of productive forces bothinternally and globally. Internally, the model of extensive economicgrowthhadvisiblyreached its limits.However,themovetoan intensivemodelofgrowth (especiallywithin thecontextofanalreadyurbanizedcountrywith a high technical and educational level of the population)required an increase in the initiative from below (from the productionunits,regions,etc.)andnotmerelytheobeyingofordersfromabove.Thiswas reiterated in several CPSU documents. (KPSS, 1983­1989i, p. 111;KPSS,1983­1989j,p.37;TsKhSD,f.2,op.1,d.805,l.6)Atagloballevel,whentheentireworld(especiallyfromthe1970sonward)begantostudythenew flexibleparadigms(e.g., theavalancheofWesternstudiesaboutJapanese techniques in their attempt to learn the new ways), thedisadvantagesofrigidandverticalparadigms(suchasWesternFordismorSovietproto­socialismwithFordistcharacteristics)becameapparentaswellastheneedforflexibility,initiativeandcreativity. Fromthe1960sonward,therigid,vertical,hierarchicalrelationsofproductionof theSovietmodelbegan tocollapseprogressivelywith thedevelopment of productive forces. Perestroika (with its emphasis ondecentralizationand“intensification”oftheeconomy)wasanattempttoresolve this conflict. The inability of the Soviet and CPSU leaders toresolve this mismatch within the framework of the (proto­) socialistmodelandtheconsequentdissolutionoftheUSSR(andtherestorationofcapitalism) characterized a real revolution (in this case,counterrevolution)intheMarxistsenseoftheterm.

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6.2CONCLUSION Fromtheobservationsabove,wecandescribetheSovietmodeofproductionasproto­socialistguidedinthelightofFordistprinciples.TheseFordistcharacteristicsdonotnecessarilystemfromtheinternalnatureofthe central planning system, but from the historical political­economicconditionsoftheworldcontextinwhichtheSovietsystemwascreated. Socialism, according toMarx,would solve the contradictions ofcapitalism, which would reach itsmaximum point ofmaturity— andcontradictions—andwouldbegin todeteriorate.Socialism (centralizedplanning) would not be appropriate to take a backward country toindustrialization, which is traditionally carried out by capitalism. Theregime that emerged in post­1917 Russia, owing to its isolation (therevolutiondidnotspread tomoreadvancedcapitalistcountries,aswasexpectedatthetime),accordingtotheStalinistmodel,attemptedtocarryout the taskof industrializationwithinparametersofMarxist socialism(collectiveownershipofthemeansofproduction,centralplanning,etc.).Without thenecessary levelofdevelopmentofproductive forces,wouldthese instrumentsbeenough todevelop thecountrywithin theconceptthatwasconventionallycalled “socialism”?Thiswasa theoreticaldoubtthatwouldonlyberesolved,aposteriori,inpractice.Thechoiceofthepathofindustrializationforcedthesystemtoabsorbthe Fordist characteristics of the prevailing paradigm in the WorldEconomy and, in the absence of the economic coercive relations ofcapitalist private property (Joseph Berliner’s “invisible foot”), to usepoliticalcoercionbythestateasasubstituteforthecapitalist“boss.” TheSovietmodelwasthena“hybrid”modeloftransitionbetweencapitalismandsocialism,withsomecharacteristicsof the twomodesofproduction. In addition to an economy of permanent scarcity and theexistence of a “black market” in it, the violence employed in forcedcollectivization and the political oppression necessary to keep thepopulationdisciplinedfortheexecutionofthenationaldevelopmenttasksweresignsthatthelevelofdevelopmentoftheproductiveforceswasnotyetsufficienttopromoteamoreharmoniousandbalanceddevelopment.These repressive mechanisms paralleled the repressive mechanismsemployed by capitalism in its early stages of industrialization anddevelopment.The collective ownership of themeans ofproduction andcentralplanningweretheaspectsofthesystemthatembodiedsocialismthere in an embryonic state. The Sovietmodel, as a “hybrid” system,maintained throughout its developmental years this permanent tensionbetween its “socialist”and “capitalist”poles. In the late1950sandearly

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1960s, it seemed that perhaps the socialist pole of the systemmightfinally become dominant. The USSR had achieved high economicdevelopment in themid­1960s, andKhrushchev had already spoken ofovercoming capitalism in twenty years andmoving on to communism.TheSTR,whichhadoriginatedinthepost­warperiod,reachedfullbloomfrom the 1970s onward. At this age of STR, Toyotism clearly provedsuperiortoFordisminthenewconditions.TheSovietdilemmawasthenrenewedonahigher level.IftheSovietUnionseemed tobecatchingupwith traditional Western Fordism until the 1960s, from the 1970sonward,with the new challenges posed by the flexible paradigms, theUSSR began to lag behind again in the technological race with theadvanced capitalist countries,which renewed the tension between thetwo internal poles of the Soviet “hybrid” system.122 This tension wasexacerbatedwithin theprocessofperestroikaandreachedanexplosivelevel in 1991,which ultimately lead to a disintegrative process of thesystemasawholethatyear. Thus,theemergenceoftheSTRchangedthecourseoftheSovietmodel from the 1960s onward. Until then themodel seemed to havemanaged topass through themostacuteandviolentphaseof “forced”industrialization (the take­off),and reachedapointwhen,owing to theriseintheleveloftheproductiveforces,itmightbepossibletomovetoahigher stagewhen the socialist elementsof the systemwouldoutweighthe capitalist “remnants” and becomemore productive than themostefficientparadigmsofthecapitalistfield. Things changed in the 1970s and 1980s though. By 1985, thetechnologicaldistancefromtheadvancedcapitalistcountrieswasalreadysocriticalthatitwasobviousthatsomethinghadtobechanged.Duetothe new need for flexibility, information and qualitywithin the STR, itwould no longer be possible to resort to a clamp­down using force, asunder Stalinism. Such a closed, authoritarian system, which workedrelativelywellinthefirsthalfofthecentury,wouldbecounterproductivebecause of its rigidity, insufficient horizontal information flows, anddifficulty in integrating quality. Theproto­socialistmode ofproduction,then,couldno longerremaincompetitive intheworldarenaand,duringitslastattemptatradicalreform(perestroika),itdisintegrated.

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PARTII:

OTHERFACTORSPRESSURINGTHESOVIETSYSTEM

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7THEBURDENOFMILITARYEXPENDITURES

Toslackenthetempowouldmean fallingbehind.And thosewho fall behind get beaten.Butwe donotwanttobebeaten.No,werefusetobebeaten!One feature of the history of old Russia was thecontinual beatings she suffered because of herbackwardness. She was beaten by the Mongolkhans.ShewasbeatenbytheTurkishbeys.ShewasbeatenbytheSwedishfeudallords.Shewasbeatenby the Polish and Lithuanian gentry. She wasbeaten by the British and French capitalists. Shewas beaten by the Japanese barons. All beat herbecause of her backwardness, militarybackwardness, cultural backwardness, politicalbackwardness, industrial backwardness,agriculturalbackwardness.Theybeatherbecauseto do so was profitable and could be done withimpunity. [...]It is the jungle lawofcapitalism.Youare backward, you are weak, therefore you arewrong;hence,youcanbebeatenandenslaved.Youaremighty,thereforeyouareright;hence,wemustbewaryofyou.Thatiswhywemustnolonger lagbehind.[...]Weare fiftyorahundredyearsbehindthe advanced countries.Wemustmake good thisdistanceintenyears.Eitherwedoit,orweshallbecrushed.(Stalin,1946­1951e,p.38­39)

Stalin’s words above, spoken at a conference of industrialmanagersoftheUSSRin1931,referredtotheneedtoaccelerateratherthandiminishthegrowthratesof(especiallyheavy)industryinthefirstfive­yearplans.ButtheyarealsoillustrativeofanothervitalemphasisthatmarkedthedevelopmentoftheSovietmodelinthedecadestocome:theever­presentconnection,even in thepost­Stalinistdecades,between thecountry’seconomicgoalsanddefensepriorities.Thesetwoaspects—the

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pressure forhighratesof industrialgrowthdue to thesiegeofahostileexternal environment and the need to always combine economicdevelopmentcloselywithdefenseneeds—are important todiscuss theproblemwearenowintroducing:theburdenofmilitaryspendingontheSovieteconomy. OneofthemostcitedpointswhendiscussingthedifficultiesoftheSovieteconomyinthe1980swasthequestionofmilitaryspending.Withthe escalation of the costs involved in the production of modernarmamentsinthenuclearage(atomicweapons,intercontinentalballisticmissiles,etc.),itwasestimatedthattheweightofSovietmilitaryspendingwas becoming unbearable aswe entered the 1980s. Itwas difficult tomakeanaccurateestimateoftheseexpenditures,sincetheiramountwasliterally a state secret.The only figureofficiallypublished,on a regularbasis,wastheitemoborona(=“defense”)ofthecountry’sannualbudget.However,thisfigure123wasnoticeablytoolowtocovertheexpensesofacountrythatwasinapermanentarmsrace,insearchofparity124withtheUnitedStates.(Holzman,1989,p.101)This ledtoaseriesofinstitutionsandresearchersintheWestseekingtoassessthe“real”amountofSovietmilitary expenditures. InTables8.1 and 8.2 ofAppendix8,we presentsomeoftheWesternestimates:thoseoftheCIA,SIPRI,andWilliamLee. The estimatesby theCentral IntelligenceAgencywere theonesthathadmore repercussion in theWest,due to thewholeapparatusofresearchersandaccesstoclassifiedinformationithadatitsdisposal.CIAstudies were variously criticized for either underestimating oroverestimatingSovietspending.WilliamT.Leewasoneofthecriticsonthe side of underestimation, while the Stockholm International PeaceResearchInstitute(SIPRI)representedthecritiqueontheotherside.Allthesedivergenceswerenatural,asthemethodologiesemployed totrytofillinforthelackofSovietofficialinformationonthesubjectdiffered. SIPRI used the Soviet official budget as a basis and tried tocomplement it with information from other primary and secondarysources.(SIPRIYearbook,pp.171­172)WilliamT.LeealsousedofficialSovietsourcesbutnotonlyfromthebudget;heincludedofficialdatafromindustry and from the economy as a whole, trying to reconstruct theactual flow of the production of goods (especially of thewaste in eachbranch of production unexplained by the statistics and which waspresumedtobesecretlydestinedfordefense)andassessthepercentageactuallydevoted tomilitaryproduction. (Lee,1977,pp.2and138­140)TheCIAusedacompletelydifferentmethod.Basedonthebuildingblocksmethodology, the agency collected information not only from Sovietstatisticalbooksbutalsousedaerialphotographsofsatellitesandotherformsofespionage todetermine thequantityofmaterials/productsandlaboremployedineachbranchorsubdivisionoftheSovietmilitarysector

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(forexample,howmanyplaneswereproduced,howmanysoldiersservedineachdivision,etc.).Withthisinformation,theCIAcalculatedhowmuchitwould cost indollars to reproduce in theUSAamilitaryapparatusofexactly thesameproportionsandcharacteristics. (CIA,1978,pp.13­14;Holzman, 1989, pp. 103­104; SIPRI Yearbook 1988, p. 134) This wassupposed to give an accurate idea of the comparative costs of the twocountriesindollars. Noneofthemethods,ofcourse,wasperfect.SIPRIwascriticizedforbasingitsestimatestoomuchonSovietofficialinformation(andnotpreciselydetermining itsmethodology).WilliamT.Leewascensured formaking some debatable assumptions andhaving certainmethodologicalinconsistencies. (Becker, 1985, pp. 6 and 8) The CIA was accused ofoverlooking the structural differences between Soviet and Americansocieties in itscalculations.Forexample, to imaginehowmuch itwouldcost,indollars, intheUSA,tomaintainabrigadeof50soldiers,doesnotmeanthattheresultistheequivalentoftheamountactuallyspentintheUSSR to keep these 50 soldiers since Soviet military salaries wererelatively lower than in theUSA. Likewise, the system of prices in theUSSRdidnotobey the lawsof themarket,being fixed administratively.Thus,aSovietaircraftcouldhaveitspricekeptartificiallylow(evenbelowitscostsofproduction)burdeningthedefenseministrieslessthanitwouldnormallycostintheUSA.(SIPRIYearbook,1992,p.208­212)Inaddition,someof theCIA’speriodic revisionsof its estimateswere criticized forinconsistencywiththeagency’spreviouscalculations(hencethediversityofCIAestimatesintable8.2ofappendix8).125 Letusnowlook atthequestionofthemilitaryburdenintermsofpercentage ofGNP spent. Ifwe look at tables 8.1 and 8.2,we see thatSIPRI, Lee, and CIA estimates differ not only in themagnitude of thepercentageofGNPdevotedtomilitaryexpendituresbutalsosometimesinthedirection(increaseordecrease)ofchangesinexpenditure.However,we can glimpse some general trends that can be considered similar inmostestimates. IfweareguidedprimarilybyLeeandCIAdata in table8.1,weseethat,afterahighexpenditure rateinthefirsthalfofthe1950s(duetotheKoreanwar tensions),therewasacertaindecrease in1956­57, perhaps reflecting themore relaxed atmosphere after the XX CPSUCongress (with emphasis on improving the consumption sector of theeconomy). In the early 1960s, with the Cuban missile crisis, theaccelerationof theatomicarms raceand themanufactureof expensivelong­range missiles, there was resurgence in defense expenditures,followedbyarelativepause,betweentheyears1963­65,approximately.Theperiod1966­70sawarapidacceleration inmilitaryspendingagain.Increases in military spending in absolute amounts do not alwayscorrespond to increases in thepercentageofGNPbecause theydepend

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on how rapidly the Gross National Product of the country grows: thesame increase inabsolute termswill representdifferentproportionsofGNPintimesoffasterorslowergrowthoftheeconomyasawhole.The1970s and 1980s represent different trends in terms of percentage ofGNP.WhileLeeseesspendingrisingsteadilyuntilitreachesapeakof18percentofGNP in1980 (lastyearofhisestimates), theCIAalsoseesahigh percentage of GNP spent on defense but relatively steadilythroughout the period,with a small increase in the overall percentagefromthemid­1970sonward.ItisimportanttonotethattheCIAestimateshaveundergoneseveralrevisionsovertheperiod. The question was the following. Most Western estimatessuggested that the military burden was reaching exceedingly highproportions in the1980s,on theeveofperestroika,ata timewhen theSovieteconomywasexperiencinggrowthdifficulties.Severalscholars(D.Holloway,W.Lee,M.Castels,etc.)pointedtothefactthatdefensecouldberequiringresourcesthatwereneededinotherareasofeconomicactivity(especially investmentandconsumption).SomeauthorsevenposedthequestionofthemilitaryburdenasoneofthekeyissuesthatledtheSovieteconomytothebrinkofstagnationinthelate1970sandearly1980s,andwas thusoneof the “causes”of theneed fora “perestroika.”ThecostlySDI (Strategic Defense Initiative) program, proposed by U.S. PresidentRonaldReaganinthe1980s,furthercomplicatedthesituation,forcingtheSoviets tomaintain (or increase)military spending at the expense ofothersectorsof theeconomy—according tosome, this led toa fateful“overstretching”ofthealreadyburdenedSovietsystemandultimatelytoitsdefeat. How toassess themilitary issue in theUSSR?Did the excessivedefense spending really contribute to the country’s economicdecline inthelate1970sandearly1980s?Ifso,towhatdegree?Wasthisreallythemainreasontoexplaintheeconomicslowdownintheperiodimmediatelypriortoperestroika? Before we enter this assessment, it should be noted that theburdenofdefensewasnotseenbyanalystsonlyfromthemonetaryangleoftheincreasingpercentageofGNPspentformilitarypurposes—whichwouldmeanthattherewouldbefewerfinancialresourcesintheareasofinvestmentandconsumption.Since the1930s,asystemofpriorityhadbeenformedfortheSovietmilitaryproductionsector.(Cooper,1976,p.3;CIA,1978,p.1;Holloway,1982,pp.280­281;Gaddy,1996,pp.40­43)DuetothetraditionalsupplyproblemsintheUSSR(latedeliveries,lowqualityof products, etc.), themilitary sector had priority in supply (receivedexpedited,high­qualityproductsintime)andoftenreceivedtheallocationofthebestexistingskilled labor.SomeWesternauthorsevenregardtheSoviet economy as dual: a civilian sector with a high incidence of

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deficiencies and amilitary sector that was quite efficient in terms ofrelative quality of production. (Davis,1990,p.155)This efficiencywaslargelyachieved through theprioritysystem,whichspared themilitarysectorfromtheday­to­daysupplydifficultiesexperiencedbytheciviliansector. In addition, the military sector had long had its own qualityinspectors(thevoenpredy),withthepowerandautonomytorejectbrak(= “defectiveproducts”) from the supplier companies. (MOSSSR,1976­1980,v.2,pp.271­272;Voenpredy,1987,p.1). All thismade themilitarysector in theUSSRhave ahigh­qualityproduction,respectedevenatinternationallevel.126However,thisprioritysystemwasalsoseenasanextrasourceof“burden”ontheeconomyasawhole inthat itdrainedanexcessivelyhighproportionofthebest laborforce and the best intermediate products for itself, leaving less to theciviliansectors.Thiswouldnotbeaproblem,ifthemilitarysectorservedas a model of efficiency (in terms of managerial or technologicalprocesses) to be “copied” or followed by civilian enterprises. Critics,however, pointed to the fact that the atmosphere of secrecy thatsurroundedalmostalldefenseprojectspreventedtheinnovationsinthatsectorfromautomaticallybeingtransferredtothecivilianarea.Thatistosay, in the view of these critics, the military sector functioned as a“sponge,”absorbingadisproportionateshareofthematerialandhumanresourcesof the restof theeconomyandnot repayingas itcouldwithtechnologicalormanagerialspin­offs.(Castels&Kiselyova,1995,p.29) Thisviewofthemilitaryasa“sponge”ofresourcesisdifficulttoassess given the precariousness of available information. Firstly, it hasalwaysbeendifficulttodetermineexactlywhatwasspecificallymilitaryinthe industriesof thatsector.Since the1930s, theeconomyof theUSSRwas designed to ensure the convertibility of civilian and militaryindustries in the case ofwar. (Lagovskii, 1961, pp. 179, 180 and 184)Thus,thefamousciviliantractorindustryoftheUSSRwascreatedsothatit couldbeused for theproduction ofwar tanks, ifnecessary. (Cooper,1976,p.13;MO SSSR,1976­1980,v.7,pp.662­664) Similarly,militaryministriesproducedasurprisingamountofciviliangoodsranging fromtape recorders, motorcycles, tractors to […] baby carriages andsamovars!127According toBrezhnev’sownassertionsat the1971XXIVCPSUCongress,42%oftheproductionofmilitaryministrieswasintendedforcivilianpurposes.(Brezhnev,1971,p.46)Obviously,theoppositewasalso true:partofcivilianproduction (e.g.,steel, rawmaterials,etc.)wasconsumedbydefenseindustries. Secondly,itisnecessarytoqualifytheviewthatthedefensesectortransferredverylittleofitstechnologicalormanagerialinnovationstothecivilianarea.Infact,thismayhavevariedovertimeanddependedonthegeneral conditions of the economy. If, on the one hand, this assertion

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appearstobevalidinthe1980s,generallyspeaking,ontheotherhand,some authorshave emphasizedhow themilitary sectorhason severaloccasions served to uplift the technological level of the economy as awhole. Cooper (1976, pp. 24­25, 28) provided some examples of theindustrializationeraofthe1930s.Inthatdecade,militaryenterprisesnotonlydirectly fabricatedbetweenone­sixthandone­fifthofthecountry’stotal machine tools but also their excessive demands in terms of thequality and need for ever more sophisticated machines for militarypurposes exerted upward pressure on technical demands for civilianmanufacturing enterprises, forcing them to raise their technologicalstandards. For example, the need for high quality steel and alloys forarmamentproduction ledtothecreationofcompanieswithcapacity forsuchproduction.Civilaviationwasdirectlybenefitedbytheinnovationsachievedintheproductionofmilitaryaircraft(oneofthesectorswiththehighestpriorityintheSovietrearmamentscheme):civilianaircraftwereoftenadaptationsofmilitarymodels.Moreover,asoneSovietexpertofthetime—quotedbyJ.Cooperinhis1976paper—putit:

[...]therequirementsoftheaviation industry inthe other branches of productionwere so greatthat they exerted a decisive influence on theprofile and development of a number of otherbranchesofproduction (ferrousandnon­ferrousmetallurgy, electrical engineering, etc.). (Rinberg,1935,p.3)

Thus thequestion of the Sovietmilitary sector as a “sponge”ofresourceswilldependonthecontextofthetime.Theveryconceptofthemilitarysectorasa “burden”on theeconomyofacountryasawhole isopen to discussion. This is seen most clearly within the capitalisteconomy. In the United States, for example, much of the armamentproduction is carried out by private­sector companies that receivegovernmentorders.128Inaddition,asignificantamountofthisproductionisexported.129Thus,thecreationofarmamentsnotonlybringsprofitbutalsodrivestheeconomyandgenerates jobs.Undertheseconditions,themarkofthe“apogee”of18%ofGNPforthemilitarysectorthattheUSSRreachedinthe1980s(accordingtothehighestWesternestimateamongthosepresentedinAppendix8)wouldnotnecessarilyrepresentasignof“unbearable burden for the economy.”There isnodefinitive correlationbetweenmilitary spending and declining economic activity among thecountriesof theworld.Atmost,one can speakof trendsobservedwithsomefrequency.SufficeittosaythattheUSSRwasnotthecountryintheworldwiththehighestpercentageofmilitaryexpendituresofGNP.Israel,

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forexample,inthe1970­1985periodemployedanannualaverageof23.8percent of its GNP in defense and no direct correlationwas observedbetweenperiods of increasedmilitary spending and those of economicslowdown in the country. (WMEAT1970­1979, p.63;WMEAT1989,p.51). However, the examples above are from capitalist economies,where the possibility of profit could turn arms production into a traderather thanmerelybeinga “burdenon theeconomy.”Butwhataboutanon­capitalistsystemliketheSovietone,wherethispossibilitywasmorelimited?130Would18%ofnational income131 in the1980srepresentanunbearableburdenonthecountry? Firstly,the1930sisaperiodinwhichtheamountofinformationavailable in theWest, especially on sensitivematters such as nationaldefense,wasmuch lower than in the post­WorldWar II era.With thedisintegration of the Soviet Union and the partial opening of formerclassifiedarchivesofSovietinstitutionslikeGosplan,Sovnarkom(CouncilofPeople’sCommissars)andothers,itisbecomingpossibletogetamoreaccurate idea of the “real” military expenditures there although theinformationisstillpresentedinfragmentedform,theresultoftheworkofindividualresearchersfordifferentyearsorperiods.SeveralestimatesofmilitaryexpendituresasapercentageofGNP/NMPappearintable8.5of Appendix 8. Bergson and JEC 1957 made their estimates beforeperestroika;DaviesandHarrison,inthe1990’s,hadaccesstotheformerSoviet classified archives.Bergson (1961,p.149)made it clear thathecalculateddefenseexpendituresasbeingofficiallyannouncedintheUSSRbudget(excludingmilitaryretirements),withoutintendingtouncoverthe“hidden”military expenditures in other appropriations for industry andscience. JEC 1957 proposed to calculate “real” defense expenditures.Analyzingtheyearof1940,JEC1957arrivedatanassessmentconsistentwith the “post­perestroika” findings by Davies and Harrison. AlthoughDaviesandHarrisondidnotprovideaccuratedatafortheyears1937­40,ifwecanguideourselvesbythepercentageoftheSovietbudgetofficiallydevotedtodefense(see“Official%budget”lineintable8.5),wenotethatfrom1936­7 to1940,defense spending rose sharply. It is true that theyears 1937­40, despite being marked by economic growth, were lessintense than in some otherperiods of the decade.According to officialdata,theNetMaterialProductoftheUSSRgrewatanannualaverageof16.2 percent between 1928 and 1937 and “only” 10 percent between1937and1940.AccordingtooneofBergson’s(1961,p.271)calculations,SovietGNP grewatannual average averagesof11.9% in1928­37and3.4% in 1937­40. This could mean that the military expendituresamplified in 1937­40 had a negative impact on economic growth.

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However,thisisprobablyonlypartofthetruth,forthisbehaviorseemstohavebeenpartofalargercyclicalcharacterofthedevelopmentoftheeconomy in the period, than exclusively a function of militaryexpenditures. Inthe1930s,theUSSR,unlikethecapitalistcountries,experiencedcontinualeconomicgrowth.However,thisprocesswasnotregular.Some“cycles” of faster and less rapid growth of the economy can bedistinguished from what Davies (1994, p. 154­156) called“superinvestment crises.”The excessof ambition of the grandiose five­year plans and the radical structural transformations that the countryunderwent in aprocessof “forced” industrializationmade itdifficult tocentrallyplanandpredictall thedetailsof these transformationsand tomaintain the adequate proportions between the different branches ofproduction. Periodically these disproportions became more andmorenumerous. There was a time when it was impossible to fulfill all theambitious projects planned for lack of resources in some sectors andexcess in others: several projects then accumulated as “incomplete”—whichfurtherincreasedtheimbalanceoftheeconomy,sincethecountrycountedon thoseprojects to “feed” otherproduction branches.At thatmoment, the annual plans had to be revised, fewer new projectswerepresentedandemphasiswasplacedonthecompletionofprojectsalreadystarted.Thismore “calm” rhythmallowed to increase thepercentageofprojects completed as planned, which restored a better balance andproportionamong thevariousbranchesofproduction.Thus, theSovieteconomy followedacyclicalrhythmof: investmentphaseandambitiousplans ­> over­investment ­> increased disproportion between thedifferentbranchesoftheeconomy­>reductionofplannedrhythms,withaviewtoreducing thenumberof incompleteprojects ­> increase inthenumber of completed projects, better proportion among the variousbranches ­>resumptionofrapidgrowthrates ­>new investmentphaseandambitiousplans.MostWestern studiesof thephenomenon see thefollowingphasesof faster(+)and lessrapid(­)growth:1928­1930(+);1931­33 (­); 1934­36 (+); 1937­39 (­) (Zaleski, 1971, p.270; Davies,1994, p.154). The year of 1940 is controversial inWestern estimates,with some authors including itwithin thedecelerated growthphaseof1937­39(Davies,1994,p.154),andotherspointingtoacertainrecoveryon the eveof thewar.132 (Zaleski,1971,p.270)Sovietofficial statisticsalso point to these “cycles,” butwith slight differences in some years.(Davies,1994,p.154;seealsotable3.2ofappendix3)AccordingtoSovietofficialdata,thecyclesareasfollows:1928­1931(+);1932­33(­);1934­36(+);1937­38(­);1939­40(+). Thus,defenseexpendituresintheyears1937­40donotappeartohavebeen themaindriversof theslowdown ineconomicgrowth in the

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period(althoughtheymayhavecontributedinparttothis,togetherwiththenegativeeffectstheGreatPurgehadoncadresoftheadministration).Aswehave seenabove, thisdeceleration seemed tobepartofa largercyclicalpictureoftheeconomy.Somuchsothattheperiod1939­40,justas the Soviets were urgently increasing defense spending due to theproximity of war, was a time of “acceleration” within the cycles seenabove. Inaddition totheyears1937­40,theperiodofthe first five­yearplan (1928­32)—whichuntil the1970swas considered in theWestaperiodwhenmilitaryexpenditureswereatarelativelymoderate level inGNP percentage terms — was also marked by military expenditureswhich,althoughnotof themagnitudeof1937­40,wereat least twiceasmuch as previously thought. In other words, most of the 1930s wasmarkedbyarelativelyhighlevelofmilitaryspending,withapeakattheendofthedecade.(Davies,1993,p.580;seealsotable8.5inappendix8)However, they were also marked by accelerated economic growth.Moreover,aswecanseebycomparingTables8.6and8.4ofappendix8,theaverageannualgrowth ratesofmilitaryspending in theUSSRwerehigher in the 1930s than in the decades after World War II: 26.6%between 1928 and 1940 (Ofer in table 8.6) against annual averagesslightlyabove3% for theentire1955­85period(accordingtothesameOfer in table8.4).Thus, in the1930s, the impactof the introductionofincreasingmilitarizationwasmuchgreater,sincetheUSSRstartedfromalowerlevelintermsofdefensespending.Inthepost­WorldWarIIdecades,whentheSovietUnionalreadyhadahigherlevelofmilitarizedeconomy,increasesindefensespendingweresmallerandmoreevenlydistributedovertime.Iftherewereanydirectcorrelation betweenincreasedmilitaryspending and decelerating impact on the economy as a whole, thiscorrelation shouldhavebeenfeltmorestronglyinthe1930sthaninthepostwarperiod(whenexpendituresremainedsteadyanduniformlyhigh,bothinperiodsofrapidandslowereconomicgrowth). Thus, the question of the “burden ofmilitary spending” in theSovieteconomyhastobeseenwithinthedifferenthistoricalcontexts.Ahigh level ofmilitary spending does not automaticallymean economicslowdown.Italldependsonhowthis“wareconomy”fitsintotheoveralleconomicmodelofthesystem.(Holloway,1983,p.171)Inthe1930s,forexample, when the process of initial industrialization of a lesssophisticated economy required a large concentration of resources inbasicareas (constructionof largehydroelectricpowerplants,steelmills,machine tools,etc.), the “discipline”andhierarchy in thedistributionofresourcesstimulatedbythemilitarizedeconomyseemstohaveservedasastimulustomaintaintherhythmsof“forced”industrialization.(ibid.)Inthe1980s,when theUSSR had adeveloped industrial economy and an

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educated population with more demanding urban habits, thecontradictionsbetween thedemandsof the civilianandmilitary sectorswere becomingmore acute.Moreover, global industrial standardsweremovingtowardwhatPiore&Sabel(1984)called“flexiblespecialization.”This flexibility demanded by the new industrial paradigms contradictedtheeminentlyrigidcharacterofamilitarizedeconomy. Theproblemofthe“militaryburden”intheSovietcaseseemsnottobeaquestionofamountsorpercentagespersebutratherofthewayinwhich thismilitarized sector “fits” into the economy as awhole. In the1930s,themilitarizedeconomyseemsnotonlynottohavecontradictedbut ratherstimulatedeconomicgrowthunder “forced” industrialization.In the postwar period, in the first half of the 1950s, the highmilitaryspendingratedidnotpreventrapideconomicgrowtheither.133Asforthe1970s and 1980s, most Western analysts detected a contradictionemergingbetweenthemilitaryandciviliansectorsoftheeconomy.Butifon the one hand the demands of the military sector seemed to bebecoming excessive for the conditionsof the economy as awhole, it isperhapsexaggerated toplace thisprocessasoneof causality (as someauthors sometimes put it) ofmilitary spending causing the economicslowdown but rather as the case of a somewhat lame economy,whichalreadyhad failings,andwhichwasnolonger inaconditiontomaintainsuch a military apparatus. To make this idea clearer, we can draw aparallel, in the Western world, with the welfare state apparatus(unemploymentpayments, freemedicine, etc.) thatwasunder attack inthe neoliberal decades of the 1980s and 1990s even in traditionalEuropeansocialdemocraticcountries.Itisnotthatwelfarestatespendingcaused theWestern economic slowdown begun in the 1970s (as someneoliberaleconomistsseemtosuggest),butratherthatduetoastructuralcrisis(whosecausesareelsewhereandarealsolinkedtochangesintheworld industrial paradigm) the Western economies seemed to be nolongerabletomaintainsucha largeapparatusofthewelfarestatesocialnetworkasbefore.Butthefactthatwelfarestateexpendituresbecameaheavyburden inaworldof smallermarketsand intensifiedand flexiblecompetitiondoesnotmean that theseexpenseswere thesourceof theproblemsofdeceleration.134 Finally,one lastwordtobettercontextualizetheproblem.Alltheabovediscussionwasbasedon criteriaofmarketeconomic rationality.What is the opportunity cost of military expenditures? Would theeconomy of the USSR be better, more efficient, grow faster if theseexpenditureswerenotbeingused indefensebut inanotherproductivesphere? However, this type of analysis, often employed by Westernanalysts in examining the Soviet military question, leaves aside animportantfactor,namelythatthelogicoftheSovietstatewasnotguided

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primarily by considerations of economic market rationality. Since itsLeninistorigins, the Soviet state adopteddecisions basedon criteriaofmaximizationofpower(withinaMarxistlogic),whichoftenclashedwiththeprinciplesofcapitalistmicroeconomicefficiency.ThequestionofthesurvivalandstrengtheningofSovietpowerwithinacontextof“capitalistencirclement” was the main consideration in the first decades of itsexistence.Allothergoals—tacticalandstrategic—weresubordinatedtothis question. This is not difficult to understand given the sequence ofmilitaryepisodes—suchasWorldWarI, foreign intervention,civilwar,general rearmament in the1930s,WorldWar II— inwhich theSovietpowerwas involved literally from its birth. (Gorbachev,1987c,p.149)Butnot only that.Even in the1960s,when theUSSR could “afford” totransfer part of the competitionwith capitalism to the economic level,other aspects made “peaceful coexistence” between the two systemsimpossible in practice (in spite of the official rhetoric then employed).Just as capitalism is intrinsically expansionist — because of thecharacteristicsoftheprocessofcapitalaccumulationandvalorization—theMarxist logic of Soviet powermade it inherently expansionist too.This becomes clearer from the angle of a theory such as that of thepermanentrevolution,inwhichtheflourishingofthecommunistsystemwould not be possible without the concomitant weakening (andsubsequentdisappearance)of capitalismworldwide.The coexistenceoftwosystemsbasedonmutuallyexclusivelogicsmademilitarismanalmostnatural consequence. Throughout the USSR’s existence (even at theheightoftheeraofthesloganof“peacefulcoexistence”),135Sovietleadersmade the permanent feeling of threat from capitalism clear. Thispermanent threatwasused as justification for themaintenance of theformidable defense apparatus. (Stalin, 1946­1951e, pp. 38­39; Stalin,1946­1951g,pp.302and305;Khrushchev,1963,pp.172­173;Brezhnev,1970­1982b,p.375;Moiseev,1989,p.5). Inconclusion,the“formidabledefenseapparatus”wasanintegralpartoftheStalinistandpost­StalinistSovietsystem,withnopossibilityoftrade­off in favorofasystemthatstronglyprioritized theciviliansectorbasedonpurelyeconomicopportunitycostcalculations.136Moreover, inrelationspecificallytoperestroika,therearenodirectindicationsthattheexistence and maintenance of this apparatus caused the economicdecelerationinthe1970sand1980s.137

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8THEPROBLEMOFSOVIETAGRICULTURE8.1INTRODUCTION Onepoint,withcharacteristicssimilartothoseoftheproblemofmilitaryspendinginitsconsequencesintheeconomicdecelerationoftheUSSRinthe1970sand1980s—adecelerationthatleadtotheneedforaperestroika of the system in themid­1980s—was that of agriculture.Soviet agriculture, having been seen as a source of accumulation ofresources to finance the process of industrialization in the 1930s, hassince become increasingly considered by many as a “burden” on thecountry’s economy due to the unfavorable relationship between theenormous amount of resources it consumed and its low productivity.(Hedlund, 1984, p. 11; Doolittle & Hughes, 1987, p. 27) Table 9.1 ofAppendix 9 shows thatwhile in the pre­WWII period the agriculturalsectorhadalowerpriorityinallocation,inthedecadebeforeperestroikamorethanaquarterofthecountry’scapital investmentswerededicated(directlyorindirectly)toagriculture.138 Thesituationbecamecriticalbecause,withthefallintheratesofcapital growth since the 1960s (exhaustion of the extensivemodel ofgrowth;seetable5.1),aneverlargeramountofinvestmentwasnecessarytokeepupeconomicgrowth.(Gorbachev,1985,p.15)Intheearly1980s,on theeveofperestroika,competition for resourcesamongagriculture,defense,industry,andothersectorswasgrowing. In principle, a high allocation of resources to the agriculturalsectorwould not be a problem if the income derived from therewerecorrespondinglyhigh.Critics,however,pointedtothe factthatthishighprioritydidnotcorrespond tohighproductivity.On thecontrary,Sovietagriculture was becoming adrain on investments. (Ek, 1987,p.1)Theproblemwasnotonlylowagriculturalproductivitybutalsoinefficientuseof available inputs and equipment and high post­harvest waste.Gorbachev(1985,p.20)himself,atapartyconference in1985,claimedthat almost one­fifth of the cropwas lost in the storage, transport, orprocessingphase.

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Fromthispointofview,spendingonagriculturewasindeedoneofthe strongest points of tension that could contribute to the growingeconomicdifficultiesoftheUSSR,especiallysincethemid­1970s.Unlikemilitary expenditure — which, from the 1930’s onward, were fairlyuniformly high — spending on agriculture (as percentage of totalinvestment) increased progressively in the post­World War II years,reachinganapogee(seetable9.1)inthedecadebeforeperestroika.Thus,excessivespendingonagricultureseemedtobemoreofapre­perestroikaproblemthanmilitaryexpenditures—whichhavetraditionallyremainedhighintimesofhighandloweconomicgrowth,anditisthereforemoredifficult to imputetothem thecauseofthe loweconomicgrowthof thespecificperiodpriortoperestroika. Indeed, there was an understanding not only among Westernauthors but also among the Soviets themselves that amoreproductiverural sectorwithamore efficient relationshipbetween investmentandproduction could make it easier to resume the desired economicacceleration inthemid­1980s.Yetagriculture,even intoday’sworld, isaveryspecific field,withpeculiarities thatoften requireamorenuancedreading than, for example, the more “standardized” industrial sector.Therefore,thereallevelofcontributionoftheSovietagriculturalsectorisahighlycontroversialissue.8.2ORIGINSOFTHEPROBLEM TheSovieteconomicmodelhasitsmostdistanttemporalfrontierin the late 1920s and early 1930s, when the end of NEP and thebeginningofthefive­yearplansbegantotakeshapemoredefinitively.Inthe period of initial formation of this model, two processes hadfundamental influence: agricultural collectivization and heavyindustrialization. And these two processes were intrinsicallyinterconnected. As the USSR could not rely on external resources tofinanceherindustrialization(asdidtsaristRussia),resourceswouldhavetocomefromagricultureitself.Thiswasaconclusionthatwasrelativelyobvious to the Soviet leaders in the late 1920s.However, theway thisprocess shouldbe carriedoutdividedopinions.On theonehand, therewere those who advocated a policy of exerting pressure on theagricultural sector, with the creation of terms of trade unfavorable toagriculture (lowerpricesandhighertaxationforproducersofagriculturalgoods,higherprices for industrialproducts,etc.), inorder toexecutetheperekachka (= “pumping,” transfer) of resources from agriculture toindustry.(Preobrazhenskii,1965)Ontheotherhand,theBukharincamp

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advocatedapolicyof incentivesandpriority foragricultureand for the“enrichment”ofpeasants,sothathigheragriculturalproductionthroughtaxes would lead to the creation of resources for a gradual butharmoniousandstableprocessof industrialization.(Bukharin,1967,pp.245­316; idem,1967a,pp.375­397)AtthecenterofthediscussionwastheevaluationofNEP(NewEconomicPolicy)andtheresultsofthe1920sintheagriculturalfield. NEPwasdecreedin1921,asameasuretoescapetheimpasseofthe fall ofproductionduring the years of theRussian civilwar (1918­1921).Inthefieldofagriculture,itreplacedthehatedprodrazverstkawithprodnalog. 139 The possibility of being able to sell on the freemarketproductionabove the levelofprodnalogmeant togive thepeasants theincentivetorecoverthelevelofproductionlostduringthecivilwar.Freefrom theexorbitantconfiscationsandotherdifficulties,thepeasantsdidindeedgettowork.Ifin1921,attheendofthecivilwar,thelevelofgrossagriculturalproduction intheUSSRwas60%ofthe1913 level, in1925­26thatpre­warlevelwasrestored(seetable9.2inAppendix9).Theyear1925marked theapogeeofNEP.From thenon,agriculturalproductioncontinued to grow, but not at such rapid levels. And a negativephenomenon began to become apparent: the delay in the growth ofmarketablecropsurplus.Althoughoverallproductionwasincreasing,thequantity of grains available in the market did not grow in the sameproportion.Inotherwords,duetoanumberoffactors,suchaslowpricesfor agricultural products, the difficulty of obtaining affordable industrialgoods(thefamous“scissorscrisis”),etc.,thepeasantfoundnoincentivestomarketthewholeproduction.Hepreferredtouseincreasingamountsofgrainforhisownconsumption,inhisdietandasanimalfeed(orkeepthem for future sales in timesof scarcity andbetterprices) thanmakethem available to the government or the market. Production hadincreased duringNEP, the peasantwas definitely eating better, but thesurplus available on themarket did not grow at the same rate. Stalin(1946­1951a,p.85),inaspeechinMay1928,pointedoutthatin1926­27only13.3%ofthecrophadbeenmarketed(i.e.,consumedoutsidethecountryside) against an indexof26% in1913.Table9.3ofAppendix9shows thesedata.Wesee that in tsarist times large farmsandpeasantswere responsible for most of the grain placed on the domestic andexternalmarket,while smallpeasants tended to subsistenceagriculture(with a lower percentage of outside trade).With the agrarian reformpromotedbytheSovietrevolution,smallholdingwasresponsibleformostagricultural production. These small peasants continued to incline tosubsistenceagriculture,withtheresultthatmarketableNEPsurplusesdidnotkeepupwiththegrowthrateofproductionasawhole.Fromtable9.3we see that although the two years (1913 and 1926­27) had roughly

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equivalentgrossoutput,themarketablesurplusof1926­27waslessthanhalfthatof1913. Thus, on the eve of the first five­year plan, in 1928, the Sovietleaderswere facedwithadilemma.Theyneededagrowingagriculturalsurplus to finance industrialization, but the structure of agricultureinherited from NEP did not seem appropriate for that. Small isolatedpeasants,without individual capital for large investments inmachinery,tended touse thegrainsmore for theirown consumption than for themarket.Thepossibilityofallowingtheenrichmentofthemostpowerfulpeasants(kulaks),sothatthey,withincreasedcapital,couldmakegreaterinvestments in production, was ideologically forbidden. (Stalin, 1946­1951a,pp.87­88)Whatthenwasthesolution?TheanswerwasgivenbyStalinhimself:

The way out lies, above all, in passing fromsmall, backward and scattered peasant farms tounited, large socially­conducted farms, equippedwithmachinery,armedwithscientificknowledgeandcapableofproducingthemaximumamountofmarketable grain. The way out lies in thetransition from individual peasant farming tocollective, socially­conducted economy inagriculture.(Stalin,1946­1951a,p.88)

Thesewords served tomark the tone of the new policy to beimplemented. The XV Communist Party Congress in 1927, whichestablished thedirectives for thedraftingof the first five­yearplan,alsoinstructedthat

[T] he task of unifying and transforming smallindividualagriculturalproductionunits into largecollectiveunitsmustbeplacedasthemaintaskofthe party in the countryside [… with the party]stating categorically that this transformationshouldonlybecarriedoutwiththeconsentofthepeasants[...](KPSS,1983­1989f,p.299)

Despite the relatively moderate tone of the statement, whichemphasizedthevoluntaryandpersuasivenatureofthecampaign,whichshould show thepeasants theeconomicadvantagesof joining collectivefarms(kolkhoz),realpracticetookotherdirections.Inthezealoffulfillingthe objectivesof theplan and increasing thequantity of grain that thepeasantswere tosell to thestate forsupply to thecities, theprocessof

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collectivizationbecamearealbattlebetweentheSovietpowerandalargepartof theruralpopulation.Thedetailsof this“battle,” theexcessesandarbitrarinesscommittedwere the targetsofmeticulousWesternstudies,aswell as denunciations by Soviets themselves. (Lewin, 1985; Strauss,1969; Antonyuk et al., 1983, p. 209) The rhythms of collectivization,implantedwithbrutaldetermination,were rapid. In1928,only1.7%ofruralunitswerecollective.Attheendofthefirstfive­yearplan,in1932,61.5%of the ruralunitshad alreadybeen collectivized. In1937, at theendofthesecondfive­yearplan,thecollectivizationratewas93%andin1940,96.9%.(Narkhoz1958,p.346) Inarelativelyshortperiodoftime,Sovietagricultureunderwentarealrevolution fromabaseofsmallagricultural producers to large­scalecollectivizedagriculture.Moreover,thewaythisprocesswascarriedout,andtheparametersthatguidedit,wouldmarktheSovietruralsectorfordecades tocome. Inorder tounderstand the logicofcollectivization, it isimportant to note that the aim of collectivization was not simply toincreaseagriculturalproduction(afterall,NEPdidthatasonecanseeintable9.2)but to increase theagricultural surplus that couldbeused tofinanceindustrialization.(Stalin,1946­1951a,pp.93and94) Shaffer (1977, pp. 58­59) summed up the tasks of Sovietcollectivizedagricultureseenfromthisprism:

For good or ill, the fundamentalpriority of theSovietleadershipwasrapidindustrializationatallcosts [...] In order to industrialize at maximumspeed, all efforts had to be directed toward theaccelerated development of the heavy industrysector . The tasks assigned to the agriculturalsectorreflectedthispriority.Themaintaskwastoprovide thenecessary food and rawmaterials inthe cities and, if possible, generate a surplus ofexportscapableof financing importedmachineryandequipment. Inotherwords, thegoalwas themaximization of marketable agriculturalproduction, not themere increase in productiononfarms.Thesecondtaskwastoprovidefoodandrawmaterialsatminimumprices: therewerenoresourcesfortheproductionoflargequantitiesofindustrialconsumergoods topay foragriculturalcommodities. The last task was to generate asurplusoflabornecessaryforthefactories[...]

This summary view is quite consistentwith the later historical

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developmentsofcollectivizationandwithstatementsbypartyleadersandvariousofficialdocuments.(Stalin,1946­1951f,pp.176­177;KPSS,1983­1989, pp. 104­105; Gorbachev, 1987a, pp. 413­415) It is important tokeepthisinmindwhenevaluatingtheresultsofcollectivizationofSovietagriculture. These results can be analyzed from the productive prismitself,thatis,fromtheincreaseofthecountry’sproductionoragriculturalproductivity compared to other alternative models that couldhypotheticallybeadopted,or from thepointofviewofhowagriculturefulfilledtheprioritytasksabove,aslaiddownbythescheme.Wewilltrytoanalyzetheresultsthroughbothprisms.8.3SMALL­VERSUSLARGE­SCALEAGRICULTURE Beforeanalyzingtheresultsofcollectivizationanditsinfluenceonlateragriculturaldevelopment,wewillmakesomecommentsononeofthe issues at the heart of the decision to start collectivizing Sovietagriculture:theneedtoabandonthestructureofsmallfarmsandreplaceit themwith largecollective farms,whichwouldallow theadvantagesoflarge­scaleproduction. The world experience of the twentieth century shows theexistence of twomain types of agriculturalproduction in industrializedcountries.On theonehand, there istheAmericanorCanadianmodeloffarmsofconsiderablesizeandattheotherendofthespectrumwehaveagriculture like the Japanese,basedon the tiny farmsof thatextremelypopulous country. Overall, in advanced and efficient economies, large­scale agriculture tends to have higher productivity per employed ruralworker,whilesmall­scaleagriculturetendstohavehigherproductivityperplantedarea.(Strauss,1969,p.95)Fromtable9.4ofAppendix9,wecanclearly see this trend.Taking theyear1985, forexample,while in Japantheproductionofcerealsperhectarewas5.8tons,intheUSAitwas4.1.Intheproductivityperruralworker(year1986),theUSAindexwas54.7andJapan’swasonly10.1.WesternEuropeancountries(suchastheFRGin the example in the table) occupy an intermediate position betweenthesetwotypes,beingmuchcloser tosmall­scaleagriculturethantolarge­scale agriculture (productivity figures fromWest Germany demonstratethis). The choice of one or another model as the most efficient willdepend on the natural conditions of each country (availability of land,labor,capital,etc.). In thecaseof theUSSRon theeveof the first five­yearplan, thepreference for large­scale agriculture really seemed themost rational.With an extreme abundance of land and a need for labor to accelerate

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industrialization,severalanalysts, includingWesterners,agreed that thepreference for large­scaleagriculturewouldbe themostappropriate fortheconditionsoftheUSSRatthetime.(Strauss,1969,pp.96­97;Shaffer1977,60)ThispreferencebecomesmorejustifiedifwetakeintoaccountthelowdegreeofcapitalizationofNEPpeasants.Small­scaleagricultureisproductive incountriessuchas Japan,Germany,etc.due to the fact thatthese small peasants have an efficient apparatus of technical support,conditions of capitalization through loans and subsidies from thegovernment,etc.TheseconditionswereabsentintheUSSRof1928.Mostruralplots(see table9.3)consistedofsmallpeasantswhoseoutputwasgearedmoretowardsubsistencethangenerationofexcessofcapitalthatcouldbeturnedintoinvestmentstomodernizeagriculture.Fromtable9.6ofappendix9,wecanseethestructureof investmentsinfixedcapitaloftheUSSR.From1918 to1928, littlemoneywas invested in agriculture(only 3.1% of total investments).Denoting the subsistence structure ofagriculture,mostoftheinvestments(67.5%)werefortheconstructionofhousing and other non­productive investments. In other words, themajorityofNEP’ssmallindependentruralproducersinvestedlittleinthemodernization of the production processes, with the purchase ofmachines, etc., using more primitive methods which involved lessfinancialexpenses.Withthefirstfive­yearplan(1928­32),wecanseetheradical change in the structure of investments: non­productiveinvestments in housing fell to 16.1% of the total, while productiveinvestments soared. The 16.1% that agriculture (also) received forproductive investments in fixed capital in the period represented thecapitalreleased,mainlythroughcollectivefarms,inthemodernizationandindustrializationofagriculture. It is important to note that the decision to undertake forcedcollectivizationwasnotmerelyeconomic. Itwasconsiderablyapoliticaldecision of the party to allow agriculture to serve as the basis for theindustrialization of the country (within the concept of proletarianhegemonyinthealliancewiththepeasantry),andnotasanendinitself.(Stalin,1946­1951a,pp.93­95,Stalin,1946­1951f,pp.176­177)8.4RESULTSOFCOLLECTIVIZATION We can begin to analyze the results of collectivization as aproduction process and as ameans of financing industrialization. It isimportant toobserve table9.2ofappendix9. In it,wehave thegrowthindexofgrossagriculturalproductionof theUSSR.From the“GAP” line,we see that, from an index 100 in the pre­revolutionary period (year

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1913), 140 production fell to 60 during the civilwar (year 1921). Theproduction onlywentbacktoitslevelof1913around1925­26.Andwhathappenedduringthecollectivizationofthefirstfive­yearplan?Duetotheexcessivelyrapidinitialrhythmsofcollectivization,thedisorganizedwaytheprocesswasconducted,theresistance(passiveandactive)ofmuchofthepeasantpopulation,productionfell!Weseethat,fromanindex124in1928,agriculturalproductionfellto107in1932.Thefallwasmainlyfeltinlivestock.Fromthe“GLP”line,weobservethat,fromanindexof137in1928, livestockproductionplummetedto75(!) in1932.Cattleranchingwas especially hard hit, since many peasants, before associating“voluntarily”intocollectivefarms,preferredtokilltheiranimals,toeatorsell, than give them to common use.The animals died in themillions:from68.1millionheads of cattle in1929, the country declined to38.6millionin1933.(Stalin,1946­1951g,p.321). However(andthisisimportanttounderstandthelogicofthethenSoviet leaders),despite totalproduction falling in the first five­yearplan,themarketable surplus ofproduction rose (!). From the same table9.2(line “MCP”)we see that NEP left a dubious legacy: on the one hand,productionrose,reachingandsurpassingthelevelsof1913.Ontheotherhand,thesubsistenceagricultureofmostpeasants(seealsotable9.3)leftmarketed production below the level of 1913. Table 9.2 (line “MCP”)shows that,evenwith the fall inproduction in theperiod1928­32, themarketedsurplusincreasedinrelationtotheNEPperiod.Thatistosay,the financialcontribution thatagriculturegave(at least in the first five­yearplan) to industrializationcamenot froman increase inproductionbut from a large extractive “tightening” in terms of low wages, lowagriculturalpricesandviolentrequisitionsofagriculturalsurplus.Therewasaforcedtransferofresourcesfromagriculturetotheindustrial­urbansector.141FromTable9.6,wecanseethatthelargetransferofinvestmentresourceswentfromthehousingconstructionsectortotheothersectorsinthefirstfive­yearplan.Thesmallpeasants—who,withtheirtendencytosubsistenceagriculture,usedmostoftheincomefromtheirproductionto improve their own food consumption (or their animals’) andindividually improve their own housing situation —142 withcollectivization had the result of their work channeled to otherproductivepartsof theeconomy (including toproductive investments inagriculture itself,butmainlytoindustry). Regardless of the increase in production itself, collective farmsincreased the extractive power of the state and its power over societyoverall.Thegreatcontributionofcollectivization,fromtheinternalpointofviewof thesystem,seems tohavebeen toput the “last remnantsofcapitalism” (i.e., independentpeasants)at thedisposalof thecommand­administrative economy,143 facilitating the reallocation of financial

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resources and labor in accordance with the priorities establishedcentrally. The critics of collectivization, in addition to emphasizing theenormoushumancostsofhowtheprocesswascarriedout,pointtotheevidencethatitsoprofoundlymarkedtheSovietruralsectorthateveninlater times several systemic failures lingered on, leaving the country’sagriculture atacomparativedisadvantage to thatofother industrializednations(Strauss,1969,pp.123­129;Lewin,1975,pp.397and515). Wemust,then,analyzehowSovietagriculturebehavedlater.8.5STALIN,KHRUSHCHEV,BREZHNEV... From table9.1 ofAppendix9 (line “%PDI”),we can see a greatdifference in the treatmentof investments inagriculture in thepre­andpost­WorldWar IIera.While in theStalinistperiod, theruralsectorwasgiven lowpriorityof investments (being treatedmoreasageneratorofresources for industry), from the rise of Khrushchev onward thissituation changed. With industry already more developed and able togenerateitsownresources,Sovietleadersbegantopaymoreattentiontothe agricultural sector in an attempt tomake itmore productive. Thepicture was then reversed. The share of investment in agricultureincreased from decade to decade. In the ten years leading up toperestroika,morethanaquarterofthecountry’sfixedcapitalinvestmentswerebeingusedinagriculture.Criticspointedoutthat,evenwithallthisamountofresources,collectivefarm­basedagriculturewasnotbecomingproductiveenough.(Ek,1987,p.1) Letus seehow theprocess ofproduction in theUSSR unfolded.FromTable9.2,wecansee that thegrossagriculturalproductionof theSovietUnion,afterfallinginthefirstfive­yearplan,recoveredattheendof the second (1937). In 1940, gross agricultural productionwas 45%higherthanthatof1913.However,withtheadventofWorldWarII,theproduction index fellagain. In1945, theSovietshada14percent lowerproduction thanthatof1913.Inotherwords,uponenteringthepostwarperiod, the Soviets were back to pre­revolutionary production rates.However,withacollectivefarmstructurealreadysetupandbasedontheuse of large­scale production machinery, the recovery of post­warproductionlevelswasfaster.Especiallyafterthe1950s,withKhrushchevinaugurating the time of greatest attention (and even priority) foragriculture,theratesofincreaseoftheagriculturalproductionindexesoftheUSSRfrom1950to1986wererapidandmuchhigherthanthoseoftheUSAandWesternEuropeoverthesameperiod(seetable9.5).

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We need to separate the facts. In terms of total output, Sovietagriculture grew much faster than that of industrialized capitalistcountries(table9.5).Asweenteredthe1980s,theUSSRwastheworld’slargestproducerofwheatand thesecond (behind theU.S.)ofgrains ingeneral. (FAO Yearbook 1987, pp. 113­117) However, this increase inproduction wasachievedthroughacomparativelymuchgreaterinjectionof resources andmanpower than in other industrialized countries. AswasnotedataconferenceonSovietagriculturepromotedbytheKennanInstituteofWashingtonin1976:

Since 1950 Soviet agricultural production hasmore than doubled. Although progress has beenuneven, average annual growth has been of therespectable magnitude of 3.5% per year, morethandoublethatoftheUSandabovetheaverage3% for the rest of theworld.As a result of thisrelatively rapid progress, Soviet output in 1974amounted to 85% of American production,compared with about three­fifths in 1950 […]Since1950theinputsutilizedinagriculturewentup 75% and included costly programs thatrequired massive support from industry [...] Incontrast to the dramatic increase in inputsinjected into Soviet agriculture, US farm inputsremained virtually constant since 1950. As aresult, almost 50% of growth of Americanproduction isattributable toan increase in factorproductivity.(Diamond,1976,pp.3­5)

Inotherwords,fromthe1950sonward,whentheimprovementofagriculture becameapriority, theUSSRachievedsubstantial increase initsproductive capacity.However, this increase came at a relativelyhighcostofinvestment.While intheUnitedStatesproductionincreaseswerelargelyachievedthroughtechnicalprogress(withoutmuchproportionalincreaseininputexpenditures),intheUSSRimprovementsinproductionandproductivitywereachievedthroughincreasedallocationofresourcestotheruralsector.Andthis,inthe1970sand1980s,provedtobetoobigaburdenonaneconomythatdidnotgrowasquicklyasbefore. From tables9.5and9.4ofAppendix9,wecansee that,between1950 and1985,despite the fact that the agriculturalproduction in theUSSRgrewmuchfasterthanintheUSAandWesternEurope,productivityperruralworkerandperhectaredidnotgrowproportionally. In1985,forexample, theproductivityperhectareof theSovietUnionwasabout

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1/3 of the American, whereas the productivity per rural worker wasalmost10timessmaller(theUSSRhad16.2%ofitspopulationemployedinagricultureversusonly2.8%intheUSA).(Table9.4andFAOYearbook1987,pp.69and78). ItisimportanttonotethatthislowproductivitywasnotsharedbyallformerEuropeansocialistcountries.Someofthesecountries,suchasEast Germany, Hungary and Czechoslovakia had relatively highproductivity per hectare. From Table 9.4we can see that, in 1985, theproductivityperhectareof cereals inEastGermanywasclose to thatoftheUSA.Inwheatcrops,forexample,productivityperhectare(inthemid­1980s)inEastGermany,Hungary,andCzechoslovakiawashigherthanintheUSA (althoughproductivityperworkerwas lower). (FAOYearbook,1987,pp.16­17) The factthatagriculture intheUSSRwas lessproductive,even inrelation to other Eastern European socialist countries, was partlyexplainedbytheclimaticandnaturalconditionsofthecountry. ThesenaturaldifficultiesarehighlightedifcompareddirectlywiththesituationoftheAmericanruralsector.AlthoughtheUSSRis2.5timeslargerthantheUnitedStates,duetobadconditions,onlyabout1/4oftheareawasused foragriculture in1985(againstalmost50% in theUSA).(FAOYearbook1987, pp.51 and57)Only1% ofU.S. arable land is inareas considered problematic for agriculture, compared to 60% in theUSSR. (Novosti Press Agency, 1977, p. 151) As one Sovietminister ofagriculture putit:

The entire US territory lies south of the 48thparallel,whileintheUSSRthisistrueforonly1/3oftheland.Whileonly1.1%ofSovietterritoryhasan annual precipitation above 700 mm, theAmerican percentage is 60% [... In the SovietUnion] precipitation is insufficient in 2/3 of thearea planted with grains [...] Severe droughtshappen every three years [...] Temperaturevariation is extreme [...] Sixty percent of Sovietarablelandhasatemperatureof5degreesorless,versus justslightlymore than10% in theUS [...](Matskevich,1973,p.4)

Itisimportanttokeepthesenaturalconditionsinmind,especiallywhenexaminingtheissueoflargegrainimportsbytheUSSRinthe1970sand 1980s. At that time, several analists posed the problem as if “theUSSRcannotfeeditself.”(Ek,1987,p.1)Thiswastrueonlyinpart.Aswehave seen, through a large injection of resources, Soviet agriculture,

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surpassingtheUSA,wastheworld’slargestwheatproducerin1985, forexample. (FAO Yearbook 1987, pp. 113­117)Whywere there years inwhichtheUSSRbecameoneofthelargestimportersofwheat? Theansweristwofold.Firstly,therewastheweatherinstability.Aswehaveseenabove,approximatelyevery threeyears theSovietUnionsufferedseveredroughts (apart fromothernaturalproblems).Thiswasrevealedinthezigzagcharacterofproduction,withtwoorthreeyearsofgood harvests, interspersedwith crop failure.144 In those years, itwasnecessarytoimportgrains. Theneedforimportintensifiedinthe1970sand1980sduetotheincreaseinrealincomesofthepopulation.Withthepriceoffoodfixedbythegovernmentandstableovera longperiodof time,andnominalandrealwages going up, a change in the food patterns of the populationbegan tooccur:consumptionofahigherpercentageofmeat insteadofthetraditionaldietbasedoncereals.Asone1983OECDstudyputit:

The increase in the Soviet standard of livingsince the 1960s is also reflected in a higherconsumption of animal products, fruits andvegetables and a decline in the proportional percapitaconsumptionofpotatoproductsandothercereals [...]Thedaily calorie intakeofanaverageSovietcitizenis[...]similartothatofanAmericancitizen.But thestructureof foodconsumption inthetwocountriesisdifferent:intheUnitedStates,37­40%ofthecaloriesareofanimalorigin,whilein the USSR this proportion is only 26­27%.(OECD,1983a,p.12)

The increase in the consumption of animal products raised thelevel of demand on Soviet agriculture, since livestock farming demandslargeruralareasandanincreasedamountofinputs(madeup,inpart,ofagriculturalproductsusedforfoodforanimals). Thus,asHedlund(1984,p.1)putit,ontheeveofperestroika,theSovietgovernmentwas“underintensepressurenotsomuchforfoodasforabetterdiet,especiallyintermsofincreasedmeatconsumption.”Andthisincreaseintheuseofmeatproductsintensifiedthepressureontheagriculturalsystemasawhole,as itdiminished thespaceof fertile landthatwouldhavetobededicatedtolivestockanddivertedagrowingpartof the agricultural production for use as fodder and food animal. TheattemptbytheSovietgovernmenttotrytomeetthepopulation’sgrowingconsumptionneedsledtoanincreaseintherateofimportsofagriculturalproductsasaresultofyearsofpoorharvest.

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8.6CONCLUSION TheSovietruralsector, from1950 to1985,achievedsubstantiveincreases in terms of total output. However, these increases wereachievedat thecostofagrowingpercentageofnational investments. Inthe 1980s, agriculture was absorbing more than a quarter of all thecountry’sinvestments(line“%DII”oftable9.1).Thiswashappeningatatime when (due to the decline in overall capital productivity in theeconomy) thedisputeof thedifferentsectors for thereducedresourcesavailable for investment was becoming more and more fierce. Asagriculturedidnotrespondwithanincreaseinproductivityattheheightof the increase in investments,145 it is fair to say that increasingexpenditureswith this sectorwere one of the factorsweighing on theSoviet economy in the decade prior to perestroika. Expenditure onagriculture, perhapsmore directly than defense expenditures, could beconjecturedasoneof thepartial (secondary)explanatory factorsof thespecific economic slowdown in the pre­perestroika period, as theseexpendituresreachedtheirpeakatexactlythattime(unlikeexpenditureswith defense which reached peaks both in phases of rapid and sloweconomicgrowth,and therefore it ismoredifficult toattribute to themthedecelerationofspecificperiodsofrelativestagnation).Ifexpenditureswith the agricultural sectorwere not themain cause of the economicslowdown in the period prior to perestroika, it can be said that theycontributedtoaggravatetheproblematicsituation.

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9THESOVIETNATIONALITIESPROBLEM9.1PROBLEMOUTLINE One of the issues most frequently raised when discussing thedisintegrativeprocesses that led to theextinctionof theSovietUnion istheproblemofnationalities.EspeciallybecausethedisintegrationoftheUSSRattheendof1991seemstohavebeencarriedoutpreciselybytheassertionoftheexistenceofindependentnations(formerrepublicsofthecountry)thatimposedthemselvesoverthefederalcenterofthecountry.There is a certain consensus among scholars that the question ofnationalitiesplayedakey roleduring the courseofperestroika,notablyafter 1988­89 (when the first protracted and openly violent majorinterethnicconflictemergedinNagorno­Karabakh).(Carrèred’Encausse,1995,p.12;Tishkov,1997,p.49) Thiswork discusses the causes of perestroika, that is,what ledSoviet leaders to initiate theprocessesofeconomicdecentralizationandpoliticalopennessintheUSSRinthemid­1980s.Iftheimportanceoftheroleofthenationalitiesproblemisclearinthedevelopmentofperestroika,wemust also analyze the importance of this role in the unleashing ofperestroika.Thatis,towhatextenttheproblemofnationalitieswasoneofthefactorsthatpromptedGorbachevandotherSovietleaderstostartreformsin1985. This isacontroversialpointsince,priorto1985,ethnicissuesinthe USSR were generally not seen as an “explosive” problem of thesystem.Unlike the economic field, for example— inwhich deficienciesaccumulated in the 1970s and 1980s were pointed out by variousWesternandSovietauthorsasworryingorevenalarming—relativecalmreignedinthefieldofethnicity.OntheSovietside,mostscholarsworkedwithintheofficialconceptionthatnationalproblemshadbeen(orwerebeing) resolved by government policies and even that there was atendency to sblizhenie (“rapprochement”, “drawing together”), or evensliyanie (“fusion”),of theethnicgroups towardsaunifiedSovietpeople(sovietskiinarod). (Kulichenko,1981,p.4;Troitskii,1984,p.77;Kozlov,

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1988,pp.218­220)OntheWesternside,mostscholarsalsoanalyzedpre­perestroika interethnic relations in the USSR without observingeminently“explosive”tensions.146(Azrael,1978,p.363;Anderson,1978,pp.309 and332;Bialer,1980,p.216;Lapidus,1983,pp. 32­33;Motyl,1991,pp.509­510) To understand the contradiction between a period of apparentcalm in interethnic relations in theperiodbeforeGorbachev147and theexplosionof conflicts in this area, especially after1988­89,weneed toanalyze the specificity of some geographic and ethnographic conceptswhenusedintheSovietcontext. The former USSR, at the time of the beginning of perestroika,consisted of 15 republics (the largest of which, the Russian SocialistSovietRepublic, commonly calledRussia,aloneoccupiedapproximately76%ofthetotalterritoryofthecountryandhad52%ofitspopulation).The 1979 census (the last one before the beginning of perestroika)computeddataon109ethnicgroupsthroughouttheUSSR.(Goskomstat,1989­1990,v.4,Pt.1,book1,p.3)Theseethnicgroupsweredividedintothree main categories: natsional’nost’, narodnost’ and inostrannyimen’shistvo, translated into English, respectively, as “nationality”,“subnationality” and “foreignminority”. In thepopulation censuses, themostconsolidatedand largestethnicgroups(over300,000people,suchas Russians, Ukrainians, Estonians and others) were considerednationalities (natsional’nosti); those of less than 300 thousand peoplewere generally considered subnationalities or narodnosti (Kalmyks,Eskimos,Chukchi,etc.).148Examplesof foreignminoritieswereKoreans,Finns,CzechsandSlovaks. From theexamplesabove, itmaybenoted thatwhentheSovietsmentionedtheexistenceofmorethan100nationalitiesintheUSSR,thetermnatsional’nost’wasusedmore freely,sometimesencompassingtheother two subcategories aswell.The linguisticdifficultybecomesmorecomplex when one notices the inexistence in the Russian language ofanotherword for the conceptwe call “ethnicity.” In Russian, the termnatsional’nost’ often assumes the sense of “ethnicity” as well as“nationality”. It is important tonote thatnationality inRussia(theUSSRandSlaviccountriesingeneral)forlegalpurposesislinkedtothelineoffamilydescent(jussanguinis)andnotnecessarilytotheplaceofbirth(jussoli).Inotherwords,theSovietUnionwasamultinationalstatefollowingthe jussanguinisunlikemostWesterncountries,whicharenation­statesfollowing jus soli. InBrazil, forexample, thesonofacoupleof JapaneseimmigrantsborninBrazil,isimmediatelyconsideredaBraziliannationalforlegalpurposes.InRussia(asinotherSlaviccountries)thisisdoneinadifferentway.The Soviet Identity Card (passport) contained two items:

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“citizenship” and “nationality.” The first itemwas always filled out as:“Sovietcitizen,”but the item “nationality”was filled inaccording to thenationalityofthefatherorthemother,regardlessoftheplaceofbirth.149Thus,inthecaseofachildbornintheRepublicofAzerbaijanofaRussianfatherandanEstonianmother, thepersonwould in the futureneverbeclassified as an Azerbaijan national, but as Russian or Estonian. Thenationalityoftheparentsdeterminedthatofthechildrenindependentlyoftheplaceofbirth.Itisimportanttokeepthisinmindwheninvestigatingtheeruptionofethnicproblems inSlaviccountries.Unlikenationstates,whose jus soli concept of nationality ensures a relatively rapidincorporationofimmigrantspracticallysincethefirstgenerationborninthecountry, theSlavicconceptofnatsional’nost’keepsalive, forseveralgenerationsandsometimesindefinitely,elementsoftheoriginalculture. Therefore,thisconditionoftheSovietUnion(andRussiatoday)asa multinational state based on jus sanguinis is very important tounderstand the peculiarities ofwhat we call ethnic (and the Russiansnational)developmentsinthehistoryoftheUSSR. As it turns out, the concept of nationality in the former SovietUnion differed from the one used in several Western countries:natsional’nost’ sometimes assumed the meaning of what we call“nationality”andsometimesassumedasignificanceclosetowhatwecall“ethnicity.” This semanticambiguity reflects theambiguous characterof thetask that theBolsheviksreceivedasa legacy from tsarism:how tosolvethe problem of relations between nationalities, without employing theimperialist instrumentsuseduntil1917.Afterall,Lenin (1967­1970,p.67)himselfcalledtheRussianempirea“prisonofnationalities.” TheSovietstrategyon theproblemwasmarkedby twooppositetendencies.Ontheonehand,theofficialMarxistideologyespoused,initsvery essence, proletarian internationalism. (KPSS, 1962a, p. 25; KPSS,1962b, p. 156) The emphasiswas placed on class conflict, not conflictbetween nations. National conflicts were seen as derived from thecapitalistcontradictionsthatledtoeconomicandpoliticalimperialism.150(Stalin,1946­1951b,pp.291,303and305­307)On theotherhand, theSovietstriedtosatisfy(as faraspossibleandalwayswithintheMarxist­Leninist paradigm of the party’s leading role) the territoriality andculturalneeds inherent intheSovietdefinitionsof“nation”(natsiya)and“nationality”(natsional’nost’)151 TheSovietConstitutionsof1924,1936and 1977 consolidated the territorial division of the USSR based onethnicprinciples. 152 Ifwe take the timeof thebeginningofperestroika,forexample,wewillseethattheUnion (oftheSovietSocialistRepublics)wasdivided into15republics. 153Therepublicsbasicallyhad3 typesofimmediate territorial divisions (oblast’, krai and okrug),which in turn

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weresubdividedintoseveralraiony(“districts,”moreorlessequivalenttolarge counties). 154However, in addition to this common administrativesubdivision, the ethnic principle was noted by the existence ofautonomous administrative units in places where there were largeconcentrationsofoneormorespecificethnicgroups.Themaintypes,inincreasingorderofimportance(accordingtotheamountofpeopleofthatnationality) were: avtonomnyi okrug (= “autonomous area”),avtonomnaya oblast’ (= “autonomous region”), and avtonomnayarespublika(=“autonomousrepublic”).TheseautonomousadministrativeunitswereaconstituentpartoftheUnionrepublics,buthadautonomytodecide their specific form of administration in various spheres,mainlycultural and educational (owning schools and book publishers in theirownlanguagesetc.),besideshavingtheirrepresentativesintheSovietofNationalities. 155Thus, theSovietauthoritiessought toprovidedifferentnationalitiesand ethnicgroupswitha territorialbaseof theirown.Ontheeveofperestroika,forexample,therewere20autonomousrepublics,8autonomousregionsand10autonomousareasintheUSSR.(SES,1980,p. 1262) Through the creation of bodies such as the DagestanAutonomous Soviet Socialist Republic, the Buryat Autonomous SovietSocialistRepublic,theGorno­AltaiAutonomousOblastandothers,manyethnicgroupsmanagedtohavetheirownofficialterritorialbaseforthefirsttimeduringtheSovietperiod. Thus,wenotethatSovietpoliciesinrelationtoethnicdivisionsinthe country contained a certain duality. On the one hand the officialMarxist ideology emphasized proletarian internationalism, criticizingpurely nationalist phenomena (without class content) as “remnants ofcapitalistmentality.” On the other hand the Soviet period, to a certainextent,consolidatedanddevelopedthenotionsofnationality,bymeansofits territorialdivisionbasedon ethnicprinciples (with the existenceofautonomous regions based on the same principles, etc.). In sum, byconsolidating thenotionsof territorialityandculturalexpression156 thatnormally accompany their definitions of nationality, the Soviet periodparadoxically“awakened”variousnationalistorethnictendencieswhich,under tsarism, were still non­existent157 or held in subjection (latent)becauseoftheclearlyimperialistandrepressivepoliciesadoptedatthattime.Theironyofthis(unintentional)sideeffectofconsolidatingnationaltraitsintheUSSR(throughterritorialautonomyandculturalexpression)was noted by scholars in the academic field. The effects of thisconsolidationwere feltmainly in the caseof the smaller ethnic groups(narodnosti) which, under tsarism, were relegated to an extremelysecondaryposition,receiving littleofficialattention from thecenter,andthatduring theSovietperiodwerenot infrequentlygivenopportunitiestoimprovetheireducationallevelandtopublishintheirownlanguages,

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inadditiontoacquiringtheaforementionedterritorialautonomy. Obviously,theseculturalandterritorialbenefitsdidnotmeanthatnationalitieshadrealautonomyofpoweroverthecenter.158Abundantlyexplored in Western studies and even openly decreed by the officialideology of proletarian internationalism, the territorial division of theUSSR into ethnic principles and her cultural policy towards ethnicitieswere seenasameans to facilitate thedesired end thatwas theparty’scontrol of the social processes towards a communist society withoutclassesandwithoutdivisionsandethnicconflicts.(KPSS,1983­1989a,p.105; Lenin, 1967­1970i, p. 164) Somuch so that, especially since the1960s,theCPSUbegantostronglypropagatethetheorythatasblizhenie(“rapprochement,” “drawing together”) and even sliyanie (“fusion”), ofthe differentpeoples thatmadeup theUSSR towards the creation of auniqueSovietpeoplewastakingplace.(KPSS,1983­1989h,pp.163­165)Evidence of these trends included, inter alia, the absence of conflictsbetweennationalities,thehighrateofinterethnicmarriages,culturalandeducational leveling among nationalities. (KPSS, 1983­1989h, pp. 163­164;Tishkov,1997,p.111). Afterall,whowas right: thosewhopointed toa relative calm ininterethnic relations in theUSSR in the periodprior toperestroika, orthose fewauthorswho indicated that therewasadangerous tension intherelationsbetweennationalitiesinthesameperiod? The author who, in the pre­perestroika era, most vehementlyposed the problem of nationalities (pointing to its disaggregatingpotential) was probably the French Hélène Carrère d’Encausse. It isuseful to reviewwhat she considered themainproblems in the ethnicareaintheUSSRandcheckhowtheseproblematicareasfaredduringthecourseofperestroika. Carrère d’Encausse, in hermost influential book in the periodprior toperestroika,L'EmpireÉclaté (1978),workedon twomain lines:demographic perspectives and problems with ethnic groups (mainlyMuslims)intheUSSR.Inthebook,theauthorpointedtocertainproblemsbetween ethnic groups (muffled by the apparent monolithism of theSoviet system) such as: the three Baltic nationalities (Lithuanians,EstoniansandLatvians)who,becausetheyhadbeen(re)incorporatedinatruculentwayinarelativelyrecenttime(duringWorldWarII),keptanti­Russiasentiments;theproblemoftheemigrationoftheSovietJews(whoweretargetedasvictimsofasubtleanti­Semitism,whichwassupposedtopermeatenotonlylayersofthepopulationbuthighechelonsofpoweraswell); the question of the revival of a certain embryonic culturalnationalism in Ukraine and Georgia in the 1970s; the problem of theresentment of the nationalities deported en masse by Stalin due tocollaborationwith the Nazis at the time ofWorldWar II (besides the

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CrimeanTatarsandVolgaGermans, especially studied byd’Encausse inher book,wemust also add theChechens, Ingush,Kalmyks,Karachays,Balkars,andMeskhetianTurks.(Carrèred’Encausse,1978,pp.196­219,226­233and273) Theauthoralsoshowedother factorsthatweremoresubtleandlittle studied before the 1980s. One of these was revealed by Sovietstatistics but not acknowledged by the official ideology of peacefulcoexistenceamongthepeoplesoftheUSSR:thegrowthoftheSlavicpartof the population had long been lower than that of the Easternnationalities, especially theMuslim. (Carrère d’Encausse, 1978, p. 86)From table10.1ofAppendix10,wecanvisualize thisprocess. Itshowsthat all thenationalities that grew themostwereEastern andMuslim(e.g.,Kyrgyz,Turkmen,Uzbeks, andTajik).Then camemainly thenon­Muslim peoples of the Caucasus (Georgians and Armenians) andMoldovans. Much lower in the scale we see the Slavs (Russians,Belorussians,Ukrainians)vyingfornearstagnationingrowthwiththoseof theBaltic,withEstoniansandLatviansgrowingnearzero in the lastdecades.Carrèred’Encausseassertedthat,withthelowbirthrateofthe(majority) Slavs, theweight of the “Muslim”populationwould increaseproportionately to thepointof affecting the country’spoliticalbalance,sinceIslamandotherEasterntraditionsformawayoflifedifferentfromthatpreachedbyMoscowandwas,inthelastyears,findingresonanceasaculturalagglutinantinthatregion.(Carrèred’Encausse,1978,pp.269­270) This, especially after the convulsions in theMuslimworld due toKhomeini’s rise in Iran,could lead toamoveaway from thecenterandrapprochementwith Islamic fundamentalist nations,withunpredictableconsequences.159Followingthistrend(seetable10.1ofAppendix10),atthe turn of the century Russianswould no longer be themajority (inabsolute terms) of the country; in this case, a shift to under the“psychological” barrier of 50% of population, could have politicalimplicationsintermsofdecentralizationofpoweraswell. TheFrenchscholarpointedtoanotherproblematicareainrelationtothepopulationoftheUSSR.Therelativelylowbirthrateofthecountrycould lead to an acute labor shortage, which could have very seriousconsequencesforanextensiveeconomy,basedonlargeuseoflabor,suchastheSovietone.Theproblemwasexacerbatedbythefactthat,preciselyintheregionswherethe laborshortagewasacute,birthrates tended tobelow,whileinthelabor­abundantpartspopulationgrowthwasgreater.Worse still: migratory currents generally developed in the sense of“swelling” even more the saturated areas and of abandoning someregionswith labor shortages. (Carrère d’Encausse, 1978, pp. 109­114)Thus, forexample, therewasemigration from theUrals,Siberiaand theFarEast(regionswheretherewasashortageoflabor),notcompensated

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byimmigrationtotheseareas.(ibid.,p.110­111)Likewise,RussiansandotherSlavstendedtoemigratetotheBalticorCentralAsia(areasalreadydensely populated or labor­intensive), while the populations of theseregionswithexcessivedensityorshowingacertainexcessoflabortendednottoemigrateasmuchastheSlavs.(ibid.)EventhenorthernCaucasusregion,which also had a certain excess of labor, butwhose populationtended toemigrate,endeduphavingasurplusofmigratorymovements,since thewarm climateattracted residents fromother regions. (ibid.,p.111) In otherwords, themigratorymovements of theUSSR tended tosharpentheproblemofregionalimbalancesintheallocationoflabor.160 Carrèred’Encausse joinedothervoices in theWest (e.g.,RobertConquest,Richard Pipes, ZbigniewBrzezinski)who pointed to severalworrying areas of tension in the ethnic and demographic field of theUSSR,evenbeforeperestroika.9.2 A BRIEF HISTORY OF RELATIONS BETWEEN NATIONALITIES INTHEUSSR Atthispoint,beforeanalyzingtheseproblems,wewillgiveabriefhistorical synopsis of the development of relations between thenationalitiesoftheUSSR:161—TheRussianempirewasformedbetweenthesixteenthandnineteenthcenturies. In the late fifteenth and early sixteenth centuries, theGrandDuchy of Muscovy began to dominate the regions around it whereRussianSlavslived,suchasNovgorod(1471)andPskov(1510).ThefirstTsar,IvanIV(“TheTerrible”,r.1547­1584)begantheexpansiontowards“non­Russian” territories.With the conquest of the khanates of Kazan(1552) andAstrakhan (1554­56),he came todominate theVolga river.Thus,theconquestoftheTartarkhanateofKazanisgenerallyconsideredthebeginningof theconstructionof theRussianempire,since itmarksthe first expansion ofMoscow beyond the territorieswhere Slavs hadpreviously lived. The seventeenth century saw the expansion of theempiretoSiberiaandtotheDnieperRiver.Inthe18thcentury,PetertheGreat (r. 1682­1725) pushed the borders north to the Baltic Sea andincorporatedEasternUkrainewhileCatherine theGreat (r.1762­1796)conquered Crimea (in the south, reaching the Black Sea) and dividedPolandwithPrussiaandAustria.InthenineteenthcenturytherewastheincorporationofGeorgia(1801),Finland(1809),CentralPoland(1815),theCaucasusandCentralAsia.Thus,ofthe15republicsthatformedtheUSSR at the time of perestroika, all had already had their territory

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incorporated(inwholeorinpart)totheRussianempirebefore1917.—TheUSSR, since its inception in 1922,was legally assumed to be afederative multinational state, which proposed to give territorial andculturalexpressiontoitsdifferentethnicities.162— The era of industrialization, and especially forced agriculturalcollectivization in the 1930s, with its demands for centralization ofmaximumpowerinMoscow,createdtensionsintheethnic­nationalfield.Forcedagriculturalcollectivization imposedsedentaryruleson theruralpopulationwithastrongnomadictendencyinKazakhstanandelsewherein Central Asia and created tensions among leaders with nationalisttendenciesintherepublicthatwasconsideredthe“granary”oftheUSSR,Ukraine,whichsufferedgreatlywithexcessivegrainrequisitionsevenintimesofdrought,harvestfailureandfamine(asin1932­33).—TheSecondWorldWarbrought themassdeportationof some smallnationalities accused of collaborating with Nazism: Volga Germans,Chechens, Crimean Tatars, Ingush, Kalmyks, Karachays, Balkars andMeskhetian Turks. These nationalities would only be officiallyrehabilitatedfrom1957onward,duringtheKhrushchevianthaw.Duringthe war, there was a reuse of nationalist slogans (“For the Russianmotherland!”etc.)tomobilizethemassesinthedefenseeffort.Thepost­warStalinperiodwasmarkedbyacertainhistoricalreassessmentoftheroleoftheRussiansduringtsarism.Someacademicandjournalisticworkseven emphasized certain positive aspects of the progress that theRussiansweresupposedtohavebroughttothemorebackwardpeoplesoftheempire,despitetheoppressiveroleoftsarism.163—TheKhrushchevian thawof the late1950sandearly1960sbroughtabout political liberalization and decentralization of the economy,producinga (at leastapparent)reductionof tensions in theethnic field:thenationalitiesdeportedduringthewarwererehabilitatedandthevastmajorityof thembroughtback to theirown territories; theentranceoftheUSSRintoahigherlevelofdevelopment(“maturesocialism”inofficialjargon)leadtoanimprovementinthepopulation’sstandardofliving(inrelation to the Stalinist period) in the various republics, reducing thepossibilityofincreasedethnicdiscontentduetoeconomicdissatisfaction.The increase in the level ofmigration between the republics (amongotherthings,becauseofcampaignssuchasthe “VirginLands”thattookmigrants from the center tomore remote areas) and the number ofinterethnic marriages lead the official ideology to proclaim the trendtowardrapprochementandfusionofthevariousnationalities.—DuringtheBrezhnevyears(especiallysincethe1970s)certainuneasyethnic trends reappeared: theexcessivedisproportionbetween theslowgrowthoftheSlavandEuropeanpopulationscomparedtothatofAsianandMuslimnationalities;theproblemofJewishmigrationtotheWest;a

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certain rebirthofnationalist sentiment in some republics (Russia itself,Georgia,Ukraine);164 anti­corruption campaigns inperipheral republics(GeorgiaandUzbekistan)165 lead toacertainethnic tension; in1978, inGeorgia, and in 1979 in Tselinograd (Kazakhstan), ethnic incidentsoccured.166— Despite the “uncomfortable” tendencies noted above, GorbachevassumedthepostofGeneralSecretaryoftheCPSUin1985withanethnicsituation apparently quite stable in terms ofmultinational status. Thecritical Gorbachev— who broke a tradition of “rosy” descriptions ofSovietrealitybyGeneralSecretaries—acknowledgedinhisreporttothe1986XXVIICPSUCongressdeficienciesoftheUSSRinseveralareas,butwhenitcamedowntotheethnicfield,hechangedthetonesomewhat.Hedescribed the ethnic sphere as one in which the USSR had achievedexemplaryprogressdespitewarning about thenecessityof vigilance inorder to prevent “remnants” of “narrow and chauvinistic nationalism”fromdeveloping.167— In 1988­89 the first official violent interethnic conflicts began toexplode in theUSSR.168The firstmajor landmark,which awakened thecountry from its “dogmatic slumber” in theethnic field,was theconflictbetweenArmenians andAzerbaijanis in theNagorno­Karabakh region.The violence of the Sumgait progrom in February 1988, early in thedispute,shockedthepopulationoftheUSSRasawhole.169Theprecedentof widespread violence would spread to other regions. On the “BlackSunday”of9April1989intheGeorgiancapitalTbilisi,governmenttroopsviolently suppressed a demonstration in support for people on hungerstrike for the independence of the republic, causingmore than twentydeathsandabouttwohundredwounded.Theeventwould leave indelibleresentment in the local population, increasing the sympathy with theseparatists. In theFergana valley inUzbekistan, in the firsthalfof June1989,Uzbeksheldaprogromagainst theTurkishMeskhetianminority.On June17­21,1989, in theoilcityofNovyiUzen (Kazakhstan)violentstreet demonstrations took place, during which Kazakhs clashed withimmigrantworkersfromotherrepublics(Dagestan,Chechnya,IngushetiaandOssetia).IntheOshregion(KyrgyzRepublic)inthesummerof1990,a Uzbek­Kyrgyz conflict eruptedwithmore than 100 dead.170 Broadlyspeaking, itmay be said that 1989was the year of the emergence ofserious ethnic conflicts,which shocked theSoviets tobecomeawareofthe problems in this sphere. The Nagorno­Karabakh dispute in 1989turned into an open conflict between the republics of Armenia andAzerbaijan. The year of 1989marked the definitive take­off of openlynationalist movements and the beginning of the generalization ofinterethnicviolence.At the forefrontof thenationalistmovementswerethe Baltic republics (especially Lithuania and Estonia) from where

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national grassroots fronts began to coordinate and unify the action ofgroups and informal organizations that had been forming since thebeginningofperestroika.From theBaltics, the strategyof formationofpopular fronts spread to other republics (Georgia, Ukraine, Moldaviaetc.).171IntheBalticrepublics(themostadvancedinthisprocess)1989marked the proclamation of the sovereignty of one’s republic over theUnion.Intheotherrepublics(notablyMoldavia,Georgia,AzerbaijanandUkraine) the year of 1989 was still marked by a nationalism whichfocusedonculturalaspects(mainlylinguisticquestionsofassertionofthenational language) and on the struggle for a greater decentralization ofpowerto therepublics.Theyearof1990markedaradicalizationoftheprocess: the Baltic republicsmoved from the slogans of sovereignty toindependence and secession, and the others moved from cultural andlinguistic claims to thoseof sovereignty (almost immediately thereafter,with debates on independence and secession).The year1990was alsomarked by the escalation and spread of ethnic conflicts in severalrepublics, through the appearance of a complicating factor: severalautonomousrepublicsandautonomousregions,whichexistedwithintheframework of the 15 constituent republics of the USSR, also requiredtheir sovereignty in relation to the latter.172The first half of 1991wasmarked by the radicalization and intensification of pressure from therepublics for total autonomy from the center and refusal to accept thetermsofGorbachev’sproposalsforanewUniontreaty.Inthemidstoftheimpassecreatedinacontextofgrowingandgeneralizedethnicconflicts,camethefrustratedattemptoftheAugust1991putsch,which,inmovingaway fromGorbachev,aimedatstrengthening thedyingUnion throughtherepressionofnationalistmovementsbyforce.Withthefailureoftheputsch, in the second half of 1991 the country was practically adrift,waiting for an agreement to concretize the transformationof theUSSRintosome formofconfederationofsovereignor independentstates.Theimpassewasbrokenby theunilateraldeclarationof theSlavicRepublics(Russia,ByelorussiaandUkraine)on8December1991 that theywerewithdrawing from the USSR and forming a Commonwealth ofIndependentStatesintowhichtheotherrepublicswereinvited.Withtheotherrepublics—minusthethreeBalticstatesandGeorgia,whichwasincivilwar— later joiningthisgroupandofficiallycreatingtheCISon21December,theUSSRceasedtoexistinpractice.GorbachevresignedfromthepostofPresidenton25Decemberand the “official”abolitionof theUSSRwassignedbyasmallgroupof30deputiesoftheSovietparliamenton12/26/91.9.3CONCLUSION

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Afterwhatwassaidabove, thequestion remains.Afterall,weretherestrong (“explosive”) interethnic tensions inpre­perestroikaUSSR?Was the situation with the problem of nationalities one of thedeterminantsforperestroika? Theanswertothesecondquestion,inourview,isno.AmongthefactorsthatmoststronglyledtheSovietleadershiptostartperestroikain1985wasnottheproblemofnationalities.Whenanalyzingthe1985­86party texts,wedonotseeacriticalanalysisandasenseofurgency forsolving ethic problems (unlike other areas, especially economic ones,wherecriticismswereformulatedalongwithaffirmationsoftheneedforchangeassoonaspossible).Mentionsof“narrownationalism,”especiallyintheareasofcultureandreligion,weremitigatedbydefinitionssuchas“remnants from the past” that could be solved by the system itself,withoutradicalchanges.Gorbachevwasoneofthosewhohadthisvisionat the time.Aswe saw earlier, he even admitted that he only becameawarethatethnicproblemscouldbeadangertotheveryexistenceoftheUSSRin1990. However, this answer to the second question in the firstparagraph does not give us any support for the first question (“Werethere serious interethnic tensions in the USSR before perestroika?”).Afterall,thefactthatSovietleadersdidnotperceivethepre­perestroikainterethnicsituationasalarmingorworryingdoesnotmean that therewerenotproblems. Our analysis leadsus tobelieve that: (1) the “nationalquestion”hadnotbeen satisfactorily resolved in thepre­perestroikaUSSR (therewere interethnic tensions, toagreateror lesserextent insomepoints),but(2)interethnictensionsdidnothaveenoughmomentumatthattimetolaunchadisintegratingorcentrifugalprocessintheSovietUnionandthat (3) the national processes, in their later salient role, served asconduits of popular dissatisfaction from other areas which found innationalistmovementstheirmostefficientplatform. Letusconsiderthepartsofthestatementabove. Firstofall,wewould like to expressourdisagreementwith themany interpretations, very common in theWest, that the problem ofnationalitiesintheUSSRwasbeingexacerbatedintheSovietperiodbyapolicyof“repression”(cultural,political,etc.)ofethnicminorities.(Smal­Stock,1960;Armstrong,1968)We even believe that the oppositemayhaveoccurred:anumberofethnicminorities(mainlysmallonesbutnotonly)may have found their form of national expression in the Sovietperiod. Tounderstand thestatementabove,onemustkeep inmind that

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theUSSRdidnotexpandtheRussianempire.Ofthe15Sovietrepublics,all had been part of the Russian empire before the Bolsheviks tookpower.173ThestatusquoofthemanynationalitiesoftheformerRussianempiredidnotworsenintheSovietperiod:onthecontrary,itimprovedbecause colonies became part of a multinational state. In thismultinationalstate,notonlytherewas(formal)legalequalitybetweentherepublics,butinthefieldofnationalculturalexpressionthesituationwasfarmore favorable thanunder tsarism. For this reason, it is difficult toanalyze an escalation in interethnic tensions in the Soviet period (forexample,underBrezhnev)byexplaining that thenationalsituation itselfhad worsened under the Soviet regime, with the adoption of morerepressivemeasuresandsoon.Weemphasizethenationalsituationitself(of nations as nations) as opposed to the (economic, political, social)condition of the populations of each constituent nation of the USSR,because theseare twodifferentcategories,Thisdifferencewillbecomevitaltounderstandthedisintegrativeprocessesattheendofperestroika,asweshallseelater. Thus, if we do not agree with writers such as Smal­stock andArmstrong,who saw the “nationalproblem” in theUSSR sharpenedbypolicies of repression,we agreewithTishkov (1997, p. 234)when hesays that,on thecontrary, taking the totalityof theethnicgroupsof theUSSRintoconsideration,itwasintheSoviet periodthatasignificantpartof them found theirmoresophisticated formsofnationalexpression.174Ironically, these national expressions, generated (or at least fortified)duringtheSovietperiod,175mayhaveservedasabasisforstrengtheningself­assertion tendencies where there were none before, by raisingexpectations,demands,andsoon. However, such an increase in expectations occurredwithin theSovietregime,fromitsownpolicies,andcouldberesolvedwithinit.Itisour position that interethnic relations, even on the eve of perestroika,werestillwithinthelimitsofthe“resolvable”withinthesystem.Webaseourpositiononseveralpoints:1)ontheperceptionofSovietleaderswho,aswehaveseen,inthefieldofnationalities,unlikeotherspheres,didnotseereason foralarmismuntil the lateyearsofperestroika (KPSS,1986,pp. 75­76; Andropov 1990, p.14); 2) on the perception of almost allSovietethnologists andanalystsoftheissue,inadditiontothemajorityofspecializedWesternobserverswhodidnotview,priortoperestroika,thenationalquestionashavingapotential forcausing immediateorshort­term disintegration of theUSSR. (Azrael, 1978;Bialer, 1980; Zaslavsky,1982; Lapidus, 1983; Troitskii, 1984; Kulichenko, 1984; Kozlov, 1988;Motyl, 1991); 3) on our interviews and personal contactswith Sovietcitzensofdifferentnationalities in12of the15Soviet republicsduringtheperiodwewerepursuingourmaster’sdegreeintheUSSRatthetime

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ofperestroika.(Segrillo,1992) Obviously,wearenotsayingherethattherewerenoproblemsinthe ethnic area. A multinational state (inherited from an imperialstructure),composedofmore than100differentnationalities,couldnothaveacompletelystress­freestructure(especiallywithin theconceptofnationality based on jus sanguinis,which perpetuates themaintenanceandreproductionofethnicdifferences).ThemostobviouscaseswerethethreenationalitiesoftheBalticsandthenationalitiesdeportedenmasseby Stalin duringWorldWar II. The three republics of theBaltic region(Lithuania, Estonia and Latvia) because they had been reinstatedrelativelyrecently,atthetimeofWorldWarII(theyhadbeenindependentin the period between the two greatwars): theywere those inwhichnationalisttensionsweregreater.Likewise,amongnationalitiesdeportedby force, abruptly and violently, it was only natural that seriousresentments remained for a long time. However, even among thesenationalities,qualificationsmustbemade.If,ontheonehand,thereweredeportations of these entire nationalities during the war years, it isequallytruethatin1957(inaprocessthatlastedforthefollowingyears),thesedeportationswereofficiallycondemnedbytheSovietregimeitself,the nationalitieswere rehabilitated and all (with the exception of theCrimean Tatars, Volga Germans andMeskhetian Turks) had their ownterritoriesre­established.176Sincethe1960s,thesedeportednationalitieswere reincorporated into the normal life of the country, schools withnationallanguagescreated,partycadreseducated,etc.Thislongperiodofreintegrationrepresentedalotintermsofdilutingmuchofthefeelingsofbitterness, humiliation, and low self­esteem in the immediate post­deportation period. Not that therewere nomarks of the ignominiousdeportations,butattheendofthe1970sandbeginningofthe1980s,theKarachays,Kalmyks,Chechensetc.werealreadymuchmorereintegratedinto thenormal lifeof the country. (Tishkov,1997,p.164)Even in themostseriouscaseintheperiodimmediatelypriortoperestroika,whichwere the Baltic republics, thememory of the Russians as a troop ofoccupationwasmingledwith apopular feeling of a certain resignationwiththeduration(morethan40years)andthenaturallongingofalargepartofthepopulationtoascendthesocialscalewithintheSovietsystemitself.(Carrèred’Encausse,1978,p.273) Even in the case of Armenians and Arzebaijanis, despite thehistorical rivalries of the tsarist period among the peoples of theCaucasus,severalobserversalsoindicatedtheexistenceofalarge“silentmajority”ofthepopulationthatmoreorlessassimilatedintothesituationofcomponentsoftheSovietmultinationalstate.(Dashdamirov,Zhvaniya&Mravyan,1984)ReportsofformerNagorno­Karabakhvillagersdenotedhowtheexplosiveescalationoftheconflictcaughtthembysurprise,since

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interethnicrelationsbetweenArmeniansandAzerbaijaniswererelativelyreasonable until then, with examples of peaceful and even friendlycoexistence between members of the two nationalities, especially inmixed schools attended by children of both nationalities.177 (Tishkov,1997,p.136) Allof theabove isnot todeny theexistenceofareasof tensionwithintheSovietethnicstructureinthepre­perestroikaera.Wejustwantto emphasize that the level of these tensionswould not be enough toexplain, by itself, the explosion of violent conflicts in the final years ofperestroika.However,howtoreconcileasituationofrelativecalminthefieldofinterethnicrelationsintheperiodpriorto1985andanexplosionofconflictsinthisfieldafewyearslater? Thekey,inourview,liesinthefactthattheseinterethnicconflictsservedasconduitsfortransmission(andamplification)ofcontradictions(dissatisfactionsetc.)fromotherareas,especiallytheeconomicone. Beforeexplaininghowthishappenedatthetimeoftheoutbreakofthe firstviolentethnicconflicts in1988­89, itwouldbe interestingtorecall the background of this situation, inwhich, prior to perestroika,motivations from the economic area intervened in the ethnic sphere,stirring rivalriesbetweennationalities .A clear exampleof thiswas theanti­corruption campaigns in the republics of Georgia and Uzbekistan.Therevelationofwidespreadcorruptionand favoritism in therepublicsof Georgia (in 1972) and Uzbekistan (in 1984­86) led the centralgovernmenttodetermineabroadcampaigntocombatsuchpracticesinthoserepublics,includingpurgesofsectionsofthepartytodismantlethesmall “mafias” that were forming. However, these anti­corruptioncampaignshadanundesirablesideeffect:manyofthenativesconsideredMoscow’smeddlingasa formofdiscriminationagainstawholenation,accusedofbeing “incorrigiblycorrupted.” (Carrèred’Encausse,1993,p.21)This led toan instinctivenationalist reaction: since corruptionwasnot a “privilege” of these nationalities, they understandably feltdiscriminatedagainst. 178 (ibid.) Inotherwords,apolicy initiallyguidedbyeconomicobjectives (endingcorruption in thoserepublics toputanend to waste, misappropriation of funds and government material,falsificationofeconomicstatistics,etc.)endeduphavingrepercussionsinthefieldofnationalistfeelings. Likewise,intheperiodofperestroikaitself,thecontradictionsanddissatisfactions in the economic field reflected and sharpened thecontradictionsinthefieldofproblemsamongnationalities. Letus take the caseof the intensification ofpopular sentimentsamong Russians and inhabitants of the Caucasus region (Georgians,Armenians,Azerbaijanis, Chechens, etc.).We cited this example, aswewitnessed this process of changing popular attitudes vis­à­vis different

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ethnicities.Beforeperestroika,theimageoftheinhabitantsofGeorgiaorChechenya, for example, among theMuscovites was one of hospitablepeople.TheseasideresortsoftheBlackSeawerefrequentedbyRussiansonholidays,who returned to theircitiesenchantedwith the traditionalhospitality of the inhabitants of the Caucasus.179 That is, despite (orperhapsbecauseof)geographicaldistance,oneofthestrongestimagesofthe Caucasus amongmostMuscovites, before and at the beginning ofperestroika,wasthatofgreathospitalityvis­à­visvisitors.However,aftertheonsetofperestroika,thisimagewasradicallyaltered.In1989­90,thebasic image of Caucasus inhabitants among Muscovites and otherinhabitantsoflargecitiesinRussiawasthatofexploitative(intrade)andeven criminal.Whatwas the reason for this transformation? After thestart of perestroika, “cooperatives” were allowed to carry out smallservices and retail trade. Fresh agricultural products from the sunnyCaucasus, mainly fruits and vegetables, which were once distributedthrough government channels, began to be distributed in the largeRussian cities by small semiprivate structures operating in the freemarket.Thesecooperatives(inreality,privatestructures)soldproductsofsuperiorquality(butatpriceswellabovethoseoftheofficialstores)atthecities’ freemarkets.True“mafias”werethenformedbytradersfromtheCaucasus(mainlyGeorgians,ArmeniansandAzerbaijanis)whocametodominatethefreemarketsofMoscowforfruitsandvegetables.ThisledtheMuscovitepopulationtocreateastrong“antipathy”fortheCaucasusnationalities because of their experience with these “speculators” (astheywerecalled).Thesituationworsenedduringtheperestroikaprocesswhen, inaddition to the retaildistribution,criminalstructuresbegan toforminMoscow.Severaloftheseorganizationswereerectedonanethnicbasis.180From thismomentonward,a trueethnicbarrierofhatredandprejudicewascreatedbetweenRussiansandtheCaucasusnativesinthecapitaland inotherbigcitiesofRussia.AtthetimeoftheChechenwar,the imageof theChechensas “thieves”wasalreadystronglymarked inthe popular imagination. Thus, economic motivations between“consumers”and“exploiters”extrapolatedtotheethnic field inMoscow,with“Caucasians”beingseenasthe“controllersofthecity’sfreemarkets”or“mafiosiofshadowybusinesses.” Manyofthestrongestethnicconflictsoftheperiodofperestroikahad economic motivations behind them. In the Nagorno­Karabakhconflict (between Armenians and Azerbaijanis), we should note thatbefore1917,Karabakh(wheretheArmenianswerealwaysthemajority)was part of the route of nomadic Azerbaijani herders who used theregion’smountain pastures in the summer and then migrated in thewinter to the steppesofMil’sko­Karabakh,betweenNagorno­Karabakhand theKuraandAraksrivers.(Tishkov,1997,pp.75­76)Although the

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collectivizationofthe1930sbroughtwithitsedentarizationoftheAzerisandothernomadicpeoplesofCentralAsia,grazingandcattleraisingwerelessaffected in this sense: in the1980’s,on the eveof the conflict, theAzerbaijanichabansstillused theKarabakhroute(crossing it inspringand autumn, accompanied by their families) to transport the kolkhozyherds.AzerbaijanisofruraloriginwereamongthemostopposedtothetransferofKarabakhtoArmenia.(ibid.) Similarly,intheOshregion(Kyrgyzstan),therewastraditionallyadisputebetweenKyrgyzandUzbekistan for theuseof thebestpasturelandandnomadicpastoralistroutes.(Tishkov,1997,p.76)InthecaseofthemassacreofMeskhetianTurksbyUzbeksinFergana,HélèneCarrèred’EncaussedrewattentiontothefactthattheMeskhetianTurkminorityinUzbekistan,was generallybetterpositioned in termsof employmentthan theUzbeks. (Carrère d’Encausse, 1993, p. 103) This generated acertainenvyamongtheUzbeks.(ibid.)Duringthesevereeconomiccrisisofperestroika, these tensions inOsh andFergana turned into violence.This type of phenomenon was repeated in most situations of ethnicconflict: in times of crisis and dispute over jobs and economicopportunitiestherewasatendencytoengageinethnicdisputesbetween“us”and“them”withotherpeoples(acommonphenomenonintheworldin general, as seen in the resurgence of racist­fascist animosities inGermany and other European countries due to the problem ofunemployment). The case of the unrest in the oil city of Novyi Uzen(Kazakhstan) in 1989,when the Kazakhswere forced to fight for theexpulsionof immigrantworkersofothernationalities, isemblematicofthischannelingtoethniclinesofeconomicproblems. The very ecological demands thatmarked the birth and initialconsolidationofmanynationalistmovementsof theUSSRat the timeofperestroika (in theBaltics,Armenia,among several SiberianandArcticpeoples, such as Yakuts, Buryats, etc.) can be seen from an economicprism,notonlybecausetheymarkedtheapparentfailureofthecurrentindustrialmodelbutalsobecausethemainslogantorestoretheecologicalsecurityofthesenationalitieswasthedecentralizationofdecision­makingpower over resources and investments in favor of the republics andregions.(Tishkov,1997,p.70) Whatwewanttopointoutwiththeaboveexamplesisthatitwasnotthepurelyethnicanimositiesinthepre­perestroikaperiodthatwereresponsible for theexplosionof interethnicviolence later,butrather theeconomicdisruptions that led toadeepeningof interethnic tensionsofprevioushistoricalperiodsnotsatisfactorilyresolvedduring thecourseof perestroika.181 From the moment that centrifugal forces in theeconomic field began to develop and the politico­economic power(previouslyconcentratedprimarilyintheCPSU)begantobedisputedby

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severalothercurrents,thesphereofnationalitiesbecameafertilecatalystof thispowerstruggle.Whenperestroika reached theanarchicstage, inwhichthehegemonyoftheCPSUandthelegitimacyoftheSovietregimebegantobequestionedandattacked,thenationalistbannerservedasoneofthemosteffectiveanddirectmeanstoachievetheseends.Consciouslyor unconsciously, the nationalist “card” was used more and moreintensivelyby the forces interested in thedestructionof theoldregime.Not that there was no substrate of interethnic tensions behind thesemovements, but these tensions were used as catalysts of the populardissatisfactions in theeconomicarea (mainly the rapiddeteriorationofthestandardoflivingduringtheyearsofperestroika).Thatis,inthefinalphaseofperestroika,therewasanideologicaluseofnationalismtojustifyprocesses and interests coming from other areas (for example, theintroduction ofmarket relations, the endofCPSUhegemony, etc.). In acountrysuchastheUSSR,wherepopularconsciousness—forbetterorworse, aftermore than 70 years of actually existing socialism—wasrelatively impregnatedwithanti­capitalist values, themerepropagationof capitalism as a solution to the Soviet crisis would find greaterresistance. 182Thus, thenationalist ‘card’ wasawayofaccelerating thedisintegrativeprocessesoftheoldsystem,usingaconceptthatcouldbeclosetothepopularimagination(atleastlocally). A symbolic parallel can be drawn between the use of thenationalist “card” in the USSR during perestroika and the Americanideologyof“democracy”and“humanrights”sooftenused to justifyU.S.imperialistattitudes inseveralregionsoftheworldduringtheColdWar.To justify intrusions of the CIA and other organs of the Americangovernment in internal affairs of other countries based on the (real)Americandesiretoexpanditsareaofinfluenceandeconomicdominationwould not be a strategy capable of capturing the popular imagination,either abroador evendomestically.Therefore, the ideologicalmantleofdisseminationof“democracy”and“humanrights”intheworldwasusedtojustifyAmericaninterventionsindifferentareasandcountries.Thisisveryclearinananalysisofthecontradictionsoftheseinterventions.TheCIA tried to overthrow Fidel Castro “to establish democracy” in Cuba.Meanwhile, the CIA (and the U.S. government) supported dictatorialgovernments (post­1964 Brazil, Pinochet’s Chile, etc.) in Latin America(governmentsthatallowedtheexpansionofAmericanbusinessesintheircountries).TheU.S.governmentcondemnedthe“closed”frontiersoftheUSSR and received fugitives or exiles from the Soviet regime, but theideologyof“freetransit”betweenpeoplesdidnotpreventtheAmericansfromdenyingvisastomostMexicansandpoorLatin­Americanswishingto enter the country (fearing they would stay to work illegally). Thisideologicalstrategyofcamouflagingeconomic interestswithnoble ideals

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worked quitewell.Much of theU.S. population and evenmany in theneocolonized countries assimilated, to a greater or lesser extent, theideology that the United States was the “champion and guardian ofdemocracy” and responsible for its defense and dissemination in theworld. But thesemore intentional aspects of the ideological use of thenationalist “card” are only one facetof theproblem in the Soviet case.Indeed,therootsofthepossibilityofsuchusemustbesoughtinthefactthattheformationofnationalconsciousnessandstrongnationalstatesisintrinsically linked to capitalist development. The development ofcentralized and strong national states was in fact one of thecharacteristicsandconditions for thedevelopmentofcapitalismand theexpansion of trade that accompanied it. That is why nationalconsciousness becomes extremely and intrinsically rooted among theinhabitantsofcountrieswherecapitalistrelationsflourish.Justastribalorfeudal consciousness predominated in the past, most inhabitants ofcapitalist countries cannot even imagine themselves outside a nationalframeofreference.However,ifnationalconsciousnessischaracteristicofcapitalism,achangeinthemodeofproductionforsocialismshouldbringchangetowardaninternationalistconsciousness.(Marx&Engels,1961­1971c, p. 479; Lenin, 1967­1970g, p.354) The USSRwas then in thistransitionalsituation.Aswehavearguedelsewhere in thiswork,wedonotsharetheopinionofthosewhoconsideredthattheSovietUnionhadalready fully entered the socialist phase. In this case, the nationalproblemsshouldhavealreadybeenresolved.Trotskii(1936,pp.287­288)considered that theUSSRwas a transitional society between capitalismand socialism and therefore affected by a combined series of factorscharacteristicofthetwosystems,theultimateresultofwhichcouldbeanadvance of the system towards socialism or a regression to capitalism.Perestroikaultimatelyprovedtobeareturntocapitalism.Itwasnatural,then, to expect that elements of nationalist consciousness shouldaccompanythisprocess. These interactions with socialism­capitalism andinternationalism­nationalismshouldnotbeanalyzedonlyintheperiodofperestroika. Throughout the period of existence of the USSR theseinteractions were at play. In our study, we analyzed the differencesbetween the 1930s and the decades of 1960 and thereafter. From the1930s to the 1960s, the Fordist production regime was the mostadvanced in the world, andmany of its central principles (centralism,hierarchy,rigidity,etc.)werealsoprinciplesoftheSoviet“proto­socialist”modeofproduction.However,afterthe1960s,newparadigmsofflexibleproduction(notablyToyotism)begantoemergeasthemostadvancedona worldwide scale. Its principles (flexibility, emphasis on horizontal

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information flows, emphasis on quality, etc.) were antagonistic toprinciples of the Sovietmode of production. In this period, the Sovietsystemlostmuchofitsdynamismandendedupstagnating.Wecanseeahistoricalparallelbetweenthemoments inwhichtheSovietsystemwasmore dynamic (it seemed to actually be moving toward socialisthegemonydomesticallyandabroad)andanincreaseofinternationalismasanideologythatwasimposedwithintheUSSR.Despitealltheexcessesand repressions of Stalin, the process of rapprochement andinternationalization (sovietization) of nationalities deepened in thoseyears,peakingaround1960underKhrushchev.The1961CPSUprogram— which envisaged communism in twenty years’ time, and alsoemphasizedthatnationalitieswerecomingtogetherandminglingintoacommon homus sovieticus—wasnot amere ideological fantasy of theleaders of the USSR. The constant migrations between the republics(especiallyduringindustrialization,thecampaignofvirginlands,etc.),theelevation of the cultural level of minority nationalities, interethnicmarriages, all led to the existence of a trend toward greaterhomogenizationamongcultures.However,afterthemid­1960sandearly1970s,with increasingeconomichardship,theSovietsystemwasstuck.Theslowdownintheeconomyforcedtheleadershiptocarryoutaseriesofeconomicexperimentsthat,ifdeeplyanalyzed,revealed,infact,theuseofcertainsuccessfulmarket (“capitalist”)mechanisms (decision­makingdecentralization to the level of the companies, profit as one of theindicatorsofsuccess,etc.). Inotherwords, thenewphaseof theworldeconomyfromthe1960sonward,withitsnewparadigmsofproduction,wasnotfavorabletotheSovietsystemandsharpenedthecontradictionsofthistransitionregimebetweencapitalismandsocialism:theinexorableadvance of the system towards socialism did not seem so certainanymore. This was revealed in the ethnic­national sphere as well.Western observers began to notice signs of rebirth of incipientnationalist sentiments in theBrezhnevperiod.Someof theseobserverscaptured thisdifference in attitudes between theKhrushchevianperiod(at least until 1961) and the later Brezhnevian period. (Carrèred’Encausse,1995,pp.35­36) In sum, we consider that the process of reappearance ofnationalistphenomenaintheUSSRmustbeseen,notisolatedinitself,butin coordination with other processes that occurred (mainly in theeconomicsphere)andthatrepresentedtheoscilationsoftheSovietmodeof production in its complicated transition between capitalism andsocialism.TheauthorswhoanalyzetheethnicproblemsoftheUSSRperse,regardlessof theconditionsof themodeofproduction inwhich theyoperated,confuse“thelastdropofwater”thatspillsthebucket,withthedeeperprocessesthatledtotheelevationofthewaterlevelinthebucket.

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The fact that nationalist processes, inpractice, capped off thephysicaldisintegrationoftheUSSRmayconfoundanalystsandkeepthematthelowestleveloftheprocess.Thiscanbeillustratedbytakingtheexampleofthe French specialistHélène Carrère d’Encausse. Shewas (deservedly)considereda“prophet”ofthenationalistexplosionofperestroika.Inhermainbookofthepre­1985period,L'EmpireÉclaté(1978),shepointedtothe ethnic problems that theUSSRwould later face on amore seriousscale. However, she autonomized the national question, making it anindependentvariableamongthevectorsthataffectedthesystem—hencethe titleofoneofher firstpost­perestroikabooks,TheEndof theSovietEmpire:thetriumphofnationsor,inFrench,GloiredesNations).However,thisautonomizationorabsolutizationof thenationalconsciousnesscanlead to confusion of the external phenomenon with the internalprocesses,oftheformwiththecontent.Ananalysis,startingofffromtheabsolutizationofnationalprocesses,isinaccurate.Ifwelookcloselyatherpre­perestroika book L'Empire Éclaté, we will find that, Hélèned'Encausse was not able to correctly predict which of the nationalproblemswouldreallyprovetobethemosturgent issuesatthetimeofperestroika.Severalof theproblemspointedoutas themostseriousbyd’Encausse did not reveal themselves as the ones responsible for thedisintegration of the USSR; on the other hand, national problems thatwere less emphasizedby the authordevelopedwith greater speed andbecame more worrisome during perestroika. This is because thesenationalissueswerelinkedtoothereconomicprocesses.Ifthesenationalproblemswerereallysoautonomous,itwouldbelessdifficulttopredicttheindividualdevelopmentsofeach.Thus,forexample,inthechapterofL'EmpireÉclatédevoted to themostseriousethnic­nationalproblems inthe USSR (“L'Intégration en Crise”), d’Encausse (1978, pp. 195­224)pointedtofourproblems:(1)thequestionofthetwonationalities(VolgaGermansandCrimeanTatars)deportedenmassebyStalinduringWorldWarIIandneverreturnedtotheirplacesoforigin;2)theproblemoftheJewsintheUSSR;3)therenaissanceofGeorgiannationalism;4)thealsoresurgent Ukrainian nationalism. Moreover, in her book, d’EncaussestronglyemphasizedthedevelopmentofagrowingIslamicconsciousnessamong thepeoplesofCentralAsia.Whenwecompare thispicturewiththe problems that really became more explosive in the period ofperestroika,weseeacertainmismatch.Duringperestroika,fundamentalimportancehadthedisputeforNagorno­KarabakhbetweenArmeniaandAzerbaijan. Ethnic outbreaks also occurred in the Fergana valley(between Uzbeks andMeskhes), the Osh region (between Uzbeks andKyrgyz)andtheconflictbetweentheAbkhaziansandOssetianminoritiesandtheGeorgianmajorityintheRepublicofGeorgia.TheBalticcountries,which initiated theentireprocessof independenceof therepublics,also

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playedakeyrole.Thatistosay,Hélèned’Encaussewascorrectthattherewouldbeethnicproblems in theUSSR in the futureanddescribedquitewell the range of “hot spots” or problematic areas. But if the nationalprocesses reallyhadanexistenceof theirown, it shouldbepossible toforesee at least some general tendencies of development: where thisprocess would be stronger etc. It is precisely here that d’Encausse’sanalysisrevealsitsdeficiencies:theethnicprocessesthatdevelopedafterperestroika do not seem to have developed from their internalcontradictions andmotivations, but from external aspects. Some of theprocesses described by d’Encausse asmore advanced, or as emergingproblems,werenottheonesthatprovedmosturgentduringperestroikaandviceversa.Thus, theproblemof the Jewsand the twonationalitiesdeprivedofterritory(TartarsandGermans),despitehavingmarkedtheirpresenceduringperestroika,werenotamong themosturgent— ifonehad to choose the most serious problems among the deportednationalities after perestroika, one probably would point out theChechens,whohadnotonlybeen rehabilitated,buthad regained theirown territory.Nationalisms in Georgia and Ukraine actually played animportant role inperestroikabutwere eclipsed,at least initially,by theproblemsbetween thenationalismsofArmeniaandAzerbaijan. In fact,the problem of historical rivalries between the three Caucasusnationalities (Armenia,GeorgiaandAzerbaijan)wasnot evenanalyzedbyd’Encausseinher1978book(perhapsbecausetheyweresupposedtohavebeensupplantedduringtheSovietperiod).TheproblemofIslamasa culturalagglutinatorof thepeoplesofCentralAsia (pan­Islamism), soemphasized by d’Encausse, did not play such a vital role duringperestroika—acutally theCentralAsianMuslimrepublicswere the lastonestodeclareindependencefromtheUSSR,anddidsoindividually,notinacoordinated (“Islamic”)manner. Indeed, thenotionofpossiblepan­IslamismamongtheCentralAsianrepublicswasgreatlyeclipsedby theMuslim ethnic clashes between them during perestroika (progrom inFergana of theUzbeks against theMeskhes, enhanced rivalry betweenUzbeks and Tajiks, shocks between Kyrgyz and Uzbeks in Osh etc.).D’Encausse’schiefmistakeincalculatingL'EmpireÉclatémighthavebeeninrelationtotheBaltics.Inherbook,theFrenchauthormentionsthatinthe threeBaltic republics (Estonia,Lithuania and Latvia), (re) annexedinto theUSSR relatively recently (during the SecondWorldWar), anti­Soviet sentimentsweremore “fresh,”with thememories of a differentsociety still imbued within part of the popular memory. However, inL'EmpireÉclaté,d’Encaussedidnot explore this route intensively, sincesheconsideredthatmigrationofothernationalities(especiallyRussians)into the region and the low population growth rate of those Balticnationalities created a danger of even ethnic disappearance in

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demographic terms. In view of the fundamental role that the Balticrepublicsplayed in the initiation anddevelopment of the independencemovementsduringperestroika,anerrorofcalculationoftheauthorinthisareaisevident.183 Theobservationsabovearenotintendedtodiminishthemeritofd’Encausse inpointingout theexistenceofethnic­nationalproblems intheUSSRevenbeforeperestroika.Wewanttodrawattentiontothe factthat the dynamics of ethnic­nationalmovements in the USSR did notfollowtheirown“autonomous”developmentpath,andwasratherlinkedtootherfactorsoftheeconomictransformationsthattheSovietmodeofproductionandsocietywentthrough inthe1970sand1980s.184This iswhy itwasdifficult topredict the form that thisdynamicwould take inthefuture,startingfromapositionthatabsolutizesnational(nationalist)processes over considerations of economic transformation and classstruggle. The end result of perestroika is not a mere “Triumph of theNations”overanyotherconsiderations.The “GloiredesNations” in thiscontextrepresentsasetbacktonationalistprocessescharacteristicofthecapitalistepoch,asetback that isaconsequenceandnotacauseof theother (mainly) economic processes that the Soviet regime passedthroughinitsstruggletoassertitselfinthetransitionbetweencapitalismandsocialism.185

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10THENOMENKLATURAASEXPLOITATIVECLASS?PERESTROIKAASREBELLIONOFTHEEXPLOITEDMASSES? The publication of M. Voslenskii’s book Nomenklatura in 1980causedsensationintheWestandpopularizedtheterminitstitle.Inthiswork,theauthor,himselfanemigréwhohadbeenamemberoftheupperranksintheUSSR,describedfromhisinsideexperiencehowhesawthefunctioning of the ruling classes of Soviet power in terms of classexploitation. The term nomenklatura in Soviet bureaucratic languagerefers to the fact that the CPSU maintained internal, classified andhierarchicallistswiththenamesofthepeoplewhoholdleadingpositionsinthecountryorwhoareheldinreservefortheseposts.Approvalforanylevel of these listswas carefully controlled by the corresponding partybodiesimmediatelysuperiortothepostinquestion.186(Voslenskii,1980,pp. 70­71) Voslenskii’s book popularized the term nomenklatura as asynonym for the leading bureaucratic layer of the Soviet Union in theWest. Voslenskii characterized the nomenklatura as a “class”differentiatedfromtheothers,notameresocialstratum.Letusconsiderhisargument:

Lenin[(1967­1970h,p.15)]gavethisdefinitionof class: “Classes are large groups of peopledifferingfromeachotherbytheplacetheyoccupyin a historically determined system of socialproduction,by theirrelation (inmostcases fixedand formulated in law) to the means ofproduction,bytheirroleinthesocialorganisationoflabour,and,consequently,bythedimensionsoftheshareofsocialwealthofwhich theydisposeandthemodeofacquiringit.Classesaregroupsofpeopleoneofwhichcanappropriatethelabourofanotherowingtothedifferentplacestheyoccupyinadefinitesystemofsocialeconomy.” [...]Doesthe group of [Soviet] “leaders”, as it isnamed in

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theUSSR, fitLenin’sdefinition?Yes, the “leaders”constitute a large group of people, distinguishedfrom other groups in Soviet society by their(preponderant) place in the social productionsystem, by their relation to the means ofproduction(therighttodisposeofthem),bytheir(directing)roleinthesocialorganizationofworkandthe(important)partofthesocial wealththattheyappropriate.(Voslenskii,1980,p.35)

TheoriesaboutthebureaucraticdegenerationoftheSovietUnionwereset forthbyseveralauthors:Trotsky,ErnestMandel,RudolfBahro,BrunoRizzi,MilovanDjilas,Ota Sik,AndreiAmalrik,CharlesBettelheimandothers.Thecontroversyvaried inconsidering thebureaucracyasadistinctclassorjustasocialstratum. Rizzi(1985,p.67),Djilas(1957,pp.37­41),Amalrik(1970,p.43),Sik (1981,p.159) andBettelheim (1974­1983, v.3,pp.210­211)wereamong those who considered the bureaucracy a distinct social class.Trotskyconsidereditasocial“stratum.” This “social class versus stratum” discussionwas epitomized inTrotsky’s famous intellectualdisputewith the ItalianBrunoRizzi. Inhis1939 book The Bureaucratization of theWorld, Rizzi was one of thepioneersinlaunchingthe ideathatFascismandStalinismweredifferentfacesof thesamesystem,whichhecalledbureaucraticcollectivism.Andhe considered that the Soviet bureaucracy had become a distinct classexploitativeoftheproletariatinthatcountry.Accordingtohim:

In Soviet society, exploiters do not appropriatecapitalgainsdirectly,as the capitalistdoeswhenhe pockets the dividends of his enterprise, butindirectly, through the state, which pockets theglobalamountofnationalsurplusvalue,andthendistributestoitsfunctionaries.(Rizzi,1985,p.75)

Trotskyconsideredthebureaucracya“socialstratum,”a“parasiticexcrescence,”butdeniedthatitconstitutedasocial“class”:

Classesarecharacterizedbytheirpositioninthesocialsystemofeconomy,andprimarilyby theirrelation to the means of production [...] Theattempt torepresenttheSovietbureaucracyasaclass of “state capitalists” will obviously notwithstandcriticism.Thebureaucracyhasneither

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stocknorbonds.Itisrecruited,supplemented,andrenewed in the manner of an administrativehierarchy, independently of any special propertyrelations of its own. The individual bureaucratcannot transit to his heirs his rights in theexploitation of the state apparatus. Thebureaucracyenjoysitsprivilegesintheformofanabuse ofpower [...]Onemay argue that the bigbureaucrat cares little what are the prevailingforms ofproperty, provided only they guaranteehimthenecessaryincome.Thisargumentignoresnot only the instability of the bureaucrat’s ownrightsbutalsothequestionofhisdescendants[...]Privileges have only half their worth, if theycannot be transmitted to one’s children. But therightoftestamentisinseparablefromtherightofproperty. It isnotenough tobe thedirectorofatrust;itisnecessarytobeastockholder(Trotskii,1936,p.280,282,286e287)

Bettelheim(1976,p.26)usedtheconceptof“statecapitalism”todescribetheSovietUnion.Hearguedthat,despitetheideologicalmantle,themodelofcapitalaccumulation in theUSSR followeda logic thatwasessentially capitalist, withdrawing surplus value from the workers tofavor a separate class (the Soviet equivalent of the capitalist“bourgeoisie”), and a national project that had nothing to dowith theinterestsofthoseexploited.(Bettelheim,1974­1983,v.3,pp.210­211and221­223). Trotsky,however,didnotconsider theSovietUnioncapitalistbutrather a “society stagnated in the transition [... between capitalism andsocialism](asaresultofthedefeatofproletarianrevolutionsinthemostadvancedcountries).”(Fernandes,1991,p.260) Bahro,Wittfogel andother authorswhoRobertKurz (1993,pp.55­58)called “Orientalists”sought to “explainBolshevikstatism throughthe traditionofAsiandespotismwithamodernization regimebasedonthewareconomy.”(Haddad,1993,p.56). As we have seen, there were many theories that implied theexistenceofadistinctsocialclass—oratleasta“stratum”—intheUSSR.Where thereareexploitersandexploited, therewillbesocialstruggle.Ifthisexploitationreachedtoohighlevels,suchasthoseexposedbysomeoftheauthorsabove,then itwouldbepossiblethatthisstrugglecouldtakethe formof socialupheavals thatwould jeopardize theexistenceof theSovietregimeitself.

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Isthisthenthecasewithperestroika?Haditbeenanexampleofhowtheexploitedmasses“rebelled”againsttheirexploiters? Asituationsimilartothatofthe“nationalitiesquestion”seemstous to happen here.We do not understand that perestroika began as amovementofthe“exploited.”Onthecontrary,itwas,initsearlieststages,amovement from top to bottom.Therewas a political decision of theCPSUtostartthe“reconstruction”thattooktheSovietaveragecitizen“bysurprise.” Somuch so that the initial reaction ofmanyRussians, uponfirsthearingGorbachevannouncing thechanges in1985,wasskeptical.(Gorbachev, 1987c, p. 62) After all, if the Khrushchev, Kosygin andAndropovreforms didnotmanage togo far,whywould thisGorbachevonebeableto? Sothefirstannouncementofthereformscame“fromthetop”attheCPSUplenarymeeting inApril1985,amonthafterGorbachevwaselected General Secretary. Their implementationwas an act of politicalwillof thecurrentsalignedwithGorbachevand facedmuch resistance,insideandoutsidetheparty.(Gorbachev,1987c,pp.70­71,85) Butoncetheprocessunfolded,especiallyfromlate1988onward,itbegan to escape the party’s control. The decentralization of powerfollowingtheintroductionofthemarketeconomyhad,infact,sparkedan“uprising”against theparty’sattempts tohold the reinsof theprocess.The Communists began to be persecuted and crushed in variousrepublics,the“shadoweconomy”(informal,clandestineorcriminal blackmarket)irresistiblyasserteditself,satellitecountriesrevolted,andfinallyin mid­1991 the masses took to the streets to expel the nationalist­communistauthorsoftheAugustputschattemptofthatyear. Onthesubjectofthecausesofperestroika,inourview,itwasnotan“uprising”oftheexploitedclassesthatcausedperestroika(sinceitwasa top­down party initiative). But once the process started, thesedissatisfactions of the masses (as well as the previously exposedproblemsamongnationalities)actedasacceleratorsofthedisintegrativeprocesses.

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11FINALTHOUGHTS Thepresentworkanalyzesthemaincausesofperestroika,thatis,whatledtheSovietleaderstolaunchsucharadicalreformprocessinthemid­1980s. As we have seen from the analysis of the documentspublishedatthe time,themainconcernwas theeconomicslowdownofthe previous two decades and the growing technological gapwith theWestthatcreatedaseriesofundesirablesideeffects(suchasthedifficultyin maintaining the raising of the population’s standard of living in acontextofalmoststagnationof theeconomy)andwhichmade iturgentthat “something had to be done” otherwise the Soviet Union wouldeventuallybecomeasecond­classpower. Oursecondstepafterthisfindingwastoanalyze,then,whathadledtothisslowdowninthecountry’seconomicandtechnologicalgrowth.Western economistshad longpointed to the Soviet economicmodel asinefficient. The fact that there was no private property and marketcompetition,accordingtothem,ledtowaste,disinterestinwork,attitudeof “what belongs to everybody belongs to nobody” in relation to statepropertyetc.However, theseexplanations,typicalofWesterneconomicstextbooks,couldnotexplain thespecificeconomic slowdownof the twodecades before perestroika, since this state of affairs practically alwaysexisted intheUSSR fromthe timeofthe first five­yearplansonward—andtheSovietUnionhadexperiencedhighratesofeconomicgrowthinthe1930s,1940sand1950s. Inotherwords, therewassomethingnew(exogenous) in the air that caused the slowdown specifically in thedecades prior to perestroika. Aswe discussed earlier, this “somethingnew” was the deepening of the Third Technological Revolution in theworldeconomy. At the time of the Third Technological Revolution neworganizational patterns of industrial production emerged, based onflexibility, more horizontal flows of information and command, andemphasis on quality. Finding themselves in permanent economiccompetitionwith theWest, theUSSR—whose rigid systemof verticalflows of information and command and emphasis on quantity andeconomiesofscalefittedrelativelywellintotherulesdictatedbyWestern

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Fordism in the1930s,1940s,1950s andpartof the1960s— failed toadapt to these basic principles of the new industrial paradigms of theworld economy without undermining the pillars of its own (proto­socialist)system. WeconsiderthisthecentraldilemmaoftheSovietleadersandthemain reasonwhy itbecamenecessary, and even inevitable (Gorbachev,1987c,p.18) thaturgent reformulationmeasuresbe taken in themid­1980swhen the relative stagnation of the economywas reaching pre­crisislevelsinsomeareas. The factthatweconsiderthisthecentralandmainaspectofthestory, obviously does not imply that we consider this the only vectoractingonthesystem.Itisnotaquestionofreducingeverythingtomereeconomism. Therewere, of course, other factors (political, social, etc.)that influenced the situation. However, we consider it important tohighlight the centrality of the economic causes becausewithout itwecould arrive at erroneous conclusions about the process of unleashingperestroika, confusing form and content and cause and effect. It isimportanttoanalyzeotherpoliticalandsocialfactorsthatinfluencedtheSoviet leaders in their decision­making process at the outset ofperestroika,butwehavetolookattheseotherfactorsinconjunctionwithour central explanation, i.e., with the new variables introduced in theUSSR­Westeconomiccompetitionatthetimeof theThirdTechnologicalRevolution.Itwouldbeasifabundleofseveralvectorswasactingonthesystem.Atthecoreofthisbeam(coordinatingthemaindirectionofthemovement)wouldbeourcentralexplanation.Othervectorswouldbe inthe periphery, also affecting the movement of the beam, but withincertainlimitsimposedbythemaincore. Thus, in the presentwork,wewant to expose the heart of thequestionofwhy itbecamenecessary,almost inevitable, the launchingofperestroika in the mid­1980s. So we focused on the economic­technological aspect that we consider central. Fascinating research—whichwould represent thewriting of another large academicwork—wouldbe to try to linkall theseothervectors(political,social,andevenotherdiverseeconomicvectors)toexplaintheirrelationsbetweenthemandwiththeeconomic“core”describedinthiswork. Another reasonwhywe consider it important to “isolate” thesefactorsspecificallyrelatedtothetransformationsofthetimeoftheThirdTechnologicalRevolutionascardinalcausesistodistinguishbetweenthefactorsthathadaffectedtheUSSRforalongtimeandthosethatcametoactexactlyinthedecadespriortoperestroika.Itisrelevanttomakethisdistinction,sincetheUSSR,asastatecreatedinarevolutionaryway,hadalways been under pressure from several factors that were acting to“force” thesystem(i.e.,torequirechanges in it).Asanexample,wecan

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mentionpressuresandpropaganda fromcapitalistcountriesdemandingpoliticalopennessintheUSSR,highmilitaryspendingthatcould“deplete”a civilian economy, etc.Traditionally,many of these factors alonewerenotstrongenoughtoactuallyforceradicalchangesinthe system.Butinacontextof“depletion”ofthepossibilitiesoftheproductionsystemcausedbytheinabilitytoadapttothenew,moreadvancedpatternsoftheworldeconomy, these other “peripheral” factors could magnify theproblematicityofthesituationandacceleratetheprocessoftheneedforchange.However, inordernottoconfusetheperipherywiththecenter,theformwiththecontent,onemustalwayskeepinmindwhichwerethemostessentialaspectsofthequestion.187 Another final observation that we think is important to drawattention to.Muchofouranalysisof theneworganizationalparadigmsthat emerged in industry in the period of the Third TechnologicalRevolution, i.e., theparadigms thatPiore&Sabel (1984) called “flexiblespecialization,”wasbasedon themost famous and influentialof them:Toyotism. Inviewof Japan’s currentvicissitudes in theworldeconomy,the inevitablequestionmayarise: “But is the famous Japanesemodelofdevelopmentnotcurrentlyincrisis?” Here it is very important to establish the difference betweenToyotism and the “Japanesemodel” (expression that can have severalconnotations). Toyotism, aswe understand it, is a new microeconomicindustrial paradigm, the strongest representative of the “flexiblespecialization” patterns that emerged at the time of the ThirdTechnologicalRevolution,whosegeographicaloriginisJapan.Atthetimeof theThirdTechnologicalRevolution,Toyotismsoeffectivelyproved tobe themost advanced of the industrial paradigms that led traditionalFordistindustriestostudyitandtrytocopyanumberofthetechniquesof “flexible specialization.”Overwhelmedby Japanese superiority in the1970s and 1980s,Western Fordist industries (especially in themorestrategicindustriessuchastheautomotiveindustry,electronics,etc.)wereonly able to improve their competitiveness in the 1990s through theadoptionofvarioustechniquesof“flexiblespecialization.”Atpresent,rareisthebigcompanythatdoesnotemployatleastsomeofthenewmethodsof Just­in­Time, TotalQuality Control, quality circles, flexiblemethods ofproductionetc.Flexibilityiscurrentlythekeywordintheglobalindustry.Theclearestexampleofthis istheAmericanautoindustry.Ford,ChrislerandGM(Saturnproject)sentobserverstoJapanese factoriesduringthe1980sandstartedemployingmanyflexiblemethodsintheirfactories.Theveryfactthatinthemid­1990sToyota’sproductivityleadershiprelativetothese Western factories diminished represents the very victory ofToyotism, that is, the recognition of its superiority through thedisseminationof its techniques (which,ofcourse,wouldeventually lead

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competitorsto“narrowthegap”). Thus,Toyotismand themethodsof “flexible specialization”wereprecisely the “flagships” of innovation at the time of the ThirdTechnologicalRevolution.Theso­called“Japanesemodel”depletionrefersto Japan’s macroeconomic problems in the 1990s, mainly from itsfinancial sector (problems of excessive capitalization, speculation and“bubbles” in the financial sector, loose regulationof the banking sector,currencydifficulties,etc.).Infact,agoodpartoftheseproblemsarealsolinked to thecountry'ssupercapitalizationand“financialisation,” that is,to the transition from an eminently “producer” country — in whichcapital is linkedmoredirectlytoproduction—toacountry that,grownfarabovetheinternalpossibilitiesofitsmarket,beginstoinvestitsexcesscapitalinthefinancialsectorbothathomeandabroad.Arrighi(1994,pp.345and352­353)drewattentiontothefactthatseveralleadingpowersof the past (e.g., Great Britain) have also gone through this phase of“financialization.” Inshort,heretoo,inordernottoconfusethepartwiththewhole,or the periphery with the core, it is important to separate what isToyotism (an industrial microeconomic paradigm that emergedgeographically in Japan) and the Japanese model (the financialcomponent of which has involved the system in macroeconomicstagnationinthe1990s). As a conclusion to all of the above, it is clear that the fullunderstanding of the process ofperestroika involves an analysis of theinterconnection between various factors, macro and microeconomic,national(internaloftheUSSR)andinternational,etc.Thephenomenonofthe “globalization” of the world economy, although often seen assomethingthatacceleratedmainlyfromthe1970sonwardandinsidethecapitalistcountries,mayactuallyonlyreveal theexternal faceofdeeperprocessesthataffected—morethanisnormallyperceived—thecampofactuallyexistingsocialistcountries.

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12SOURCES12.1ARCHIVALRESEARCH:GARF(GosudarstvennyiArkhivRossiiskoiFederatsii—StateArchiveoftheRussianFederation),Moscow,Russia.RGAE (Rossiiskii Gosudarstvennyi Arkhiv Ekonomiki — Russian StateArchiveoftheEconomy),Moscow,Russia.RTsKhIDNI (Rossiiskii Tsentr Khraneniya i Izucheniya DokumentovNoveishei Istorii— Russia’sCenter for thePreservation and Study ofDocumentsofRecentHistory),Moscow,Russia.TsKhSD (Tsentr Khraneniya Sovremennoi Dokumentatsii— Center forPreservationofContemporaryDocumentation),Moscow,Russia.NOTE:weusethestandardformofreferencingarchivalsourcesinRussia,orderedasfollows:1)(nameofthe)archive(inanabbreviatedform) ­>2)f.(=fond ,“fonds”or“collection”or“recordgroup”) ­>3)op.(=opis’,“series”, “record series”) ­> 3) d. (= delo, “file”) ­> 4) l. (= list, “page”).Example:TsKhSD,f.89,op.41,d.2,1.3.

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12.2PERIODICALS:­The American Economic Review, Nashville, American EconomicAssociation.­Annual Review of Engineering Industries and Automation (currentlyknown as World Engineering Industries and Automation), New York,UnitedNations:EconomicCommissionforEurope.­Aviapromyshlennost’, Moscow, Glavnoe Upravlenie AviatsionnoiPromyshlennosti(Glavaviaprom).­Bol’shevik,Moscow,TsKVKP(b).­CanadianJournalofPoliticalScience,Toronto,CanadianPoliticalScienceAssociation.­DruzhbaNarodov,Moscow,Izviestiya.­TheEconomicJournal,London,RoyalEconomicSociety.­Economic Outlook, Paris, Organisation for Economic Co­operation andDevelopment(OECD).­Economic Studies, Paris, Organisation for Economic Co­operation andDevelopment(OECD).­Economic Survey of Europe, New york, United Nations publishingdivision.­TheEconomist,London,TheEconomistNewspaperLimited.­EKO:seeEkonomikaiOrganizatsiyaPromyshlennogoProizvodstva.­EkonomicheskayaGazeta,Moscow,TsKKPSS.­Ekonomika i Organizatsiya Promyshlennogo Proizvodstva (EKO),Novosibirsk,AkademiyaNaukSSSR:OrdenaLeninaSibirskoeOtdelenie.­Europe­Asia Studies (formerly Soviet Studies), Glasgow, University ofGlasgow.­EZHBSE:seeEzhegodnikBol’shoiSovetskoiEntsiklopedii.­Ezhegodnik Bol’shoi Sovetskoi Entsiklopedii, Moscow, Izdatel’stvo“SovetskayaEntsiklopediya”.­FAOYearbook,Rome, Food andAgricultureOrganization of theUnitedNations.­ForeignAffairs,NewYork,CouncilonForeignAffairs.­GolosArmenii,Erevan,OrganTsentral’nogoKomitetaKommunisticheskoiPartiiArmenii.­Handbook of Economic Statistics, Washington, Central IntelligenceAgency:DirectorateofIntelligence.­Industrial Structure Statistics, Paris, Organisation for Economic Co­operationandDevelopment(OECD).­International Security, Cambridge (USA), Center for Science andInternationalAffairsofHarvardUniversity.

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­IstoriyaSSSR,MoscoW,AkademiyaNaukSSSR:InstitutIstorii.­Izvestiya (full title: Izvestiya Sovetov Narodnykh Deputatov SSSR),Moscow,Izdatel’stvo“IzviestiyaSovetovNarodnykhDeputatovSSSR”.­Kommunist,Moscow, teoreticheskii ipoliticheskiizhurnalTsentral’nogoKomitetaKommunisticheskoiPartiiSovetskogoSoyuza.­KrasnayaZvezda,Moscow,MinisterstvoOboronySSSR.­Main Economic Indicators, Paris, Organisation for Economic Co­operationandDevelopment(OECD).­MainScienceandTechnologyIndicators,Paris,OrganisationforEconomicCo­operationandDevelopment(OECD).­MirovayaEkonomikai MiezhdunarodnyeOtnoshieniya(MEMO),Moscow,AkademiyaNauk SSSR: InstitutMirovoi Ekonomiki iMezhdunarodnykhOtnoshenii.­NarkhozSSSR:seeNarodnoeKhozyaistvoSSSR.­Narodnoe Khozyaistvo SSSR: statisticheskii ezhegodnik, Moscow,Tsentral’noe Statisticheskoe Upravlenie SSSR (TsSU) and (from 1987onward)GosudarstvennyiKomitetSSSRpoStatistike(Goskomstat).­NewLeftReview,London,NewLeftReviewLtd.­Ogonek,Moscow,variouspublishers.­PartiinayaZhizn’,Moscow,TsKKPSS.­Planovoe Khozyaistvo, Moscow, Gosudarstvennyi Plannovyu Komitet(Gosplan).­Problems of Communism,Washington, Documentary Studies Section ofInternationalInformationAdministration.­Post­Soviet Affairs (formerly known as Soviet Economy), Silver Spring,Joint Committee on Soviet Studies of theAmerican Council of LearnedSocietieseSocialScienceResearchCouncil.­Pravda,Moscow,TsK KPSS.­PravdaUkrainy,Kiev,OrganTsentral’nogoKomitetaKompartiiUkrainy,VerkhovnogoSovetaiSovetaMinistrovUkrainskoiSSSR.­Pravda Vostoka, Tashkent, Organ TsK Kompartii Uzbekistana,VerkhovnogoSovetaiSovetaMinistrovUzbekskoiSSR.­Review ofEconomic Statistics,Cambridge,Department ofEconomicsofHarvardUniversity.­Revued`EtudesComparativesEst­Ouest,Paris,EditionsduCentreNationaldelaRechercheCientifique.­SIPRI Yearbook of World Armaments and Disarmament, Stockholm,StockholmInternationalPeaceResearchInstitute.­SlavicReview,Columbus,AmericanAssociation for theAdvancementofSlavicStudies.­SobraniePostanovleniiPravitel’stvaSoyuzaSovetskikhSotsialisticheskikhRespublik,Moscow,UpravlenieDelamiSovetaMinistrovSSSR.­SotsialisticheskayaIndustriya,MoscoW,TsKKPSS.

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13APPENDICES

185

13.1APPENDIX 1:CPSU, POWER STRUCTUREANDECONOMY INTHEUSSRONTHEEVEOFPERESTROIKA Article2ofthe1977SovietConstitutionstated: “AllpowerintheUSSRbelongstothepeople. The people exercise state power through Soviets of People’sDeputies,whichconstitutethepoliticalfoundationoftheUSSR. Allotherstatebodiesareunderthecontrolof,andaccountableto,theSovietsofPeople’sDeputies.”188 However,Article6of thesameConstitution,whichdiscussed theroleoftheCommunistPartyleadership,statedthefollowing: “TheleadingandguidingforceoftheSovietsocietyandthenucleusof

itspoliticalsystem,ofallstateorganisationsandpublicorganisations,is theCommunistPartyof theSovietUnion. TheCPSU exists for thepeopleandservesthepeople.

TheCommunistParty,armedwithMarxism­Leninism,determines thegeneralperspectivesofthedevelopmentofsocietyandthecourseofthedomesticandforeignpolicyoftheUSSR,directsthegreatconstructivework of the Soviet people, and imparts a planned, systematic andtheoreticallysubstantiatedcharactertotheirstruggleforthevictoryofcommunism.

All party organisations shall function within the framework of theConstitutionoftheUSSR.”

Thus, in the USSR therewas a certain duality, underwhich poweremanated from thepeople, but itwas a prioriunderstood that theCPSUwould have a leading position in the exercise of this power.Severalobserverscriticizedthat,inpractice,theroleoftheCPSUwaspredominant,while the Sovietsmerely discussed and approved thepoliciesoutlinedbytheactualdecision­makingstructuresoftheparty.(Ginsburgs&Pomorski,1979,pp.9­10)

TheSoviets(Councils)existedatnationalandregionallevel.ThemainCouncil(Soviet)wasthatoftheUnion.

SUPREMESOVIET: “ThehighestbodyofstateauthorityoftheUSSRshallbetheSupreme

SovietoftheUSSR”.(Article108).189Electedbycitzensovereighteenyearsoldonthebasisofuniversalandsecretballot(art.95),unlikemostWesternparliaments,theSupremeSoviet(approximately1,500

186

non­professionalmembers,who continuedexercising theiroriginalprofessions concurrently) did notmaintain permanent sessions. Itconvenedupto2timesayear(art.112)todebateandvotethemostimportant laws (five­year plans, for example). The Supreme Sovietelected a Presidium of approximately 40 members who workedpermanently in the period when the Supreme Soviet was not insession (articles119and120).ThisPresidiumwasaccountableandsubordinate to the Supreme Soviet, but it had the power to enactcertaindecrees(calledukazyor“edicts”)duringtheintervalsbetweensessions of the latter (article 121). Ukazy by the Presidium mustnecessarilybelaterconfirmedintheregularsessionsoftheSupremeSoviet.(BSE,3rded.,vol.4,p.564)

ThistendencyofthegreatSovietauthoritybodies(formallydecisory)tohaveaPresidium (orsomethingsimilar),composedofanelectedminority who can act on behalf of themajority while it is not insession, is one explanation of how power in the USSR could beexercised by party elites, despite the democratic character of theconstitution.Thus,withintheCPSUitself,theCentralCommittee(307votingmembers in1986),elected inpartycongresses (andmeetinggenerally 2 or 3 times a year), also had its permanent core, thePolitburo (about 14 votingmembers),which represented the truelocus of the highest power in the Soviet Union, in the opinion ofvariousauthoritativeauthors.(Fainsod&Hough,1979,p.466)

COUNCILOFMINISTERS: TheSupremeSovietelectedtheCouncilofMinistersoftheUSSR, i.e.,

the “cabinet” of ministers which, according to the Constitution,constitutedtheexecutivegovernmentpower(article129).

“The Council ofMinisters of the USSR, i.e. the Government of theUSSR, is the highest executive and administrative body of stateauthorityoftheUSSR”(article128).

TheCouncilofMinisterswasaccountable toandsubordinate to theSupreme Soviet (article 130). The President of the Council ofMinisterswasoftendescribedastheprimeministerof theUSSRbytheWesternpress.

Thus, formally, the legislative and executive functions in the USSRwere linked respectively to the Supreme Soviet (and local Soviets)and the Council of Ministers. However, article 6 of the 1977constitution, not only guaranteed the single­party system but alsogave the CPSU the leading role in the political leadership in thecountry.BackedbythesepowersguaranteedbytheConstitution,theCommunist Party created a structure throughwhich, in practice, it

187

controlled and guided the activity of legislative and executive Sovietbodies.(Feldbrugge,Berg&Simons,1985,p.152)

THE CPSU, ITS INTERNAL STRUCTURE AND ITS RELATIONSHIP

WITHTHENATIONALECONOMY: According tothestatutesof theCPSU,190“Thesupremeorganofthe

CommunistPartyoftheSovietUnionisthePartyCongress”thatmust“beconvenedby theCentralCommitteeat leastonce in fouryears”(article 31 of the statute). The Party “Congress elects the CentralCommittee”(article33).ThenumberofCCmembers“isdeterminedby the Party Congress” (article 34). The XXVI Congress in 1981elected 319 votingmembers, for example. (EZH BSE, 1982, p. 13)“Betweencongresses,theCentralCommittee[…]directstheactivitiesof the Party” (article 35 of the statute). However, the CentralCommitteedidnotremain inpermanentsession. Ingeneral, theCCmettwoorthreetimesayearforafewdays.(EZHBSE,1982,p14;Feldbrugge,Berg&Simons,1985,p.151)“TheCentralCommittee[…]elects a Presidium to direct the work of the CC between plenarymeetings and a Secretariat to direct current work, chiefly theselection of cadres and the verification of the fulfilment of Partydecisions”(article38ofthestatute).Thus,intimeswhentheCCwasnot insession, thePolitburo191was thebody thatactuallymade themostimportantpartydecisions.AsinthecaseoftheSupremeSovietanditsPresidium,thisstructure(madeupofalargerbody—formallypowerfulbutwhichmetonlyforashorttime—andlowerinstances—whichinbetweenthemeetingsoftheformerreallydominatedthescene) allowed for the concentration of power in the hands of aminority. ManyWestern and Soviet observers agree that the realcenterofpower in theUSSRwas located in thePolitburo.(Hough&Fainsod,1979,p.466)TheSecretariat,which in1984consistedof9departments plus the post of General Secretary192 (who wastraditionally also a Politburo member), took care of the dailymanagement of the party andwas responsible formonitoring theimplementation in practice of the strategic decisions taken by thePolitburo. (BSE, 3rd ed, vol 23,p.183; Feldbrugge,Berg& Simons,1985,p.151).

The Politburo elected during the 1981 XXVI Congress had 14 fullmembers and 8 candidatemembers andmet at least once aweek.(EZHBSE,1982,p.13;Feldbrugge,Berg&Simons,1985,p.151)TherealpowerofthePolitburowasnotimmediatelyclearfromareadingof the of the country’s constitution or of the party’s documents.However,anexaminationofthefunctioninginpracticeofthevarious

188

governing bodies of the USSR points to the crucial role of thePolitburo. According to the Soviet (later émigré) jurist O. Ioffe, noimportantSoviet lawcould inpracticebepassedagainstthedesignsof thePolitburo:all important legislationwaspreviouslyscrutinizedbyit.(Ioffe&Maggs,1983,p.105)

Due to theschemeof “concentriccircles”ofdelegatedpower, itwaseasy, for example, in the early 1980s, for the 14members of thePolitburo to “collude”with the (approximately)40membersof thePresidiumoftheSupremeSovietandbasicallypreparethestage forthelargerinstancesoftheCentralCommitteeandtheSupremeSoviettoonlyratifymajordecisionspreviouslytakenbythem.ThePolitburoalsoimplementeditsdecisionsthroughdecrees(postanovleniya)oftheCentralCommittee.Ifthemeasuresaffectednotonlytheinternallifeof thepartybutalso the country’seconomyasawhole, therewereoftenissuedjointdecreesoftheCPSUandtheCouncilofMinistersofthe USSR— under article 133 of the Constitution, the Council ofMinisters was authorized to issue decrees of a federal character.(Antonyuketal.,1983,pp.405­435)

Inorder toassume its roleofcontrol (“leadershipandguidance”)ofSoviet society, guaranteed by Article 6 of the Constitution, theCommunist Party held a “parallel control” of state bodies: as thegovernmentwasdividedintoministries(alongproductionlines)andregionalinstances,theCPSU“mirrored”thisstructure.Thus,ineverydistrict, city and region, the party had, respectively, its districtcommittee(raikom)citycommittee(gorkom)andregionalcommittee(obkom or Kraikom) (articles 41 and 42 of the CPSU statute). TheCentralCommitteealsohadapermanentstaff(apparat),dividedintodepartments(otdely).Intheeconomicfield,thisapparatoftheCC—whichoperatedunderthesupervisionofthepartysecretariat—wasin chargeofmonitoring thework ofministries and state economiccommittees.(Hough&Fainsod,1979,pp.410­417)Inaddition,partynuclei (pervichnye partorganizatsii, literally “primary partyorganizations”)werecreatedintheworkplacesofthepartymembers(factories, state and collective farms, army units, educationalestablishmentsetc.)—where therewereat least threemembersoftheparty(article53oftheCPSUStatute).ThefactthattheCPSUhadmillionsofmembers(about17intheearly1980s)allowedthisworkof“duplication”and“parallelcontrol”ofstatestructures.(Antonyuketal.,1983,p.437)

Thus,notonlythegovernmentbutalsotheeconomywasconstantlysupervisedbytheparty.Secretariesofobkomy,gorkomyandraikomy(respectively,regional,municipalanddistrictpartycommittees)wereresponsibleforthecontrolandsupervisionoftheperformanceofthe

189

enterprisesintheareasundertheirjurisdiction.(PERVYI,1986,p.1)Ineachfirm,thebasicnuclei(pervichnyipartorganizatsi)ofthepartyhelped to “control” (kontrol’)management activities, asprovided inarticle60of theCPSUstatute(thewordkontrol’ inRussianhasnotthemeaningofmanagingdirectlybutrathertomonitor,supervise).Itis important to note that several decrees (postanovleniya) of theCentralCommitteeandotherresolutionsofthepartyreiteratedthatparty bodies should avoid interfering unnecessarily in the dailyroutine activities of enterprises — which should be left to theadministration, according to the principle of edinonachalie or“responsibilityofoneperson”.(KPSS,1983­1989b,p247­248;KPSS,1983­1989e)According toanarticlepublished inoneof theofficialmagazinesoftheCentralCommittee,“thepartyleader[rukovodit]theeconomic life of the country,but does notmanage [upravlyaet] theeconomydirectly.”193(Slepov,1951,p.47)

In addition to the “external”parallel control, the partywas present“internally” on the other levels of government and the economythroughthefactthatmostofthegovernmentofficialswerealsopartymembers. Thus, for example, in the Gorbachevian Politburo wereincluded the “primeminister” (i.e., the president of the Council ofMinisters, N.I. Ryzhkov), the chairman of the Supreme SovietPresidium (A.A. Gromyko), and other ministers. (Novosti PressAgency, 1988, pp. 72 and 74). Through this party­state structure,many problems had already been discussed and resolved in thePolitburo before being placed under discussion in government orCongress. This party­state structure was also replicated at othersubfederallevels(republican,regionaletc.).

Lastbutnotleast,bythenomenklaturasystem,194theappointmentofpersonneltoallmajorpositionsofresponsibilityintheconductofthenational economy (fromministers to local senior government officialsand company managers) had to receive approval and official“confirmation” by the corresponding party committee (or otheranalogouspartybody).(Bugaev&Leibzon,1962,pp.154­155;Hough&Fainsod,1979,pp.430­432; Feldbrugge,Berg& Simons,1985,p.152)Eachpartycommittee(atdistrict,regionalandnationallevel)hadalistofposts under their jurisdiction for “confirmation.”Although theoreticallythe party only “confirmed” the appointment made by governmentauthorities, in practice the approval of the party was a sine qua noncondition for theappointmentandremovalofpersonnel inpositionsofresponsibility.(Bugaev&Leibzon,1962,p.155;Hough&Fainsod,1979,p. 431) An evidence of this is the existence of cases where factorydirectorswereremovedbypressure from firstsecretariesof localpartycommittees.(Kuptsov,1984,p.6)Thenomenklaturasystemprovidedfirm

190

controloftheCPSUoverthegovernmentandtheeconomy.

191

13.2 APPENDIX 2: GROWTH TRENDS IN THE SOVIET ECONOMY INDIFFERENTDECADES(officialSovietstatistics)Table2.1:AverageannualgrowthratesoftheNetMaterialProductoftheUSSR,accordingtoofficialSovietstatistics.*1928­1940

1941­1950**

1951­1960

1961­1970

1971­1975

1976­1980

1981­1985

14.3% 6.3% 10.3% 7.2% 5.7% 4.3% 3.2%* Growth in average annual percentage of the Net Material Product(NMP) according to calculations by the TsSU (Central StatisticsAdministration) of the USSR, published in the Statistical YearbookNarodnoe Khozyaistvo. Net Material Product is the term used by theUnited Nations to designate what the Soviets called National IncomeProduced (Proizvedennyi Natsional'nyi Dokhod). Unlike Westerncalculations ofGrossNational Product (GNP), theNetMaterial Productincludes only the production of material goods, excluding the servicesector.**The1940saveragedatypicalgrowthduetoWorldWarII(withextremenegative and positive rates in its several years of destruction andeconomicrecovery).Onthis,seedetailsintable3.2.Foralternativestatistics(WesternandRussian)ofthegrowthratesoftheSovieteconomy,seeAppendix3.SOURCES:Narkhoz,1988,p.8andTable3.1ofAppendix3.

192

13.3APPENDIX3:ECONOMICGROWTHRATES(USSR,USAANDJAPAN)Table3.1:GrowthratesoftheSoviet,AmericanandJapaneseeconomiesaccordingtovarioussourcesNMP * oftheUSSRaverageannual%(Official ­Narkhoz)

1928­194014.3%

1941­19506.3%

1951­196010.3%

1961­19656.5%

1966­19707.8%

1971­19755.7%

1976­19804.3%

1981­19853.2%

1928­19858.4%

NMPU.S.averageannual%(Narkhoz)

1971­19752.2%

1976­19803.4%

1981­19852.4%

GNP of theUSSRaverageannual%(Official ­Narkhoz)

1966­19707.6%

1971­19756.2%

1976­19804.8%

1981­19853.6%

GNP of theUSSRaverageannual%(Ofer­CIA­Bergson)**

1928­19405.8%(9.7%)

1940­19502.2%(1.8%)

1950­19605.7%

1961­19655.0%

1966­19705.2%

1971­19753.7%

1976­19802.7%

1981­19852.0%

1928­19854.2%

GNP/GDPU.S.averageannual%(CIA­ B. oftheCensus)

1928­19401.5%

1928­19502.9%

1951­19602.7%

1961­19654.8%

1966­19702.8%

1971­19753.0%

1975­19803.4%

1981­19853.0%

GNP of theUSSRaverageannual%(CIA)

1961­19654.9%

1966­19705.1%

1971­19753.1%

1976­19802.2%

1981­19851.8%

Japan'sGDPaverageannual%(CIA)

1961­196510.1%

1966­197011%

1971­19754.3%

1975­19805.0%

1981­19853.9%

193

NMPUSSRaverageannual%(Khanin)

1929­19413.2%

1942­19501.6%

1951­19607.2%

1961­19654.4%

1966­19704.1%

1971­19753.2%

1976­19801.0%

1981­19850.6%

1929­19873.3%

NMPUSSRAbsolutegrowthindex(1913=1)(Bolotin ­IMEMO)

19131

19200.35

19291.10

19382.20

19503.65

198619.00

U.S.NMPAbsolutegrowthindex(1913=1)(Bolotin ­IMEMO)

19131

19200.85

19291.20

19381.35

19501.50

19864.70

JapanNMPAbsolutegrowthindex(1913=1)(Bolotin ­IMEMO)

19131

19201.15

19291.75

19382.30

19502.00

198620.00

Notes:*NMP(NetMaterialProduct):termusedintheWesttodescribewhattheSoviets called Proizvedennyi Natsional'nyi Dokhod (“National IncomeProduced”).UnliketheWesternGNP(GrossNationalProduct),NMPonlyencompasses the production ofmaterial goods (excluding the area ofservices).From1988onward,theSovietsbegantocalculatetheUSSRGNPinthestatisticalyearbookNARKHOZ(NarodnoeKhozyaistvoSSSR).**Period1928­1950fromOFER(basedonBERGSON)calculatedinrublefactorcostof1937.ThenumbersinparenthesisarealternativeBERGSON(1961,pp.216­217and271)estimateswhich“blend”the1928,1937and1950 factor costs intoa composite index, taking1937 as thebaseyearandperformingthecomparisonofanygivenyearwith thebaseyear intermsofvalues(specificweightsforgoodsandservices)ofthegivenyear.1950­85periodfromOFER,basedonCIA(1950­1980in1970factorcostand1980­1985in1982factorcost).Aggregation1928­85byOFERalone.SOURCES:Lines “NMP of theUSSR (officialNarkhoz)” and “GNP of theUSSR(official–Narkhoz)”:Narkhoz1988,p.8andTable3.2ofAppendix3(atconstantpricesasexplained inNarkhoz1988,p.698:years1929­50at1926­27prices,1951­55at1951prices,1956­58at1956prices,1959­65at1958prices,1966­75at1965prices,1976­85at1973prices; fortheyears1986onwardNarkhozused1983constantprices).

194

Line“NMPU.S.”:Narkhoz1988,p.680.LineGNPUSSR (Ofer): seenotes (the asterisks) above. Sources:Ofer,1987,p.1,778;Bergson,1961,pp.271and217; JEC,1982,p.15;CIA,HandbookofEconomicStatistics,1986,p.39.Lines “GNP USSR (CIA)” and “GDP Japan (CIA)”: CIA Handbook ofEconomicStatistics,1988,p.33(USSRin1982rublefactorcost; Japanat1987constantdollarsandpurchasingpowerparity)Line“GNP/GDPU.S. ­CIAandU.S.BureauofCensus”:years1928­60(GNP) fromU.S.Bureauof theCensus,HistoricalStatisticsof theUnitedStates, Colonial Times to 1970, p. 226 (in constant 1958 dollars). Years1961­85 (GDP) CIA, Economic Handbook of Statistics, 1988, p. 33 (inconstant1987dollars)Line NMP USSR (Khanin): Khanin, 1988, p. 85 (calculated from thegrowthrateofthe volumeofphysicalproductionofkeyproducts,asperKhanin,1988,p.84)LinesNMPUSSR, Japan andU.S. (Bolotin):Bolotin, 1987, p. 149 (at1980constantdollarsandpurchasingpowerparity)

COMMENT: Soviet official statistics published in the Statistical YearbookNarodnoeKhozyaistvoSSSRwereaccusedintheWestofexaggeratingtheeconomic growth of theUSSR, among other things, by not taking intoaccount the “hidden inflation” costs caused by distortions in theadministrative (i.e., non­market) price system established by thegovernment and for using unrealistic constant prices of 1926/7 tocalculate the long 1928­50 period.195(Ericson,1988,p.7)Thus, judgingsolely by the official statistics, the Net Material Product of the USSR(NationalIncomeProduced)grewbyafactorof88.23from1928to1985.(Ibid.,p.14)Westernstatistics(CIA,Ofer,Bergsonetc.)lowerthisfigure,pointingtoagrowthbyafactorof10.96.(Ibid.) Withthebeginningofperestroika,theSovieteconomistsbegantorevisetheofficialfigurespublishedbyTsSU(Tsentral'noeStatisticheskoeUpravlenie, the “Central Statistical Administration”).196 A team fromIMEMO (Institute of World Economy and International Relations) inMoscow,under thesupervisionofB.Bolotin,published statisticalseriesrecalculating aspects of the economic growth in the USSR and other

195

countriesintheperiodfrom1913to1987.SovietNationalincomeintheperiod 1929­1986, according to these calculations, had increased by afactor of 17. However, other Soviet economists (G. Khanin and V.Selyunin)presentedthemostextremealternativecalculationsofthetime:their growth rate was lower than the figures published by the CIA.According to them, ifwe account for unofficial inflation in productioncosts and for methodological errors in official Soviet statistics, thenational incomeof theUSSRgrewbyonlya factorof6.6 from1929 to1985.(Khanin,1988,p.84) It is important to note that in all of the above statistical tables(eveninKhaninandSelyunin’s),theeconomicgrowthoftheUSSRintheperiod from1928 to1985washigher than thatof theUSA.AsKhaninhimselfwrote:

"The national income of the USSR grew by afactorof6.9 from1929 to1987. In comparison,theU.S.grewbyafactorof6.1duringthisperiod[…]”(Khanin,1988,p.86)

KhaninandSelyunin’sfiguresarousedcontroversy.

[...]KorolevandAdamovsaidthatifKhaninandSelyuninwere right, theSovietUnionwould stillbeatits1928levelincomparisontotheU.S.,thatis,withonly10%ofU.S.nationalincome,whichisclearlyanabsurd.Butthisclaimseemstobebasedon a “trick.” Abram Bergson calculated that thereal Soviet national income in 1929 was about20%of theU.S.,so that,withAmericannationalincome being approximately 4.3 times higherthanin1928,theUSSRwasabletoprogressevenatKhaninandSelyunin’srates.WhatactuallycanbeadducedfromKhaninandSelyunin’sfindingsisthat the size of the current Soviet economy isaboutone­thirdoftheU.S.,whichisareasonablenumber to anyone living in the Soviet Union.However, by the official statistics, a 90­foldgrowth, starting from a 10% U.S. base, wouldmaketheSovietnationalincomecurrently[1988]about twice as large as thatof theU.S. (Ericson,1988,p.32).

AccordingtothecalculationsbyBolotinandtheIMEMOteam,the

196

USSR economy, in terms of national income produced (NMP, whichexcludestheservicesector),wasabout65%oftheU.S.in1986.(Bolotin,1987, p. 148) The CIA estimated that the GDP (including the servicesector)of theUSSR in1985 represented54% compared to thatof theU.S., while TsSU (the “Central Statistics Administration” of the Sovietgovernment)said that, in termsofGDP, the levelof theUSSRwas56%thatof theU.S. in thesameyear. (CIA,HandbookofEconomicStatistics,1991,p.36)

197

Table3.2AnnualeconomicgrowthoftheUSSRaccordingtoSovietofficialstatistics: annual growth rates (in percentage) of the National Income(NetMaterialProduct),1928­1990.year 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940rate 8.2 16.0 21.0 16.8 11.3 6.5 15.2 19.2 29.3 12.0 8.9 9.5 11.6year 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952 1953rate ­8 ­28.3 12.1 18.9 ­5.7 ­6 19.1 24.1 18 20.1 12.2 10.9 9.8year 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966rate 12.0 11.9 11.4 6.7 12.6 7.4 7.7 6.9 5.6 4.1 9.4 6.8 8.0year 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979rate 8.7 8.3 4.7 9.1 5.6 3.9 8.9 5.4 4.5 5.2 4.5 5.1 2.2year 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 rate 3.9 3.3 4.0 4.2 2.9 1.6*

(3.5)2.3*(4.1)

1.6*(2.3)

4.4 2.5 ­4

*Theofficialstatisticalyearbookof theUSSR (NarodnoeKhozyaistvoorNarkkhoz for short) initially gave, for the years1985,1986 and1987,respectively,therates3.5%,4.1%and2.3%.FromNarkhoz1988onward,a downward revision of the rates for these three years were set at,respectively, 1.6%, 2.3% and 1.6%. The official explanation given inNarkhoz1988,page7,wasthatuntil1988theassessmentofthoseyearshadexcludedthe fall in income from the“production,sale[and taxation]of alcohol” (mainly due to the current Gorbachevian anti­alcoholcampaign).SOURCES:years1929­38,calculatedfromBSE,2nded.,vol.29,p.302;years1939­40 calculated from Zaleski, 1980, pp. 578­579; years 1941­1945calculated fromNarkhoz za70 let,page43;1946­1950 calculated fromNarkhoz1964,p.87;1950­1963calculated fromNarkhoz1964,p.575;1964­1971calculated fromNarkhoz1972,p.531;1972­1976calculatedfromNarkhozza60 let,p.485;1977­1984fromNarkhoztoletza70,p.58;1986­1990fromNarkhoz1990,p.7.

198

13.4APPENDIX4:PRODUCTIVITYINDICES(USSR,USA,JAPAN)Table4.1:laborproductivityindexintheUSSR,theUSAandJapan,1913­1986;general*,industryandagriculture.(Productionperemployedworker:averageoftheIndustrializedCapitalistCountries[ICC]=100) 1913 1920 1929 1938 1950 1986ICC 100 100 100 100 100 100 USSRgeneral* 23 9 19 29 40 41U.S.General* 175 185 180 175 240 145Japangeneral* 35 45 50 50 33 85 USSRindustry 25 7 20 34 36 58U.S.industry 145 170 160 145 180 130Japanindustry 15 25 30 45 20 90 USSRagriculture

26 16 27 28 25 20

U.S.agriculture 175 180 180 200 325 200Japanagriculture

35 37 37 36 35 37

* “Labor productivity in general” is what the Soviets called “socialproductivity of labor” (obshchestvennaya proizvoditel’nost’ truda)whichwasobtainedbydividingthenationalincomebythenumberofworkersemployedinthematerialproductionsector.NotethattheSovietMarxistconcept of national income, unlike theWestern concept, encompassedonlymaterialproduction,excludingtheservicesector.SOURCE:Bolotin(1987,No.12,pp.144,146and148.).

199

Table4.2:Laborproductivitygrowth in theUSSR,USAand Japan,1920­1986(ingeneral*,inindustryandinagriculture)(Outputperemployedworker)(1913=1) 1920 1929 1938 1950 1986USSRGeneral* 0.35 1.05 1.85 3.20 11.15U.S.general* 1.00 1.30 1.45 2.50 5.15Japangeneral* 1.15 1.65 2.00 1.55 14.75 USSRindustry 0.25 0.90 1.50 2.00 8.70U.S.industry 0.95 1.30 1.10 1.80 3.45Japanindustry 1.35 2.10 3.10 1.85 20,65 USSRagriculture 0.65 1.20 1.45 1.55 5.50U.S.agriculture 1.20 1.30 1.70 3.25 9.00Japanagriculture 1.15 1.25 1.40 1.65 7.75* “Labor productivity in general” is what the Soviets called “socialproductivity of labor” (obshchestvennaya proizvoditel’nost’ truda)whichwasobtainedbydividingthenationalincomebythenumberofworkersemployedinthematerialproductionsector.NotethattheSovietMarxistconcept of national income, unlike theWestern concept, encompassedonlymaterialproduction,excludingtheservicesector.SOURCE:Bolotin,1987no.12,pp.144,146and148.Table4.3:AverageannualgrowthoflaborproductivityintheUSSR,1928­1985(differentestimates). 1928­

19401950­60

1961­1965

1966­1970

1971­1975

1976­1980

1981­1985

USSR: labor(Narkhoz)

6.8 4.5 3.3 2.7

USSR: industry(Narkhoz)

5.8 6.0 3.2 3.0

USSR: Agriculture(Narkhoz)

5.4 4.0 2.6 1.5

USSR:labor(Ofer) 2.4 4.4 3.4 2.0 1.4 1.3SOURCES:Narkhoz1988,p.62.Productivity defined asnational incomeproducedper employed worker. Since the concept of Soviet national incomeincluded only material production (excluding the tertiary sector, or

200

services),“laborproductivityingeneral”(line1)wasobtainedbydividingthe national income by the number of workers employed in theproductionofmaterialgoods.Ofer,1987,p.1778.Laborproductivity inOfer isobtainedbycalculatingtheGDPperman­hour(ofwork).

201

13.5APPENDIX5: INTENSIVEANDEXTENSIVEGROWTH FACTORS INTHESOVIETECONOMYTable5.1:WesterncalculationsofextensiveandintensivegrowthsourcesintheUSSR,1928­1985(averageannualgrowthrates) 1928

198519281940

19401950

19501960

19601970

19701975

19751980

19801985

GNP 4.2 5.8 2.2 5.7 5.2 3.7 2.6 2.0Total factorproductivity

1.1 1.7 1.6 1.6 1.5 0 ­0.4 ­0.5

Factors ofproductioncombined:

3.2 4.0 0.6 4.0 3.7 3.7 3.0 2.5

Labor 1.8 3.3 0.7 1.2 1.7 1.7 1.2 0.7Capital 6.9 9.0 0.4 9.5 8.0 7.9 6.8 6.3Land 0.8 1.6 ­1.3 3.3 0.2 1.0 ­0.1 ­0.1SOURCE:Ofer,1987,p.1778.Comments: Extensiveeconomicgrowthisbasedontheuseoflargeramountsoffactorsofproduction(labor,capital,landandrawmaterials).Intensivegrowthisbasedonamoreefficient(more“productive”)useofthesameamount of factors of production. Total Factor Productivity (TFP) is theresidueofeconomicgrowththatcannotbeexplainedbythequantitativeincrease in factors ofproductionused.That is, it is assumed that totalfactorproductivityreflectsthepurecontributionoftechnicalprogressforeconomic growth. Thus the sum of the growth rate of the item“CombinedFactorsofProduction” (extensivepartof economicgrowth)withtheitem“TotalFactorProductivity”(intensive component)givesusthegrandtotaloftheGNPgrowthrateintable5.1. Labor,capitalandlandhavedifferentrelativeweightsintheirsumin“CombinedFactorsofProduction”tocompensateforthedifferentcostsandprofitabilityofeachfactor(formoredetailsonthemethodologyusedinthecalculations,seeOfer,1987,p.1779and1785).

202

13.6APPENDIX6:PRICEANDWAGE INDICES INTHEUSSR,USAANDJAPANTable6.1:averagenominalsalaryintheUSSR,inrubles,1960­1986.1960 1970 1980 1985 index 1960­

1985nominalwages1960=100

index 1960­1986realwages*1960=100

80.6 122.0 168.9 190.1 235 210*Thegrowthrateofrealwagesequalsthegrowthrateofnominalwagesminustheofficialinflation.SOURCE:Narkhozza70let,pp.431and441.Table6.2:ConsumerPriceIndex(CIAcalculations;1980=1) 1960 1970 1975 1980 1983 1984 1985 1986 1987 1988 1989 1990USSR 77 84 92 100 109 109 112 117 119 123 131 149USA 36 47 66 100 121 126 131 133 138 144 150 159Japan 24 42 73 100 110 112 115 116 116 117 119 123

SOURCE:CIAHandbookofEconomicStatistics,1988,p.39and1991,p.42.

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13.7 APPENDIX 7: TOYOTISM, FORDISM AND MACROECONOMICGROWTH COMPARED (JAPAN, U.S. AND OTHER COUNTRIES DURINGTHETHIRDTECHNOLOGICALREVOLUTION)Table 7.1: Comparison of GDP per capita in Japan, USA and Germany(1950­1988)(indollars,convertedattheofficialexchangerates).Year Japan USA WestGermany1950 131 1,895 4681955 273 2,446 8251960 468 2,852 1,3021965 919 3,629 1,9421970 1,948 4,952 3,0411975 4,475 7,401 6,7841980 9,103 11,996 13,2961985 11,098 16,760 10,3551988 19,905 18,570 18,373Source:Tsuru,1993,p.182.

COMMENT: In1993, the per capitaGrossDomesticProduct (GDP) of Japan,USA and Germany in U.S. dollars at official exchange rates were,respectively,$33,612,$24,302and$23,537.(OECD,1995a,p.14)ButtheJapanese advantage has to be qualified. If instead of official exchangerates,weutilizePPP(PurchasingPowerParity)calculations—whichusethepricesofonecountrytouniformlyvaluethegoodsandservicesofallcountries in order to prevent the distortions caused by exchange ratefluctuation—weobtain, forthethreecountriesthe followingrespectiveresults: $20,279, $24,302 and $18,506. (Ibid.,p.18) Inotherwords, in1993, theUnited States still lead inproductivity (measured asGDPpercapita)asawhole(encompassingindustry,servicesandagriculture).TheAmericanadvantagecomesnotfromspurtsofhigheconomicgrowth(theso­called“economicmiracles”)butratherfromapersistentlylongperiodofmoderate economic growth formore than two centuries (Maddison,1991,pp.49­51)Thissteadygrowthforsuchalongtime(combinedwithrelatively little damage, and even overproduction, during the twoworldwars)enabledan “isolated” leadaheadofothercountries in thesecond

204

halfofthetwentiethcentury.However,sincetheSecondWorldWar,whiletheUnitedStatesremainedatmoderategrowthrates(withatendencytostagnation from the 1970s onward), Japan was the fastest growingcountry (both in termsof theeconomyasawhole,and in termsofpercapitaproductivity)intheperiodoftheThirdTechnologicalRevolutionuptotheendofthe1980’s. Thegreattestofsuperiorityofaneconomicmodeloveranotheristhe productivity per capita (output per employed worker) or, what istechnically more accurate (due to differences in working hours andholidays etc.), output per hours worked. The United States is still theleaderintermsofproductivity,butbecauseoftheJapanesesuperiorityinterms of productivity growth rates, the gap between the two countriesnarrowed rapidly in the post­war period (Japan is a leader in absoluteproductivity insomeareas,suchasautomotive,electronics industryandequipment,i.e.,exactlythefieldsmostdirectlyaffectedbyToyotism). Below isatableofproductivitygrowthratespercapita inseveralcountriesindifferentperiods:Table7.2:productivitygrowthphases(GDPperhourworked),1870­1987(compoundannualaveragegrowthrate). 1870­

19131913­1950

1950­1973

1973­1987

1870­1987

Japan 1.9 1.8 7.6 3.5 3.2USA 1.9 2.4 2.5 1.0 2.1Germany 1.9 1.0 5.9 2.6 2.5UK 1.2 1.6 3.2 2.3 1.9Australia 1.1 1.5 2.7 1.8 1.6Austria 1.8 0.9 5.9 2.7 2.4Belgium 1.2 1.4 4.4 3.0 2.1Canada 2.3 2.4 2.9 1.8 2.4Denmark 1.9 1.6 4.1 1.6 2.2Finland 1.8 2.3 5.2 2.2 2.7France 1.6 1.9 5.0 3.2 2.6Italy 1.7 2.0 5.8 2.6 2.7Netherlands 1.3 1.3 4.8 2.4 2.1Norway 1.6 2.5 4.2 3.5 2.6Sweden 1.7 2.8 4.4 1.6 2.6Switzerland 1.5 2.7 3.3 1.2 2.2arithmeticmean

1.7 1.9 4.5 2.3 2.4

Source:Madison,1991,p.51.

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Table7.3:Comparativeproductivitylevels(GDPperhourworkedrelativetotheleadingcountry)1820­1890UK=100/1913­1987UnitedStates=100 1820 1870 1890 1913 1929 1938 1950 1960 1973 1987USA 83 96 99 100 100 100 100 100 100 100Japan 31 18 20 18 22 23 15 20 46 61Germany 62 48 53 50 42 46 30 46 64 80France 80 54 53 48 48 54 40 49 70 94Italy 58 39 35 37 35 40 31 38 64 79UK 100 100 100 78 67 64 57 56 67 80Canada 62 63 75 66 58 75 79 83 92Austria 66 49 53 48 37 33 27 38 59 74Belgium 72 79 80 61 55 53 42 45 64 86Denmark 66 57 59 58 59 54 43 46 63 68Finland 49 33 32 33 32 33 31 36 57 67Netherlands 99 85 87 69 74 64 46 54 77 92Norway 59 46 48 43 45 50 43 52 64 90Sweden 58 45 46 44 38 43 49 54 76 82Switzerland 60 61 51 57 55 56 59 67 68Australia 90 127 99 93 77 75 67 69 70 78

NOTE:1.TheUnitedKingdomwas the leader inproductivityuntilabout1890.Afterthat,theleaderwastheUSA.2.Thedata for1820were calculated extrapolatingbackwards the1870data,usingthegrowthofrealGDPpercapita.Source:OECD,1996a,vol.2,p.32.COMMENT: Japan, starting out from the lowest postwar comparativeproductivitylevelofalltheabovecountries(index15in1950accordingtotable7.3),wastheonewiththehighestratesofproductivitygrowth,bothin theperiod1950­73and in1973­1987 (respectively,7.6%and3.5%annually,according to table7.2),wellaheadof theothers. Inparticular,theJapanesemodelwastheonethatbestresistedthevicissitudesofthecrisis of the 1970’s, which put the future of the Fordist­basedaccumulation regime in check. (Lieptz, 1986,pp. 17­18)Writing aboutthiscrisis,Lipietz(ibid.,p.26)pointedoutthat:

According to theFrenchCenter forPerspectiveStudies and International Information (C.E.P.I.I.

206

1984),onlyone country [Japan], through radicalinnovations in labororganization,showed, in thelate1970s,areversaloftheunfavorabletrendsinterms of productivity growth andmovements inthe organic compositionof capital (althoughnotatthesamelevelasinthefavorable1960s).

Theresultof this is that theWest,starting in themid­1970s,setouttocopymanycharacteristics(mainlymicroeconomic)oftheJapaneseparadigm.Most largeWesterncompaniesadopted flexible techniques intheir operation (Just­in­Time,TotalQualityControl,QualityCircles, ZeroInventories,etc.). In terms of productivity, in the industriesmost affected by theToyotist techniques — i.e., the transportation industry (includingautomobile),machineproductionandelectricalengineering— Japaneseproductivity(perhourworked)isalreadythefirstintheworld,with17%above therunner­up,theUSA.197(Nasar,1992,p.D19,c.4)ProductivityintheservicesectorinJapanisrelativelylow,whichgreatlydiminishesitsoverallaverage. It is important to note that we analyze the developments ofToyotism and Japan at the time of the Third Technological Revolution.ThisMandelianperiodofabout50years,198whichbeganafterWorldWarII (1945), shouldend in theearlyormid­1990s. And thereare indeedsignsthattheeconomyoftheadvancedcapitalistcountriesslowlybegantorecoverinthe1990sfromthelongwaveofstagnationofthe1970sand1980s.199 On the other hand, Japan has shown less dynamicmacroeconomic growth rates at the beginning of this new decade andnew period. This is due to the fact that, after having grown into thesecond largestGNP in theworld, Japan is experiencing a phenomenoncommon toother leadingpowersof thepast (suchasEnglandand theUnitedStates),whichisreflectedinmoremoderateratesofgrowthandagrowing financializationof its system: theexcess capital createdduringtheperiodofthe“economicmiracle”surpassestheabsorptivecapacityofthe system and this capital, then,without obtaining its valorization bypurely productive (industrial) means, launches itself into financial orspeculativemarkets.200ThismoremoderategrowthofJapaninthe1990sdoes not invalidate our thesis about Toyotism as the most advancedindustrial production paradigm of the ThirdTechnologyRevolution erabecause: (1) Japan’s current accommodation at lower industrial growthrates,asdemonstratedbyArrighi,201correspondstothenaturalstageofan“excessivelyrich”countryandtothedifficultiesofvalorizationoftheaccumulated capital;2)Toyotism,notonlyproved its superiority in the1970sand1980sbutalsothebigWesternindustrialcompaniesentered

207

the1990sadopting(orattemptingtoadopt)Toyotisttechniques(orotherforms of “flexible specialization”) in order to regain competitiveness.Nowadaysalmostallmajorglobalcompaniesadopt“flexible” techniques.The first half of the 1990s still does not allow us to foreseewhat thefuturehegemonicproductionparadigmswillbe inthisnew(“post­ThirdTechnologicalRevolution”)phase,butthe“flexible”paradigmshaveleftanindeliblemark.

208

13.8APPENDIX8:SOVIETMILITARYSPENDINGTable8.1:Sovietmilitaryspending,variousestimates,from1950to1985(billionrubles)year Soviet

official(Currentprices)

SIPRI1979(Currentprices)

SIPRI1980’s(currentprices)

Lee1(Currentprices)

Lee2(1970rubles)

CIA11970rubles(average)

CIA21970 rubles(min./max.)

1950 8.3 17.1 1951 9.4 26.0 19­331952 10.9 26.5 20­331953 10.8 24.5 19­301954 10.2 25.5 20­311955 10.7 23.3 14.0 30.0 24­361956 9.7 12.5 28.5 23­341957 9.1 12.5 25.5 21­301958 9.4 17.0 13.5 26.0 22­301959 9.4 18.4 15.0 25.5 22­291960 9.3 18.3 21.8 16.0 27.0 23­311961 11.6 22.8 18.5 30.0 26­341962 12.6 24.9 21.0 33.5 29­381963 13.9 27.3 23.0 35.0 31­391964 13.3 26.1 24.5 38.0 34­421965 12.8 25.1 30.0 26.0 39.0 35­431966 13.4 26.3 28.0 29.2 40.0 36­441967 14.5 28.5 32.5 33.0 43.0 39­471968 16.7 32.4 38.5 38.5 46.0 42­501969 17.7 34.6 42.0 42.2 47.5 43­521970 17.9 35.2 42.0 46.0 46.5 48.5 44­531971 17.9 35.7 42.7 52.0 59.5 45­541972 17.9 36.3 43.3 56.5 51.0 46­561973 17.9 36.9 44.0 63.5 53.0 48­581974 17.7 37.4 44.7 69.0 56.5 51­621975 17.4 38.0 45.4 77.0 59.0 53­651976 17.4 38.5 46.0 83.5 62.5 56­691977 17.2 39.1 46.7 89.0 63.0 56­701978 17.2 39.7 47.4 98.0 64.5 57­721979 17.2 48.0 107.0 67.0 59­751980 17.1 48.7 117.0 70.5 62­791981 17.1 49.5 1982 17.1 50.2 1983 17.1 1984 17.1 1985 19.1

Source (table adapted with modifications and additions from Becker,1985,p.4.):Column“SovietOfficial”(=allocationoftheitemOborona[“Defense”]intheofficialannualbudgetoftheUSSR):years1958­85,Narkhozofeachyear;1950,1953,1955and1956,Narkhoz1958,p.900;1951and1952,Moorsteen&Powell,1966,p.630;1954,Plotnikov,1954,p.531;1957,Minfin1962,p.19.

209

Column“SIPRI1979”:SIPRIYearbook,1979,pp.38­39.Column “SIPRI 1980’s”: SIPRI Yearbook 1980 (p. 25), 1981 (p. 102),1982(p.146)and1983(p.167).Column“Leecurrentprices”:Lee,1977,p.97(1975projection)Column “Lee1970rubles”:U.S.Houseof Representatives,1980,p.22(roundednumbersareaveragesofLeedata).Column“CIA1”:roundedaverageofthedataprovidedincolumn“Cia2”.Column“CIA2”:figuresrepresentminimumandmaximumestimatesoftheUSSR'sdefensespending foreachyear,calculatedby theCIA in JEC,1982,p.123.Variationsrepresentnarrowerorbroaderdefinitionsoftheconcept of “defense spending” (including, or not, part of aerospaceresearch,spendingoninternalsecurityetc.).

210

Table 8.2:Military spending as percentage ofGNP from 1950 to 1985,variousestimates.year USSR

officialNMP%

USSR____SIPRI1979

USSR____SIPRI1980­81

USSR____SIPRI1982­83

USSR_____LEEcurrentprices

USSR____LEE1970rubles

USSR_____CIA11970rubles

USSR______CIA2Currentprices

USSR______CIA31970rubles(AverageofCIA4)

USSR_______CIA41970rubles(min./max.)

USA____SIPRI%GDP

1950 15.0 5.11951 19.0 13.9to24.0 1952 18.2 13.7to22.6 13.61953 14.6 16.0 12.4to19.6 13.41954 15.9 12.4to19.3 11.61955 11.5 11.5 17.2 13.7to20.6 10.01956 9.4 9.5 15.1 12.2to18.0 9.81957 8.3 8.5 13.0 10.7to15.3 9.91958 7.3 11 8.5 12.3 10.4to14.2 10.01959 6.9 11.2 8.5 11.4 9.8to13.0 9.41960 6.4 10.4 12.4 9.0 11.6 9.9to13.3 8.91961 7.6 12.3 9.5 12.3 10.6to13.9 9.11962 7.6 12.5 10.5 13.2 11.4to14.9 9.31963 8.2 13.4 10.5 13.9 12.3to15.5 8.81964 7.3 11.9 10.0 13.6 12.2to15.0 8.01965 6.6 10.7 12.8 10.0 11­13 13.2 11.8to14.5 7.51966 6.5 10.5 10.0 11 11­13 12.8 11.5to14.1 8.41967 6.4 10.5 10.5 11.5 11­13 13.2 12.0to14.4 9.41968 6.8 11 12.0 12.3 11­13 13.6 12.1to15.0 9.21969 6.8 10.9 12.0 12.8 11­13 13.4 12.1to14.6 8.61970 6.2 10 12 11.5 12.9 11­13 12­14 12.6 11.4to13.8 7.81971 5.9 9.7 9.7 13.6 11­13 12.5 11.3to13.6 6.91972 5.7 9.6 9.6 11.4 13.7 11­13 12.6 11.3to13.8 6.61973 5.3 9.0 9 10.8 14.5 11­13 12.2 11.0to13.3 6.01974 5.0 8.7 8.7 10.4 14.8 11­13 12.5 11.3to13.7 6.11975 4.8 8.6 10.3 10.3 14.5 15.5 11­13 12.8 11.5to14.1 6.01976 4.5 8.3 9.9 9.9 11­13 13.0 11.6to14.3 5.41977 4.2 8.0 9.6 9.5 11­13 12.7 11.3to14.1 5.31978 4.0 9.4 9.2 12­14 12.6 11.1to14.0 5.11979 3.9 9 12­14 13.0 11.4to14.5 5.11980 3.7

(2.8) 8.8 18 12­14 15­17 13.4 11.8to15.0 5.6

1981 3.5 8.7 12­14 15­17 5.81982 3.3 12­14 15­17 6.51983 3.1 12­14 15­17 6.71984 3.0 15­17 6.51985 3.3

(2.5) 15­17 6.6

1986 3.2(2.5)

15­17 6.7

1987 3.4(2.4)

15­17 6.4

1988 3.2(2.3)

15­17 6.0

1989 11.2(8.0)

15­17

nineteenninety

9.9(6.9)

Source:tableadaptedwithmodificationsandadditionsfromBecker,1985,p.13.Column“USSROfficialNMP”(=valueoftheitemoborona[“defense”]in

211

theSovietofficialbudgetasapercentageofNetMaterialProduct;valuesin parentheses after 1980, representing % of GNP): 1958­90 fromNarkhozofeachyear.1950,1953,1955,1956calculated fromNarkhoz1958,p.900andYearbookofNationalAccountsStatistics,1960,p.263.Year1957calculated fromMinfin,1962,p.19andYearbookofNationalAccountsStatistics,1960,p.263.TheSovietconceptofnational incomeproduced (= Net Material Product) includes only material production,excludingservices.Beginning in1988,thestatisticalyearbookNarodnoeKhozyaistvo also began to publish estimates of GNP (Gross NationalProduct, which includes services) of the country, from which thepercentages of GNP in parentheses were taken. Until 1988, when theactualdefenseexpendituresof theUSSRwereastatesecret, thebudgetitem “defense”covered only themaintenance (salary,etc.)of thearmedforces (excluding arms production, research, etc.). With Gorbachev’s(1990, p. 2) revelations of the USSR’s actual military expenditures(“defenseexpenditures[in the1980s]wereashighas18percentoftheNMP”),thenotable increase inofficialpercentages for1989and1990isdue to the fact that, in those years,military expenditures began to betotallybroughtunder theheading “defense”of theofficialbudgetof theUSSR (andnotdispersed intootherbudgetary items, like “science”and“industry”,asbefore).Columns“USSR­SIPRI”(variousassessmentsofSovietmilitaryspendingatmarketpricesbySIPRI):SIPRI1979 fromSIPRIYearbook1979,pp.38­39;SIPRI1980­81fromSIPRIYearbook1980,p.29and1981,p.166;SIPRI1982­1983fromSIPRIYearbook1982,p.150and1983,p.171.Column“Leecurrentprices”:Lee,1977,p.98.Column “Lee1970rubles”:U.S.Houseof Representatives,1980,p.22(year1980fromUnitedStatesSenate,1980,p.9)ColumnsCIA(variousCIAassessments,allatfactorcost):Column “CIA 1”: JEC, 1984, p. 214 and the testimony of CIADirectorStansfieldTurner in JEC,1981,p.137 that “[...USSR]defense spendingaccounted for 11­13% of GDP between 1965 and 1978; a roughlyconstantproportion.But, since the economyhasnot grown asquickly,thisproportionroseto12­14%[since1978].”Column “CIA 2” (after review of previous CIA figures because of the1982price reformintheUSSR):JEC,1988,p.124andJEC,1990,p.60.Column “CIA 3”: The average between the minimum and maximumfiguresincolumn“CIA4”.Column “CIA 4”: Calculated from JEC, 1982, pp. 123 and 52­54. Thefigures represent minimum and maximum estimates of the USSR’sdefensespendingforeachyear,calculatedbytheCIA.Variationsrepresentnarrower or broader definitions of the concept of “defense spending”(including or not part of aerospace research, spending on internal

212

securityetc.).Column “USA­SIPRI” (percentage of U.S. GDP employed in militaryspending):year1950 from SIPRIYearbook1980,p.29;years1952­72from SIPRI Yearbook 1974, pp. 208­209; years 1973­75 from SIPRIYearbook1981,p.166;years1976­85fromSIPRIYearbook1986,p.243;years1986­88fromSIPRIYearbook1989,p.188.

213

Table8.3:Militaryspendinginconstantandcurrentprices(inbillionsofUSdollars),accordingtocalculationsbySIPRI(S.)andUSACDA(U.).year 1950

X1955X

1960X

1965X

1970X

1975X

1979X

1979XX

1980XX

1985XX

1985XXX

%1985

USA(S.) 39.5 98.2 100.0 107.2 130.9 110.2 110.1 138.8 144.0 204.9 266.6 30.9NATO(S) 67.4 142.6 150.4 168.0 193.9 184.9 191.8 248.2 256.3 327.7 49.4USSR(S.) 37.7 51.2 48.0 65.9 92.5 99.8 105.7 129.9 131.8 146.2 22WP(S.) 40.7 54.2 51.4 71.3 100.8 110.3 118.0 142.3 144.3 160.1 24.1World(S.) 561.8 567.0 663.1 100 USA(U.) 128.8 108.5 112.3 144.0 265.8 27.6NATO(U.) 192.4 183.3 195.2 188.9 409.2 42.5USSR(U.) 127.8 151.4 166.7 198.2 277.2 28.8WP(U.) 150.0 178.1 193.6 233.3 329.7 34.2World(U.) 425.4 474.7 521.4 719.0 963.4 100

Source:SIPRIYearbook1980,p.21andSIPRIYearbook1986,pp.231and238;WMEAT1970­1979,pp.43,46,76and81andWMEAT1989,pp. 31, 35, 65 and 69 (data rounded to the first decimal place, whennecessary)NOTE:1. SIPRI= Stockholm InternationalPeaceResearch Institute.USACDA=UnitedStatesArmsControl andDisarmamentAgency.WMEAT=WorldMilitary Expenditures and Arms Transfers (annual publication ofUSACDA).Toevaluatethemilitaryspendingofthecommunistcountries,USACDAusesCIAdata,whereasSIPRIuses(SovietandWestern)officialpublications complemented by independent evaluation through otherprimaryand secondary sources.Forother countries,bothagenciesuseofficial publications of NATO and the countries involved. ThemilitaryspendingconceptfollowsNATO’sdescriptivemodel.2.YearsXin1978constantdollarsandexchangerates.YearsXXin1980constantdollars andexchange rates.Year XXX in 1985currentdollars andexchangerates.Forcommunistcountries,bothagenciesusepurchasingpowerparitycalculationsinsteadofofficialexchangerates.Duetotheuseofdifferentbaseyearsforconstantdollars(1978e1980;plusthecurrent1985dollars),thehorizontallinecomparisonisonlyadvisableforperiodsusingthesame­yeardollarbase.Theverticalcomparison(incolumns)isalwayspossible.Thestatisticaldiscrepancycausedbytheuseofdifferentbase years can be observed by contrasting the columns 1979XX and1979Xor1985XXand1985XXX.3.“WP”representsWarsawPactcountries,includingtheUSSR.NATOtotalincludes the USA. Due to the well­known difficulties in calculating the“real”militaryexpendituresoftheSovietUnion,thedataforthatcountryandtheWPshouldbeviewedaslargelyapproximative,withgreatmarginforerror.

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Table8.4:Averageannualpercentagegrowthofmilitaryspending inthepostwarperiod,differentestimates. 1950­

19551955­1960

1960­1965

1965­1970

1970­1975

19751980

19801985

USA(SIPRI) 4.7 ­2.2 0.2 7.4USSR(SIPRI) 7 1.5 1.5 USSR(CIA) 4 2 2USSR(Ofer) ­2.1 6.1 3.8 2.6 2.2

SOURCES:SIPRI:Years1965­70 fromSIPRIYearbook1969/70,p.28 (inconstant1960 dollars); years 1970­80 from SIPRI Yearbook 1981, p. 150 (inconstant1978dollars).Years1980­85(USA)fromSIPRIYearbook1986,p. 212 (in constant 1980 dollars). Figures for the USSR at purchasingpowerparity.CIA:years1970­85fromJEC,1989,pp.103­104(in1982rubles)Ofer:Ofer,1987,p.1778.

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Table8.5:SovietmilitaryspendingaspercentageofGNP/NMPbeforetheSecondWorldWar. 1928 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945Bergson%GNP

1.6 6.7 14.5 39.8

JEC1957 %GNP

2.8 9.0 17.5 35.8

Davies%NMP

4.1 9.0 19.0

Harrison%NMP

17.0 28.0 61.0 61.0 53.0

Official%budget

10.0 3.4 3.4 9.0 11.1 16.1 16.4 18.7 25.6 32.6 43.3 59.3 59.5 52.2 42.9

OfficialGosk.%NMP

11 40 44 35 25

Sources:Line“Bergson”:Bergson,1961,p.149(in%ofGDP,in1950rublefactorcost)Line“JEC1957”:JEC1957,p.127(in%ofGNP,incurrentrubles)Line“Davies”:Davies,1993,p.602(percentageofNetMaterialProduct,incurrentrubles)Line “Harrison”:Harrison, 1996, p. 126 (in% of GDP, in 1937 rublefactorcost)Line “Official % budget” (percentage of the Soviet budget officiallyallocated todefense):calculated fromPlotnikov,1954.(atcurrentprices:years1928­32,page132;years1933­37,pp.206and215;years1938­40,p.260;years1941­45,pp.324.Note: theyear1928on this line isequivalenttoPlotnikov’sfinancialyear1928­29).Line “Official Gosk.% NMP” (= percentage of Net Material Productspentondefense,accordingtocalculationsbyGoskomstat,thenewSovietUnion's statistical service in the period of perestroika) apudHarrison,1996,p.29­30.Table 8.6: Average annual growth percentages of the USSR’s defensespendingbeforetheSecondWorldWar,Westernestimates. 1928­1937 1937­1940Bergson 29.2% 38.5%Ofer 26.6%SOURCES:Bergson(1961,p.217)(in1937rublefactorcost)Ofer(1987,p.1778)(in1950rublefactorcost).

216

13.9APPENDIX9:AGRICULTUREINTHEUSSRTable 9.1: USSR, annual averages of the portion of investments (fixedcapital) in agriculture and portion of national income generated byagriculture,expressedasapercentageandinrubles. 1918­

40 1956­

591961­65

1966­70

1971­75

1976­80

1981­85

%PDI 11.3% 13.9% 15.2% 16.7% 19.8% 20.0% 18.5%%DII 20% 24% 27% 28% 27%%NI 21.6% 21.8% 18.9% 16.6% 17.9%PDI 42.3 66.7 111.2 143.2 156.2DII 56.9 96.2 152.8 199.6 227.2NI 206.5 301.5 348.2 380.9 483.7

NOTE:%PDI = Percentage of Productive (i.e., directly related to production)Direct Investment inagriculture in relation to the totalof the country'sinvestmentsinthegivenperiod.%DII=PercentageofDirect(productiveandnon­productive)andIndirectInvestment in agriculture in relation to the total investments in thecountry in the designated period. It includes spending on agriculturalresearchinstitutes,ruralhousing,etc.%NI=Percentageof(Soviet)NationalIncomegeneratedbyagricultureinthegivenperiod.PDI=%PDI expressed in billions of constant1983 rubles (total of thegivenperiod).DII =%DII expressed in billions of constant 1983 rubles (total of thegivenperiod).NI=%NIexpressedinbillionsofconstant1983rubles(totalofthegivenperiod).Sources:Lines“%PDI”,“%DII”,“PDI” and“DII”:Narkhozza70 let,pp.275and328­329.Line“%NI”:atcurrentprices,fromthesection“Natsional’nyiDokhodpoOtraslyamNarodnogoKhozyaistva”ofNarkhozof each year (added anddivided by the number of years of each period to obtain the annualaveragerepresentativeoftheperiodasawhole).Line“NI”:calculated fromLine“%NI”ofthis tableandBolotin,1987,n.11,p.147,whogivesusthetotalnationalincome foreachperiod.Sinceline “%NI” is given in “national income produced” [proizvedennyi

217

natsional'nyidokhod]andBolotinpresentshisdata in termsof “nationalincome used” [ispol’zovanniy natsional’nyi dokhod], the current authoradapted Bolotin’s numbers in terms of national income produced. Thiswasdonebycalculating theannualdifferencebetween the twogiven inNarkhozofeachyearandaddingthisdifferencetoBolotin’sfigures.

218

Table9.2:Indexofgrossandmarketedagriculturalproduction;U

SSR,1913­1945;1913=100.

GCP=G

rossCropProdutionMCP=M

arketedCropProductionGLP=G

rossLivestockProductionMLP=M

arketedLivestockProductionGAP=G

rossAgriculturalProduction(=G

CP+GLP)

MAP=M

arketedAgriculturalProduction(=M

CP+MLP)

NOTE:m

arketedproduction(tovarnayaproduktsiya)referstothepartoftheproductionsoldoutofthecountryside.Years1917to1940arecom

paredwith1913intheterritoryoccupiedbytheU

SSR’sbordersin

early1939.Year1945incomparisonto1913w

ithintheterritoryoccupiedbythebordersoftheUSSR

afterthew

ar.SOURCE:Sel’khoz1960,pp.23and79.M

arketedcropproduction(MCP)ofyears1923

­27fromNarkhoz

1958,p.351,andrefersonly

toproductionofcereals

inthe

periodascom

paredtothe1913cropofcereals.

year1913

19171920

19211922

19231924

19251926

19271928

19291930

19311932

19331934

19351936

19371938

19391940

1945

GCP100

8164

5575

8482

107114

113117

116126

126125

121125

138118

150120

125155

93

MCP100

122

GLP100

10072

6773

88104

121127

134137

129100

9375

6572

8696

109120

119114

72

MLP100

58

GAP100

8867

6075

8690

112118

121124

121117

114107

101106

119109

134120

121141

86

MAP100

94100(annualaverage)

125(annualaverage)147(annualaverage)

38(annualaverage)109(annualaverage)

152(annualaverage)174(annualaverage)

88(annualaverage)92(annualaverage)

174(annualaverage)

219

Table 9.3: The Stalin/Nemchinov table of gross and marketed grainproduction before the FirstWorldWar (1913) and at the end ofNEP(1926­7)intheterritoryoftheUSSR.202Beforethewar: grossgrain

productionmarketedgrainproduction

Marketedgrainas%ofgrossgrainproduction

millionsofpoods

% millionsofpoods

% %

1.Landlords 600 12.0 281.6 21.6 47.02.Kulaks 1,900 38.0 650.0 50.0 34.03. Middle and poorpeasants

2,500 50.0 369.0 28.4 14.7

Total 5,000 100 1,300.6 100 26.0AftertheFirstWar(1926­7)

Grossgrainproduction

marketedgrainproduction

Marketedgrainas%ofgrossgrainproduction

millionsofpoods

% millionsofpoods

% %

1. State farms andcollectivefarms

80.0 1.7 37.8 6.0 47.2

2.Kulaks 617.0 13.0 126.0 20.0 20.03. Middle and poorpeasants

4052.0 85.3 466.2 74.0 11.2

Total 4749.0 100 630.0 100 13.3NOTE:1pood=16.38kilos.%=percentage (of).Marketedproduction(tovarnayaproduktsiya)referstotheproductionsoldoutsidecountryside.Kulaks=affluentpeasants.SOURCE:Stalin,1946­1951a,p.85

220

Table 9.4: Total Production of cereals (TP), production of cereals PerHectare(PH)andnetagriculturaloutputPerAgriculturalWorker(PAW)inseveralcountries,1969­1986. 1961­65

averageTP

1969­71averageTP

1979­81averageTP

1985TP

1969­71averagePH

1979­81averagePH

1985PH

1913PAW

1950PAW

1986PAW

USSR 112.9 169.3 170.5 182.2 1.5 1.4 1.6 1.0 1.6 5.5

USA 169.1 209.9 301.3 347.4 3.5 4.1 4.8 6.1 19.6 54.7

FRG* 14.7 19.1 22.9 25.9 3.7 4.4 5.3 3.1 5.3 31.1

GDR* 5.8 7.0 9.1 11.6 3.0 3.6 4.6 na na na

Japan 19.5 17.6 14.3 15.9 5.0 5.2 5.8 1.3 2.1 10.1

* FRG = Federal Republic of Germany; GDR = German DemocraticRepublic;na=notavailableNOTE:Totalproduction(TP)giveninmillionsofmetrictons;ProductionperHectare(PH) in tonsperhectare;PAW in thousandsof1980dollars(atpurchasingpowerparity).SOURCES:TPandPHfromFAOYearbook1975,pp.57­59,FAOYearbook1979,pp.93­95andFAOYearbook1987,pp.113­115;PAWfromBolotin,1987,n.12,p.147.

221

Table 9.5: Total net agricultural Production growth index (TP) and netagricultural production Per Agricultural Worker (PAW) in severalcountries(1913=1). 1920 1929 1938 1950 1986

TP–USSR 0.70 1.30 1.45 1.45 3.85

TP–USA 1.15 1.25 1.30 1.70 2.50

TP–WesternEurope 1.05 1.15 1.20 1.30 2.20

PAW–USSR 0.65 1.20 1.45 1.55 5.50

PAW–USA 1.20 1.30 1.70 3.25 9.00

PAW–WesternEurope 1.10 1.25 1.40 1.55 7.45

NOTE:Netproduction(=grossoutputminuspartofproductionusedasinputsinagricultureitself).SOURCE:Bolotin,1987,n.11,p.155andno.12,p.148.

222

Table9.6:USSR,structureofinvestments(fixedcapital)bysectorsoftheeconomy(averageannualpercentageofthetotal),1918­1955. 1918­

28*1928­32*

1933­37

1938­1941*

1941­45*

1946­1950

1951­55

Total 100 100 100 100 100 100 100Industry 15.8 39.1 38.0 35.5 44.6 41.0 43.5Agriculture 3.1 16.1 12.6 11.4 9.7 12.8 15.5Transportationandcommunications

9.7 16.8 19.3 17.5 14.7 11.8 8.6

Housingconstruction

67.5 16.1 13.1 17.5 16.0 19.9 19.8

Otherbuildings 3.9 11.9 17.0 18.1 15.0 14.5 12.6

*1918­28doesnotincludethefourthquarterof1928;1928­32beginsinthe fourthquarterof1928,whichmarks the effectivebeginningof theFirstFive­YearPlan;1938­41includesonlythefirsthalfof1941untiltheGermaninvasioninWorldWarII;1941­45beginsinJuly1941.Note:“Other buildings” = Other forms of construction in non­productivesectors(cultural,educational,trade,hospitals,governmentbuildingsetc.)Please note: “Industry”, “Agriculture” and“Transportation/Communications” include only productive directinvestment(i.e.,investmentdirectlyrelatedtomaterialproduction).Non­productive investiments (i.e.,according toSovietmethodoly, investmentslinkedtonon­materialproduction,suchasschools,housing,etc.)arenotincluded in those itemsbut rather in the items “HousingConstruction”and“OtherBuildings”.Source:Narkhoz1961,pp.540­541.

223

13.10APPENDIX10:NATIONALITIESINTHEUSSRTable 10.1 Population of titular nationalities of the 15 republics of theUSSRaccordingtothecensusesof1959,1970,1979and1989.Nationality population

1959(millions)

population1970(millions)

population1979(millions)

population1989(millions)

% oftotalUSSRin1959

% oftotalUSSRin1989

%growth1959­89

Azerbaijanis 2.940 4.380 5.477 6.770 1.4 2.4 332.3Tajiks 1.397 2.136 2.898 4.215 0.7 1.5 301.7Uzbeks 6.015 9.195 12.456 16.698 2.9 5.8 277.6Turkmen 1.002 1.525 2.028 2.729 0.5 1.0 272.4Kyrgyz 0.969 1.452 1.906 2.529 0.5 0.9 261.0Kazakhs 3.622 5.299 6.556 8.136 1.7 2.8 224.6Armenians 2.784 3.559 4.151 4.623 1.3 1.6 165.9Moldovans 2.214 2.698 2.968 3.352 1.1 1.2 151.4Georgians 2.692 3.245 3.571 3.981 1.3 1.4 147.9Lithuanians 2.326 2.665 2.851 3.067 1.1 1.1 131.9Russians 114.114 129.015 137.397 145.155 54.6 50.8 127.2Byelorussians 7.913 9.052 9.463 10.036 3.8 3.5 126.8Ukrainians 37.253 40.753 42.345 44.186 17.8 15.5 118.6Latvians 1.400 1.430 1.439 1.459 0.7 0.5 104.2Estonians 989 1.007 1.020 1.027 0.5 0.4 103.8

Note: Titular Nationalities = nationalitieswhich give their names to aUnionRepublic.Source:Goskomstat,1989­1990,vol.4pt.1,Book3,p.187;SKSNG,1991­1993,vol.7,pt.1,p.10.

224

Table10.2:SomeofthemaincriminalorganizationsinactivityinMoscowin1992, according to estimatesof the InteriorMinistryof theRussianFederation.Group Members

(approximately)Mainactivities origin

Chechenmafia

800 corruption,extortion, illegalexport

Chechnya

LyuberetskayaBratva

350 extortion andprostitution

Lyubertsy district ofMoscow

Solntsevskayagang

300 extortion andprostitution

Solntsevo District ofMoscow

Podolskayagang

250 extortion andprostitution

Podolsk

Azerbaijanimafia

200 transportation ofdrugs;foodmarkets

Azerbaijan

Georgianmafia

(?) extortion,mainly ofhotels; machinerepairshops

Georgia

Dagestanimafia

200 theft Dagestan

Kazanphenomenon

60 gambling,nightclubs, bars,restaurants

Kazan (capital ofTatarstan)

Source:Costa,1993,p.22c.2,3and4.

225

ENDNOTES

1OfficialinflationintheUSSR,asfarasthefinalconsumerisconcerned,tendedtoberesidualorseasonal.UsingtheConsumerPriceIndex(CPI)systemoftheUNStatisticalYearbook,from1953to1969,therewasdeflationintheUSSRwiththeindexfallingfrom104to98(year1963=100);from1969to1978,theindexrosefromabase100to101.From1979to1984(baseyear1980=100),theCPIchangedfrom99to104.Incomparison,accordingtotheUNStatisticalYearbook,theCPIfrom1979to1984changedfrom88to126intheUSA,from93to112inJapan,from56to2380inBrazilandfrom50to17462inArgentina[!].(StatisticalYearbook1970,p.569;ibid.1979/80,pp.726;ibid.1985/86,pp.114­118).

Itisimportanttonotethatthisindex,appliedtotheSovietUnion,onlycoveredthepricesinofficialgovernmentstores,wherelevelstendedtoremainstableforthelongterm:beforeperestroika,thelastpriceincreaseofbread,pasta,kitchenoilandsugarhadbeenin1954andthelastpriceincreaseformilkandmeathadbeenin1962.(Bornstein,1991,p.187)WesternspecialistscriticizedthatSovietofficialstatisticsdidnotincludepricevariationinthe“freemarkets”ofthekolkhozy(“collectivefarms”),thedisguisedpriceincreasesintheintroductionofnewconsumergoods(supposedlyhavingsuperiorquality),orthe“hiddeninflation”ofcostsinascarcitymarket.(ibid.,pp.189­190)However,evenconsideringtheseotherfactors,whoseprecisemeasurementisproblematic,Sovietinflationwasratherlowincomparisontointernationallevels.Table6.2showstheCIA’scalculationsfortheinflationoftheUSSR,tryingtotakeintoaccounttheproblematicfactorsmentionedabove.Evenallowingforthesefactors,weseeacomparativelymildrateofinflationuntil1985,followedbyan“explosion”(bySovietstandards)inthefinalperiodofperestroika.

TheimpressionthatthevastmajorityoftheSovietpopulationconsideredconsumerpriceinflationintheUSSRquitelow,orevenresidual,beforeperestroikawasconfirmedinourinterviewsandconversationswithresidentsduringourthree­yearstayintheSovietUnion.(Segrillo,1992)

2AccordingtoBethkenhagen(1987,pp.58­59),“AsafreerideroftheOPECcartel,theSovietUniongainedunexpectedprofitsfromoilandgassalestotheWestfrom1.3to13billiontransferablerublesinthe

226

period1973to1983(althoughthequantityexportednotevendoubled).”

3Thefirstfive­yearplanbeganinthefourthquarterof1928(thefiscalyearofthefive­yearplansbegan,atthattime,inOctober).From1931onward,the fiscal year was matchedtothe calendar year, startinginJanuary.(Zaleski,1971,p.148).

4Thethirdfive­yearplan(1938­42)wasinterruptedbytheNaziinvasioninJune1941(untilthentheaveragewasslightlyabove10%peryear).

5TheconceptsofScientific­TechnicalRevolution(STR)andThirdIndustrialRevolution(orThirdTechnologicalRevolution)wereusedinnuancedways.Thefirstonewasusedmainlybyauthorsoftheactuallyexistingsocialistcountries,thelatteronesbywesternauthors.Wewilltrytoestablishabridgebetweentheseconceptsinthecourseofournarrative.Subsequently,wewillalsoanalyzetheirindividualnuances.Meanwhile,forthepurposesoftheanalysisinthisintroduction,thethreemaintemporalaspectsoftheScientific­TechnicalRevolutiontowhichwewishtodrawattentiontoarethedevelopmentofcomputinginthelate1940’sand1950’s,roboticsinthe1960’s,andthetelematicsboom(datatransmissionatadistance)mainlythroughmicroelectronicsinthe1970s.

6The terms“Scientific­TechnicalRevolution”(used mainlybyauthorsoftheactuallyexistingsocialistcountries),"ThirdIndustrialRevolution"or "Third Technological Revolution", in spite of the differentconceptual nuances between them, generally designate a historicalperiod of inauguration of the new productive processes that useautomationbasedonelectronics,fromWorldWarIIonward.

7 For the purposes of our work, we will study the technologicalrevolutionsthathaveoccurredsincetheIndustrialRevolution,whichcreatedcapitalism’suniquetechnicalbasis.

8 The works in which Mandel exposes his theory of technologicalrevolutions are Late Capitalism and Long Waves of CapitalistDevelopment.

9Theterm“craftproduction”or“manufacture”referstothe(pre­industrial)productionprocessesinWesternEuropefromthemid­sixteenthcenturyuntilthefirsthalfoftheeighteenthcentury.AsMarx(1961­1971b,pp.356­390)described,themanufacturingprocessthenstillhadaverystronghandicraftbasewithanenlargeddivisionoflabor.Sometimes,itmeantjusta largernumberofartisansworkingtogetherunderoneroofforthesamecapitalist.

10Anotherimportantdetail,wellemphasizedbyMandel(1985,p.84),basedonLange(1964,p.160),isthatthemention ofasecondand

227

third“industrialrevolutions”leadstoalevelingofthehistoricalimportancebetweentheseandthe“original”IndustrialRevolution.ThishidesthespecificityoftheIndustrialRevolutionoftheeighteenthcentury,whichwasthedefinitivemomentoftheconsolidationofthetechnical basisofcapitalism.During the manufacture (craftproduction)period,fromthesixteenthcenturytothebeginningoftheeighteenth,methodsofproductionwerestilllargelyderivedfromartisanalorsemi­handcraftedtechniquesfromearliereras.Capitalismcametofinditsuniquetechnical basis,withtheemergenceofthemodernindustrybasedonmachinery.AccordingtoLange(ibid.),thisterminologyofother“industrial”revolutionsobscuresthehistoricalcharacteroftheBritishIndustrialRevolutionasthe“genesis”foralllatertechnologicalrevolutions—whichdespitetheintensechangesproduced,stillfitwithintheframeworkofcapitalistproductiondevelopedfromthe“original”IndustrialRevolution.Ontheotherhand,wedonotagreewithauthorslikeJ.Tauileandotherswhodisagreewiththeuseoftheterm“ThirdIndustrialRevolution”todesignatetheeraofthisMandelianThirdTechnologicalRevolutionbecausetheythinkthatthechangesbroughtaboutbyautomation,microelectronicsandtheInformationSocietyaresogreat,soqualitativelydifferentfromtheIndustrialAge,thatonecanspeakofanotherpost­industrialphase,distinctfromthat.(Tauile,JoséRicardo:personalcommunicationtothecurrentauthoronOctober31,1995,attheIEI­FEAoftheFederalUniversityofRiodeJaneiro)Ourpositionisthatthepresenterastillformspartoftheframeworkofcapitalistindustrialsociety.However,weconcedethatcontradictionsarebecomingsostrongthattheymayrequirefutureradicalchanges(rupture)intheproductionmodetowardwhatmaybecomeaqualitativelydistinctphase.Butthisistobeseeninthefuture.Fornow,wearestillwithinthebasicframeworkinauguratedbytheeighteenth­centuryIndustrialRevolution,thatis,ofindustrialproductionbywage­earnerswithaviewtoprofitandsurplusvalue.

11ThefollowingexplanationsonMandel'stheoryofeconomiccyclesandtechnologicalrevolutionsarebasedonhisbookLateCapitalism,especiallychapters4,6,and8.

12InMarx’s(1961­1971c,p.185)time,theperiodofrenewaloffixedcapital(i.e.,machineryandequipment)wasapproximately10years.Thiscorrespondedtoeconomiccycleswhosedurationwasnormallybetween7and11years.Nowadays,withtheintensetechnologicaldevelopment,thistimeoffixedcapitalturnover,incertainareas,hasbeendecreasingstronglytowardslevelsof5(inextremecases,upto4or3)years.AsMandel(1985,pp.157­162)noted,thishas

228

consequencesintheeconomicoscillationsofthelatecapitalistera.

13Technologicalrentsaresurplus­profitsderivedfromamonopolizationoftechnicalprogress,i.e.,above­averageprofitsderivedfromtheuseofsuperior,moreproductivetechnologiesnotyetgeneralizedintheeconomy, beingmonopolyof some producers.Those who producewiththeaveragetechnologyobtaintheaverageprofit.Thosewhoholdthemonopolyofthesesuperiortechnologies,duringthetimeinwhichthistechnologyhasnotyetbeengeneralized,obtainanextraprofit(thesurplus­profit)becausetheyproduceatalowercostperunit.

14Thisterminologyof“periods,”“longwaveswithexpansivetonality”and“longwaveswithslacking(stagnant)tonality”isusedbyMandelhimself.

15Thedivision intoperiods belowwas taken,with somemodifications,fromMandel,1985,pp.92­93.

16Theempiricalconfirmationofthese“periods”and“longwaves” isnotsimple. In his books, Mandel reproduced tables with data on thegrowth of world industrial production and trade that apparentlycorroborate the existence of these long cycles. Among these, twostandout:

Table1.4:Annualcumulativerateofgrowthinthevolumeofworldtrade:years %growth1820­1840 2.71840­1870 5.51870­1890 2.21891­1913 3.71914­1937 0.41938­1967 4.8Source:Mandel,1985,p.99.Table1.5:Annualcumulativerateofgrowthofphysicalpercapitaoutput

onaworldscale:years %growth1865­1882 2.581880­1894 0.891895­1913 1.751913­1938 0.66Source:Mandel,1985,p.99. In relation to the longpost­WorldWar IIexpansionistwaveand the

229

subsequentlongwavewithstagnanttonalityfromthelate1960’sandearly1970’sonward,wecanuseOECDdata(whichincludesthemajorindustrializedcountriesinEurope,USA,JapanandCanada).Afterthegloriousdecadeofthe1950’s,wheneconomicgrowth,stimulatedbythe postwar recovery,reachedaverage levels above 5%, the averageannualGDPgrowthoftheOECDcountriesasawholewasasfollows:

Table1.6­AverageannualeconomicgrowthoftheOECDcountries,1960­

1993.1960­68 1968­73 1973­79 1979­89 1989­935% 4.5% 2.8% 2.6% 1.7%Source:OECD,1989b,p.44;OECD,1995a,p.50;OECD,1970a,p.21. Itisimportanttonotethatthisdownwardtrendingrowthratesafter

thelate1960swasfollowed,withoutexception,byallOECDcountries.Japan itself,whoserealGDPgrewatanannualaveragerateof10.2per cent between 1960 and 1968, slowed down to 8.7 per cent in1968­73andto3.7percentbetween1973and1987.(OECD,1989b,p.44)TheOECDdatashows that thesignsof thecrisis (asMandelnoted in 1972, the time of the launching of the first edition of hisbook Late Capitalism)were already present in the late 1960s.The1973­74 “oil shock” only exacerbated trends already latent in theeconomiesofcentralcountries.

The existence of long cycles in the capitalist economy, thoughcontroversial, is also confirmed by other economists (Kondratieff,Schumpeter, W. W. Rostow, etc.), varying the explanation of thefactorsthatproducethem.

Creditshouldbegiven toMandel forhavingpreparedhis theoryonlongwavesandtechnologicalrevolutionsinthelate1960’sandearly1970’s, at a timewhen the economy of the big countrieswas stillfresh fromthehigh­growthdecadeofthe1960’s,andit wasdifficultto predict an international crisis like the one that occurred in themid­1970’s.Mandel correctly predicted that the1970’s and1980’swould have “a stagnant tonality.” Similarly, on the eve of his death,Mandel, in the second edition (1995) of his book Long Waves ofCapitalistDevelopment,discussedarelatedissue:isthereapossibilitythatthedecadeofthe1990’swillmarkthebeginningofanother“longwaveofexpansionisttonality”forcapitalismthatwilllastforaroundtwoorthreedecadesasthepreviousones?

17AnotherimportantcontributionofFordwasthedefinitiveimplantation,inmassproduction,of the interchangeabilityofparts.This concepthaditsoriginsintheSpringfieldandColtarmsfactoriesintheU.S.in

230

themid­nineteenth century, i.e., as part of the period of the FirstTechnology Revolution of capitalism. Until then, factory productionhadbasically followed theBritishmodelof the IndustrialRevolutioninwhich,due to the imprecisionofmeasuring instruments (amongother factors),the parts that made up the equipment often hadsmalldifferences between them, necessitating specialized workers(“fitters”) who filed them down to fit each other. The “Americansystem,” — which began to supplant the “British system” inproductivity in late nineteenth century (with the advent of moreprecisemeasuring instruments)—propugnedamaximumpossiblestandardization (and hence, interchangeability) of the partscomponentofmanufacturedproducts,usingdedicatedmachines foreach operation. Since the components were reliably fit, assemblyproduction became much faster (no need for fitters, etc.) andrepairing defectiveproductsmuch easier (replacing adefectivepartwith any other). (Best, 1990, pp. 30­34) However, due to thetechnical difficulties and limitations of the time, the principle ofinterchangeabilityofpartscouldnotbegeneralizedonalargescaleinthe nineteenth century. It was Ford who generalized it inmanufacturing processes. Fordism opened the doors to massproductionbyunitingtheprincipleofinterchangeabilityofpartswiththeprincipleofflow inthemetallurgical industries(bymeansoftheassemblylinewithconveyorbelt).(Ford,1922,pp.74­75;Best1990,54)

18Usinghisnewmethods,Fordwasabletoreducetheassemblytimeofacarbyafactorofninecomparedtothebestpreviousautomakers.(Womack,Jones&Roos,1992,p71)

19To follow theevolutionofpostwarcomputing,here isachronologyofthemostimportantmoments,highlightingtheintroductionofvacuumtubes (used in first­generation computers), transistors (second­generation computers), integrated circuits (third­generationcomputers)andmicroprocessors(fourth­generationcomputers):

1943: creation of Colossus, the first programmable, special­purposeelectronicdigitalcomputer.

1945: creation of ENIAC, the first large­scale general­purposeprogrammableelectroniccomputer.

1947:AT&T'sBellLabsscientistsdevelopthetransistor.1949:numericalcontroliscreated.1951: Remington Rand launches the first commercially successful

computer,UNIVACI.IBMsoonlaunchesitsIBM701.1954: TRADIC, the first transistorized computer, is built by Bell Labs

engineers.

231

1958: Texas Instruments’ Jack Kilby develops the integrated circuit

(“microchip”). The third generation electronic computers will bebased on the integrated circuit, just as vacuum tube computersconstituted the first generation and transistorized computers thesecond.

1961:thefirstcommercialindustrialrobotisbuilt.1971: the microprocessor, which will enable the emergence of

microelectronics,iscreated.1974:Altair8800, the first commercially successfulpersonalcomputer,

inauguratesthefourthgenerationofcomputers(microcomputersforpersonaluseusingmicroprocessors).

20TheNCMTandTransfert linehavealreadybeenexplainedpreviously.CNCMT(ComputerizedNumericalControlMachineTools)areliketheNCMT,only theirprogramming ismore flexibleandcanbechangedby computer.Unlike theNC (NumericalControl) installed inside themachine tool itself,DNC (DirectNumerical Control) represents thecontrolofprogrammingmachinesdirectly froma central computerlocated outside the machine tool area. The Flexible ManufacturingModules (FMM) produce an interaction between themachines andtheparts tobeworkedon inwhich thepartscome to themachinesautomatically,withouthumanintervention,throughindustrialrobotsand other devices. FMS (FlexibleManufacturing Systems) aremorecomplexsystems,whichinvolvetheautomatictransportationofpartsbetweendifferentmodules(FMM)throughpreprogrammedconveyorbeltsortrolleys.Computersalsoinvadedmoreabstractareas,suchasdesigning. CAD (Computer­Aided Design) systems representprograms thatautomaticallyperformalmostall themanual tasksofdrawing,repetitivecalculationetc.ofaproject.Thehumandesignerisleft only with the initial abstract intellectual creation since the“manual”workofdrawinglines,doingmathcalculations,redesigningoldworks,etc.canbedonebythecomputer.TheintegrationofCAD­CAM (Computer­Aided Manufacture) systems dramatically reducesthetimebetweendesignandexecutioninthefactory.Intheareaofbusiness administration there appeared the concept of CAPM(Computer­Aided Production Management) in which specificcomputer programs are used in the tasks of control, planning andexecutionofproductionmanagement.(Hill,1991,pp.2­5)

21Forpracticalpurposes,henceforthwhenwerefer to“Fordism,”underthis conceptwill be subsumed the Taylorist techniques thatwereincorporatedbyit.Insodoing,wearealigningmorewiththeviewofRaphaelKaplinski thanRobertBoyer’s.Kaplinski (1989,p.12) sawTaylorism as a development in the paradigms of productionwhich,

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alongwithotherdevelopments,wastoflowintoFordism(andbecomeanintegralpartofitlater).Boyer(1990,pp.131and133),alongwithotherauthorsoftheFrench“regulationschool,”tendedtoemphasizethe specificities of Taylorism and to see it socially as a historicalphase,a “regime ofaccumulation” distinctfrom Fordism. In our view,from the 1930s — which is the initial period of Sovietindustrialization that most interests us in the present work —onward, this separation of Taylorism and its specificity loses itsmeaning. At that time, the Fordist paradigm had consolidated. Itwouldbecomehegemoniclater,anditalreadycontainedinitself,asanintegral constituent, severalTaylorist postulates. In factorypractice,Taylorism, Fordism (and, on another level, Fayolism) becameinterconnected, indivisiblecomponentsof thisnewparadigm that isconventionallycalledFordism.

22Weusethe term“toyotism”todesignatethe Japanesemicroeconomicparadigm of flexible production that has been imposed worldwide(especially since the 1960s). In studying this paradigm, severalauthorsemployavariedterminologytoexplainthisphenomenonorpartsofit:post­Fordism,Ohnism,Toyotism,“lean”production,etc.Wechosethisdesignation inordertosimplifyourexplanation,sincetheToyotacompanywasapioneerandtothisdayisthevanguardintheuseof thegreatmajorityof the elements that form the constitutiveframeworkofthispost­FordismofJapaneseorigin.

It is important tonote thatToyotismwasnot theonlyparadigmofflexibleproductiontostandoutatthetimeofdifficultiesoftheFordistmodel.AsPiore&Sabel(1984)putit,the1970’sand1980’smarkeda sharpdecline in the traditionalFordistmodelofmassproductionandtheemergence ofanewparadigmthattheauthorscalled flexiblespecialization. This flexible specialization took different forms invarious parts of the world. Piore & Sabel (1984, pp. 133­164)recordedthecrystallizationofformsofflexiblespecializationinsomeregionsofItalyandinindustriesinGermanyandJapan.Inthecurrentwork,wewillbeconcentratingontheJapaneseexampleofToyotismsince this has been the most widely developed (in practice andtheoretically) flexible specializationmodel (because it encompassedmore than justa few industrialregionsorbranchesof thecountry),since itwas (aswe shall see) not only a differentmicroeconomicmodel but also distinctive and original in its macroeconomicimplications, and lastbut not leastbecause itwas the paradigm offlexiblespecializationthatmoredirectlyand frontallychallengedtheprimacy of the American Fordistmodel in the 1970’s and 1980’s.Other forms of flexible specialization were limited in their spatial

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geography or in their comprehensiveness in the overall set ofindustries in their countries. In addition, the Japanese paradigmreachedacertaintotalitythatalreadyallowsanattemptoftheoreticalcomparisonwith the Fordistmodel. Toyotism decisively influencedthe strategies of large Western firms which, facedwith the superiorJapaneseproductiveefficiencyofthe1970’sand1980’s,wereforcedto change their way of thinking and adopt “flexible” productiontechniquesinthe1990s.

23Amongthemachinetoolswithanelectromechanicaltechnicalbasis,twotypescanbedistinguished:(single­purpose,special­purpose)productionmachinestools(whichperformspecificandinvariabletasksonasinglepieceofequipmentandarethereforeusedforhigh­volumeproduction)andtheuniversal(generalpurpose)machinetools,whicharemoreversatile,andmakeitpossibletoperformdifferenttasks(e.g.,cut,polish)ondifferenttypesofparts.Theformermaybeoperatedbyunskilledworkers,whereasthelatterusuallyrequireskilledworkers.(Tauile,1984,p.10)Inordertoobtainstandardized,interchangeablepartsatalowerprice,Fordsoughttodividetheworkintoitsmostelementarytasksandemphasizedtheuseofdedicatedmachines(specializedinonetask).Withthesemachines,agroupofunskilledworkers(whoperformedthesimpletasksofoperatingtheseeasy­to­handlemachines)wasevenabletoworkonalargervolumeofpartsatalowercostthanagroupofskilledworkersusinguniversalmachinetools.“Theonlypenaltywiththissystemwasinflexibility.Changingthesededicatedmachinestodoanewtaskwastime­consumingandexpensive.”(Womack,Jones&Roos,1992,p.24)

24Ford’sfamousquoteabouthismodelTthat“Anycustomercanhaveacarpaintedanycolorthathewantssolongasitisblack”illustratesthelevelofstandardizationheproposed.TherigidityofatypicalFordistfactorywasevincedin1927when—hamperedbycompetitionfromGeneralMotorsseekingtoofferagreatervarietyofmodelsandthusgainingsignificantmarketshare—Fordwasforcedtomakemodificationsinhisproductionlinetointroducegreatervariabilityinmodels(frommodelTtomodelA):todoso,thefactoryhadtobeclosedformonths!(Womack,Jones&Roos,1992,p71)

25 According to Toyota’s official history, “Just­in­Time” and “zeroinventories” notions go back to Toyota's then­president, engineerKiichiroToyoda, in the1930s(though their full implementationandgeneralizationwasonlypossibleinthepost­warperiod).

Kiichiro wrote the words Just­in­Time on a flagand hung it on the [factory’s] wall. “People say

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they missed the train because of a minute’sdifference,”he said, “but it’spossible tomiss thetrainbecauseofasecond.WhatImeantbyJust­in­Time is not only that it’s important to dosomething on time, but that it's absolutelyessentialthatyoutakeitintermsofquantityandnot, forexample,producesomething in the righttime but in excessive quantity, because excessmeanswaste.”Inthisway,theJust­in­Timesystemwas born, one of the pillars of the ToyotaProductionSystem.(Toyota,1988,p.69)

26“Leanproduction”(i.e.,withnothingsuperfluousintermsoftoomanyworkers,waste,excessiveinventories,etc.)isthetermJamesWomackusestodescribetheToyotistsystemasopposedto“classicalmassproduction”(=Fordism).(Womack,Jones&Roos,1992,pp.39­70).

27Ohno’sconceptofself­activationcomesfromanother:“autonomation.”Inobserving theworkprocess in the textile factoriesof theToyotagroup,thefoundingPresidentSakichiToyoda,

[…,] shockedby thewaste causedby thedefectsaffecting thewholeofa fabric flap ifonlyoneoftheshuttlesofaloomfunctionsinafaultymanner,devises looms equipped with devices that allowautomatic shutdownofmachines in the eventofan anomaly […] the idea being to endow theautomaticmachineswithacertainautonomy [...]This is what Ohno will call autonomation, aneologism formed from the contraction of twowords:autonomyandautomation. (Coriat,1994,p.52;seealsoOhno,1984,p.202)

Theautonomation createdbyToyodaalso servedasaprecursor tothefuturepolyvalenceoftheworkersinthefactory,sinceitallowedaworkertooperatemorethanoneloomatatime.

28Womack,Jones&Roos(1992,p.48),inanaccountofToyota’shistory,wrote:

Not surprisingly, as Ohno began to experimentwith these ideas,hisproduction line stopped allthe time, and the workers easily becamediscouraged.However,as thework teamsgainedexperience identifying and tracing problems totheirultimatecause,thenumberoferrorsbeganto drop substantially. Today, in Toyota plants,

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where every worker can stop the line, yieldsapproach100percent.Thatis,thelinepracticalyneverstops! (In [Fordist]mass­productionplantsby contrast,wherenoone but the linemanagercan stop the line, the line still stops constantly.Thisisnottorectifymistakes—thesearefixedatthe end—but todealwithmaterial supplyandcoordination problems. The consequence is that90% yield is often taken as a sign of goodmanagement) [...] Today, Toyota assembly plantshave practically no rework areas and performalmostno rework.By contrast, […] a number ofcurrent­day [Fordist] mass­production plantsdevote20%ofplantareaand25%of their totalhoursofefforttofixingproblems.

29LifetimeemploymentinJapanmainlycoversworkersinlargeenterprises(about30%oftheworkingpopulation).Typically,thecoreToyotistcompanyadherestolifetimeemployment,whereasthesubcontractorshavemoreflexiblehiringarrangements.Likemanyothercharacteristicsoftheemployer­employeerelationshipinJapan,lifetimeemploymentisanimplicittradition(notwritteninformalcontracts)andlargefirmsusuallysticktoit.But,infact,insometimesofrecession,therehavebeenlay­offsalsobylargecompanies.(Coriat,1994,p.88).

30IntheJ­firm,theexchangeofinformationbetweenagentsofthesamehierarchicallevel(eveniftheyareindifferentdepartments)orbetweentheworkersamongthemselvesisencouraged.InaFordist­Fayolistfirm,directcontactbetweenstaffofdifferentdepartmentsisoftendiscouraged,andanyinterdepartmentalinitiativemustbepreviouslycommunicatedtoandauthorizedbyhigherauthorities.Thisbureaucratizationcauseswasteoftimeanddelaysininformationprocessing.TheJ­firmalsoencouragesinitiativefromtheworkersthemselves.(Aoki,1986,pp.972­973)AtellingexampleiscitedbyJaikumarinstudyingthedeploymentofaFlexibleManufacturingSystem(SMF)inatypicalmidwestern U.S.enterprise.Theequipmentwasflexible,butmanagementwastypicallyFordist,rigid.WhileinJapanworkershavetheautonomytostoptheassemblylineintheeventofadefect(untilitisremedied)andencouragedtomakesuggestionsforchangestotheproductionline,attheU.S.firm,managers,concernedaboutthehighcostandcomplexityoftheequipment,madeclearthatworkersshouldsticktotheguidelinesandavoiddoingthingsontheirown(“Ifthereisaproblem,donottouch

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themachine:callyoursupervisor”).(Jaikumar,1986,p.71).

31Maddison(1991,p.137)wrote:“[...inJapan]asignificantportionofwageandsalaryearnershavelifetimejobsecurity,whichemployerscanguaranteebecausewagesareveryflexible,withmid­andend­of­year bonuses thatmove with business profits andcan amount toathirdofearningsinnormaltimes.Thesebonusescanbesqueezedtozeroindepressedconditions,whichenablesemployerstokeepworkersratherthansackthem.”

32 TheMassachusetts Institute of Technology conducted a comparativesurvey in 1986­87 between two automobile manufacturing plantswith similar characteristics:GeneralMotors’FraminghamplantandToyota’s Takaoka plant. GM’swaswithin the standards of “classicalmass production” (Fordist) and the other one followed the “leanproduction”model. Although bothwere state­of­the­art factories intheircompanies,differencesinproductivitywerenotable:

Table 1.7 ­ Comparison of productivity between car plants: Toyota in

TakaokaandGeneralMotorsinFramingham(1986) GM

FraminghamToyotaTakaoka

Grossassemblyhourspercar 40.7 18.0Assemblydefectsper100cars 130 45Assembly space per car (square meters

pervehicleperyear)0.75 0.45

Inventoryofparts(average) 2weeks 2hoursSOURCE:Womack,Jones&Roos,1992,p.71. Forcompetitionatmacroeconomiclevel,seeappendix7.33Thisdespite Japanhaving entered these two fields later than theU.S.

WhileintheUnitedStatesnumericalcontrolwascreatedin1949andthe first industrial robot in 1961, in Japan the production ofnumerical control machine tools began in 1958 and the firstindustrialrobotwasproducedin1968(in1967theJapaneseindustryhadimporteditsfirstrobot).(Gregory,1986,pp.304and317)Thisisan important detail, as it draws attention to the fact that Japanesesuperiority did not originate from technological superiority. Firstcame the organizational innovations of “Ohnism.” Theseorganizational innovations—which had a life of their own, beingindependent of the technology used in production — allowed forgreater and more flexible productivity even within an initialtechnological pattern that was not yet themost advanced. It was

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mainly from the advent of microelectronics onward (with theinvention of the microprocessor in 1971) that Japan acquiredtechnological leadership in some areas. This detail — thatorganizational changeswithin the Japanese paradigm precede andsubsume the technological changes,although formingan indissolublewhole that explained Japanese superiority— will be of particularimportancewhenanalyzingthepre­perestroikaSovietmodel.Thefallin the technological race with the West was fundamental to thedifficultiesofeconomicgrowthintheUSSRafter1975,butwecannotanalyzemere technology in thesecomparativestudiesofmicroandmacroeconomicefficiencybetween the twosystems (capitalismandsocialism);wemust analyze technology in its correlationwith theorganizational­administrative methods employed (in the USSR, ingeneral,macroandmicroeconomicsweremorecloselylinkedthanintheWestduetocentralizedplanning).

34 After recognizing the greater productivity of Japanese flexibleproduction (economiesofscope) incomparisonwithWestern rigidproduction(economiesofscale),WesterncompaniesbeganadoptingmoreflexibleequipmenttotrytokeepupwithJapaneseproductivitygains. But themere purchase of flexible equipment is not enough:they must be used flexibly (that is, with flexible organizational­managerialmethods).Forexample, Jaikumar conducteda survey in1984ontheuseofFlexibleManufacturingSystems(FMS)intheUSAand Japan. Itssamplecoveredmore thanhalfofallsuchsystems inuseinbothcountries.Itwasnotedthatwhilein Japansuchsystemswere used to produce theway theywere supposed to, i.e., flexiblyproducingawidevarietyofmodels,intheUSAtherewasatendencytousesuchsystemstoproduce inlargevolumeswithlittlevarietyofmodels— that is, they could not escape the “temptation” of theFordistlogicofeconomiesofscale.Thus,accordingtothesurvey,theaveragenumberofparts typesproducedbyFMSwas10 in theUSAand93inJapan!Ontheotherhand,intheUSAthesizeofeachbatchproducedwasmuch larger (1,727piecesperbatchversus258).Allthis Fordist effort to produce in large volumes proved to becounterproductive, since theuseof equipmentmore efficientlyandintensively by the Japanese — the rate of utilization of theequipment,i.e.,theratiooftheactualcuttingtimeofthemetalbythemachine in relation to the potentially available time, was 84% inJapan versus only 52% for the Americans—meant that the totalnumberofpiecesproducedperdayinJapanwas120againstonly88of theAmericans.TheToyotistmodelcanproducemorewithmorevarietyinsmallerbatches.Flexibletechnologyisnotenough.Ithasto

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be used flexibly through appropriate organizational­managerialmethods.(Jaikumar,1986,p.70)

35InRussian,Nauchno­TekhnicheskayaRevolyutsiya(NTR).TheacronymNTRwascommonlyusedintheSovietliterature;wewilltranslateitas STR.

36WebaseouranalysisonMandel’sapproachtotheThirdTechnologicalRevolution.Not only becausewe consider (for the reasons alreadymentionedbefore)thathiswasthemostprofoundandconsequentialapproach but also to convey clearlywhatwe understand by ThirdTechnologicalRevolution,itsoriginsandimplicationsforthestudyoftheworldsituationintheperiodofperestroika.

37TheseauthorsoftencitedotherpassagesbyKarlMarx, inwhich thisGerman author seemed to foresee a qualitatively superior,increasinglydecisiveroleofscienceastheguidingforceofproductionascapitalismdevelopedtoitslimitsandtheepochofthelowerphaseofcommunismapproached.(Marx,1954 ­...,v.46,pt.II,pp.213and215).

38 As with the concepts of “Third Industrial Revolution” and “ThirdTechnologicalRevolution” in theWest, thereweresomedisputes intheUSSRaboutwhenexactlytheSTRerastarted.Thegreatmajorityof the authors regarded the postwar period as the time whenhumanity “entered” the STR. Thus, in one of political economymanualsusedastextbooksinthefreshmanyearofSovietuniversitiesin the1980s,weread that “ingeneral themid­1950’s isconsideredthebeginningofthescientific­technicalrevolution.”(Medvedevetal.,1990,p.99)

39 In 1936, Stalin argued that socialism, in general, had already beenachieved by the USSR through the socialization of the means ofproductionandtheresultsoftheindustrializationofthefirsttwofive­yearplans.(Stalin,1942,pp.381­382and386)In1967, inthe50thanniversary speech of theRussian revolution,Brezhnev stated thatthe USSR had entered the era of developed socialism (“razvitoisotsialism”). (Brezhnev, 1970­1982a, p. 92) This idea had beenlaunchedbyFedorBurlatskii inanarticle inPravdaon12/21/1966andwouldserve todistinguish thestageofsocialistprogressof theUSSR incomparison toothercountries, likeChina,whichwere inalessadvancedstageofbuildingsocialism.(Burlatskii,1966,p.4)Theconceptwas incorporated intotheSovietConstitutionof1977 in itspreamble.A number of Sovietwriters sought to estimate the timewhen the USSR had entered this new phase,most pointing to theearly or mid­1960’s. Khrushchev also spoke of mature socialism(“zrelyisotsialism”)at theXXIICongressof theCPSU in1961,when

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heannouncedthattheUSSRwouldbepreparingthetransitionfromsocialismtocommunismwithintwentyyears.(Khrushchev,1961,p.21)

40 Tavares, Maria da Conceição, quoted by Tauile, José Ricardo, incommunication to the author atthe IEI­FEA ofthe Federal UniversityofRiodeJaneiro,on10/31/95.

41ThequestionofwhethertheSTR’snewtechnologiesincapitalismleadtounemployment isquite controversial. Ifnew levelsofautomationundoubtedlymakealargenumberofjobsunnecessary,ontheotherhand, according to some economists, new technologies “increaseproductionandcreatenewdemands,eitherbyincreasingproductivityand consequently raising real incomes, or via creation of newproducts.VCRs,cellphones,walkmenhadbarelyappeared20yearsago.Thesenewindustrieshavecreatednewdemandsandnewjobs.”(Survey,1996,p.19)Despitethecreationofnewfieldsofproduction,theeffectoftheincreasingautomationofnewtechnologiesseemssooverwhelming, judgedbystatisticsofunemploymentandwagelevelsincapitalistcountriesinthelasttwodecades(OECD1995a,pp.47and98)thatthesolutiontothesecontradictionswithincapitalismwouldbetoreducetheworkingdaytowellbeloweighthoursdailyorfortyweekly, in order to broaden the number of people employed. Thissolution is currently being proposed by several European tradeunions.

42Especiallymarked in capitalism are the contradictions in the field ofleisure.Withthecurrentproductivityofmachinesandequipment,thepossibilityofreducingtheworkdaytowellbeloweighthoursperdaywouldbeassured.Duetocompetitionandunemployment(existenceof the “industrial reserve army”), this STR potential isnot realizedundercapitalism.

43Besidesperestroika,thesereformsincluded:­ the Khrushchev reforms (in the mid­1950s), which created new

sovnarkhozy (regional economic councils), decentralizing andregionalizingthevastmajorityoftheoperationalfunctions(andevensomeplanning functions)oftheeconomy(VSSSSR,1957a,pp.341­346;SMSSSR1957,pp.199­203);

­theKosyginreforms(inthesecondhalfofthe1960s)thatextinguishedthesovnarkhozy,recentralizingandre­establishingtheadministrationof theeconomyonministerial lines,carriedoutapricereformandtried to givemoreautonomyand incentives to companies. Itsmostinnovative aspect was trying to put “profit” as one of the maineconomic indicators to be pursued by state­owned enterprises. Inaddition,itwasproposedtoaccountonlyforactuallysoldproduction

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(not merely total gross production), to prevent low­quality ordefectivearticlesfromcountingasplanfulfillment(SMSSSR,1965,pp.356­386);

­ the industrial reorganization of 1973­74 that unified enterprisesproducing related products into larger units called ob’’edinenie (=“association”), tosimplify the tasksofcoordinatingcentralplanning(SMSSSR,1974,pp.154­199);

­ the decree of July 1979 which, among other measures, aimed atstimulatingefficiencyandqualityintheproductionofenterprisesandattemptedtoestablishvalueaddedcalculations(insteadoftraditionalgrossproductionindices)asoneofthemain indicators forbusinessactivity(SMSSSR1979,pp.390­341);

­Andropov’seconomicexperiments(July1983decree)which,inselectedcompanies, tried to establish more incentives for efficiency anddisciplineincompanies.(SMSSSR,1983,pp.339­348)

Foradiscussionofthesereformulations,seeHewett(1988).44 For detailed analyses of the functioning of the central planning

economies of the Soviet type see: Soviet­Type Economies (RobertCampbell); The Economics of Socialism (J. Wilczynski), The SovietEconomicSystem:LegalAnalysis(Ioffe/Maggs);Reforming theSovietEconomy (Edward Hewett); and An Economic History of the USSR(AlecNove).

45 This does not mean that there was no private production. Thekolkhozniki (farmers of collective farms) were entitled to work insmall individual plots at off­duty hours. Many urban workers alsoperformedparallel“oddjobs”(mainlyintheareaofservices,repairs,construction).Not tomention clearly illegal activities such as gangsthat diverted material from state­owned companies, black­marketdealers, etc.For an analysisof the legal and illegal formsof the so­called “second economy” of the pre­perestroika USSR see GregoryGrossman(1977).

46TheCPSUpolitical leadershiprolewasclearlydefined inconstitutionalterms.Theeconomicroleoftheparty—inpracticeverylarge—wasnotsoclear­cutinconstitutionalterms.Inthefamousarticle6ofthe1977Constitution (whichdealsexactlywith theparty's relationshipwithsociety)thefollowingwaswritten:

TheleadingandguidingforceoftheSovietsocietyandthenucleusof itspoliticalsystem,ofallstateorganisations and public organisations, is theCommunistPartyof the Soviet Union.TheCPSUexists for the people and serves the people.TheCommunistParty,armedwithMarxism­Leninism,

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determines the general perspectives of thedevelopment of society and the course of thehomeand foreignpolicyof theUSSR,directs thegreatconstructiveworkoftheSovietpeople,andimparts a planned, systematic and theoreticallysubstantiated character to their struggle for thevictory of communism All party organisationsshall function within the framework of theConstitutionoftheUSSR.(VSSSSR,1981,p.29)

47 For a more detailed description of how the CPSU influenced theeconomy,seeAppendix1.

48Lenin,1967­1970a,p.200.49SeeKPSS,1983­1989e.50An article by Bol'shevik (the Central Committee’s political­economic

publication)put theofficialpositionon the separationof functionsbetweenpartyandgovernmentintheeconomyasfollows:

Themostimportant[ofpartyleadershipprincipleson economics] is the clear division of functionsbetweentheeconomicbodies,theSoviets,andtheparty.This requirementstems from the fact thatthe party should not be identified with theeconomic organs and that the party leads[rukovodit] the economic life of the country, butdoes not directly administer [upravlyaet] theeconomy.(Slepov,1951,p.47)

51 Ed Hewett (1988) made an excellent analysis of the sometimesambiguous characterof thepartywith regard toeconomics.ThaneGustafson(1981,p.2)hadstatedthattheUSSRwascharacterizedby“a dual government between the party and the state.” Ed Hewettagreeswiththispropositionanddoesananalysisalongtheselines.

Thepartyhasaclearauthorityandresponsibilityforthemostfundamentaldecisionsthataffecttheeconomy,thatis,thosethatestablishthedivisionof the national product between consumption,investment and defense; the generaldirection ofinvestment policy; important external economicvariables (foreign debt, for example); policiesinvolving largeprojects(suchas theBaikal­Amurline). The primary responsibility of thegovernmenthierarchy [for itspart] is tomanagethe economy in order to contribute in the bestpossibleway tothe implementationoftheparty’s

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goals.(Hewett,1988,p.102)

Thus,thePolitburo(onbehalfoftheCentralCommitteeoftheCPSU)previouslydiscussed(inpracticewithvetopower)theguidelinesofthe Gosplan plans and monitored their implementation, includingintervening through decrees in problematic areas. “In the fourmeetings that normally take place everymonth, the Politburo canhear reports and enact decrees related to theYambur pipeline, thepreparation of cattle for winter, the development of the televisionindustry...”(Hewett,1988,p.164)Theimplementationoftheplansinthedifferent regionswasmonitoredby localpartybodies.The firstsecretaries of local party committees (raikom, gorkom,obkom/kraikom, respectively,district, cityand regional committees)wereheldaccountabletotheCPSUfortheperformanceofenterprisesin that jurisdiction. In each state enterprise, therewas also apartycommittee(madeupofthefirm’sdirector,thepartysecretaryforthatenterprise,and theunion leader),whowas inchargeofmonitoringthe implementationof theplan therein.Theorientationwasso thattherewasnointerferenceintheday­to­dayoperationalmanagementof the enterprise, but rather positive stimuli such as suggestions,practicalhelp(e.g.,thetraditionalcallingofvolunteerstoassistintheharvests), political doctrinal exhortation, etc. But the negativereinforcementwasalsopresent inpractice: therehavealreadybeenextremecaseswherethelocalpartysecretaryhasevencontributedtothe replacementofdirectorsconsidered inept. (Kuptsov,1984,p.6;Hewett,1988,p.144)

52SeetableinAppendix2.53 To remedy the shortcomings presented above, in the Soviet period,

several attemptsweremade to reduce the importance of val as anindicatorofplanfulfillment.ThemostprofoundofthosewasduringtheKosyginreformsinthemid­1960’s.(SMSSSR,1965,pp.356­386)In itsmost radical phase itwas proposed that “profit” (not grossproduction) became themain indicator of success— andmuch ofthis profitwould stay with the firm and not revert to the centralgovernment at the end of the year as was usual until then. Sovietenterpriseswouldalsoberesponsiblefortheirownprofitsandlossesby means of khozraschet, or self­financing. In addition, only theproductionactuallysoldbythecompany(ratherthanthemeregrossamountproduced)wouldbe counted asplan fulfillment in order toavoidlowqualityordefective,unwanteditemscountingassuccessfulproduction.Thehopewas to create incentives for the use ofmoreproductivetechniques,toreducewaste,toencouragecreativityintheproductionunits,andsoon.However,theKosyginreformswerenot

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carriedtotheirconclusion.Therebegantoappearaconflictbetweentheinterestsoftheindividualenterprisesandthecentralgovernmentagencies.With thenewautonomygained, theenterprisesstarted tobe interested in producing articles that yielded more “profit,”interrupting the production of other items. This led to bottlenecks,curtailing production in some areas. The upper echelons of theministries,whichwerepressedforresultsandgrowthofproduction,beganagaintointerveneandinterferewiththeindividualcompanies,oftenforcingthemnottofollowthe“pathtoprofit,”butratherenablethe continuous increase in output. In an effort to remedy thissituation, the government began to establish new indicators(pokazateli) forcompanies inanattempttoharmonize the interestsof the firms’ individual profitswith themore general governmentplans. But in this process, the profit pokazatel’ started losing theimportanceitinitiallyoughttohave.Bytheearly1970’s,theKosyginreformswerecompletelywatereddown,virtuallydisappearing.

AnotherattempttolessenthenegativeeffectsofvalwastheJuly1979decree,which created the new indicator ofNChP orNormativnayaChistaya Produktsiya. (SM SSSR, 1979, pp. 390­431)NChP roughlycorresponds to value added calculations in the jargon of Westerneconomists.Thesuccessofanenterprisewouldbejudgednotbythevalueofitsgrossproductionbutonlybythevalueadded(netincreaseinvalue)created in thecompany itself (i.e.,discounting thevalueofthe rawmaterialand intermediateproductsused in theproductionitself).Thiswasexpectedtodiscouragetheoveruseofrawmaterialsandheavymaterials(whichunderthevalindicatortendedtoincreasethe total value produced by the enterprise). The use of the NChPpokazatel’ did not live up to the expectation created around it,because a new problem arose: companies tended to use asmuchlaboraspossible (especiallymanual labor),as itdirectly influencedvalue addedby the calculationmethodsused at that time. (Filippov,1984,p.83)This— at a timewhen the automation ofproduction(andconsequentdiminutionofmanual labor) isoneofthedemandsof theperiod of the Scientific­TechnicalRevolution—proved tobecounterproductive.

AsMarshallGoldman(inthemid­1980s)putit,evenwithallattemptsat reform and “despite all the good intentions and even sometemporary successes, the [spirit of] the val system continues toprevail.”(Goldman,1987,p.22)

54Gossnab(GosudarstennyiKomitetSSSRpoMaterial'no­Tekhinicheskomu

Snabzhenyu–“StateCommitteeforMaterialandTechnicalSupplyof

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the USSR”) handled the distribution of raw materials, parts andequipment for state­owned enterprises. The traditional division ofthemain tasks of each body was as follows: Gosplan handled theproduction plans, Gossnab the distribution plans for rawmaterialsand production goods for industry, and Mintorg (Ministry ofCommerce) retail trade (consumer goods).However, thisdivisionoftaskswas not as clear­cut as itmight seem (and even variedwithtime). Thus, Gosplan also established plans for the distribution ofsomeproductsconsideredessential,Gossnabalsoparticipated intheplanning of the production of certain consumer goods etc. (Ioffe&Maggs,1987,p.184)

55 The designation and role of government agencies in charge ofproductionplanninganddistributionmayhavevariedovertime,buttheessenceoftheoperatingmechanismremainedrelativelyconstantfrom the1930’s to themid­1980’s.Gosplan, forexample, founded inthe 1920’s, underwent several reformulations (being subdivided,concentratingmore or fewer tasks in its hands etc.). Gossnabwasfoundedmuch later thanGosplan.Themost extreme variationwasperhapsfrom1957to1964­65duringtheKhrushchevperiodwhen,with thecreationof the sovnarkhozy (RegionalEconomicCouncils),economic administration was regionalized, rather than follow thetraditionalministerial line(production line)asbefore.(Rubin,1969,pp.175­176and218­219;TsKhSD, f.2,op.1,d.805, l.9ob.)Duringtheperiodfromthe1930’stothe1980’s,therewasalsovariationinthe degree of independence given to enterprises to establish theirownproductline(asindicatedinthecentralplan)orthefreedomtoenter into supply contracts with other companies. The pre­WWIIStalinistperiodwas themost rigid,with theallocationofalmostallindustrial products centrally determined. In the Khrushchev period,andespeciallyaftertheKosyginreformsin1965,itwasattemptedtogiveenterprisesmorefreedomtoenterintosupplycontractsdirectlywith one another (subject to approval by the upper planningauthorities). (SMSSSR,1965,pp.356­386)As the resultswerenotverygood(supplybottlenecksarosedue to thecompanies’attemptstomake only the most profitable contracts for themselves), in the1970stherewasacertainreturntoapatternclosertothetraditionalone. (Ioffe, 1989, pp. 74­75) Yun’ (1986, p. 147) recorded a newattempt in the late1970s todecentralize theallocationofwholesaleproductsbetweensupplierandrecipientcompanies:

“In accordancewith the resolutions adopted in July1979,Gossnab,togetherwiththeministries[...]should,in1980,establishatransitionof themajority of production associations to the system of direct

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contacts[supplycontracts]betweentheminthelongrun.However,todate[1986]onlyonethirdofproductionisdistributedinthisway.”

56ItisimportanttonotethatGosplanhadregionalsubdivisions.Sothere

were Gosplans in each republic andplanning committees at the locallevel.Goodsthatwerenotcoveredbycentralplanning,suchasgoodsoflocalimportance,werelefttotheseregionalGosplansorministriesofthedifferentrepublics(alwaystakingintoaccounttheguidelinesofthe“central”GosplanoftheUSSR).

57Thus,within theSoviet system, therewasalsoa restricteddegreeofdecentralizationofplanning(alwayssubordinatetothemoregeneraldirectionsofthecenterandsubjecttoitssupervision).Intheory,thecompanies themselves, within the “straitjacket” of the differentproduction indicators anddistributionplans that they had tomeet,could(mainlyaftertheKosyginreformsinthemid­1960s)employthetechniquesandmixofproducts that they findmostappropriate forthe production of the goods required by the plan. However, inpractice, even after 1965, “the specifically assigned directives formandatoryphysicaloutputaresodetailedthatanyfreedomofchoicelefttoproducersisminimal.”(Shmelev&Popov,1989,p.82)

58Birman,1978,p.161;Filippov,1984,p.57;Gorbachev,1987d,p.8.59Howeversimplethemethodmayseem, itservedasanaccessiblerule

forplanningtohaveabasisinreality(inthiscase,inpreviousyears’reports which, at least theoretically, should provide a realisticdescription of the situation and potential of the firms).One of themajordrawbacks,accordingtoBirman,wasthe“inertial”characterofthe method, placing the center at the mercy of a preconceivedsituation that might not correspond to the dynamic reality of(primarily technological)processes inacompany. (Birman,1978,p.167)Afterall, the fact thatacompany thisyearachievedagrowthrate of 2% does notmean that this growth will be repeated thefollowing year. Especially if there are changes in the reality of themarket or if new technologies are introduced. Theoretically, thesepossibilitiesforchanges(mainlyinthetechnologicalfield)shouldalsobe included in theannual reportsofcompanies.But,aswewillseelater,anotherproblemwasthatthereportswerenotalwaysreliabledescriptionsoftherealityoftheenterprises...

60Formally,thegovernmentdecreethatgovernedtheministry­enterpriserelationshipinthemid­1970’sestablishedthat:

“Confirmedplanningtasksforaproductionassociationmustbestableandcanonlybechangedbyasuperioragencyinexceptionalcases.”(SMSSSR,1974,p.175)

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61 Thegigantic taskof collectingall thenecessarydata froma complex

economy,inacorrectandtimelyfashion,forannualplanssometimesled to serious problems in balancing the economy. There wereoccasions when the plan could only be completed in the third orfourthmonthofthe followingyear.As Ioffe criticallyputit:

Due to the difficulties in obtaining correct datawith outdated Soviet computer equipment, [...]the fact that even so, annual plans appear onlythreeor fourmonths late isamiracle in itself.Ofcoursethismiracleoccursbecauseoneoverlooksmanymistakes.But,fromtheSovietpointofview,itisbettertohaveacentralplancontainingerrors,butmadeintime,thananirreproachableplanthatwould not be ready until the following year.However, even a slight delay in editing the plangives rise to an original problem.Not only is itnecessary to confront the inevitable mistakesarisingfromhasteandinefficiencybutalsostate­ownedenterprisesareleftwithoutaplantoguidetheirproductioninthefirstmonthsoftheyear[...In this case] According to established rules, theyearplan should serve as a guide forproductionanddistribution incompaniesuntil thenewplanis ready and takes effect. From then on, allproduction units must make the necessaryadjustments to the new guidelines, not only forthe futurebutalsoretroactively to themonths inarrears.(Ioffe&Maggs,1987,p.112)

62AsShmelev&Popov(1989,p.137)putit, This is a vicious circle: you cannot get your

supplies outside the plan; you can get yoursupplies only within the plan — but you willnevergeteverythingyouneedbecause theywillhave “run out.” If youwant to break out of thisvicious circle, you need a tolkach [an expediter]who constantly travels through the country, firstmaking agreements with producers and thenmanagingtoextractGossnab’sapproval.

63ThestructureofdomesticstatepricesintheUSSRwasasfollows.Therewerethreemaintypesofprices:1)wholesale industrialprices(paidbystateenterprisesamong themselves);2)agriculturalprices(paidby the government to farmers); 3) prices of retail trade (to Soviet

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consumers). These prices were fixed administratively by thegovernment, taking away from companiesmuch of the “burden” ofcostsandprofit.Wholesale industrialpricesweresubdividedintotwotypes: 1) the wholesale price of the company (optovaya tsenapredpriatiya, i.e., the price that the producer company received); 2)wholesale price of the industry (optovaya tsena promyshlennosti, orwhat the state­ownedbuying companypaid).And these twopricesdid not coincide (!!), the difference being pocketed by thegovernment. Theoretically, the company’s wholesale price shouldcover the average production price (sebestoimost’) of that industryplusaprofitmarkup. (Bornstein,1987,pp.96­97)Problems beganwithdistortions caused by firms thathad aproduction costhigherthantheindustryaverage(thesewouldthenhavealowerprofitratethanothercompanies).Anotherdistortion:as themarkupofprofitwasalsocalculatedontopofthecostsofproducingthematerials(atleast until the 1982 price reform), firms tended to want to use“expensive” materials in order to increase its profit volumeaccordingly.Inthecaseofretailprices,thegovernmenttendedtousethenalogsoborota(adifferentialtaxonthesaleofgoods,whosevaluevaried from product to product) to tax a fewmore articles (luxuryitems,cigarettes,alcoholetc.)orsubsidizeothers(food,forexample).Thiswholesystemallowedthemaintenanceoffixedpricesforalongtime,buttendedtomaketheproducersnottakeintofullaccountthereal individual costs involved (since these tended to hide behind acurtainofdifferentpurchaseandsalepricesadministrativelyset).Foran excellent description of the Soviet price system, see Bornstein(1987).

64Valovoi,1989,p.4.65IntheUSA, forexample,at the timeof thestartofperestroika(1985),

91%ofthecivilianlaborforcewascomposedofemployees(deprivedofthemeansofproduction).(StatisticalAbstractoftheUnitedStates1996,p.401)

66TheoperationofStalinist“terror”asamechanismforacceleratingtheprocessesofeconomicgrowth inthe1930’s,1940’sand1950’shasbeen analyzed in the economic literature. (Nove, 1990, p. 213)However, it is perhaps in the pages of the fiction literature thataccompanied the onset of perestroika in the USSR that theseprocesseshavehadtheirmostillustrativeexpression.Forexample,intheanthologicalsceneofthenovelChildrenoftheArbatinwhichanNKVD officer in the 1930s explains to an exiled student why theinvoluntarybreakingofatractorpartbyasemi­illiteratepeasantwastreatedasaneconomiccrimeagainstthestate:

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Formanycenturies,ourpeasantsknewonlyone

typeof instrument: the ax.Nowweput them towork on tractors and harvesters;we gave themtrucks to drive. And the peasants break thesemachines because they do not understand howtheywork,becausetheyhavenotraining,becausetheyknownothingabout technologiesandotherthings. So,what canwedo?Waituntilour ruralarea overcomes its intellectual and technicalbackwardness?Wait until the peasants begin tochange amentality that took centuries to form?And inthemeantime,dowe letthemcontinuetobreak our machinery until they learn? No, wecannot condemn our machines to destruction:they costus a lotofblood.Nor canwewait: thecapitalist countrieswould suffocate us.Only onemethod remains.Adifficultmethod,but it is theonly one we have: fear. Fear embodied in theword saboteur. Did you break a tractor? Soyou're a saboteur and you're going to get tenyearsinjail.Foralawnmowerorreaper,alsotenyears. Then the peasant begins to think. Hescratches his head, starts to take care of thetractor.He offers a bottle of drink to thosewhoknow thesemachines: “Helpme, showme how,save me.” And there is no other way: we aresaving ourmachines, our industry, the future ofthecountry.Whydon´ttheydoitintheWest?I'lltell youwhy.Wemadeour first tractor in1930,while in the West theymade the firstone in the1830’s! They have the experience of severalgenerations accumulated. There the tractor isprivate property and the owner takes care of it.Herethepropertybelongstothestateandhastobemaintained through statemethods! (Rybakov,1987,pp.320­321)

67“Theypretendtopayusandwepretendto work”and“whatbelongstoeverybodybelongstonobody”werephrasesthatthecurrentauthoroftenheardinMoscowduringtheperiodinwhichhestudiedforhismaster’sdegreeintheUSSR(1989­92).

68Seepreviousnote.69Wesaytheoreticallybecause,duetosupplyproblems,theenterprises

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often carried out informal transactions among themselves, throughtolkachi (expediters). The existence of this tenevaya ekonomika(“shadoweconomy”),ontheborderoflegalityandillegality,endedupfortifying the existenceof ablackmarket in the SovietUnion.Thisblack market,growing in the Brezhnev period,eventually led to theformation of real “mafias” that trafficked an increasing number ofproducts.Theexistenceof thesemafias,previouslyofficiallydenied,was evident after perestroika erupted. For an analysis of thesephenomenaseeGregoryGrossman’sarticle“TheSecondEconomyoftheUSSR” inProblemsofCommunism(September­October1977).

70PostanovlenieTsKVKP(B) theMerakhpoUporyadocheniyuUpravleniaProizvodstvomiUstanovleniyuEdinonachaliya[“DecreeoftheCentralCommittee of the All­Union Communist Party (Bolsheviks) onMeasures for the Standardization of Production Administration andEstablishment of one­person Responsibility”]. (KPSS, 1983­1989e,pp.556­562)

71Inacapitalistmarketeconomyofderegulatedprices,such imbalanceswouldbereadjustedbythemarketitself.Missinggoodswouldriseinprice (thus decreasing demand) and excess output would bewithdrawn from production (with or without the producer’sbankruptcy). This mechanism of automatic price adjustment, inpractice,wasforbiddentoSovietplanners,becauseoftheverylogicofthesystem.

72Theexpression “passedon”maybemoreappropriate than “sold” inthis phrase because outdated or shoddy products often remainedunsold in government stores.But in this case, theproblemwasnolongeraresponsibilityof the factoriesbutratherof thedistributionagencies.Themostimportantmissionofthefactorieswassimplytofollowtheplanandreachtherequiredproductionquota.

73AccordingtoArticle15oftheSovietConstitutionof1977,“thesupremegoal of social production under socialism is the fullest possiblesatisfaction of the people's growing material, and cultural andintellectualrequirements.”(VSSSSR,1981,p.32)

74AnexampleofthiswascitedinSotsialisticheskayaIndustriya,October2,1985:

“Minenergo [Ministry of Energy and Electricity],for example, sends lumber produced byconstructionfirmsat theBratskiandKrasnoiarskhydroelectricplants[inSiberia ...]atadistanceof3,000­5,000kilometerstotheircompanies[intheEuropean part of USSR]. At the same time,Minlesbumprom (Ministry of Wood, Pulp and

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Paper)sendswoodproducedbyitsenterprises[intheEuropeanpartoftheUSSR]toSiberia,exactlytheoppositeway[!]”(Medvedev,1985,p.2)

75AccordingtoShmelev&Popov(1989,p.174),[Until 1987] the unwanted differences in profitrates of [state enterprises] caused by thevicissitudes of command­administrative priceformationwereneutralizedverysimply:allofthe“extra”profitwasseizedand incorporated in thebudget.Atfirstenterprisesmadeobligatory,fixedpayments for capital (up to 6% of capital stock)and rental payments, in addition to otherpayments(morethanathirdofthetotalprofitinindustry). Then they made payments intoincentive funds (17%) and various otherpayments (paying off losses and bank loans,financinggrowth in theirownnetassets,and soforth—aboutathirdofallprofits)andthentheywere required to give to the budget everythingthat remained (20% of the profits) — the“payments on the remainder of free­and­clearprofit.”Undertheseconditions,theincentivefundswerenotafixedpercentageoftheprofitbutwerecalculatedbyacomplexsystem thatdependedonchanges in a number of fund­forming indicators(volume of sales calculated by contractualdeliveries, increaseof labor productivity,decreaseinprimecosts,andothers).So itwaspossible tohavehigherprofitsbutdecreasedincentivefunds,andtheotherwayaround.

76TheshareofadultfemalelaborintheUSSR(87%in1980)wasmuchhigher than in the USA (59.7%) or in European OECD countries(48.5%).(OECD,1982a,p.33;Ofer,1987,p.1783)

77Asmentionedearlier,the“Kosyginreforms”(undertakeninthesecondhalf of the 1960s, beginning in 1965) attempted to give greaterautonomy to enterprises (in relation to the central Gosplan) byencouraging them to increase productivity and reduce costs bypursuingprofitthatcouldberetainedbythecompaniesthemselves,insteadofbeingpassedontothecentralbudgetasbefore.The1973­74 industrial reorganization unified production­related enterprisesinto larger units called ob’’edinenie (= association) to simplify thetasks of central planning coordination. The decree of July 1979,

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amongothermeasures,triedtoadoptvalueaddedasan indicator tobe followed by the enterprises (instead of traditional grossproduction indices). Andropov’s economic experiments (July 1983decree) tried, in selected companies, to establish more normsconducive tomore efficiencyanddiscipline in companies.(SMSSSR,1965,1974,1979e1983)

78 As in the previous chapter in which we did the analysis of theseorganizational models, under the concept of Fordism are alsosubsumed the aspects of Taylorism and Fayolism that, in factorypractice,endedupbeingincorporatedasintegralpartsoftheformer.

79ThestorycouldhavebeenquitedifferentiftheRevolutionof1917hadbeenaccompaniedbysocialistrevolutionsintheadvancedcapitalistcountries (especially Germany), as initially expected by severalRussianrevolutionaries,includingLenin.(Lenin,1967­1970b,p.456;Lenin,1967­1970c,p.508;Lenin,1967­1970d,p.417) In thiscase,therewould be no need to achieve and/or copy amore advancedproduction paradigm, since the socialist camp would already have(incorporated)initsuchaparadigm.

80LeninwasalsooneofthegreatestsupportersofthecreationoforganssuchasSOVNOT,aSovietorganizationfoundedinthe1920stocarryoutmotionand timestudy in theworkplace inorder toachieve thehighestpossible efficiencywithminimalmovementsby theworker.NOT (Nauchnaya Organizatsiya Truda, “Scientific Organization ofLabor”), as this type of study was called in the USSR, was clearlyguided by Fordist and Taylorist principles. (SES, 1980, p. 876;Voslenskii,1980,p.178;Conquest,1967,p.60)

81 Ironically, thesewords turnedout tobeprophetic.Tenyears later, in1941,GermanyinvadedRussia...

82 For example, in factories, from the time of industrialization in the1930s,thealternatinguseofpiecework(sdel'nayarabota)andtimewages,theestablishmentoftechnicalnorms(normativy)andquotasofproduction(andeventheintroductionofsalarybonusesandwagedifferentials) were clearly more guided by the need and goal ofachieving standards compatiblewith the efficiency requirements ofthe more advancedWestern (Fordist)model than by the hope ofestablishing alternative socialist forms of labor remuneration.(Conquest,1967,pp.59­60)

Inthiscontext,theargumentsusedbyStalininhiscampaignagainsturavnilovka (“leveling” or “egalitarianism”) that greater wagedifferentiation would be necessary and would be in line with theprinciple that “in socialism,people are rewarded according to theircontribution (work), not yet according to needs” seemed to reflect

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concern with criteria of efficiency and economic rationalizationsimilarto theonesused inFordismasmuchasconcerntoestablishwage criteria that corresponded to the canons of socialism. (Stalin,1946­1951h,pp.56­57)

83 It is important to note that the Soviet strategy, even as late as the1930s,wasnotsimplytoblindlycopytheWesternFordistmodel,buttomaster themost advanced techniques of thismodel so that, asquicklyaspossible,itwouldbecomeindependentofitandsurpassit.So much so that the number of imported technical and foreignmachinery contracts decreased significantly in the second five­yearplan,andevenmore in the third,compared to the first.BasedonacarefulsurveyofRussiansourcesandWesternstudies,Parrott(1983,pp.29,36and46)determinedthat

“[Foreign] trade accounted for almost four­fifthsofallmachine tools installed in1932andalmost15%ofthegrossinvestmentinthefirstfive­yearplan[,whereas...]duringthesecondfive­yearplanimported capitalwas responsible foronly 2%ofgross investmentsand less than10%ofmachinetoolswereproducedabroad[...]40%ofthemainmodels introduced [in the machine tool sector]between 1938 and 1940were based on foreigndesign, compared with 95% between 1928­32and75% in1933­37 [... Inaddition,] thenumberof technical assistance contracts with foreigncompanies in the second five­year plan wasapproximatelyhalfthatinthefirst”

As Nove (1990, pp. 220­221) put it, “around 1937, the basicindustrialmaterialandtheproductionofweaponswasmanufacturedwithin the Soviet Union.” This trajectorywas presented, by Sovietpropaganda of the time, as one of the signs that the USSR wasachieving its technological independenceandreachingaqualitativelynewdegreeof industrialparadigm.Forexample,Mertts etal. (1932,pp.238­239), commentinginascientificarticle onthehightechnicalgradeof theGAZ car factory installed in the cityofGorky,with thehelp of FordMotor Co., underestimated the American contributionandstatedthat.

[...] the “lastword”ofcapitalist technique isonlythe firstword of socialist technique, and in thisfieldwedonotlimitourselvestocopyingcapitalisttechnique,butweseek togo further in termsoftechnological progress […] The level of

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automation atGAZ is greater than that atRiverRouge[wherethemainFordAmerican factory islocated].

Suchboastingneedstotobeunderstoodwithinthecontextof1932,when the article was written,in which the Soviet Union was actuallyimportingandputtingintooperationthemostmodernmachines[the“lastwordofWesterntechnique”],whiletheWestwasstillstrugglingwith the effects of the 1929 crisis. However, while it cannot bedisputed that the Soviet Union at the end of the 1930s achievedremarkable results in the radical reduction of its technologicaldependence from abroad (with areas of excellencemainly inheavyindustryandarmaments),theassertionsthattheUSSRwouldalreadybe achieving a type of industrial production paradigm that isqualitativelydistinctandsuperiortoWesternFordismshouldbeseenmore as wishful thinking or part of ideological propaganda thanbasedonthedailyrealityofthefunctioningofindustriesintheUSSR.Evenduringthe1930s,somevoicesoftheSovietscientific­industrialestablishment warned against premature isolation and autarchy ofthe country’s industry and science based on the belief in thesuperiority of native installed capacity. (Rubinshtein, 1937, p.42)Indeed, despite the ideological slogans to the contrary, the Sovietindustrialmodelwas still in a technological race trying to keep upwith the progress of the central capitalist countries (which in thesecond half of the 1930s had already partially recovered from the1929 crisis and began to resume their dynamism), within theparametersoftheFordistindustrialparadigmthatwasshownasthemost advanced and which the USSR was aiming to catch up andovertake.Thatis,theWesterntechnologicallevelwasamoredifficultmobile target to be achieved than originally envisaged. (ibid.) Thetypical example again can be given by theGorki car factory,whichFord helped build.While in 1932,when itwas newly installed, theSovietfactorywasoneofthemostmodernintheworld,withalevelofautomation that was higher than most Western competitors, theSoviet author Chudakov wrote in 1936 that due to the constantprogress, the GAZ­AA truck, produced in Gorky,was already beingtechnologicallysurpassedbymoreadvancedWesternmodelsasearlyasthemid­1930s.(Chudakov,1936,p.34)Thiswasaconstantinthedevelopmentof theSovieteconomicmodel: theattempt tocatchupand overtake the moving target of the more advanced Westernparadigm.Andthismeant,inpractice,thattheUSSR,inacertainway,had its industrial development shaped by the Fordist paradigm,without being able to unequivocally achieve the second phase

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(“overtaking”)ofthestrategyof“copyingtoovertake”thisparadigm.

84SeetableinAppendix2.85Seetableinappendix7.86ShmelevandPopov (1989,p.115)wroteduringperestroika: “Soviet

enterprises are the largest in the world. The average industrialenterprisehasabout1,000workersandanaveragecollectiveorstatefarmemploysabout600people.”

87ThelogicofeconomiesofscalewasbehindgiganticindustrialprojectssuchastheDnieperDam,theMagnitogorskMetallurgicalCenter,theKharkovTractorFactory,SverdlovskiUralmash,etc.

88At the timeof thesupremacyof theFordist­Tayloristparadigm in theWest, business management, as previosly stated, was also deeplymarked by Fayol’s principles of functional divisions. His famousorganization chart became part of the day­to­day planning ofcompanies.InthebookAdministrationIndustrielleetGénérale(1916),heenumeratedsomeofthe fundamentalprinciplesguidingbusinessmanagement. It is striking to note how the description could beapplied, almost exactly, to the functioning of the Soviet businessadministration. The coincidence in principles (with only a fewexceptions)isstriking.

Iwilllistsomeoftheprinciplesofadministrationthat I have most frequently had to apply: 1)division of labor; 2) authority; 3) discipline; 4)unity of command; 5) unity of direction; 6)subordination of the individual interest to thecollective; 7) remuneration; 8) centralization; 9)Scalar chains (authority line); 10) order; 11)equity;12)jobguarantee;13)initiative;14)espritdecorps.(Fayol,1965,pp.19­20)

89 The OTK (Otdel Tekhnicheskogo Kontrolya – “Technical ControlDepartment”) operated in the tradition of the Fordistmodel as an“external”oraposteriorimechanismformonitoringthequalityattheend of the production line. In a Soviet didactic industrialmanual,Omarovetal.complainedabout theexcessivenumberofemployeesinOTK.They cited cases of factories inwhich12 to20percentofemployeeswere in theOTK rather than directly in the productionprocess. (Omarov etal.,1964,p.106) It is interesting tonotehow,since the 1960s, the Sovietswere aware of the inadequacies of aposteriori quality control systems outside the production processitself, as in the Fordistmodel. Therewere reports in the technicalliterature that since the 1960s the Soviets had been trying toexperiment with quality control simultaneous with production.

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However,theyencountereddifficultiesingeneralizingtheseattemptsof what they called samokontrol’ (“self­control”). Most productionunitscontinuedtohavetheirOTKsruninthetraditionalFordistwayof repairing the defects after they had occurred. (Smirnitskii et al.,1987,pp.164­166;Omarovet al.,1964,pp.105­106and 111­112)

90 Henry Ford’s famous phrase that the buyer of his T model could“chooseanycolorhewanted,aslongasitwasblack,”couldbetakenasametaphorforsomeofthedifficultiesSovietconsumersexperiencedoversupplyproblems.

91Whenwe refer to the Sovietmodel of production as being amodeldrivenbyaFordistperspective,wedonotmeanthatoneisidenticalwith the other. The economic literature is full of descriptions andaccountsofhowSovietfactorieswere(intermsofmicroeconomics)lessefficientthantheWesternFordistfactoriesinadvancedcapitalistcountries. Shmelev and Popov, for example, drew up a number ofareaswhereSovietfactoriescouldnotreachthelevelofefficiencyofWesternfactories(evenFordist,nottomentionToyotist):therewereexcessiveinventoriesinfactoriesandanattemptatautarky(i.e.,self­sufficiency in the production of intermediate goods and laborinstrumentswithin theproductionunit itself)due to thedifficultiesencountered in the supply of parts; the level of most civilianconsumergoodsdidnotreachthelevelsofthebestWesternfactories;customer service was of poor quality; the level of product qualityoften did not reach the level of “good enough” typical ofWesternFordism;theverticalhierarchicallevelsoftheuppermanagementofthe companies, unlike the Fordistmodel, suffered external politicalinterference. (Shmelev & Popov, 1989, pp. 73­77, 80­81, 118 and133)

Despite all the shortcomings, these differences between the SovietmodelofproductionandtheWesternFordistmodelof theadvancedcountriesdonot invalidate,but rather corroborateourproposition.WedonotaffirmthattheSovietmodelofproductionwasidenticaltotheWesternFordistmodel,butratherthatitwasorientedbyavaluesystem [in what concerns strictly the production process of thefactoryfloor:seenextfootnote]thatreflectsandisguidedbyaFordistperspective.Aswenotedearlierintheaforementionedstatementsofthe leaders of the USSR from the time of the beginnings ofindustrialization, the ideal of the Sovietmodel was, in practice, toachievetheproductivityindexesofthemostefficientWesternmodel[Fordism] by copying and adapting it. We have seen how thecharacteristicsofverticalhierarchy,separationofadministrationandexecutors (workers),economiesofscale,etc.were theguidelinesof

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the Soviet model. The Soviets tried, in every way (consciously orunconsciously), to catch up with the Fordist paradigm. Theycompeted with the (Western) Fordist model guided by commonproduction values and methods that they tried, with a greater orlesser degree of success,toemulate. Thisis nottosay thattheywereable tokeepupwithFordistsuccesses inall fieldsandareas.HencethedeficientareasoftheSovietmodelofproductionmentionedabovearetheareasinwhichitwaslesssuccessfulinitspolicyof“copyinginorder toovertake”Western Fordism. It isnot that the Sovietsweretrying tomaintainareasofdifferencewithWesternFordism.Onthecontrary, if theycould, theywouldbe inaccordancewith theFordistlogicalsointheseareas.Ifintermsoflargescalesandquantities,theSoviets (with their gigantic hydroelectric and industrial complexes)werenotbehindtheWest, intheaspectofqualitytheyhadnothadthesamesuccessincopyingFordism(nottomentionToyotism).Butthisdoesnotmeanthattheywerenottryingtogetthereinthisareaaswell.(Smirnitskiietal.,1987,pp.164­166).Thisisalsothecaseofthehuge inventoriesandtheattemptatautarky(self­sufficiency)ofthe Soviet production units that far exceededwhatwas considerednormal for a Fordist pattern. This represented the “lesser evil” tokeepthesystemfunctioning,inthecontextofsupplydifficulties.TheSovietswereawareofthisandtriedtosolvetheprobleminordertoreachatleastalevelclosetowhatwascommonintheWest.Thepointis that, in practice, they could not achieve these ideal of normal(Fordist)levelsofinventoryandsupplierreliability.Eventhequestionof party political interference in top management, which would,within the above deficiencies, be themost radical differencewithFordism,canberelativized.Aswesawearlier, theCommunistPartyitself, from the resolutionsof theNinthCongress (confirmedat thebeginningofthefive­yearplansbyadecreeoftheCentralCommitteeofSeptember5,1929andbyotherdecrees insubsequentdecades)established edinonachalie (responsibility of a single person, in thiscasethedirectorsofthefactories)asthebasisforthefunctioningofthe industrial administration in the country,moving away from thecollegial direction. (KPSS, 1983­1989b, pp. 247­248; KPSS, 1983­1989e, pp. 556­562) The idea was that party bodies should stopmeddlingintheday­to­daymanagementofenterprises,concentratingtheireffortsonhelpingdirectorstocomplywithestablishedgoals.Ifthisdidnothappeninpractice,withturbulenceandpoliticalchangesinfluencingtheparty’sintrusionintobusinessmanagement,thiscanalsobeconsideredthecaseofanattempttofollowapatternclosertotheFordistmodel,butwith lesssuccess.Thevehemencewithwhich

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theSovietauthorities tried to imposeedinonachalie from theoutsetof industrializationclearlyshowedhow theywere influencedby theattempt to reach the more advanced Western paradigms (thenFordism). Between maintaining a collegial form of industrialmanagement— which, in principle, would be more in accordancewithasocialistpolitical form—and theedinonachalie—which intheWestproveditsgreatestefficiency,atleastatthemicroeconomiclevel— the Soviet leaders chose the latter.Now, if, inpractice, theycouldnotavoidpartisaninterventioninbusinessadministration,thisisanothermatteranddoesnotobfuscatethefactthattheintentionofthe Soviet leaders was guided by a desire to use certain Fordistmethodstoachievetheirgoals.

Thus the deficiencies (or differences between the Sovietmodel ofproductionandWesternFordism)listedaboveare“theexceptionthatproves the rule.” That is, they do not deny that the Soviets guidedthemselves,forthemostpartfromthetimeoftheirindustrialization,by a Fordist perspective, and that these deficiencieswere areas inwhich the Soviets,unwillingly, couldnotkeepupwith theWesternFordistmodel.

To conclude, we can cite the fact that, at the time of perestroika,severalSovietwriterswhostudiedToyotismagreed that theUSSR’sindustrial systemwas based essentially on assumptions of the so­called “American system” (i.e., Fordism). On this, see, for example,Komlev&Vasyukova(1989,p.20).

92Wearereferringhereonlytotheproductionprocessitself.Wehavenotyet mentioned the socio­economic implications of Fordism incapitalist society as awhole. In this respect, the French regulationschool(R.Boyer,A.Lieptz,M.Aglietta,andothers)sawFordismastheproductivebasisonwhich the strengtheningof thewelfare stateofsocial democracywas based.The economic­financial gains broughtaboutby thehighproductivityof theFordistmodelmadepossibleawhole structure of redistribution of income in the system, viaunemploymentinsurance,freeeducationandhealth,etc.

Even these socio­economic implications ofWestern Fordismwouldnotbeincompletedisagreementwiththemodifiedversionof“SovietFordism” since, to a certain extent, theUSSR,with its emphasis onfree education and health, eliminating official unemployment —besides a “commitment to a certain egalitarianism and stability inemploymentevenatthecostofeconomicefficiency,”asBreslauerputit—couldalsobeseenasasortofWelfareState.Ifwetakeaswelfarestate thesociety inwhich thestate intervenes tocorrect the"socialinjusticesofthemarket,”inthecaseoftheUSSRthisactionwouldbe

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representedby theverysuppressionof thecapitalistmarketas the“source” of these social injustices and inequalities. For one of thepossible views of the Soviet Union as a modified version of thewelfare state see the essay by G. W. Breslauer (1978) “On theAdaptabilityof Soviet Welfare­State Authoritarianism.”

93 See tables inAppendices4 and3 for calculationsof the comparativeperformance of the Soviet, Toyotist (Japanese) and Fordist (USA)modelsintermsofproductivitygrowthandnationalincome.

94SeetableinAppendix2.95Take thecaseof the JiT (Just­in­Time)Toyotist techniques thatdenote

the high flexibility of the Japanese model. Just­in­Time requiressuppliers,partsandcomponentstobedeliveredwithoutanydelay,asan immediateresponse to theneedsof theproducercompany.Thisreducestheneedforinventoriesinthecompanyitself.HowcouldtheUSSR,withherperennialsupplyproblems,usesuchtechniques?Thespecialized literature is filled with books describing how Sovietcompaniessoughttoaccumulatehugelevelsofinventoryofpartsandcomponents because of the bureaucratic difficulties in obtainingpermission from Gossnab (and other agencies in charge ofdistribution) to get the necessary supplies (besides the eternalproblemof thedelay indeliveriesofproducts).(Schroeder,1972,pp.114­115) In this context, it was very difficult to employ flexibletechniquessuchasJiT.

96SeveralstatisticalstudiesshowthatagrowingshareoftheGNPofrichcountries isgenerateddirectly in thesectorsrelated to information,suchastelecommunications,education,computers,software,etc.Forthe USA, for example, the percentages indicated vary fromapproximatelyonequarter tomore thanhalfofGNP,dependingonthe definition of technologies and information industries adopted.(OECD,1996b,p.15;Survey,1996,p.43)

97In1986,PaulSnellwrote: Thereisevidencethattheproductionofpersonal

computers in theSovietUnionhasbeendelayed,with Soviet authors pointing to technicalproblemsasthecause.IntheWest,itissuggestedthat the Soviet authorities have tried topreventthe introduction of decentralized informationsystems of the type available in the West. Thequestion iswhether the introductionofpersonalcomputers with networked communication isreally welcome by the Soviet authorities. Thechallenge they face is the loss of control of

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information in the lower echelons of society.Personal computers could be used to storeclandestine samizdat information [...] if printersare available, then much information can betransformed into regular copies for more generaldistribution and, of course, networked computercommunicationcanbeusedbothways andevenSoviet classified information could be illegallyinfiltratedbycomputerexperts.Itseemsthat theSoviet authorities are facing a dilemma aboutwhether this new decentralized informationtechnologyisreallydesirable[...]somuchsothat,unlike other computer technologies [...]when itcomestopersonalcomputers,Sovietauthorsusethe excuse of technical problems that preventtheirmassproduction.(Snell,1986,p.62)

98Shturmovshina=thepracticeofgreatly intensifyingproduction(oftentothedetrimentofquality)inperiodswhenthedeadlinesfortheplanarenear.

99AsCastels&Kiselyova(1995,p.27)putit, [...] the irony is that,at leastaccording toofficial

statistics, despite the economic slowdown andsocial disarray in the 1980s, the Soviet UnionproducedsubstantiallymorethantheUSinsomesectorsofheavy industry: itproduced80%moresteel,78%morecement,42%moreoil,55%morefertilizer, [...] and five timesmore tractors. Theproblemwasthat,inthemeantime,theemphasisof the world production system had shifted toelectronics and specialized chemistry and thebiotechrevolutionwasbeginningtotakeplace.Inall these areas the Soviet economy was laggingbehind.That is,theUSSRmissedtheboatontheinformationtechnologyrevolutionthattookshapeintheworldinthemid­1970s.

100If,ontheotherhand,theSTRincreasesthenumberofproductstobe“planned”andcontrolled, theSTR itself increases thecapacityof thecomputing systems that help this planning. Particularly with theadvent of networked personal computers, from the 1970s onward,thepossibilityofautomaticinventorycontrol(e.g.,automaticcontrolof supermarket sales through scanners that read bar codes ofproducts),couldgreatlyreducetheburdenofplannersinacentralized

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planningsystem.ThecaseofthefoodcompanyFrito­LaywascitedbyMalone and Rockart as an example of how networkedmicrocomputingbrings thepossibilityofdecentralizationofvariouspiecesofinformationanddecisionspreviouslyaccessibleonlybytheupper echelons. Frito­Lay has its employees in charge of the roaddistributionoftheproducts

[…]registering thesaleofeachof their200ownproductsonpalmtopcomputersastheymakethedistributionroute.Everynightthisinformation istransmittedtothecentralcomputer.Inreturn,thecentral computer sends information about pricechanges and special promotions to palmtopcomputers for use the next day. Eachweek thecentral computer summarizes the informationstoredandcombines itwith theexternaldataonthesaleofcompetingbrands[...]Theavailabilityofthis information enabled the company todecentralize thedecisionsof theparentcompanytoseveral localmanagers.Managerscanuse thisdatanotonlytocompareactualsaleswithplannedsales but also recommend changes in salesstrategies to senior management. (Malone &Rockart,1991,p.130)

101ItisimportanttonotethattheSoviets,despitehavinghadtheirfirst3decades of industrialization (1930s, 1940s and 1950s) guided by aFordistperspective,with theaimof “copying inorder toovercome”theefficiencyofthisparadigm,sincethe1960shadbeenawarethatradicallynewandmoreefficientcharacteristicswereemergingintheevolution of production processes. Contrary to much superficialreadingof thedescriptive literatureof thedifficulties that theUSSRwas having to adapt to the new processes of the informationrevolutionera,theSovietsquiteearly(alreadyinthe1960sandevenin the late 1950s) had studied the new trends of the time of theScientific­Technical Revolution and had the serious intention ofintroducing them in their economy. Many of the organizationalinnovationsoftheToyotistmodel,evenbeforetheybecamepopularintheWest— itwas in theearlyandmid­1970s that thereal floodofbooks aboutToyotism actually tookover theWest—were alreadystudied intheUSSR,andtheirintroductionhadbeentriedinseveralexperiments. Take, for example, the concepts of Flexibility, TotalQualityandZeroDefects.Wehavealreadynotedearlierhow in the1970s, S. Kheinman in his books scientifically explained that the

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processesandproductionmachinesneeded tobe flexible in theSTRera. But if we go back in time and take a 1964 Soviet industrialmanual,writtenbyOmarovetal.,weseethatconceptssuchas“TotalQuality”and “ZeroDefects”hadSovietequivalentsandwerealreadybeing tried in someSoviet enterprises.Itisworthdescribingpassagesfromthismanual.

Inreportingtheissueofqualitycontrolinfactories—which,aswesawearlier,wascarriedoutbyOTKs—Omarovetal.suggestedthatthis control, rather than being carried out a posteriori (identifyingdefective products and sending them back to the assembly line forrepair, as in traditionalFordism), should “verify and control,not somuch the articles produced per se but rather the technologicalprocesses, equipmentused etc. [... inorder to] avoiddefectsbeforetheyoccur, topredict [...]”(Omarov etal.,1964,pp.105­106).Now,this isoneof thepillarsofToyotistTotalQuality, that is,predictingandavoidingerrorsbefore they (repeatedly)happen.Thepurpose,according to the authors of the Russianmanual, was to arrive atbezdefektnoe izgotovlenie produktsii (“production without defects”).(ibid.,p.109)Thiswouldbe achieved through samokontrol’ (qualitycontrol performed by the workers themselves during production).The Russian concepts of bezdefektnoe izgotovlenie produktsii andsamokontrol’ correspond to the Toyotist concepts of “ZeroDefects”and“qualitycontrolsimultaneous toproduction” typicalofToyotismanddemonstratehowtheSovietswereawareofnewtechniquesevenintheearly1960s.Andnotjusttheoretically.AccordingtoOmarovetal.,atthetimeofpublicationofthemanual(1964),experimentswithbezdefektnoe izgotovlenieproduktsiiwerebeingcarriedout“inmorethan50factoriesoftheVolgasovnarkhoz.”(ibid.,p.109)

Thetruth,however,isthattheseexperimentscouldnotbereplicatedintheeconomyasawhole.Untilthemid­1980s,mostSovietfactoriescontinued, in practice, to use traditional Fordist forms of qualitycontrol at the end of the assembly line, and problemswith defectspersisted.(Smirnitskiietal.,1987,pp.164­166;Berliner,1988,p.74)Inotherwords,theSovietshadforalongtimetimebeenawareofthetheoretical need to change their production paradigm in someessentialways,butfailedtoimplementthesechangesinpractice.

These reports of how the typical techniques ofToyotism had beenstudied by the Soviets well in advance raise the question of thedifficulties of adapting the Soviet production model to the newsuperiorparadigmsof theSTRera. In the1930s,1940sand1950s,theSovietswerecopyingaFordistpattern thatactuallyrepresentedwhatwassuperiorintheWest.Evenafterthe1960s,whenthemost

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efficientparadigmofToyotismhademerged, theUSSRcontinued tofollowabasicallyFordistpath,notbecausetherewerenospecialistsand political leaders there who were aware of the strength andpotentialofthenewflexiblespecializationtechniquesfromJapan,butbecause of the difficulties in practically changing the productionmodel to adapt to these new techniques. The reason for thesedifficulties, aswe have seen previously, is that paradigms such asToyotism, with their demands for flexibility, greater emphasis onquality than on mere quantity, and horizontal information flows,provedtobemorecontradictorytothecoreoftheSovietmodelthanFordism, a paradigm whose characteristics of relative rigidity,emphasisonverticalstructuresofinformationandcontrol,etc.bettermatched the characteristics of the political­economic modelimplantedintheUSSR.

102Aoki,1984,p.25.103Itisinterestingtonotethatinthepost­warreconstructionperiod,the

priorities set by the Japanese central government for the economyresembledtheprioritiessetbytheSovietmodelinitstake­offperiod,evenshowingsomefundamentaldifferenceswiththeclassicWesterndevelopmentrecipes.AccordingtoMinami:

The industrialpoliciesadoptedbyMITI [Ministryof Industry and International Trade] in themid­1950sweredesignedtomakeheavyandchemicalindustry the leading sector of economicdevelopment.The choice of these industrieswasincongruentwith classical economic theory thatlabor­intensive industriesaremoreadvantageousthan capital­intensive industries (such as heavyindustry and chemistry) in a society thatpossessesabundanceof laborand lackof capital.(Minami,1994,p.122)

104 However, these similarities should also not be overestimated. Eventhough the Japanese government tries to influence the market(including “gentlemen’s agreements” with the big businessconglomerates), it does so within the instruments of classicaleconomicpoliciesofcapitalism,nottryingtosubstitutethemarketbyplan.(Rastogi,1995,p.244)

105 In theUSA, for example, government is traditionally responsible forabouthalfofallR&Dspending inthecountry.From1981to1989,the U.S. government invested $ 485.8 million in R & D directly(including research expenditures at public universities), while theentireprivatesectorcontributed$495,450million.(OECD,1991b,p.

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337)Inthe1970s(1970­79)theproportionofgovernmentspendinghad been even higher (55% versus 43% of the private sector).(OECD,1984b,p.77)Thetotalinfluenceofgovernmentinthefieldofresearchisnotcoveredbythesefigures.Theydonotdemonstratetheeffectof fiscal incentives on private research,nor the central role ofgovernmentindevelopingresearchinthelessprofitablebutessentialfieldsoffundamentalresearch.

106Theconstant interactionbetweengovernmentandbusinessinJapan,with the former having the central coordinating (sometimes eveninterventionist) role in the economy, was given the name of“administrative guidance” in the specialized literature.Thispractice(institutionalized,butoftenfunctioningthroughinformalchannelsofcommunication,ratherthannecessarilybeingregulatedbylawsanddecrees)wasthusdescribedbyAckleyandIshi:

Essentially,“administrativeguidance”involvestheuse of influence, advice, and persuasion to getfirms or individuals to behave in the way thegovernment sees fit. Naturally, persuasion isexercised [...] by government officialswho havethe power to grant or deny loans, subsidies,licenses, government contracts, import permits,foreign exchange, cartel approval and otherdesirable (orundesirable)objectives [...]But it isnot correct to think of “administrative guidance”solely in terms of “carrots and sticks”manipulation. In fact, the Japanese tradition ofprivatesubmissiontogovernmentleadershipandthewidespread recognition that state employeeshave more knowledge, experience andinformation than is available to ordinarybusinesses, as well as the sharing of values,beliefs and political preferences by bothgovernment officials and business leaders, allcontributetothesuccessofthemethod.(Ackley&Ishi,1976,pp.236­237)

Shigeto Tsuru cites examples of the ways this “administrativeguidance”isexercised:

1.Administrativeguidancewithout intermediariesbytheMinistry of Industry and InternationalTrade[MITI],asinthecaseofthecementindustry[...]

2. Establishment of a special subcommittee in theIndustrialFundsCommitteeoftheMITIIndustrial

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Structure Council, as in the case of the steelindustry.

3.Coordinationthroughdiscussionatadhocbilateralmeetings of government officials and businessleaders,as in the case ofthe petrochemical,timberandsyntheticfibersindustries.

4.Grantingoflicensestoexpand[productive]capacitybased on specific laws, such as in the case ofelectricpowergenerationandpetroleumrefining.(Tsuru,1993,pp.97­98)

107P.N. Rastogi, author of several publications on the Japanesemodel,describestheJapanese developmentsystem:

A crucial role in raising the country’s industrialeconomytoitscurrentpositionofsuperioritywasthat of MITI (Ministry of Industry andInternational Trade). MITI has created an“administrative cartel” to regulate competitionand coordinate investments between companiesin the industry [...] Thus, Japan’s industrialstandardcanbeconsideredasaregulatedmarketeconomy [...] Due to the close co­operation andcoordinated implementation of governmentpoliciesamong firms,unions,banks, tradingandthebureaucracy,thecountry’sfunctioningisoftencompared to that of a single, gigantic company:“JapanInc.”(Rastogi,1995,pp.244­245)

108From1956to1985,Japanhad9nationaldevelopmentplansthatwerepreparedbytheEconomicCouncilsubordinatetothePrimeMinister.It established growth rates and other macroeconomic indices ofproduction to be achieved. The plans were prepared with theparticipation of the Economic Council, a government consultativebody that has representatives of large companies, politicians, andsome representativesof tradeunions, the academic community andcivil society.According toAoki, the objectives of the nationalplanshaveagreatinfluenceonthebehavioroflargeindividualcompanies,servingasareferencefortheestablishmentoftheirownproductionplans,withinthetraditionalschemeofintimatecooperationbetweenlargeenterprisesandcentralgovernment.

Forecasts on macroeconomic growth rates arecompetitivelymadeby theprivatesectoraswell,and the forecasts by the Economic PlanningAgency arenot always considered reasonableby

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allcompanies.However, the formaland informalexchangeofinformationbetweenthegovernmentand the private sector in the course of theplanningprocess,aswellastheannouncementofthe planned final indicators constitute animportant communication process within theeconomy thathelps to form the general state ofeconomic expectations [...]Overall,whatmattersisnotwhether the forecastwill be realized,butrather that a single indicator ofmacroeconomicforecasting is proposed to serve as a frame ofreference for individual firms’ investment plans.(Aoki,1984,pp.32­36)

109ItisimportanttonotethatthisdescriptionofMarx’ssocialhistoryofhumanity (originating in primitive communism, going through theancient, feudal, and capitalist modes of production ending up in[scientific]communismagain)isnotnecessarilyteleological,assomecriticsof theGermanphilosopherhad it.Communismwasnotanaprioridirectiontowardswhichallpasthistoryofmankindwasguided.In studying the internal and intrinsic contradictions of capitalism,Marxcame totheconclusion(aposteriori)that thesecontradictionswould lead to the specific direction of ending the anarchy of thatmode of production. This direction (about which he made onlygeneral considerations, not trying to create detailed speculativeschemes of the future society) he called communism (whose firstlowerstagewouldlaterbecalledsocialismbyLenin).

110Marx,1961­1971a,p.9.111 Engels also strongly emphasized that the aim of the communist

movement was not merely to create a classless society (after all,primitive communismwas also a classless society...) but to create aclassless society that was at a productively higher level thancapitalism,togetoutoftherealmofnecessityand into therealmofabundance for all. Thus, in the article “On the SocialMovement inRussia” (1875), in which he even discussed the possibility ofrevolutioninthatcountry,Engels(1961­1971a,pp.556­557)stated:

The revolution thatmodern socialism strives toachieve is, briefly, the victory of the proletariatover the bourgeoisie and the establishment of aneworganisationof societyby thedestructionofall class distinctions. [...] Among savages andsemi­savages there likewise often exist no classdistinctions,andeverypeoplehaspassedthrough

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suchastate.Itcouldnotoccurtoustore­establishthis state, for the simple reason that classdistinctions necessarily emerge from it as thesocialproductive forcesdevelop.Onlyatacertainlevel of development of these social productiveforces, even a very high level for our modernconditions, does it become possible to raiseproductiontosuchanextentthattheabolitionofclassdistinctionscanconstituterealprogress,canbe lasting without bringing about stagnation orevendeclineinthemodeofsocialproduction.

112On thepossibilityof revolution inbackwardRussia,Marx (togetherwith Engels)wrote in the preface to the 1882 Russian edition of theCommunistManifesto:

IftheRussianRevolutionbecomesthesignalforaproletarianrevolution in theWest,so thatbothcomplement each other, the present Russiancommon ownership of land may serve as thestarting point for a communist development.(Marx&Engels,1961­1971b,p.576)

OrEngels’mostdirectstatement inthequestion­and­answertextThePrinciplesofCommunism:

[question 19]: Will it be possible for […]revolutiontotakeplaceinonecountryalone?

[answer] No. By creating theworldmarket, bigindustryhasalreadybroughtallthepeoplesoftheEarth, and especially the civilized peoples, intosuchcloserelationwithoneanotherthatnone isindependent of what happens to the others.(Engels,1961­1971,p.374)

Similar idea,although formulated atamore generaland theoreticallevel, is found in The German Ideology,written jointly byMarx andEngels. When referring to the prerequisites for overcoming thephenomenon of alienation (entfremdung) through communism, theauthorsemphasizedthat:

[…]agreatincreaseinproductivepower[…]isanabsolutely necessary practical premise becausewithoutitwantismerelymadegeneral,andwithdestitution thestruggle fornecessitiesandall theold filthy business would necessarily bereproduced;and furthermore,becauseonlywiththisuniversaldevelopmentofproductiveforcesis

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auniversal intercoursebetweenmenestablished,whichproduces inallnationssimultaneously thephenomenon of the “propertyless” mass(universal competition), makes each nationdependent on the revolutions of the others, andfinally has put world­historical, empiricallyuniversal individuals in place of local ones.Withoutthis,(1)communismcouldonlyexistasalocal event; (2) the forces of intercoursethemselvescouldnothavedevelopedasuniversal,hence intolerable powers: they would haveremained home­bred conditions surrounded bysuperstition; and (3) each extension ofintercourse would abolish local communism.Empirically, communism is only possible as theact of the dominant peoples “all at once” andsimultaneously,whichpresupposes theuniversaldevelopment of productive forces and theworldintercourseboundupwithcommunism.(Marx&Engels,1961­1971d,pp.34­35)

113Itisinterestingtonotethatthis“economic­technological”biaspresentinMarxand (strongly) inTrotsky isalso found inseveralBolshevikwritings,includingLenin’sandStalin’s.Althoughtheydonotplacetheexistence of socialism in itself unidirectionally dependent on thedevelopmentofproductiveforces,inseveralpassagesbothemphasizethat thisdevelopment isan essential condition forat least the finalvictoryofsocialismovercapitalism.Forexample,inhis1919text“AGreatBeginning:Heroism of theWorkers in the Rear (ConcerningCommunistSubbotniks),”Leninwrote:

In the last analysis, productivity of labour is themostimportant,theprincipalthingforthevictoryof the new social system. Capitalism created aproductivity of labour unknown under serfdom.Capitalismcanbeutterlyvanquished,andwillbeutterly vanquished by socialism creating a newandmuch higher productivity of labour. (Lenin,1967­1970h,p.21)

Stalin, inhis1929article “Yearof theGreatTransformation:On theTwelfth Anniversary of the October Revolution,” quoted Lenin’spassageaboveaddingthat:

[...] only the labour enthusiasm and zeal of thevast masses can guarantee that progressive

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increaseoflabourproductivitywithoutwhichthefinal victory of socialism over capitalism in ourcountry is inconceivable. (Stalin, 1946­1951c, p.120)

114 AccordingtoBahro (1980, p.21), It is not justified to call them [the countries of

actually existing socialism] even “pre­socialist”(by analogywith the firstphaseof the capitalistepoch.) Pre­capitalism already contained in itselfthe fundamental germs of the capitalist socialformationasitshowsitselfinitsadvancedstages,whereas [in the countries of actually existingsocialism] socialization, which is a definingcharacteristic of socialism, remains totallymasked in the form of “statism.” The mostappropriate term would be that of “proto­socialist,”that is,[inthem]socialism isstillatanembryonicstage.

115“Itwouldbetruer,therefore,tonamethepresentSovietregimeinallitscontradictoriness,notasocialistregime,butapreparatoryregimetransitionalfromcapitalismtosocialism.”(Trotskii,1936,p.62).

Trotsky'spositionseemstousmoreinkeepingwiththeSovietrealitythanthepositionofR.Bahroexpoundedinthenoteabove.Weagreewith Bahro when he says that socialism in the USSR was “in anembryonic state.” We disagree with his position on thenationalization of themeans of production of theUSSR, contrastedwitha“true”socializationof thesemeansofproduction.Webelievethat,within the historical conditions of capitalism in the twentiethcentury, nationalization, carried out in a revolutionary context ofalternative opposition to private capitalist property, is one of thepresuppositions or stages necessary to reach a true (radical anddemocratic)socializationofthemeansofproduction.

116We have placed this position in contrast to the currents thatKevinKelly (1985, pp. 51­71) identified as being heir to the originalconceptionsbyKautskiandStalin,thatis,thosewhoregardtheSovietsystemeitherasa formofstatecapitalism(inthewakeofKautsky’ssuspicions)orasdefinitelysocialist(followingStalin).

117Thisisnottosaythatthetheoryofpermanentrevolutionaffirmstheexistence of homogeneous capitalism and its absolute dominationover theworld economy. On the contrary, the notion of the law ofunequal development is an integral part of it. According to this,differentpartsof theworldareatdifferentstagesofdevelopmentof

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modes ofproduction.Capitalism(dominant)bringswithittendenciesto homogenization (aspects of the more advanced societies aretransferred to themostbackward,etc.).But inequalitycontinues,asevidencedbytheoccurrenceofcountriesthatcombinetheexistenceofa capitalistindustrialization withpre­capitalistforms ofproductionin other areas of the economy. The historical process flows withjumps, combining the existence of the old and the modern. Thisinterconnection makes possible even the outbreak of a socialistrevolution first ina relatively lessadvanced country (with capitalistelementsmerged with other elements), butmakes it necessary tocomplementitwithrevolutionsintheadvancedcountriessothatthetheinitiallevelofthesocialistrevolutionis,onaworldwidescale,fromthe beginning, equal or superior to that of the advanced capitalistnations.(Trotskii,1932,vol.1,pp.5­6;Trotskii,1936,p.61)

118In1917,inhispamphletTheImpendingCatastropheandHowtoFightIt,Leninstated:

TherevolutionbrokeoutinRussiaearlierthaninother countries. The revolution has resulted inRussiacatchingupwiththeadvancedcountriesina fewmonths, as far as her political system isconcerned. But that is not enough. The war isinexorable; it puts the alternative with ruthlessseverity:eitherperishorovertakeandoutstriptheadvanced countries economically as well. [...]Perish or forge full steam ahead. That is thealternativeputbyhistory.(Lenin,1967­1970e,p.198)

Stalin also emphasized that the fate of the USSR was intrinsicallylinkedtotheresultsofherperformancevis­à­vistheadvancedWest.Forexample,inhis1933reportTheResultsoftheFirstFive­YearPlan,commenting on the policies employed to launch the process ofindustrializationinthe1930s,hestated:

Was the Party right in pursuing the policy ofacceleratingdevelopmenttotheutmost?

Yes,itwasabsolutelyright. Itwasnecessarytourgeforwardacountrywhich

was ahundredyearsbehindhandandwhichwasfaced with mortal danger because of itsbackwardness.Onlyinthiswaywasitpossibletoenablethecountryquicklytore­equipitselfonthebasis ofmodern technique and to emerge on tothehigh roadat last.Furthermore,we couldnot

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know justwhenthe imperialistswouldattacktheU.S.S.R. and interrupt ourwork of construction;but that they might attack us at any moment,taking advantage of the technical and economicweakness ofour country—of that there couldbeno doubt. That iswhy the Partywas obliged tospurthecountryon,soasnottolosetime,soastomaketheutmostuseoftherespiteandtocreateintheU.S.S.R.thebasisofindustrialisationwhichisthefoundationofitsmight.ThePartycouldnotafford towait andmanoeuvre; it had to pursuethe policy of accelerating development to theutmost.

Finally,thePartyhadtoputanend,intheshortestpossible space of time, to the weakness of thecountryinthesphereofdefence[...](Stalin,1946­1951f,pp.183­184)

ThismentalitythatthefateoftheUSSRwasinextricablylinkedtoitsperformance in the fieldof competition,mainlyeconomic,with thecapitalist system permeated the thinking of the Soviets and foundexpressioninvariousdocumentsoftheparty.Thus,in1961,whentheXXIICongressof theCPSU establishedaprogram thatprovided forthetransitionfromsocialismtocommunismintheUSSRin20years(inchronologicalterms),itwasstatedintheadoptedresolution:

TheSovietUnionhasalreadysurpassedthemostadvancedcapitalistcountry,theUnitedStates,notonlyintermsofratesofrelativegrowthbutalsoofabsolute growth of industrial production [...]Fulfilling theseven­yearplanwill lead theSovietUnion tosucha time that itwillnot take long tosurpass the USA also in per capita production.This will be the world historical victory ofsocialismover capitalism. (KPSS,1983­1989h,p.68)

The very passage from socialism to communism, a process inprincipleinternaltotheUSSR(withinthevisionoftheconstructionof“socialisminonecountry”)wasoftendefinedincomparativetermstotheadvancedcapitalistfieldintheresolutionsoftheXXIICongress:

The main economic task of the party and theSoviet people consists in the foundation of thematerial and technicalbasisof communism in aperiod of twenty years [...] In this way, the

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communistsocietywillbebuiltingenerallinesintheUSSR [...] ]The creation of thematerial andtechnical basis of communism [...] requires thedevelopment of heavy industry. The otherindustrial branches will be re­equipped based onit [...] From this point of view, the CPSUdetermines to increase the volume of industrialproduction [...] by at least six times in twentyyears, well ahead ot the general levels of USindustrialproduction[...](KPSS,1983­1989h,pp.128­130)

As we see, the mentality of the Soviet leaders, consciously orunconsciously, has always been permeated by the notion that thedevelopmentoftheircountrywoulddependontheirrelations,mainlyeconomic,with the capitalist camp.There seemed tobea seriesofconcentriccircles inwhichthecoreofthedevelopmentoftheSovietcampwas seen, first in economic competitionwith theWest, andwithin thiseconomic field theroleof industrywasemphasized asadecisivefactor.InStalin’sownquotationabove,heputstheindustrialbaseasthe foundationofallpower(includingmilitary)oftheUSSR.Therefore, inanalyzingperestroika,weemphasize the technologicalquestion,which, fromthe1960sonward,withtheweakeningoftheextensive factors of economic growth,became crucial todetermineSoviet industrialdevelopment,and fromthere(withinthe logicof itsleaders),thedevelopmentofotheraspects(political,social,etc.)ofthecountry’slife.

119ForaliteralstatementbySovietleadersthatinthemid­1980sasystemreform had become “not only necessary but inevitable,” seeGorbachev(1988,p.17).

120 It canbeargued that in theStalinistperiod the relatively successfulstrategy was precisely this: to isolate itself from the capitalisteconomy, to try to develop through autarchy. Paradoxical as itmayseem,inourview,thisdoesnotinvalidatethethesisofthepermanentrevolution. In using the strategy of closing itself within the USSR,attempting to develop socialism there through “forced”industrialization,Stalinneverlostsightofthenotionthatthesurvivaland development of socialism toward communism in the long run,woulddependontheirperformanceinthebattleagainstthecapitalistcamp.TherelativeautarchydesiredbyStalincouldbeseenasatacticfor victories in the World System arena in the future. And whatbrought about the permanence of this “semi­autarchic” Stalinistsystem formany yearswasexactly its efficiency in the competition

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withtheadvancedWest.DuringtheStalinistera,anduptothe1960s,the Soviet regime was able tomaintain this type of development,apparentlyautarkicandparallel to thecapitalistcamp,because thisstrategymadepossibleagreatdevelopmentofSovietindustry,eveninrelation tothe capitalistfield. Until the 1960s,the productivitygrowthrates of Soviet industrywere higher than those ofmost advancedcapitalistcountries.Fromthetime(late1960sandearlymid­1970s)wheneconomicgrowthandproductivitygrowthdeclinedrelative tothe capitalist camp, the situation changed and there appeared theneedforchangeinthestrategy.

What we want to draw attention to here is that these needs forchange were made pressing since the mid­1970s not so directlybecauseof the internalsituationof theUSSR—which,even in the1980s,hadgrowthratessimilartothoseofUSA—butbecauseofthecomparativesituationoftheUSSRinthecompetitionwithcapitalism(in a struggle forWorld Systemhegemony, theUSSR,becauseof itslowerinitialposition,hadtogrowatlevelsmuchfasterthanthoseofthecapitalistcampinordertominimallycatchupwithit).

121Muchofouranalysisofperestroika isbasedon theassumption thatthe USSR could not be examined separately from theWorld Economy.Thus all the transformations of the time of the Scientific­TechnicalRevolution in theWest (the emergence of post­Fordist forms and newflexible production paradigms, the information revolution, etc.) directlyaffectedtheSovietUnion. Whatbound theUSSR to everything thathappened abroadwasnot simply a system of exchanges (economic, political, ideological, etc.)between watertight compartments. In fact, to see how theinterconnection between the various parts of the World System wasrealizedatadeeperunderlyinglevel,weneedtouseconceptsofpoliticaleconomy. InDasKapital,Marxdemonstratedhowthelawofvalueultimatelyregulates theproductionandcirculationofcommodities in thecapitalisteconomy.Preobrazhenskii(1965),writingduring theNEPperiod in the1920s,described that inarevolutionarybutrelativelybackwardsocietysuch as the Soviet one under NEP, where a considerable part of theeconomywasalreadynationalized,but therewas still space forprivateproduction(mainlyinagriculture),acertaindualitywasestablishedinthesystem.Theprivatepartoftheeconomywasstillregulatedbythelawofvalue,as incapitalism.However, thestatepart(due tothecontrolofthemeansofproductioninthehandsofthestate,withtheconsequentpriorplanning of the activities) began to function according to new rulesoriginating in the new (socialist) social formation. Studying the Soviet

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case,Preobrazhenskiipostulated that the state sector followedwhathecalled the law of primitive socialist accumulation. By this law, heunderstood

[…] the entire sum of conscious and semi­spontaneous tendencies in the state economywhich are directed towards the expansion andconsolidation of the collective organization oflabour in Soviet economy [… They involve] thedeterminationofproportionsinthedistributionofproductiveforces,formedonthebasisofstruggleagainst the law of value inside and outside thecountry and having as their objective task theachievement of the optimum expanded socialistreproduction in the given conditions and of themaximumdefensivecapacityofthewholesystemin conflictwith capitalist commodity production[...](Preobrazhenskii,1965,p.146)

ForPreobrazhenskii,theSovietstatesectortendedtoescapefromthe“dictatorship”ofthelawofvalueandtobeincreasinglyregulatedbyconsciousplanningaimedatstrengtheningtheexpandedreproductionofthesocialistproductionsystem.Forexample,loss­makingfirms,whichincapitalismwouldbeforcedtoclosetheirdoors,could,intheSovietsystem,bekept inoperation(becauseof theirstrategicvalue, forexample).Theconscious elements begin to operate at an ever­increasing level andactivitieswillbeplannedinordertoincreasetheexpandedreproductioncapacity of the socialist economy. In capitalism (a system withoutplanning centersof allproductive activity), the lawof value,directlyorindirectly,providesfortheregulationoftheequilibriumofthesystem. Thus, in the 1920s, Preobrazhenskii saw the SovietUnion as adualsystem inwhich the lawofvaluebasically regulatedprivate sectorexchanges, and the law of primitive socialist accumulation increasinglyregulated the state sector. Obviously, the compartments were notwatertight.Thelawofvaluealsoaffectedthestatesector,sinceitboughtfrom and sold to the national (and international) private sector. TheSoviet private sector was influenced by the law of primitive socialistaccumulationwhenthegovernmentusedcreditinstrumentstoimposeitspriorities, etc. Basically, Preobrazhenskii then saw these two laws inintrinsicconflictwitheachotherandhopedthat,overtime,andwiththenationalizationofeverlargerpartsoftheeconomy,thelawofvaluewouldloseitsregulatoryimportanceintheUSSR. After the 1930s, once agricultural collectivization andindustrializationhadtakenplace,thesituationwasdifferent.Whileduring

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theNEP,mostofthepopulation(thefarmers)wereinaprivateinitiativemode,afterthe1930smostoftheeconomicactivitywasinthehandsofthestate.Inthe1950s,whendiscussinganewofficialmanualofpoliticaleconomy, Stalin (1952, pp. 12­22) made considerations about theoperation of the law ofvalue in the Soviet system in his book EconomicProblemsofSocialismintheUSSR. Accordingtohim,wherethereiscommodityproduction,thelawofvaluewillact(Stalin,1952,p.18).Commoditiesaregoodsproducednotfor immediate use but for exchange (sale) (Marx, 1961­1971b, p. 55).Stalin (1952, pp. 16 and 18) conceded that, in the USSR, personalconsumer goods circulated as commodities. They were sold andaccountedforascostsandexpenditures,andnotbymeansofaplanned,direct distribution “according to needs” (for immediate use) thateliminates the intermediation of money, etc. In addition, kolkhozy(collective farms)werenotstateproperty—suchasthesovkhozy(statefarms,where the peasantswere direct government employees)— butagricultural cooperatives. Members of the kolkhozy produced goodshoping, through the sale of food, to obtain the highest possible profit,whichshouldbedividedamong thecooperators.This isnot tomentionthesaleinthekolkhoz freemarketsofprivateproductioncarriedoutonthepersonallotstowhicheachmemberofthekolkhozwasentitled.Stalin(1952,pp.18and19)arguedthatthelawofvalue“withincertainlimitsexerts a regulatory function” in the sphere of the circulation ofcommodities,mainlyconsumergoods,intheUSSR—this,inturn,ledtothefactthatthislawwouldalsohaveinfluenceinthesphereofproductionofthesesamecommodities.Inareaswheresocialiststateregulationwaspracticallycomplete,forexample,distributionofthemeansofproductionand of the labor force among the different sectors of the nationaleconomy, the effect of the law of valuewould beminimized (or evenannulled), since these were functions exercised exclusively by theplanningorgansofthecountryonthebasisoftheoperationofwhattheSoviet economists called “the law of harmonious and planneddevelopmentoftheeconomy.”(Nikitin,1983,p.312). Stalin, in his 1952 book,made a point of emphasizing that theexistenceofcommodityproductionintheUSSRdidnotmeanthedangerofacapitalistrestoration:

Commodity production is older than capitalistproduction.Itexistedinslave­owningsociety,and[…] in feudal society.Capitalistproduction is thehighest form of commodity production.Commodityproduction leads to capitalismonly ifthere is private ownership of the means of

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production,iflabourpowerappearsinthemarketas a commodity which can be bought by thecapitalist and exploited in the process ofproduction[...](Stalin,1952,pp.15­16)

The existence of circulation and commodity production in keysectors showedhow the law of value still exerted influencewithin theUSSR.Anditispreciselythroughthe“bridge”ofthiscommonunderlyingchannelbetween theUSSRand the restof theWorldEconomy that theinterconnectionbetweenthefieldsofcapitalistcountriesandthoseoftheso­calledactuallyexistingsocialistcamp is tobeunderstood.Directlyorindirectly,thelawofvalueregulatedthefunctioningofdistinctlycapitalisteconomies and influenced, in key fields, the functioning of the actuallyexistingsocialistcountries.NomatterhowmuchStalinandotherSovietwriterstriedtoemphasizethelimitationsofthevaluelawintheeconomyof the USSR, the fact that the development of productive forces(“ultimatelytheleveloflaborproductivity”)waslowerintheSovietUnionthan in advanced capitalist countries had direct consequences on thecorrelation offorcesofregulationoftheworldeconomyasawhole(andinitsdifferentconstituentparts).Thevalueofgoodsproducedinthemoreadvanced,more productive economies ultimately establishes the basicparameters by which the realization of the values of goods producedelsewherewillbeguided.HowevermuchtheSovietUniontried,througheconomic autarchy, to avoid thedirect influenceof foreign goodson itsinternalmarket, its position of competitionwith theWest forced it toadapt and try to achieve the superior productivity conditions of theadvancedWest. In fact, a certain vicious circle gripped theUSSR.WithlowerlaborproductivitythantheadvancedWest,itwasunabletoachievetotal autarky and domination by the (socialized) state sector of theeconomyasawhole.And,without thisadvancementof thestatesectorover theremnantsofcommodityproduction in itseconomy(so that thelaw of valuewas superseded by the new laws of “conscious” socialistregulation of production), the law of value continued to influenceimportantsectorsoftheeconomy,preventingthecountryfromachievingafulldegreeofsocializationandleavingitvulnerabletopartialregulationbygoodsproducedelsewhereintheworldeconomy. This is the explanation, in terms of political economy,whyweshouldnotseetheactuallyexistingsocialistcountriesandtherestofthecapitalist countries as two watertight blocs in competition with eachother.TheWorldEconomyestablishedasinglelocus,stillhegemonizedbycapitalismbutratherheterogeneous,containingelementsofothermodesof production (pre­capitalist forms still survived in parts of somebackwardcountries,“embryos”ofsocialismcouldbefoundinthecampof

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the actually existing socialist countries etc.).Butprecisely because thiswasalocuscommontoallthesedifferentformations,noneofthemcouldbeseen ina totallyseparateway fromoneanother.Hence the fact thatdevelopmentsinthecapitalisteconomyduringtheperiodoftheScientific­Technical Revolution had consequences alsoin the sphere of the actuallyexisting socialist countries. Therefore, perestroika must be analyzedwithinthecontextoftheWorldSystemasawhole.122 Luís Fernandes, in his excellent book URSS: Ascensão e Queda,presented comparative data about rates of growth of production andproductivity in the USSR and in severalWestern countries, using datafromaSovietcomparativestudyconductedbyIMEMO(InstituteofWorldEconomy and International Relations) of Moscow after the onset ofperestroika.

AccordingtoB.Bolotin,industrialgrowthintheUSSRfrom1913—whenitwasstilltsaristRussia— up to 1950 was higher than that of anycapitalist country. Soviet 1950 output was 4.5times that of 1913 (against 3.5 from Japan, 2.9from the USA, 2.4 from Italy, 1.5 from GreatBritainand1.4fromGermany)[...]Fromthepointofviewofindustriallaborproductivitygrowth,theUSSR also had the highest rate in the period—200% — although with a less pronounceddifference in relation to capitalist countries: therates were 185% in Japan, 180% in the USA,195%inItaly,115%inGreatBritainand110%inGermany.Thefactthatthedifferenceintheratesof industrial labor productivity growth is lowerthan in the economy as awhole reveals exactlythat the basic impulse for the elevationof sociallabor was the process of extensiveindustrialization [...Things change in the secondhalfofthecentury]WhereasindustrialproductionintheUSSRwas10.1timeshigherin1987thanin1950, that of Japanwas 21.1 times higher. Thegrowth of industrial production of the othercapitalist powers in the period was slower: 2.5timesintheUSA;6inItaly;1.94inGreatBritain;and3.9inGermany[...]Fromthepointofviewoflaborproductivitygrowth,from1950to1987,theSoviet Union, with an increase of 359%, wasbehindnotonlyofJapan(968%)butalsoofItaly

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(452%)andGermany(388%);itremainedaheadof theUSA (210%)andofGreatBritain (272%).The data for industrial labor productivy growthbasically follow the same pattern. (Fernandes,1991,pp.263­264)

These data cited by Fernandes can be found, in their completeversion, inBolotin (1987).Someof thesearealso found inAppendix4.How toevaluate thesenumbers?Are theynot incontradictionwithourclaimsthattheUSSRhadlaggedbehindinthetechnologicalcompetitionwiththeWestafterthe1960s?Afterall,thegrowthoflaborproductivityin its industry in the1950­87periodhadbeengreater than thatof theUSA! The key to the issue is that in the 1950s (mainly) and also in the

1960s, theUSSRmaintained relatively high levels of growth (belowonly Japan).ButalthoughtheSTRhaditsinitialperiodinthe1950s(creation of computerization), it sharpened in the 1960s (thebeginningofthefusionofcomputingwithrobotics)andcompleteditsbasic framework in the 1970s (forming the “Third RevolutionIndustrial”) when computing and robotics were associated withgeneralizedtelematics(throughmicroelectronics).Itwaspreciselyinthemid­1970s,when this formative cycle closed, that the economicstagnation of the USSR became apparent. After 1975 its economicgrowthplummetedtobelow5%annually,nevertorisesubstantiallyabove thismark. Thus, as Fernandes (1991, p. 263) remarked, therelativelygoodresultsoftheSovietUnionintheperiod1950­87aremainlyexplainedbythe1950­75period.AccordingtoPitzer&Baukol(1991,p.61),theincreaseinlabor productivityintheUSSR’sindustrywas larger than thatof theUSA in theperiod1961­75 (3.5vs.2.9),butlowerintheperiod1976­82(0.9against1.6).Fromthenonthedifference in favor of theUnited States increased evenmore.Withthesedata,wewant tocorroborateour thesis that thedeepeningoftheSTRcausedthefallintheeconomicindexesoftheUSSR.Ifinthe1960s and early 1970s the old (largely extensive) Soviet growthmethods could still, even at a slower level, “compete” with the“Fordist”West, from themid­1970sonward,with theheightof the“ThirdTechnologicalRevolution,”thisbecameimpossible.Somethinghadtobechangedinthesystem.Moreover,thetemporalcorrelationabove fits well with our view of the phenomena of Fordism andToyotismwithintheSTR.JustasthedeepeningoftheSTRmarkedthedeepening of theproblems of the Sovietmodel, it also recorded thesupremacyofflexibleparadigms(especiallyToyotism)overtherigidFordist paradigm. The 1950s represented the initial part of STR

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(computing);intheUSSRthegrowthratesthenwerehighbutnotashighasbefore,while in JapanToyotismbegan to take its firststeps.The decade of the 1960s enlarges STR with robotics, marks thedefinitive formation and consolidation of Toyotism and theappearance of visible problems in the Soviet extensive model. STRreachesitsrelativelydefinitivecontoursinthe1970s(withtelematicsand microelectronics); the mid­1970s also demonstrate theundisputedproductivesuperiorityoftheToyotistparadigmovertheFordist (in this phase of the “stagnant wave” of the ThirdTechnologicalRevolution).After1975, thegrowthratesof theUSSReconomy fall below 5% per annum to never recover substantiallyabovethatmark(leavingthecrisisphaseofthesystemvisible).As wehavesaidbefore,itisnotamatterofmerecoincidenceintime,butofphenomenathatareinterconnected.

123With theopeningprovidedbyperestroika,someof the formerSovietmilitary secretswerebrought to the surface.Thus in1987FinanceMinisterBorisGostevadmittedthatthevalueofthe“defense”itemofthatyear’sbudget(20.2billionrubles)coveredonlythemaintenanceand infrastructure costs of the armed forces (wages, pensions,repairs, etc.), excluding expenditures for military industrialproduction, weapons R & D and others. This confirmed an oldsuspicionofWesternscholars:thattheUSSR’sofficialdefensebudgetprobably represented only the operational and maintenanceexpensesofthearmed forces,whereastheotherexpendituresweredisguisedamong theothergeneral itemsof industryandscience inthebudget.Eventhisbasis intherealityofthedefensebudgetmustbecautiouslyaccepted,forlateranarticlebyDefenseMinisterMikhailMoiseevimpliedthatsometimestheSovietleadershipevendisguisedthedirection(increaseordecrease)ofofficialmilitaryexpenditures:

The Soviet state, confronted with the worldpolitical­militarysituationandtheneedtoresolvethecomplextasksoftheconstructionofsocialismquickly,wasforcedtohideinformationaboutthestate of financing of the defense and about thetendencies of variation in thisprocess.Thiswasjustifiablebothwhen theabsolutedimensionsofthe budget were diminished and when (as aconsequenceofthe intensificationofthemilitarythreat to our country) they were increased.(Moiseev,1989,p.5)

124Table8.3ofAppendix8presentsestimatesofmilitaryexpendituresoftheWarsawPact,NATO,USSRandUSA.WenotetheUSSR’sattempt

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tomaintainherparity(togetherwiththeWarsawPact)inrelationtothearmsracewiththeUSA(andNATOingeneral).Fromthetable,weseehowtheSovietUnionalonewasresponsibleforthevastmajorityoftheWarsawPact’sexpenditureasawhole.Ifwetakeintoaccountthatthe SovietGNPrepresented 50to65percent of the American (inthemid­1980s),weseehowthemilitaryburdenweighedmuchmoreontheUSSRthanontheUSA.

125For a thorough critique of the inconsistencies of the CIA estimaterevisions, see Holzman (1989). The author raises suspicions ofpoliticaluseoftheagency’sstatistics.

126 A comparative study of the technological­military race between theUSSRandtheadvancedWesterncountries,carriedoutbytheCenterforRussianandEastEuropeanStudies (CREES)of theUniversityofBirmingham inGreatBritain,summarizedsomeofthemainaspectsofthecomparativetechnologicalleveloftheSovietdefensesector:

[...] the military­technological relationshipbetween the Soviet Union and the advancedcapitalistcountrieshaschanged[...]Inthe1930s,the Soviet Union created the largest tanksproduction industry in theworldandsomeof itsdesignsfortankswereamongthemostadvanced.In the 1940s and 1950s, Soviet tanks weresuperior to most Western tanks. In the 1960s,however,Western powers created severalMBTs(MainBattleTanks) that dispelled the leadershipof the Soviets in this area. In the 1970s, theSoviets balanced the situation. As for rocketresearch,theSovietswereamongthepioneersinthisfieldinthe1920sand1930s.After1945,theUSSR embarked on a ballistic missile programbased on the technology captured from theGermans.Inthe1950s,theSovietUnioncalledfortwo important achievements: the first successfulexplosion of anuclear fusionbomb and the firstsuccessfull experimental flight of an ICBM(Intercontinental Ballistic Missile) [...] In the1960s , there was an acceleration in thedevelopmentofAmerican ICBM technologies thatlefttheSovietUnionfarbehind.Inthe1960sandearly1970s,theSovietUnionintroducedtwonewgenerations of ICBMs that helped to bridge thetechnology gap. Thus, the relationship between

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thetechnologicallevelofthetwosideshasvaried.(Holloway,1982,pp.276­277)

The CREES study only reached the 1970s. In 1987, a similarcomparativeassessmentwasmadebytheUSDepartmentofDefense.In20 areas of basic technologies (withpotential for militaryuse),theUSled15fields,theUSSRnone,andtiedfor5(optics,energysources,conventionalexplosivecharge,directedenergyandnuclearexplosivecharge). In the specific area of developed military systemstechnologies,outof31areas,theUSled16,drew10,andtheUSSRled6 (chemical warfare, biological warfare, ballistic missile defense,mines,anti­satellitedefenseandsurface­to­airmissiles). (JEC,1988,pp. 158­160) It is important to note that this assessment referredonlytotheleveloftechnologyitself,and doesnotnecessarilymeasuretheefficiencywithwhichtheseweaponscouldbeusedinpractice.

127 After carefully examiningwhichministries belonged to the variousSovietcompaniesproducingselectedcivilianproducts,Cooper(1986,pp.38­41)concludedthatoftheproductsmanufacturedin1980,thedefenseministries industries produced 100% of the videocassettes,(and approximately) 10% of cars, 30% of bicycles, 47% ofrefrigerators, 35% of washing machines and 33% of vacuumcleaners.

128TheUSDepartmentofDefensesubcontractsa largepartofthegoodsandservices itpurchases toprivatecompanies. In fiscalyear1985,forexample,theDepartmentofDefensebudgetwas$264.2billion.Ofthis total,more thanhalf (150.7billion)went toprivate companiesfor the acquisition ofweapons, vehicles, research and developmentsubsidies,etc.(DepartmentofDefense,1985,p.9;StatisticalAbstractoftheUnitedStates1987,p.298)

129 In thedecadeprecedingperestroika (1975 to1985), thevalueofUSarmsexportstotaled$103.5billion(at1983prices).Thisequaled(inconstant1983dollars)abouthalfofBrazil’sGNP in1984! (WMEAT1986,pp.67and139)

130 Although the profit­making potential of the armaments industry issmallerintheUSSRthaninthecountriesoftheWest—wherepartofthe production is carried out by the private sector— it was notentirelynonexistantintheperiodprecedingperestroika.Afterall,theUSSR also exported arms in large scale. It is true that up until the1960stheseSovietarmsalesfollowedalogicmorebasedonideology(export to socialist countries in local currency, supply to nationalliberationmovements etc.) than on commercial objectives, but thisunderwentachangelater.

[From the 1970s onward,] although Soviet

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weapons were still comparatively cheap, therewas a shift from the practice in the 1950s and1960s when the USSR offered big rebates, ten­yearfinancingattwopercentinterestayear,andaccepted local merchandise as a form of payment.Theshiftinthispolicycameinpartinresponsetorisingincomesinoil­producingcountries,someofwhich— Iraq,LibyaandAlgeria—wereamongthe largest buyers of the Soviets. But evenEthiopia, it seems, had to cover itspurchases inhardcurrency.Thenetresultofthispolicywastoimprove the Soviet tradebalance. It is estimatedthat between 1971 and 1980, 65 per cent ofSovietarmssalestothe leastdevelopedcountrieswere in hard currency, and amounted to $ 21billion.(Holloway,1983,p.125)

131Withtherevelationsofperestroika,theamountthatthe“real”militaryexpenditures of the USSR reached in the 1980s became public.Gorbachevhimselfrevealedthem,inaspeechdeliveredin1990inthetownofNizhniyTagilintheUrals:

[...] in the period of the eleventh five­year plan,andeveninthetwelfth[...]theamountofmilitaryexpendituresreached18%ofnationalincome[...](Gorbachev,1990,p.2).

Thus, in the 1980s, military expenditures reached 18% of thenational incomeoftheUSSR.TheSovietconceptofnational income(called“NetMaterialProduct”,orNMP, intheWest)differs fromtheWestern concept of Gross National Product (= total of goods andservicesproduced inacountry),mainlybecause it includesonly thematerial production, excluding the service sector. Thus, taking intoaccount that in1985(according toNarkhoz1990,p.5) theNMPoftheUSSRaccountedfor74.4%ofitsGNP,themaximumof18%oftheNMPtowhichGorbachevreferredrepresented13.4%ofSovietGNPatthetime.

This18%ofNMP(or13.4%ofGNP)wasfourtimeshigherthanthefiguresofficiallypresentedbyRussian leaders in theperiodprior toperestroika.FromTable8.2ofAppendix8,weseethatofficialdefenseexpenditures from the Soviet budget between 1981 and 1985 (theeleventhfive­yearplanperiod)representedjustover3%oftheNMP.

132SomeWesternestimates,followingthecurveofofficialSovietestimates,noteasmallrecoveryasearlyas1939­40,afterthesmallergrowthof1938(see,forexample,Moorsteen&Powell,1966,pp.622­

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623).

133 Even in the consumer sector — where the problem of militaryspendingisoftenposedasaguns­versus­butterdilemma—thelevelofpercapitaconsumptionintheUSSRseemedtobemorerelatedtoother factors such as, for example, agricultural performance — thedevastatingeffectsontheSovieteconomyofthebadharvestyearsarefamous!—ratherthanincreasesanddecreasesinmilitaryspending.(Cohn,1970,p.174)

134 Some econometric studies seem to confirm the thesis that defensespending,whilerepresentingaconsiderableburdenontheeconomy,wasnotbe themaincauseof theeconomicslowdownof theUSSR.Becker, in his 1985 review of threeWestern econometric studiessimulatingsubstitutionofcivilianinvestmentformilitaryspending—Hopkins/Kennedy (1982), Wharton Econometric­SOVMOD (Bond,1983), and Hildebrandt (1983) — came to the conclusion thatwithoutaresolutionoftheproblemofthestagnationofproductivityintheeconomywhichtheUSSRhadsufferedinthe1970sand1980s,adecrease indefensespendingwouldhave littlepracticaleffectonarenewedaccelerationofSovieteconomicactivity:

Theimportanceofthisconclusionisemphasizedifwe consider the magnitude of [economic]improvementresultingfromadecreaseindefensecosts. The various simulation studies generallyagree that the growth benefits of limiting theincrease in military spending are limited.Althoughthedefensebudgetis large,thechangespostulated in these studies and themagnitudeofthe actualdeceleration of [military] expendituresarerelativelysmallincomparisontotheimmensevolume of fixed capital of society [...] Thedifference between military expenditures heldafter 1976 at an assumed rate of 4,5% and thelimited rate [of the studies] would have totaledaround 37 billion rubles in 1982 [...] If thisamount consisted entirely of materials andequipment that couldbe easily transformed intoinvestment resources, [...] industrial investmentwouldhave increasedby13% in thisperiod,butthis would have added only 6% to the value offixedindustrialcapitalatthe endof1981[…]

Thuscuts[inmilitaryexpenditures]wouldhavetobe more substantial and prolonged in order to

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have amore significant impact on GNP growthrates. Depending on how these economies arereallocated, the effects on consumption could bemore apparent. Assuming that cuts in militaryorder expenditures were allocated to capitalformation,Hildebrandtwas themost pessimisticamong the studies cited, estimating that if thedefense budgetwere frozen at the levelof1980,an annual increase of only 0.5% in per capitaconsumption would be obtained. Hopkins andKennedyweremoreoptimistic:intheirstudy,thefreezing of the defense budget would yield anincreaseinpercapitaconsumptionof1%.Onlyifthe reduction in military spending wereaccompanied by other measures that wouldincrease theproductivity of resources inuse [...]the effects would have been substantial even inthemediumterm.(Becker,1985,pp.32­33)

Thus,thekeytotheproblemsofeconomicdownturnwas insolvingtheproblemofstagnationinproductivityfromthe1970sonward,notdefensespendingper se. Inotherwords, ifproductivity increased, itwouldbepossibletohaveascenario—whichinfacthappenedinthe1930s,1950sand1960s—wherean increase inmilitaryspendingcouldbecombinedwithanincreaseinconsumptionandinvestment.Since Soviet productivity was stagnant after the 1970s (or evendeclining, according to some Western authors), defense spendingbecame a very heavy burden.However, itwould not suffice to cutmilitary spending if the root of the problem — stagnation inproductivity — was not solved. This is one of the reasons whyGorbachev’ssubsequenteffortstocarryoutmilitarybudgetcutsandthereconversionofmilitaryindustriesintocivilianindustriesdidnotyieldthedesiredresults.

135Forexample,inKhrushchev’swords: Now,letmespeakalittleaboutwarandpeace[...]

Ofcoursewedonotliketousethelaborofmanypeople inproducingmeansofdestruction insteadof beneficialmaterial goods. But as long as wecoexist in aworldwith imperialist countries, aslongasthemonopolistsopposethe disarmamentagreement,we are obliged tomaintain an armyequippedwith themostmodern equipment andmilitaryweapons[...]

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Recently,wehadtofacethefollowingproblemin

theSovietUnion.Thestatewassellingmeattothepopulationatpriceslowerthanitpaidtocollectivefarms [...] The meat was being sold at a pricebelow the costofproduction.We hadtoraise theprice that the state paid, so that the collectivefarmscouldobtain[profit...]But,wheretoobtainthe [necessary] funds?Of course,we couldhavereduced defense allocations and produced fewerbombs,rocketsandotherweapons. However,wewondered ifthiswouldbeawisedecision.Wouldpeople give us a pat on the back? Like allmembers of the Soviet government and theCentralCommitteeofourparty,Iknewthatwhentheprice ofmeat rises, buyers are not satisfied.Everyonewantsabetterandcheaperproduct.It’snatural.And yetwedecided to raise thepriceofmeat [to the consumer ...] (Khrushchev, 1963b,pp.172­173)

136 This possibility of trade­off would exist only in strategic politico­military terms, in which a policy of general disarmament, withmaintenanceofparity,wouldenable theUSSR to investmore in theciviliansector, trying to transfer thebulkof thesocialism­capitalismcompetition to the economic field. (Khrushchev, 1963a, p. 158;Gorbachev,1987c,pp.148­149)

137Thefactthat,unlikesomeauthors,wedonotconsiderthehighlevelofmilitaryexpendituresasoneof the factors thatcould per seexplainthe specific economic deceleration of the pre­perestroika period inthe USSR does not mean that we do not consider that militaryexpenditures represented a burden on the country’s economicsystem.Theburdenofdefensewasoneofthemainfactorsexplainingwhy theUSSR,despitehavingoneof the largestGNPs in theworld,could not provide her citizenswith a standard of living consistentwiththesizeofthenational incomeproduced.However,aswehavepreviouslyemphasized, thishigh levelofdefenseexpenditurewasaconstant throughout most of the post­1930s Soviet period andtherefore could not serve as an explanation for specific periods ofeconomicdownturn.

138 On the eve of perestroika, the Central Committee commissionedseveralreportsonthebottlenecksofSovietagriculture, the financialdifficulties of the sector, and themeasures that should be taken toovercomethem.TsKhSD,f.5,op.90,d.378containsseveralofthese

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confidentialreportsdatedfrom1984­85(declassifiedin1996).

139Prodrazverstka=compulsoryconfiscationofthepeasants’productionthatexceededtheirfamily’sminimumneedsforself­consumption(anemergencymeasure created by the Soviet government during thecivil war tosecure the supplyoftowns andthe armyduringthe civilwar of 1918­1921). Prodnalog = tax in kind. Under the prodnalogsystem,thepeasantwastogiveoveracertainpercentageofhisgrainproductiontothegovernment,andhecouldselltherestofhiscropontheopenmarket.Establishedin1921,theprodnalogwasreplacedbyaregularcashtaxin1923­1924.(SES,1980,p.1076)

140For thepurposeofcomparisonswiththepre­revolutionaryperiod,theyear1913, in fact, isnot themostappropriate, for itwasabumpercrop year. As we shall see later, Russia’s agricultural productiontraditionally underwent extreme variations due to climatic andnatural instabilities. Ideally, in order to verify the de facto state ofagriculture,bothSovietand tsarist,weshould take theaverageofafewyears.Forexample,ifthebumpercropyearof1913was100,theaverageannualgrossproductionindexfor theperiod1909­1913was88.(Sel’khoz1960,p.23).

141Thequestionof thenet transferofresources fromagriculture to theurbansectorinordertofinanceindustrializationinthefirstfive­yearplans is very controversial. In theWest, the traditional view thatagriculture “financed” industry in thisperiodbegan tobe criticizedafter the1960s (Karcz,1967;Millar,1970 and1974). For adebatebetween proponents and critics of this thesis, see Millar & Nove(1976). For a Soviet attempt to quantify this net transfer (in theperiodofthefirstfive­yearplan)seeBarsov(1968).AmongWesternauthors, Millar (1974) and Ellman (1975) provided alternativeestimatestocheckthoseofBarsov’s(1968).

As AlecNove pointed out, the transfer of agricultural resources tofinanceindustrializationseemstohavebeenlargerinthesecondandthird five­year plans than in the first. (Millar&Nove, 1976, p.58)During the first five­year plan (1928­32), the initial decline inagricultural production caused by the disorganized and violentmanner in which collectivization was carried out, plus the initialinvestments necessary for the installation of the machines andequipmentofthenewlarge­scaleagricultureofthekolkhozy,lessenedthenet income thatcouldbeextracted from theruralsector in thatperiod.Barsov(1968,p.81),basedonthesophisticatedcalculationsoutlinedinhispaper,estimatedthatonlyabout30percentofthecostofSovietindustrializationinthefirstfive­yearperiodwas financedbythe net transfer of agricultural resources. That is to say, without

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externalfinancing,thiswouldmeanthatmostoftheindustrializationeffortof1928­32wasbased(touse theRussianexpressioncurrentat the time) on a rezhim strogoi ekonomii (“regime of stricteconomy”), bywhich therewas an increase in the rate of surplus­productextracted from(urban andrural) labor anddedicated totheaccumulation for expanded reproduction of the country’s industrialbase.Inacapitalisteconomythiswouldbeequivalenttoanincreaseintherateofsurplusvalueusedforproductivepurposes.

142Table9.6showsthatintheperiodof1918­1928,whichpredominantlycovers NEP, of the total investments, 67.5%were dedicated to theconstruction of housing. Of this percentage dedicated to housing,86.7%were financed by the population itself, with the rest beingcoveredbythestate(includingcollectivefarms).(Narkhoz1961,pp.535 and540)Thisdenotes the strong subsistence characterof theNEP agriculture (the peasantry made up the majority of thepopulation), with small­scale, de­capitalized farmers preferring toemploymostoftheirincomesunproductively(i.e.,intheconstructionor improvement of dwellings, etc.) than invest in expensiveequipment and machinery to modify the traditional methods ofplantingandharvestingtowhichtheywereaccustomed.

143Stalin(1946­1951f,p.173),commentingonthesituationgeneratedbyNEP, stated: “The Soviet regime could not for long rest upon twooppositefoundations:onlarge­scalesocialistindustry,whichdestroysthe capitalist elements, and on small, individual peasant farming,whichengenderscapitalistelements.”

144Forexample,giventheyearlyrateofcereal productionintheUSSRinthedecadepriortoperestroika,onecanclearlyseetheriseandfallofyearsofgoodandbadharvest.

Table1.8­Annualgrainproductionindex(average1979­81=100):1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 198675.5 127.1 110.6 138.2 102.5 108.3 89.2 105.8 107.5 94.9 107.1 120.0

Source:FAOYearbook1986,p.46145Table9.1showsthatwhiletheshareofinvestmentsinSoviet

agriculturegrewsignificantlysincethe1950s,theshareofnationalincomegeneratedbyagriculturedeclined.Althoughthiscannotbetakenasconclusivebyitself,itisquitesymptomatic.

146Therewereexceptions,ofcourse,asweshallseelater.HélèneCarrèred'Encausse(1978,p.280),RichardPipes(1977,p.10)andZbigniewBrzezinski (1975,p.31)weresomeof thevoices that,before1985,with greater or lesser vehemence, pointed to the destabilizing

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potentialofcertaininterethnictensionsintheUSSR.

147The fact thatmostSovietandWesternstudiesdescribed interethnicrelations in the USSR as relatively stable in the period prior toperestroikadoesnotmeanthattheywerecompletelymisguided.Thecurrentauthor,whomade 12tripsin the 15Sovietrepublics in 1989­92whenhewasstudyinginMoscow,witnessedthistypeofvisionbya large part of the native population. In his travels, the authorinterviewedSovietsofdifferentnationalitiesandprofessions.Urgedto report how they would describe the relations between thenationalities of the USSR in the pre­perestroika period, the vastmajority of respondents said theywere extremely surprised by theopenoutburst of conflict after1988­89.Thepicturedescribedwasthatmost interethnicrelations in theUSSRremainedata “friendly­to­tolerable” level,and thateven in themostvisibleareasof tension(BaltsversusRussians,ArmeniansversusAzerbaijanis)resentmentsdidnot reach explosive levels, remaining relativelyunder control. Inotherwords,theexplosionofinterethnicconflictsduringperestroikasurprisednotonlypoliticiansandacademicsbutalsoa largepartofthenativepopulationoftheUSSR.

148 It is important to note that the difference between natsional’nost’(“nationality”) and narodnost’ (“subnationality”) is not a purelymathematical, quantitative matter. Natsional’nost’ is used by theRussians todescribe theethnicgroups thatalreadyattainedamoreadvanced and consolidated status, forming a “nation” (natsiya) initself.Narodnost’were theethnicgroups thatwere lessconsolidatedin cultural, territorialand linguistic terms.According to theSoviets,narodnosti are ethnic groups “more developed than the tribes, butthathavenotyet reached the statusofnation.” (SES,1980,p.872)TheSovietconceptof“nation”(natsiya)willbediscussedlater.

149ThiscreatedsituationsastheonewitnessedbythecurrentauthorinMoscow. A Soviet acquaintance of his had German nationality,althoughhehadalwayslivedinRussia,spokeonlyRussian,hadneverbeeninGermany,etc.HewasGermanbecausehisGermanancestors,whomigratedtoRussiaahundredyearsbeforekeptmarryingamongGermanand choosing tokeep theGermannationalityofoneof thespouses.

Theresultof this jus sanguinis is thatDostoievsky’smother tonguedeveloped twowords forcitizensborn inRussia: russkii (pl.russkie)and rossiyan (pl. rosssiyane).RusskiidesignatesapersonofRussiannationality. Rossiyan is any person born in Russia — but notnecessarily of Russian nationality (natsional’nost’). Citizens in thesituationofthe“German”(describedabove)werethen rossiyanebut

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notrusskie.

150Althoughhistorically theUSSR supported the liberationmovementsandwarsofThirdWorldcountries,theSovietsneverplacednationalliberation as an end in itself but as a step in the journey of thosecountries to socialism. It is interesting to note that in the Sovietdictionaries and encyclopedias, the entry “nationalism”(natsionalizm)containedonlynegativedefinitionsoftheterm.Thus,forexample,inS.I.Ozhegov’sdictionary(consideredoneofthemostprestigious and competent Soviet lexicographers), the entrynatsionalizmgavetwodefinitions::

Nationalism: 1. Bourgeois and petty­bourgeoisideology and policy that starts from the idea ofnational superiority and confronts one’s ownnation with others, subordinating the classinterests of workers to the so­called generalnational interests. 2. Form of psychology ofsuperiority and national antagonisms, narrownationalformofthought.(Ozhegov,1990,p.396)

Thus,inSovietdictionariestherewasneverthepositivedefinitionofnationalism (often employed in anticolonial literature) as a“combativestanceagainstforeignimperialistinterests.”Thisabsencereflects the long­standing Bolshevik position that nationalism andnational conflicts are historical phenomena of the capitalist era.(Stalin,1946­1951b,pp.303e305­307)

151Thedefinitionsof“nation”and“nationality”inSovietdictionaries(uptotheeveofperestroika)wereinfluencedbyStalin’sessay“Marxismand theNationalQuestion” (1913,writtenonLenin’sorder toserveas a basis for party discussions on the national issue). In it, Stalin(1946­1951b,pp.296­297)defined that “[A]nation isahistoricallyconstituted, stable community of people, formed on the basis of acommon language, territory,economic life,andpsychologicalmake­upmanifested in a common culture.”He alsomentioned that: “It isonlywhenallthesecharacteristicsarepresenttogetherthatwehaveanation.[...]itissufficientforasingleoneofthesecharacteristicstobelackingandthenationceasestobeanation.”

Thus, while insisting on the fact that nations are “products ofcapitalistdevelopment,”theessay—which,approvedbyLenin,wouldhave a decisive influence on later Bolshevik policies — alsoemphasizedconceptsof“territoriality”and“culture”(amongothers)ascorrelatesnecessary tounderstand theessenceofwhatdefinesanationinitself.(Stalin,1946­1951b,pp.294­297and303)Thiswouldbe reflected, as we shall see, in the policies for the creation of

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“autonomous”regionsinthecountrybasedonethniccriteria,whichwould guarantee nationalities their own territory and culturaldevelopment. Stalin’s formula discussed above would become theclassicaldefinitionof “nation” inSovietdictionariesuntil the1980s.(BSE,3rded., v.17, p. 375;SES,1980, p. 879)

152ItisimportanttonotethatthisterritorialdivisionoftheUSSRbasedon ethnic­national principles— apparently themost “natural” and“logical” — was not unanimously accepted in the party. On theassumptionthatnationsareproductsofcapitalistdevelopment,intheearlyyearsof therevolution,somepartygroups felt itnecessary torealizeaterritorialdivisionoftheUSSRthathadnoconnectionwithnational principles, in order to exactly “break” those remnants ofcapitalistways of thinking among the peoples of the USSR (and tobegin the existence of a future indivisible Soviet people). As anillustrationof thesepointsofview that favored centralismover thelaw of Soviet “nations,” see, for example, the statements by G.L.Pyatakov and L.B. Sunitsa, recorded in the minutes of the EighthCongressof theRussianCommunistParty(Bolshevik)onMarch18­23,1919. (RossiiskayaKommunisticheskayaPartyia [bol’shevikov],1933,pp.80­81and88­89).

153 The 15 constituent republics of the Union were: Russia, Belarus,Ukraine, Armenia, Georgia, Azerbaijan,Moldova, Lithuania, Estonia,Latvia, Kyrgyzstan, Uzbekistan, Kazakhstan, Tajikistan andTurkmenistan.

154Thewordraion,inRussian,means“district”(ofacity).155TheSupremeSovietwasdivided intotwochambersofequalpowers

andnumberofdeputies:theSovietoftheUnion(electedonthebasisofone citizen/one vote) and the Soviet ofNationalities (formed onthebasisofethnicrepresentation:32representativesforeachofthe15 republics of theUnion, 11 for each autonomous republic,5 foreach autonomous region and one for each national [okrug]). (BSE,3rded.,vol.4,p.564)

156 Inaddition tostrengtheningethnic territorialexpression, theSovietgovernmenttookimportantstepsintheculturalfield.Whileintsaristtimesmostnon­Russian regionsdidnothave theirown autonomy,havingaunidirectionalrelationshipofsubordinationtoRussia,intheSovietperiod thedifferentrepublicswere integrated intotheUnionwith formal legal equality. In addition, the Soviet government, fromthe outset, promoted a policy of raising the educational level ofseveral ethnic groups that were in unfavorable conditions in thissphereatthetimeofthe1917Revolution.Alphabetswerecreatedforethnic groupswho had nowritten language; schools, theaters and

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otherculturalorganizationsbuiltforthispurpose.Theparty,fromtheresolutionsoftheXCongressin1921,andforthefollowingdecades,seriouslyinvestedinthepolicyofkorenizatsiya(“nativization”)oftheparty and government cadres, that is, promoted an educationalcampaign so that natives of each nationality could carry out theadministration of their own republics and regions of origin (KPSS,1983­1989c,p. 366;Conquest,1967a,p.50;Tishkov 1997,p. 35).Theresultwasasharp increase in theeducationalandprofessionalbackground of the minor nationalities and a decrease in thedifferences between the most advanced and the most backwardnationalities in those spheres. The fact that, in practice, thesemeasures promoting social and educational advancement of nativepeopleandcadreswerealwayssubordinated to theprioritiesof theCommunist Party — which prevented manifestations of purelynationalist interests divorced from the official line — does notinvalidatethefindingthattherewasaraiseinoverallculturallevelofmost nationalities in the Soviet period. Illiteracy was practicallyeradicated in the 1950s in all nationalities. (TsSU, 1980a, p.18)Moreover,fromthe1960sonward,someofthenationalitiesbegantoovertake the Russians themselves in educational terms. As wasexplainedinanAmericansymposiumontheproblemofnationalities,in themid­1970s the situation of the Russians by ethnicity in theSovietUnionwasmoreorlesslikethis:

Russians are in sixth place in terms of highereducationand,intermsofstandardofliving,areofficiallythird,behindLatviansandEstonians.Infact, it isonly thesixthorseventhbecause the[real] living standards inGeorgia,Armenia, andmuchofUkrainearecertainlysuperior. (Linden&Simes,1977,p.4)

ThesedataarecorroboratedbytheRussiancensusesofthetime(see,forexample,Goskomstat,1989­1990,v.4,pt.2,book2).

157Thus,before1917,thepresentKyrgyz,andevenUzbeksandKazakhs,didnotyethaveanationalconsciousnessdefinitelyformed,formanywere still nomadic peoples, with a more tribal than nationalconsciousness. Many of the Uzbeks of 1924, for example, wouldprobably still think of themselves as primarilymembers of a tribe(Barlas, Lokait, etc.), or as inhabitants of a certain locality(“Bukharans”, “Samarkandis”, etc.). (Critchlow, 1991, p.11) Thepolicies of granting territoriality and cultural expression to thevarious ethnicgroups led to the consolidationor even formationofdifferent nationalities within the Soviet period. Bennigsen (1971,

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p.169) lists, among the nationalities (natsional’nosti) andsubnationalities(narodnosti)thatwereformed(intermsoftheirownconsolidated national consciousness) within the Soviet period thefollowing: Chuvash, Yakuts, Altai, Gagauz, Uzbeks, Turkmen andKazakhs.

158 An example of how real power was not decentralized in terms ofnationalitywas the fact that traditionally the first secretary of thePartyCentralCommitteeineachofthe15Sovietrepublicswasnativeto the respective republic, but his deputy, not infrequently, was aRussian.There have even beenmore sporadic occasionswhen thefirst secretary of some republics was a Russian, not a native (forexample, the Russian Brezhnev inMoldavia and Kazakhstan). (SES,1980,pp.169and1475)

When urged in the 1970s by Maurice Jackson, a member of theCentral Committee of the Communist Party of theUnited States ofAmericawhowas travelling throughAzerbaijan, toexplainwhy thesecondsecretaryof theAzerbaijaniCPwasaRussianrather thanalocal, the Soviet interlocutors replied that this question was notimportant, since it did not matter whether those in the leadingpositionswereRussianorofanothernationalityand that themostimportant thing was that the policy followed in the republic becorrect from the communist point of view. (Jackson, Maurice inpersonal communication to the current author inWashington,DC,USAon06/18/1997)

Not counting the first and secondparty secretaries, the restof theadministration in the republics was carried out basically by localcadres.Thistypeofrelationshipwasreflectedatboththefederalandparty level aswell. Lower andmiddle classes ofpower had amoreequal distribution among nationalities. The top, where the realmaximum power was, tended to have predominance of Russians.(Hough& Fainsod,1979,p.457) For example, thePolitburo of theCentralCommittee,whichwastheParty’shighestpowerorgan,fromthe1960stoperestroikahadanaverageofabout70%ofRussiansintheir composition of voting members (although the Russiansaccounted foronlya littlemore than50%of thepopulation). (EZHBSE,1967,p.37;Hough&Fainsod,1979,p.457;Carrèred’Encausse,1993,p.10­11) The firstPolitburooftheBrezhnevera(from1965onward) contained 55% of Russians. In the 1970s and 1980s thisproportion increased. The Politburo of 1977 had 71% of Russiansand the one of 1982, 77%. In 1987, the Gorbachev Politburomaintained the 1982 average (of the 13 votingmembers, 10wereRussian).(EZHBSE,1980,p.18;Carrèred’Encausse,1993,p.10)

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ThequestionoftheprimacyofRussianswithinthemosaicofSoviet

nationalitiesisextremelycomplex.ThecurrentauthorwasawitnessinRussia in the late 1980s that a fairlywidespread feeling amongordinaryRussianswas that they felt economically inferior tomanyother nationalities. Thiswas reflected in the repetition of phrasessuchas:“We,Russians,sendalotmoremoney,specialists,resources,to the other nationalities thanwe receive”; “many of the republicshaveahigherstandardoflivingthantheRussianRepublic:theBalticrepublics livebetter,thepeopleoftheCaucasuseatmuchbetter,eatmore fresh fruits and vegetables” etc. These sentiments that theordinary Russians did not live off the “exploitation” of othernationalities(“quitethecontrary”)areechoedinSovietethnographicliteratureandeven insomeWesternwritings. (Zaslavsky,1982,pp.124­125; Tishkov, 1997, p. 70) Concerning the fact that, at theleadership level, the Russian nationality generally dominated theupper stratum of the CPSU, this seemed to be more directlyconnectedwith the fact that the Russianswere by far the largestnationality in the population of the SovietUnion, that the CPSU, acentrally­basedparty,wasoriginallyaRussianparty(“RussianSocialDemocratic Workers’ Party”; “Russian Communist Party[Bolshevik]”),thatthiscentralistpartyhad itscenter inMoscowetc.Inotherwords, thepreponderanceof theRussiannationality in thehigher echelons of the CPSU seemed to be the consequence of acertaincentralizing inertia, inwhichthecenterwasreluctantto takedecentralizingmeasuresofpowerinseveralfields(andnotonlyinthefieldofethniccompositionoftherulingstrata).OneexamplewhythequestionofpowercannotbeabsolutizedonethnicgroundsisthefactthatformuchoftheexistenceoftheUSSR,realmaximumpowerwasdefinitely not in Russian hands (Stalin was, after all, a Georgian!).Without denying the preponderance of Russian nationality in themostcrucialdecision­makingstrataoftheparty,webelievethatthisethnicpreponderance shouldnotbe seen as an intentional form ofmerenationalistassertion(anend in itself),butasan instrument,ameans (somewhat rude and imperfect) to facilitate the tasks ofcentralizingcontrolofpowerinacountryasethnicallydiverseastheUSSR. So much so that the manifestation of Russian chauvinistictendencieswas condemnedby theparty. (KPSS,1983­1989d,p.83;Stalin, 1946­1951d, p. 267; Stalin, 1946­1951i, p. 239) A qualifiedexceptiontothismayhavebeenduringWorldWarIIwhen,undertheunbearablepressureof theGermans in the initialphaseof thewar,Stalin appealed to nationalist slogans of “struggle for the mothercountry”inordertoraisethemoraleofthetroopsandtherear;and

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the doctrine of the Russian people as the “elder and experiencedbrother”within the communityofSoviet ethnicities,wasechoed inacademic and journalistic circles in the period immediately afterWorldWarII.(Nechkina,1951)However,evenpaternalisticconceptssuch as the “elder brother” image did not come from purelynationalistsources,buthadaclasscontent(regardlessofwhetherweacceptedthetruthoftheargumentsornot).ThusStalin,inaspeechattheTwelfthCongressoftheRussianCommunistParty(Bolshevik)in 1923, attacked an excessive decentralization of power tonationalitiesinthefollowingterms:

Forus,communists,itisclearthatthebasisofalloureffortistheworktostrengthenthepowerofthe workers, and only then does the otherquestion come to us. This is a very importantquestion,butonethatissubordinatedtothefirst:thenationalquestion.Theysaythatweshouldnotoffendnationalities.It’sveryaccurateandIagreewith that.But to create from this a new theorythatitisnecessarytoplacetheRussianproletariatin a situation of inequality in relation to thepreviously oppressed nations does not makesense[...]Itisevidentthatthepoliticalbaseofthedictatorship of the proletariat is constitutedprimarily by the industrial center, not theperiphery,whichisbasicallyrural.Ifweshiftourweighttotheruralperiphery tothedetrimentoftheproletarian regions,a “split”canoccur in thesystemof thedictatorshipof theproletariat.Thisis dangerous, comrades [...] It must beremembered that, in addition to the right ofpeoplestoself­determination,thereistherightofthe working class to strengthen its power: theformer is subordinate to the latter. (Stalin1946­1951d,pp.264­265)

159 Concerning the “Muslim problem” in the USSR see Bennigsen &Broxup(1983)andBennigsen&Wimbush(1985).

160ForaSoviet“internal”viewofproblemswithgeographicalallocationof labor, see Gosplan’s 1983 (formerly secret) report on thedistributionofproductiveforcesintheUSSR.(TsKhSD,f.89,op.41,d.2,l.3)

161Thefollowingsummarychronologyofeventsisbased(passim)onthefollowing sources: AN SSSR­ I.I., 1966­1980;Novosti Press Agency,

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1988; EZH BSE; newspapers Pravda, Izviestiya, Sovetskaya Latviya,SovetskayaLitva,SovetskayaEstoniya,PravdaUkrainy,ZaryaVostoka,TurkmenskayaIskra,PravdaVostoka,KazakhstanskayaPravda,GolosArmenii andVyshka;Carrère d’Encausse,1993 and1995;Tishkov,1997;Fowkes,1997.

162OnDecember30,1922, theUnion of Soviet SocialistRepublicswascreated with four republics: Russia, Ukraine, Belarus andTranscaucasia (which included present­day Armenia, Georgia andAzerbaijan). Respectively in 1924 and 1925, the Uzbek SovietSocialist Republic and the Turkmen Soviet Socialist Republicwereincorporated into the Union. The 1936 Soviet Constitutionestablished the existence of 11 republics in the Union: Armenia,Azerbaijan, Georgia, Russia, Belarus, Ukraine, Uzbekistan,Turkmenistan, Tajikistan, Kazakhstan and Kyrgyzstan (the last twowere autonomous republics, which in 1936 were elevated to thestatus of republics of the Union). In 1940, Estonia, Lithuania andLatviawere incorporated into theUnionas republics. In that sameyear,theUSSRinvadedBessarabia(whichhadbeentakenbyRomaniain 1918) and this region,merged with theMoldovan autonomousrepublic, became a republic of the Union,Moldavia. (SES, 1980, p.1.263)

163Forexample,in1951,anessayintheofficialjournaloftheInstituteofHistoryoftheAcademyofSciencesoftheUSSRaffirmed:

Tsarismwastheprisonofpeoples:thisformulaisprofoundlytrue.Inthiscountrytheelderbrotherof the people of our country, the great Russianpeople,alsosuffered[...]

In assessing the results of the incorporation ofpeoples to tsarist Russia, historians must payparticularattention to the evidencesof exchangeamongpeoples, to thenew andpositive elementwhich, despite tsarism, the great Russian peopleintroduced intotheireconomicandcultural lives.Thetaskofhistoriansistodescribethehistoricalperspectiveofunityandstruggleoftheworkersofthevariouspeoplesunder the leadershipof theirolder brother, the Russian people, andsubsequently under the hegemony of theproletariat[...](Nechkina,1951,pp.45and47)

164Theremovalin1972ofthefirstsecretaryinUkraine,PetrShelest,andhisreplacementbytheUkrainianV.Chtcherbitski(butthistimewitha Russian second secretary) was seen as a sign of mistrust that

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Shelest had been condescending to, or even encouraging, a subtleUkrainiannationalism,whichwasevidencedby thereaffirmationofthe importance of Ukrainian culture in the past, even in the pre­revolutionary period. (Carrère d’Encausse, 1978, pp. 220­221) InRussia,the nationalist renaissance took the form of a search for thepreservationofmonumentsandotherculturallandmarksofthepast(the Pamyat organization, criticized as being anti­Semitic in theperiodofperestroika,broughttogetherseveralgroupsfoundedinthelate1970stopreservetheseRussianculturalmonuments).A(subtleandlatent)nationalismseepedintotheworksoftheso­called“ruralprose” writers (e.g., Valentin Rasputin, Vasilii Belov) who showednostalgia fora “pure”Russian rural life thathadbeendisappearingwithtime.

165IntheBrezhnevandAndropovera,partyleadersdetectedanincreasein the levelsofcorruption insomerepublicswhose firstsecretarieswere actively (or passively) colluding. The center acted to replacethesefirstsecretariesbyothersinchargeofcarryingouta“cleaning”in the corrupt picture left by their predecessors. Thus, in 1972,Eduard Shevardnadze replacedVasiliMjavanadze inGeorgia. In late1983, in theAndropov era, an investigation into the administration(1959­83) of the first secretary SharafRashidov inUzbekistanwaslaunched.RashidovhadbeenafavoriteofBrezhnev’sforhisloyaltytoMoscowand for the indicatorsofeconomicsuccessof therepublic,especiallyintheproductionofcotton,itsmainculturewhichsuppliedthe entireUSSR.From1984 to1986purgesweremadeamong theparty cadres, as corruption and favoritism seemed to be reallywidespread to the highest echelon (not only in financial terms, ofmisappropriationofpublicproperty,butof falsificationofeconomicgrowth statistics, especially of cotton production, which had beenlower than what had been announced to the center). In 1986,Rashidovwasposthumously(hehaddiedshortlyafterthe initiationoftheinvestigations)convicted.(Ligachev,1996,pp.210­219)

Theseanticorruptioncampaignsintherepublics,althoughbasedonreal events, alsohad anunpleasant side effect in the ethnic field. Insomerepublicstherewasa feelingthattheirnationalitieswereseenasdeeplyboggeddown incorruptionand that inorder togetoutofthis situation they would need the “surveillance” of the Moscowcenter. This was felt mainly in the Caucasus and Central Asianrepublics, where traditionally stronger community and family tieswerefrequentlyseenbythecenterasfacilitatorsofanatmosphereoffavoritism and even corruption.As favoritism and corruptionwerenot amonopoly of these republics, being found practically in the

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entire Soviet system, these anticorruption campaigns created astrangeclimatebetweencenterandperiphery.Thecenter,suspiciousofthelossofcontrolofwhathappenedinsomerepublics,tendedtotighten a“paternalistic”vigilancewhiletheperipherysometimeshadthe feeling of being used as a “scapegoat.”(Carrère d'Encausse,1993,pp.21and23­24)

166 In 1979, a student demonstration in the town of Tselinograd inKazakhstanprotestedagainstrumorsthattheregionwouldbeturnedintoanautonomousterritorytowelcometheVolga (Soviet)Germanswho had been deported by Stalin at the time ofWorldWar II. Inaddition,itwouldbeinterestingtonotetheexistenceofanationalistprotestinGeorgia.InApril1978,therewasapublicdemonstrationinTbilisi against the deletion of the clause in the Constitution of theRepublicofGeorgiawhichdeterminedthatGeorgianwastheofficiallanguage of the republic (the Georgian Constitution was beingreformulatedin1978,inlinewiththepromulgationofthenewSovietConstitution of 1977).With the popularmobilization, the ideawasabandoned and the clause maintained in the new GeorgianConstitution.

167Presenting thepoliticalreportof theCentralCommitteeat theXXVIICPSUCongress,Gorbachevstated:

The foundation for solving the nationalitiesproblem in our country was laid by the GreatOctober Socialist Revolution. Relying on Lenin’sdoctrine and on the gains of socialism, theCommunist Party has done enormoustransformativeworkinthisarea.Itsresultsareanoutstanding achievement of socialismwhich hasenriched world civilization. National oppressionand inequality of all types and forms have beendone awaywith once and for all […]The Sovietpeople is a qualitatively new social andinternational community cemented by the sameeconomicinterests,ideologyandpoliticalgoals

However, our achievementsmust not create theimpression that there are no problems in thenationalprocesses.Contradictionsareinherentinanykindofdevelopment,andareunavoidable inthissphereaswell.Themainthingistoseetheiremergent aspects and facets, to search for andgivepromptandcorrectanswerstotheproblemspromptedby life.This is all themore important

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becausethetendenciestowardsnationalisolation,localism, and parasitism still persist and makethemselvesfeltquitepainfullyattimes.[…]

Weare legitimatelyproudoftheachievementsofthe multinational Soviet socialist culture. Bydrawing on the wealth of national forms andcharacteristics, it is developing into a uniquephenomenon in world culture. However, thehealthy interest in all that is valuable in eachnational culture must by no means degenerateintoattemptstoisolateoneselffromtheobjectiveprocess bywhich national cultures interact andcome closer together.This applies, among otherthings, tocertainworksof literatureandartandscholarly writings in which, under the guise ofnationaloriginality,attemptsaremadetodepictinidyllic tonesreactionarynationalistandreligioussurvivals contrary to our ideology, the socialistway of life, and our scientific world outlook.(KPSS,1986,v.1,pp.75­76)

Thus,ingeneral,Gorbachevsawthefieldofinterethnicrelationsasasphere inwhich the Soviet government had been quite successful,being able to set an example to the world (unlike other spheres,especiallytheeconomy,whichwascriticizedinthereportforspecificshortcomings). The problems which the General Secretary saw asunresolved in the national field, he attributed to the naturaldevelopment of historical processes (“contradictions” as a normalpart of development or narrow­minded “survivals” of culture andreligion).Inshort,thefieldofethnic­nationalrelationswasnotoneofGorbachev’smajorconcernsattheoutsetofperestroika.

Thispositionof theSoviet leaderwasnotmerelyamatterofofficialself­indulgentrhetoricwiththeprogressmadeintheethnicfield.TheGeneralSecretarydid indeedbelieve that, in thesphereof relationsbetweennationalities,therewasagenerallyquietatmosphere,whose“hottest” points could be resolved within the limits of the regime.Gorbachev, probably like most Russians, would only realize thatsomethingnew,andworrying,was takingplace in theethnic fieldafewyearslater.Indeed,theGeneralSecretaryoftheCPSUrealizedthelevelofseriousnessofinterethnictensionsonlyafterthefirstopenlyviolentinterethnicconflictseruptedinthelaterperiodofperestroika(i.e., after the start of armed disputes between Armenians andAzerbaijanis over Nagorno­ Karabakh in 1988­89). This late

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awareness of the seriousness of interethnic problems was lateradmittedbyGorbachevhimselfataprivatemeetinginWashingtonin1992. InMay of that year, the Library of Congress chief librarianJamesBillingtonorganizedabreakfastwiththeformerSovietleaderand a select group, composed mainly ofAmerican scholars.Havingstated that the most complicated and most surprising questionduringtheperestroikaerahadbeenthatofnationalisticseparatism,Gorbachevwasaskedwhenhehadbecomeawareofthis(thatis,ofthe seriousness to suchan extentof thisproblem ).The surprisinganswerwas,"Inthefallorwinterof1990."(Personalcommunicationto the current author by two participants in the meeting withGorbachev:ProfessorHarleyBalzer,atGeorgetownUniversityon30June 1997, and Professor Blair Ruble, at Kennan Institute,Washington,DC,USAonJuly21,1997;episodealsocitedinRemnick,1997,p.17)

This response perplexed his American listeners, since late 1990representsmore than a year after the outbreak of the first armedinterethnic conflicts in Nagorno­Karabakh! Gorbachev’s testimonyreinforcesthehypothesis(asstatedearlier,evidencedbythepersonalexperienceofthecurrentauthorduringhisstayintheUSSRandalsosharedbyseveralRussianethnographicwriters,even thosecriticofthe Soviet regime, such as Valery Tishkov) that the irruption ofinterethnic conflicts in1988­89 caughtmostRussiansby surprise.(Tishkov,1997,pp.46­47)

ForanaccountofGorbachev’slackofsensitivityandexperiencewiththenationalitiesproblemwhenhe tookover theCPSUsecretariat in1985,seeCarrèred’Encausse(1993,pp.6­13,esp.p.12).

168 It is important to note that as early as 1986 there was a seriousincidentthatauguredtheovertlyviolentethnicproblemsof1988­89.On 17 and 18 December 1986 there were public protests in thestreetsofAlma­Ata,capitalofKazakhstan.Acrowd,composedmostlyof youngpeople and students,protested against the replacement ofthe first secretary in that republic, Dinmukhamed A. Kunaev (aKazakh)byGennadiKolbin (aRussian). In thepoliceclashwith thedemonstrators, at least two peoplewere killed and a large numberinjured.ThiswasthefirstmajorpublicprotestthatresultedindeathintheUSSRsincetheprotestsintheRussiancityofNovocherkarsskagainstan increase inthepriceofmeatandbutter in1962(on thisincidentofNovocherkarssk,seethesecretreportsoftheKGBatthetime,recentlydeclassifiedintheRussianarchives,especiallyTsKhSD,f.89,op.6,d.16).Theethnicbalanceofpower wasasensitiveissueinKazakhstan,asKazakhswereinminorityintherepublic(36%ofthe

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population against 41% of Russians) as a result of constantimmigration.

169 The Nagorno­Karabakh autonomous region (avtonomnaya oblast’)wasa constituentpartof theSoviet republicofAzerbaijan,but thevastmajority ofits population was Armenian.The region hadbeen amatter of historical dispute, as it was part of the route used bynomadicAzerbaijani shepherds.Although95%of thepopulation atthetimewasmadeupofArmenians,theSovietgovernmentin1923placed Karabakh as part of Azerbaijan. This situation wasuncomfortable for the Armenians. Mainly from 1965 onward,petitionsweremadetothecentralgovernmentby the inhabitantsofKarabakh for the transfer of the region to Armenia, but withoutsuccess.With the beginning of perestroika, thismovement gainedmomentum. On February 11, 1988, demonstrations took place inStepanakert,thecapitalofKarabakh,andlaterinYerevan,thecapitalof Armenia. A petition calling for the unification of Karabakh toArmenia was sent to Moscow and rejected. On February 20, theNagorno­Karabakh Soviet — where, reflecting roughly theproportion of the general population of the oblast’, the Armenianswere a majority against the Azerbaijanis — voted for theincorporationof theregion intoArmeniaand formed theKarabakhCommittee to organize the work of the separatist movement.TensionsincreasedinthedaysaheadasStepanakertandYerevanputpressure on Gorbachev to acknowledge the decision of the localSoviet.On February 28, official reports that twoAzerbaijaniswerekilled inclasheswithArmeniansnear thetownofAgdan(rightnextto Nagorno­Karabakh) provoked an indiscriminate attack onArmenians living in Sumgait, a suburb of Baku, the capital ofAzerbaijan.InthetwodaysoftheSumgaitmassacre,morethanthirtypeoplediedandhundredswere injured.Federal troopsweresent tothe region. On March 23, 1988, the Supreme Soviet of the USSRadoptedaresolutioncondemningtheunilateraldecisiontakenbytheKarabakh Soviet and the functioning of the Karabakh Committee,accusedofirresponsibleseparatism.OnJune15,theSupremeSovietof Armenia passed a resolution in favor of the incorporation ofKarabakh to the republic. The escalation of tension and sporadicviolence increased, with an impasse between the position of theArmeniansonone side and thatofMoscow andAzerbaijanon theother(againstthechangeinKarabakhstatus).On7December1988amajor earthquake caused destruction in northeasternArmenia andlefttensofthousandsdead.OnJanuary12,1989,federalinterventionwasordered inNagorno­Karabakh.The region’sadministrationwas

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temporarily transferred to the federal government, with theproclamationofastateofemergency.ThequestionofKarabakhandthe position of Moscow, unable to resolve the issue in practice,fomentednationalisticdissatisfaction.InSeptember1989,Azerbaijanstarted a railroad blockade against Armenia. The conflict began toassume contours of civil war between the two republics.Moscowordered Azerbaijan to dismantle the blockade.Upon refusal, federaltroops took control of theAzerbaijani rail system in earlyOctober.Although the blocking problem had been solved, the situationremained tense. InNovember1989,apopular frontwas formed inArmenia (Armenian National Movement). In view of this lack ofprogressinthenegotiations,onNovember28,theSupremeSovietofthe USSR decided to end the period of federal intervention inNagorno­Karabakh.Thesituationthen“returnedtozero”,sinceif,onthe one hand Nagorno­Karabakh was again subordinated toAzerbaijan(withexplicitrecommendationsforthemaintenanceofitsstatusasavtonomnayaoblast’,or“autonomousregion”),ontheotherhand the localgovernmentwas in thehandsof theKarabakhSoviet(mostly Armenian and anti­Azerbaijan). On December 1, 1989,Armeniadeclaredthattheenclavewaspartofthe“unifiedArmenianrepublic” and on February 11, 1990 announced that federal lawswouldonlybevalid inArmenian territory if theydidnotcontradictlocal laws. To restore order, especially after a progrom suffered byArmeniansinAzerbaijanonJanuary13,1990,federaltroopsinvadedandoccupiedBakuunderAzerbaijaniresistance.Theoccupationandthestateofemergencyproclaimedinthecity(on January19)wouldbe marked by numerous armed conflicts that left dozens of fatalvictims. On August 5, 1990, a former high commissioner of theKarabakhCommittee,LevonTer­Petrosian,was electedpresidentofArmenia. Later, during his presidency, Yerevan would change itsposition somewhat, requiringArmenia’sannexationofKarabakh tosupportthe“self­determination”oftheArmeniansofKarabakh.Allof1990and the firsthalfof1991wouldbemarkedby the impasseofpositions and skirmishes (occasionally with large numbers ofvictims) around Karabakh. On November 26, 1991 Azerbaijandecided to officially abolish the status of Nagorno­Karabakh as anautonomousregion(avtonomnayaoblast’).Incontrast,theArmenianauthorities in Karabakh decided to self­proclaim a republic inDecember,includingfilingarequesttojointheCIS.Thus,attheendof1991,atthetimeofthedissolutionoftheSovietUnion,theconflictaroundNagorno­Karabakhcontinuedindefinitely.

170TheOshoblast’intheKyrgyzRepublic(ontheborderwithUzbekistan)

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hadamultiethnicpopulationwithKyrgyz(56%)andUzbeks(26%)as the largestgroups.Uzbeksaccused theregion’sadministrationofnot maintaining the traditional proportional balance betweennationalities according to their percentage in the population. Theeconomic crisis ofperestroika exacerbatedthe moodbetween KyrgyzandUzbeksinthestruggleforjobsandimprovementinthestandardoflivingofeachpopulation.IntheweekofJune4to10,1990,ethnicconflictsbetweenthetwonationalitiesexplodedintheOshregionandneighborhoods. The cause seems to have been Uzbek revoltwhenthey learned of a decision by local authorities to use the land of aUzbek collective farm that had been occupied by Kyrgyz people tobuildhousing forKyrgyzpeople.Theweekofethnicclashes,crimesanddeaths endedwith120Uzbeks,50KyrgyzandaRussiankilledandmorethan5,000registeredcrimes(robberies,murders, looting,rapes,etc.).

171ThefirstpopularfrontwastheoneofLithuania(calledSaiudis),initscapital,Vilnius,on June3,1988. InTallinn,onOctober1,1988, theEstonian popular frontwas formed and inRiga, onOctober 8, thepopular front of Latviawas created. OnMay 13 and 14, 1989, theBalticCouncilwas created to coordinate the actions of these threeorganizations.FromtheBaltics,thisstrategyofpopularfrontsspreadtoseveralotherrepublics.PopularfrontswereofficiallyestablishedinBelorussia (on 19 October 1988) andMoldavia (20May 1989); inGeorgiaandAzerbaijan(July1989), inUkraine(theso­calledRUKH,on8September);inArmenia(theArmenianNationalMovement,on4 November). The creation of popular fronts, because of its greatrepresentativeness, posed a problem to the sections of theCommunist Party in the republics: either to support the linguistic,ecological and decentralization demands of the newmovements (atthe riskof increasingnationalist fervor)or toactagainst the frontsand risk alienation from the population sympathetic to thosedemands. In most republics, the local Communist Parties werecriticallyoropenlyagainstthepopularfronts.IntheBaltic,however,thesituationwasdifferent.ThecommunistpartiesofLithuaniaandEstonia, after a reticent start, even supported some nationalistplatforms (the Lithuanian Communist Party, led by Brazauskas on12/23/89,wouldevendeclareitsownindependencefromtheCPSU).InLatvia(whosepopulationcontainedonly54%ofLatviansand33%of Russians), the local CP remained initially more subordinate toMoscow,but,as in theother twoBaltic republics, thepopular frontwasrelatively free topropagate its ideas.LatertheLatvianCPwouldalso takeacourse independentof thecenter. In theBalticandother

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republics, the local Russian population formed the so­calledinterfront, or internationalist fronts,whichopposednationalist andseparatistclaims.

Until the first half of 1989 (andmuch of the second half, in somerepublics) informal groups (neformal'nyeob''edineniya),andlater thepopular fronts, concentrated heavily on linguistic and ecologicaldemandsanddemandsforgreaterdecentralizationofdecision­makingpowerinfavoroftherepublicsininternalaffairs.TheexceptionwastheBalticrepublics,where theprocesswasmoredeveloped.Basedontheargument thattheirannexationbytheUSSRhadbeenbasedonthe German­Soviet secret pact of 1939 and therefore had no legalvalidity,theSupremeSovietsoftheBalticrepublicsproclaimedtheirsovereignty: Estonia (on 11/16/88), Lithuania (on 5/18/89) andLatvia (on 7/28/89). Great momentum for the prestige of thismovement had been the victory of nationalist candidates from thethree fronts in theMarch1989elections to theCongressofPeople’sDeputies. In theseelections,considered the firstrelatively freesincethecreationoftheUSSR—althoughtheCPSUwasstilltheonlypartyregistered,alternative individual candidates couldalsobe registered— nationalist candidates or candidates sympathetic to the ideas ofnationalist groups won the majority of seats reserved for therepublicsoftheBalticSea.

InadditiontotheBalticrepublics,somenationalistmovementsfromother republics were able to elect candidates (but far from themajority) in theMarch1989CongressofPeople’sDeputies,notablyMoldaviaandUkraine.However,apartfromtheBalticrepublics,mostofthenationalistmovementsinthefirsthalfof1989(and,formany,in the second half as well) were still at the stage of linguistic,ecological and autonomy demands. The linguistic question, inparticular, became a catalyst for nationalist sentiments. In severalrepublics, laws were passed making the local language the onlyofficial language for internal affairs (i.e., official documents, trafficnotificationsetc.wouldallbewritten in theofficial languageof therepublic). This type of linguistic lawwas passed, among others, inEstonia (1/18/89), Lithuania (1/25/89), Latvia (5/5/89) andMoldavia(9/1/89),thenspreadingtootherrepublics.

Theyearof1990markeda radicalizationofpositions. In theBalticrepublics (withLithuaniaat the forefrontof theprocess), themainslogangoes from sovereignty (asomewhatvague termwhich in thebeginninginpracticerepresentedthatlocallawswouldhavepriorityover the laws of the USSR while negotiating the terms of a newrelationship between the republics and theUnion) to independence

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andsecession.Intheotherrepublics(withGeorgia,Moldavia,ArmeniaandAzerbaijaninthelead),thediscussionevolvedfromanationalistpolicy that emphasized cultural and linguistic elements to thediscussion of sovereignty and (almost immediately thereafter)independence.The Lithuanian parliamentdeclared the independenceoftherepubliconMarch11,1990.OnMay4,theSupremeSovietofLatvia issuedastatement in thesamevein.Estonia tookadifferentpath.The two “parallel” parliaments that had been operating since1990(theRepublic’sregularSupremeSovietonMarch30,1990,andthe Estonian Congress, elected independently of the Soviet laws onMarch12,1990),bothadopted theposition that theEstonian statethatexistedlegallywasthesameasthatoftheindependentrepublicofthetreatysignedbyLenininTartuin1920andthatitsannexationtotheUSSRhadbeendone illegally,basedonthesecretprotocolsofthe Molotov­Ribbentrop pact of 1939. Therefore, not even adeclaration of independence was required, since legally the 1940occupationhadnolegalbasis:itwouldonlybelefttonegotiatewithGorbachevthedetailsofthereturntothelegalstatusquoofpre­1939Estonia.Georgiadeclared its independence onApril9,1991,on thetwo­year anniversary of the massacre of demonstrators by Soviettroops in Tbilisi. Most of the other republics declared theirindependenceimmediatelyafterthecoupattemptofAugust1991.

March1990alsomarkedtheSovietelectionsforlocalparliamentsintherepublics.Asaresult,onMay29,Yeltsinwaselectedchairmanofthe Supreme Soviet of the Russian republic, with the platform of“total sovereignty” for Russia. On March 13, 1990, the post ofPresident of the USSR was created, for which Gorbachev wasappointed.OnJune11,1990,Russiadeclareditssovereigntyvis­à­visthe USSR (and finally, on October 31, 1990, the last of the 15republicsthathadnotyettakenthisstep,Kyrgyzstandidthesame).

In1990,mostof theautonomous republics that existedwithin theframework of the 15 constituent republics of the USSR (and evensome of the autonomous regions) declared their own sovereignty(withaviewmainlytoautonomousresourceallocation).ThiscreatedseveralconflictswiththerepublicsoftheUnion,whichdidnotacceptthissovereignty in its territory.Thus,Georgiarepressedthe internalnationalisms of Abkhazia and Ossetia; the region of Transdniestre(mostlypopulatedbyRussians)andtheGagauzminoritytothesouthrebelledinMoldavia;theRussianswouldlaterhaveproblemswiththeChechensintheirterritory,etc.Thus,bythesecondhalf(autumn)of1990, the situation in the USSRwas becoming alarming andwithunpredictable consequences. Realizing that the situation was

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becomingunmanageable,GorbachevagreedtoaplanforanewUniontreaty thatwouldpassmostof the responsibilitiesand rights to therepublics, butwould keep some essential functions as the center’sresponsibility (defense, central bank and single currency, federallegislation, etc.). Gorbachev (unsuccessfully) submitted threesuccessiveproposals for this treatyof theUnion (oneonNovember23, 1990, the other onMarch 9, 1991, and the third on June 18,1991)— each version made more and more concessions to therepublics. During this period a referendum was held in the USSR(boycotted by the threeBaltic republicsplusArmenia,Georgia andMoldavia) on March 17, 1991, consulting the population if theywishedtopreservetheSovietUnionornot,withamajority(76.4%ofvoters) in favorofmaintaining theUnion.OnApril23,1991, in theMoscowsuburbofNovo­Ogaryovo,Gorbachevandmostoftheleadersoftherepublicsattemptedapreliminaryagreementfortheformationof a “union of sovereign states.” The details would be handled byrepublicanleadersthemselvesratherthanimposedbythecenter.OnJune12,1991BorisYeltsinwaselectedto thenewlycreatedpostofPresident of Russia. The situation came to a standstill, with therepublics refusing toacceptGorbachev’s successiveproposals foranew Union treaty. Finally, after prolonged and exasperatingnegotiations throughout the summer, a new Union treaty, createdfromtheformuladiscussedinNovo­Ogaryovo,wasreadytobesignedon August 20, 1991 by representatives of Russia, Byelorussia,Kazakhstan, Tajikistan and Uzbekistan. The treaty would leave therepublics with broad powers, including mechanisms to facilitatesecession for those which so wished. However, on the eve of thesigning of the treaty, on August 19, therewas a putsch attempt inwhich Gennady Yanayev (Vice­President of the USSR), VladimirKryuchkov(KGBchief),ValentinPavlov(primeminister)BorisPugo(interiorminister),DimitriYazov(armyminister),AnatolyLukyanov(president of the Supreme Soviet) and others tried to deposeGorbachevandpreserve the integrityof theUSSRby forceofarms.Withtheputsch’sfailureattheendofthreedays,GorbachevreturnedtoMoscowonAugust23.However,demoralized,hecouldnotpreventtherepublicsfromactingontheirown.Someofthemdeclaredtheirindependence unilaterally shortly after the putsch attempt:Moldova(8/27/91),Byelorussia(8/25/91),Azerbaijan(8/30/91),Uzbekistan(08/31/91),Tajikistan (9/9/91),Armenia (9/23/91).TheSupremeSovietofUkraine,onAugust24,adopteda resolution forUkrainianindependence,tobeconfirmedbyapopularreferendumscheduledforDecember 1. Estonia (on 8/20/91) and Latvia (on 8/21/91) also

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reconfirmedon thesedates theirdeclarationsof independence,nowwithan immediatevalidity.TheCPSU,accusedof takingpart in theAugust putsch attempt, had its legal existence suspended by theSupreme Soviet on 8/29/91. On October 18, an agreement wassigned in Alma­Ata to forma “community”— the word “union”wasavoided— between the former republics.The treaty,however,wassigned by only 8 of the republics (it also contained Gorbachev’ssignature). Inviewof thedilemma thatwasbecoming impossible toreachtheconsensusofalltherepublics,inMinsk,onDecember8,theheadsofstateofRussia,ByelorussiaandUkrainedeclared that theirrepublicswerewithdrawingunilaterallyfromtheUSSR,initiatingtheformationofaCommonwealthofIndependentStatesamongthemandinvitingother republics to join them. InAlma­Ata,onDecember21,the republics of the USSR (minus the three Baltic states, alreadyindependent,andGeorgia,whichwas in internalcivilwar)officiallysignedthecreationofSNG(SodruzhestvoNezavisimikhGosudarstvor“Commonwealth of Independent States”, CIS). On December 25,Gorbachev announced his personal resignation as president of theUSSR, passing the “nuclear button” to Yeltsin.OnDecember 26, 30deputiesoftheSovietparliament“voted”fortheofficialdissolutionofthe USSR and approved the Alma­Ata treaty (creator of the CIS),beforedecidingontheself­extinctionofthelegislativebodyofwhichtheyarepart.

172Inthisway,theautonomousrepublicofAbkhaziaandthe autonomousregion of South Ossetia were demanding their independence fromGeorgia.InMoldavia,autonomistmovementstookshapeintheregionofTransdniestre (populatedmostlyby ethnicRussians) and amongtheGagauzpopulation(wholivedinthesouthoftherepublic).

173ItisimportanttonotethatthethreeBalticrepublics(Lithuania,Latviaand Estonia) and part of Moldavia had a period of independencebetween the First and Second World Wars being reincorporatedduringtheperiodofWorldWarII.DuringtheperiodoftheRussiancivilwar(1917­21)independencemovementscametohavecontroloftherepublicsoftheCaucasus(Georgia,ArmeniaandAzerbaijan).

174AccordingtoTishkov(1997,p.234): It is true. A strong unitary political regime

carefullycontrolledpoliticalprocessesandsoughttomicromanageinterethnicrelations.Butdespitethe many crimes committed by the Sovietgovernmentagainstethnicgroups,hugeamountsof resources were also transferred tocomprehensive programs aimed at supporting

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“national cultures” [...] The culturalmosaic wasextensively documented, academically described,and staged in the repertoires of numerousperipheralandcentraltheaters,operas,museumsand groups of dance and folk music. It wasprecisely this Soviet policy of nurturing localcultures, facilitated by the professional elite ofintellectualsandadministrators,whichprovidedapowerful material and symbolic basis for thelocalized nationalism that would later challengethe identities of common culture and citizenshipoftheSovietUnion.

175 Thus, the Soviet systemhaddifferent effects on the smaller or lessconsolidated nationalities of the pre­revolutionary period (such asYakuts, Uzbeks, Turkmen, Kazakhs, Gagauz, etc.) and on the largernationalities which were already well established in the pre­revolutionaryperiod(as inArmenia,Georgia,Lithuania,etc.).Inthelattercase,onecouldarguethattherewasatleastapartialrepressionofthesenationalculturesin theUSSR.However,eveninthesecases,thequestioniscontroversial:afterall,itisquitedebatabletoconsiderthat cultures inArmenia,Georgia, Lithuania, etc.,during the Sovietperiodweremoresuppressedthaninthetsaristperiod.

176MostofthenationalitiesdeportedbyStalinduringWorldWarIIwererehabilitated in 1957. The Volga Germans, Crimean Tatars andMeskhetian Turks were officially rehabilitated in the 1960s. By adecreeofthePresidiumoftheSupremeSovietof1/9/57,confirmedby Supreme Soviet law of 2/11/57, theBalkars, Chechens, Ingush,KalmyksandKarachayswerenotonlyrehabilitatedbutagaingrantedterritorial autonomy. (VS SSSR, 1957, p. 134) The Volga Germans,CrimeanTatarsandMeskhetianTurkswererehabilitatedbydecreesof the Presidium of the Supreme Soviet respectively of 8/29/64,9/5/67and5/30/68.(VSSSSR,1964,p.931;VSSSSR,1967,p.531­532;VSSSSR,1968,p.311­312)

177Theauthoralsoheardtestimoniesin thisregardfrommembersoftheArmenianandAzerbaijanicommunityinMoscowin1990.

178 For an internal view of the Central Committee of the CPSU on thesituation of fighting corruption, embezzlement of state funds andspeculationon theeveofperestroika(1983­4),seeTsKhSD, f.5,op.90,d.67,68and69.Thesefolderscontainoriginallyclassifiedreports(declassifiedin1995)fromtheCentralCommitteesoftheRepublicanCPs and the secretaries of obkom and kraikom on the situation ofcombatingtheabove­mentionedcrimesintheirareasofactivityand

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includedstatisticaldata.

179TheauthorwitnessedandreceivedthehospitalityoftheGeorgiansinperson during his stay in Georgia. The inhabitants of the Caucasusformamore traditionalsociety,more “rural” than thecosmopolitanurban Russians. This is reflected in their gregarious behavior.Extremehospitalitytovisitorsisaconstantfeatureofalmostalllocalcultures.

180 According to data from theMinistry of the Interior of the RussianFederation (see table 10.2 of Appendix 10), at the time of thedissolution of the USSR, the Moscow mafias specialized in theexchangeofdollarsand illegalexports; theAzerbaijanimafia, in thetransportation of drugs; theGeorgianmafia, in hotel extortion; thetartarmafiaofKazan,ingamblingetc.

181Thus,Motyl(1991,p.509),inasomewhatmoreradicalpositionthanours,wroteaboutethnicrelationsattheendofperestroika.

[...] Gorbachev’s efforts to transform the SovietUnion, in fact, produced their own centrifugalforcesthatthreatentosubvertit.Inotherwords,perestroika not so much liberated latent forcesthatwerewaitingforanopportunitytotakeoverasitcreatedthem[...]

182Evidenceof this is the fact that itwasonly in the last two yearsofperestroika that theword “capitalism”wasovertlyused todescribethedirectionoftheprocessesinprogress(evenbythedemocrats’andYeltsin’s camp). The euphemism used until near the end ofperestroika was “market relations,” a term that is not so directlylinked to capitalism, sincemarket relations theoretically existed inthe SovietNEPperiodunder Lenin and themarket itself appearedlongbeforecapitalism.

183Here,quoted inextenso, is thepassagewrittenbyd’Encausse inherconclusions on the Baltic republics in the Soviet national contextpriortoperestroika:

Asecondgroup iscomposedofnationalitiesthathaveahighdegreeofnationalconsciousness,butcondemnedbycircumstances to fragility,orevenextinction. This is especially the case with theBalticnations,particularlyEstoniansandLatvians.Inspiteof thestrengthof theirnational feelings,despiteeverything thathistoricallyandculturallydistinguishes them from theotherpeoplesoftheUSSR, these nationalities are moving towardassimilation, not toward physical extinction.The

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possible disappearance of nations with suchstrong personalities is a historical tragedy ofwhicheveryBalticnationalisaware.However,nooneseemstobeabletostopthis.Facetofacewithfate,the Baltic nationalities donotseemcapable offorming at least one Baltic bloc. Each becomesmorefragilebyisolatingitselfinitsparticularcaseand in the things thatseparate themhistoricallyfromoneanother.This isolationandretractioninitself increases the extreme vulnerability of thispartof theUSSR,which, fromanypointofviewadopted, is the most modern, the mostimpregnated of foreign influences, the leastsovietized. And yet, apparently, none of thispreventstheBalticpeoples’journeytowardstheirannihilation as nations. (Carrère d’Encausse,1978,p.273)

184Thus, taking these aspects into account,Zaslavsky’s (1982,pp.124­125)analysisoftheperspectivesofethnicrelationsintheUSSRintheearly 1980s (i.e.,before perestroika) seems tohave been on targetaboutthehottestspotsinthissphere.Hewrote:

The general deterioration of the economicsituationhasadirecteffectonethnicrelations inthe Soviet Union. Thus during the 1960s and1970s the central administration was forced bythe rapid population growth of Central Asia toinvest heavily in those republics to create newjobs,socialservicesandschoolsinordertoavoida further increase in existing per capita incomeinequalities between thedifferent regions of thecountry. Although politically justifiable, suchinvestmentsobviouslyhavelittleproductivevalue:under present economic conditions they areunlikely tocontinue.Leadership ismore likely todirect investments to regions that guaranteemaximum return. It shouldnotbe forgotten thatper capita productivity in Estonia, Latvia andRSFSR is three times higher than in the CentralAsianrepublics[...]

Inflationand the growing importanceofmarketsalso influence relations betweennationalities [...]Some groups among the populations of the

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national republics are the primary producers ofmeat, wool, vegetables and even textiles (if weconsider the development of these industries intheperipheryand the relativeweaknessof statecontrol over their activities). The Russianpopulationseesitselfasincreasinglydependentonamarketwhosepricesare constantly rising andwhich is dominated by representatives of thesouthern republics. The Russian workers whocompare their incomes with those of the“merchant peoples” of the South, feel envy andirritation. This causes considerable bitterness inrelations, on an interpersonal level, betweenRussiansandotherethnicgroups.

185Thesamelineofthoughtleadsustorejecttheviewofthosescholars(e.g., Linden& Simes,1977,p.4)who see nationalist processes as“irrational,” not following any logic (a priori or historical) andtherefore this being the reasonwhy this is a sphere inwhich it isdifficulttomakepredictions.

186NomenklaturaisaRussianwordofLatinorigin:inLatin,itmeans“listofnames.”(Prohkorovetal.,1980,p.909)InRussian,inthegeneralpolitical sense, theword refers to the “listofposts [positions] thatanyinstitutionhastheformalrighttonameorconfirm.Forexample,aministryhas itsnomenklatura,asdo themunicipalSoviet,varioushigh­level tradeunionorganizations, and so on.” (Hough&Fainsod,1979,p.664)Practically thissamedefinition is found inabookonstatutes of the CPSU published by the official Soviet publisher ofpoliticalliterature,Gospolitizdat:

It is customary to call nomenklatura the list ofcareer posts that the party organs have theobligation to keep under their constantsupervision.[Forexample]Inthenomenklaturaofthe regional committeeof theparty the regionalleadersare included; indistrictpartycommittees,theheadsofdistrict institutions. Inpractice, thismeans that communists who are leaders oforganizations and institutions, before namingsomeone to a position of responsibility, mustpresent this person for confirmation by theparty’s corresponding body. This procedure isvalid not only for appointment but also forremovalfromoffice.Withoutpermissionfromthe

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party body, communists who are leaders oforganizations and institutions cannot removeanyone from any permanent position in thenomenklatura of that body. (Bugaev & Leibzon,1962,pp.154­155)

187AnexampleofthiswouldbetheveryinterestingexplanationgivenbyMosheLewin inhisbookTheGorbachevPhenomenon. In thiswork,M.Lewinplacedthequestionofurbanization(inthebroadestsense,withallthesocialimplicationsofit)ascentralinordertounderstandthe need for perestroika in themid­1980s. According to him, theimmensemodernizing transformations in theUSSR froman initiallyagrarian society toan industrial­urban society in the secondhalfofthe century led toa tremendoushiatusbetween themore educated,sophisticated and demanding “new” Soviet population and thepossibilitiesofferedby the Soviet state,which remained closedandrigid.(Lewin,1988,pp.178­179)By themid­1980s, thishiatuswasassumingthreateningproportionsforregimestability.

WeconsideritagreatmeritforM.Lewintodrawattentiontothesetrulyseriousproblemsbroughtaboutbytheprocessofurbanizationandmodernization in the USSR. However, placing it as the centralproblemthatledtotheneedforperestroikainthecountrymeans,inourview, toconfuse thehierarchyof themainvectorsof the issue.The complications caused by urbanization were really a factor ofpressure inthesystem,butwithoutthemaincausespointedoutbyus, they would not have enough autonomous force to provoke arupture in the system in the 1980s. Firstly, because the pre­prerestroika urban transformations were by no means the mosttraumatic within the history of the Soviet Union. What societychanged in this sensebetween, say, themid­1960sand1980s,wasnothing compared, for example, with the transformations thatoccurredbetweenthe1920sand1950s(withforcedcollectivization,heavy industrialization, increase in educational levels, etc.). If theSovietregime(weakeratthattime)wasabletowithstandtheviolenttransformationsofthe1930sand1940s,itisdifficulttoassumethatitwouldnotbeable todo thesame in the1960s,1970sand1980s,when itwas alreadymuch stronger and the transformationswererelativelynotsoradical.Moreover,manycountriesoftheworldhaveundergone processes of urbanization and industrializationwithoutnecessarilyundergoingruptureof thesocial fabricor revolutions intheirmode of production. It seems to us that, ceteris paribus, theSoviet state in themid­1980s was strong enough to absorb, in ageneral way, the impact of the transformations of the 1970s and

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1980s.

WearenotdenyingheretheseriousnessoftheproblemsindicatedbyM. Lewin. However, it is necessary to establish a hierarchy in thecentrality of themain factors that led the Soviet leaders to launchperestroika.The problemofurbanization,even in the broadsense asinLewin(1988),couldnotinitselfexplaintheurgentneedforsystemreforms in the mid­1980s. The complication brought about byurbanizationwasoneof the factorsweighingon theSovietsystem,but it has to be seen in conjunctionwith themore central causes.That is to say, thesemore central causes thatwe have shown canexplainmuch of the problems that led the Soviet leaders to launchperestroika, even without taking into account the issue ofurbanization.Theproblemofurbanization,withoutbeingexaminedin conjunction with these other main causes, cannot explain the(needforthe)lauchingofperestroika.

188ThefulloriginaltextoftheSovietConstitutionof1977canbefoundinVSSSSR(1981)andFeldbrugge (1979).189TheSupremeSovietwasdividedintotwochambers,equalinformalpowersandnumberofdeputies:theSovietoftheUnionandtheSovietofNationalities.TheSovietoftheUnionwasformedonthebasisofonecitizen/onevote(withrepresentativesindividuallyelectedfromeachelectoraldistrictof300,000people).TheSovietofNationalitiesconsistedofethnicrepresentation:32membersforeachofthe15republicsoftheUnion,11foreachautonomousrepublic,fivefromeachautonomousregion(avtonomnayaoblast')and1fromeachautonomousarea(avtonomnyiokrug).(BSE,3rded.,Vol.4,p.564)190AtranslationintoEnglishoftheStatuteoftheCommunistPartyoftheSovietUnioncanbeseeninBasicLawsontheStructureoftheSovietState,editedbyH.BermanandJ.QuigleyJr.191Between1952and1966,thePolitburowasrenamedPresidium(oftheCentralCommitteeoftheparty).(BSE,3rded.,vol.20,p.215)192TheGeneralSecretarywasrenamedFirstSecretarybetween1953and1966.(BSE,3rded.,vol.23,p.183)193Accordingtothearticle,

Thismeansthatifany[governmental]departmentoreconomicbody isdoingabad jobandcannot

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performthetasksitsetout,[thepartyauthorities]shouldnotreplaceordisfigureit,butstrengthenithelping make it able to meet its obligations.(Slepov,1951,p.49)

Thus, the ideal framework sought by the party was that the partybodies should “exercise leadershipand controlof the economy,”not“over” the competent government economic bodies, but rather“through” them. (ibid., pp. 48­49)However, in reality, this sensibleandbalancedbehaviorwasnotalwaysachieved.Evenpartyofficialpublications contained complaints and descriptions of varioussituations inwhich party instances sinned by lack or excess: theyeither interfered inminutiaeof routineoperationof enterprises orgovernment economic agencies or neglected their due politicalcontrolofthewaytheeconomicworkwasbeingconducted.(Ibid.,pp.50­51)

194NomenklaturaisaRussianwordofLatinorigin.InLatin,itmeans“listofnames.”(Prohkorovetal.,1980,p909.)InRussian,inthepoliticalsense,thewordreferstoa“listof jobs[positions]thatanyinstitutionhastheformalrighttoappointorconfirm.Forexample,aministryhasitsnomenklatura,aswellasthemunicipalSoviet,varioussenior­leveltradeunionorganizations,andsoon.”(Hough&Fainsod,1979,p.644)VirtuallythissamedefinitionisfoundinabookabouttheCPSUstatutespublishedbytheofficialSovietpublisherofpoliticalliterature,Gospolitizdat:

It iscustomarytocallnomenklaturathe listofcareer positions that the party organs have theduty to keep under constant supervision. [Forexample] In the nomenklatura of the regionalpartycommitteeare included regional leaders; inthe district party committees, the leaders ofdistrict institutions. In practice, thismeans thatthecommunistswhoare leadersoforganizationsand institutions,beforeappointingsomeone toaposition of responsibility, must provide thatperson to confirmation by the correspondingpartyorgan.Thisprocedure isvalidnotonly forthe appointment but also for the removal fromoffice.Withoutpermissionofthepartyorgan,thecommunistswhoareleadersoforganizationsandinstitutions cannot remove anyone from anyposition in the nomenklatura of that body.

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(Bugaev&Leibzon,1962,pp.154­155)

195Indeed,theSovietpracticeofusingconstantpricesofthefiscalyear1926­7forthelongperiod1928­1950,inaneconomyinastructuralprocess ofmodernization andindustrialization,leads to statisticaldistortions.Accordingtotheso­called“Gerschenkroneffect”incalculationsofgrowthofaneconomyintheprocessofindustrialization,theemploymentofolderyearsasthebase­yearpriceleadstoan“upwardbias”(highergrowthrates),whereastheuseoflaterbase­yearsleadstoa“downwardbias”ofthevaluesofthegrowthrates.(Gerschenkron,1951,p.47­58)Thisispartlyduetothefactthatwithtimethereisatendencyforpricereductioninthenewindustrialproductsthatgraduallyoccupyeverlargerashareofthemoderneconomy.Theseproductsstarttohaveanincreasingweightinthetotalofgoodsinthegivensocietyand,ifmeasuredbythepricesoftheyearsofthebeginningofindustrialization(whenindustrialproductsweremoreexpensive),therewillbeatendencyto“inflate”thetotalvalueofgoodsproducedinthecountryinlateryearswhenthesameproductsdonotcostsomuchanymore.Theoppositeistrueifweuselateryearstocalculatethegrowthoftheeconomyintheyearsofearlyindustrialization.ThedegreeofstatisticaldistortionwascalculatedbyBergson(1961,pp.217and271)ina studyoftheRandCorporation.Usingthesamemethodology,Bergsoncalculatedthatifweusethe1928rublefactorcost,SovietGNPgrewatanaverageannualrateof11.9%between1928and1937.However,ifweusethe1950rublefactorcost,theaverageannualgrowthofGDPoverthesameperiodwillbe5.4%.Tosomewhatescapethis“inescapable”dilemma,Bergson(1961,pp.216­217)createdanalternativemethodologyfortheperiodfrom1928to1950:heusedacompositeindexofthecostofproductionfactorsofselectedyears(1928,1937and1950)with1937asthebaseyear,inwhichthecomparisonofeachgivenyearinrelationtothebaseyear(1937)wasmadeinvaluesforeachgivenyear(insteadofusingthevaluesofthebaseyear).Inthiscase,hecalculatedthattheSovietGNPgrewatanannualaverageof9.7%intheperiod1928­1940.196TheTsSUwasreorganizedandrenamedGoskomstat(GosudarstvennyiKomitetCCCPpoStatistike,“USSRStateCommitteeforStatistics”)in1987.197AnarticleinTheNewYorkTimesof10/13/92reproducedtheresultsofasurveybytheMcKinseyGlobalInstituteonproductivityratesinseveralcountries:

In 1990, the full­time American worker

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produced$49,600ingoodsandservicesperyear.At purchasing power parity, the French workerproduced $47,000, the German $44,200, theJapanese $38,200, the British $37,100. (Nasar,1992, p.D1, c.6) In the total manufacturingindustries, Japan and Germany are tied at 80percent of the U.S. level, although Japan hasalready surpassed the U.S. in machinerymanufacturing, electrical engineering andtransportation equipment industries (Japan, 117percent and Germany, 80 percent). TheproductivityofJapanisgreatlydiminishedduetoits lowproductivity in the service sector (ibid.,P.D1,c.6andD19,c.4)

198SeetheexplanationofMandel’stheoryoflongwavesofeconomicactivity,whichguidesthepresentwork,inthechapterdedicatedtothestudyof“TechnologicalRevolutions.”199TherecoveryintheUnitedStatesbeganafter1991andinEuropeingeneralafter1993.Itwasthereafter(afterhavinghitrockbottom)thattheannualGDPgrowthratesofthesecountriesslowlybegantoriseagain.However,sincetheperiodsincethenissmall,andrecoveryisslow,notvigorous,itisnecessarytoconfirmlaterwhetherthistrendwillbelong­term. The following tableshows thepercentagegrowth ratesof theGross

DomesticProductof theUSA,Europeand Japan in the1990s, takenfromtheOECDMainEconomicIndicators:

Table1.9–GDPgrowth,1990­1996(USA,OECD­EuropeandJapan) 1990 1991 1992 1993 1994 1995 1996USA 0.9 ­0.7 2,1 3.0 4.1 2.0 2.4OECD­Europe* 2.8 1.1 0.9 ­0.3 2.6 2.5 1.7Japan 5.6 4.5 1.3 0.1 0.6 0.9 3.6*OECD­Europe=OECDEuropeancountries.Sources:year1990 fromMEI (MainEconomic Indicators),Dec.1991,p.

174; year1991 fromMEI,Dec.1992,p.174; year1992 fromMEI,Dec.1993,p.196;year1993fromMEI,Dec.1994,p.210;year1994fromMEI,Dec.1995,p.200;year1995fromMEI,Sept.1996,p.200;year1996fromMEI,Sept.1997,p.225.

200Foranexcellentstudyofthephenomenonof“financialization”as

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thefinalstageofleadingindustrialcountries,seethebookTheLongTwentiethCenturybyGiovanniArrighi.201Arrighi(1994,pp.345and352­353)andinpersonalcommunication tothe current author,at the Economics departmentofUniversidadeFederalFluminense(Brazil),onJune17,1996.202Wehaveinsertedthistable,basedonstatisticaldatabyV.S.Nemchinov,andfirstreportedbyStalinin1928,becauseoftheimpactithadinthedebatesaboutagriculturalpolicyinthefinalperiodofNEP(“NewEconomicPolicy”),whencollectivizationofagriculturewasbeingdiscussed.Stalinusedittodemonstratethatthesmall­scaleagricultureofNEPwasfailingtodeliverfurtherincreasesintheamountofmarketedgrain.ForadiscussiononthevalidityofthedataintheStalin/Nemchinovtable,readthecontroversybetweenKarcz(1967)andDavies(1970).