Politics of Productivity

Feygin draws on archival material that was not available to those of us old enough to have watched some of these events from afar. He also casts the Soviet experience in a much wider framework. Building a Ruin makes use of Charles Maier’s idea that Western governments responded to the international crisis created by the Russian Revolution and the new conditions that took shape after 1945 by looking to a technocratic “politics of productivity.”

Productivity was the means by which states could build their strength to compete with one another and provide increased living standards for their citizens that would mitigate the threat of class conflict. According to Feygin, the Soviet leadership and their advisers also came to internalize a politics of productivity, and this helped to mold economic debates about how the system should be run.

I have two criticisms of Feygin’s account. The first is that the debates he describes were often closely followed in the West at the time, despite being partially hidden by the veil of Soviet secrecy. But there are few references to these contemporary analyses.

The second, and more substantive criticism, is that Feygin’s account seems to me to understate the impact of the wider world on internal developments in the USSR. This is a pity, because one of the interesting shifts in recent work in the history of the USSR and its satellites has been to explore how they were “integrated” into the world economy and the different forms that this integration took.

Feygin might consider this a perverse criticism, because a loose sense of the global pervades his account. Whatever the talk of “socialism in one country” or different systems, the Soviet leadership was aware that their state existed in a single world economy. Success would depend on the USSR being able to measure and match productivity levels in the United States, Western Europe, and (soon) Japan. It is fascinating to see Feygin trace the ways in which new generations of Soviet economists became sensitive to tracking (and trying to learn from) developments in the West.

However, there is no real discussion that ties Soviet developments to more specific global dynamics. We do not see, except incidentally, how specific shifts in the external environment created difficulties and, more rarely, opportunities. Key markers of the Cold War barely get a look in.

Created in the 1930s, the Soviet military-industrial complex stands gloomily in the background of this account. Feygin quotes a telling remark from the deputy head of the Central Statistical Agency: “In military matters, they often say that if you fall behind you are dead. It is the same in economics, but it just happens more slowly.” Yet he does not unravel this tension.

The Placement of Commas

There is still much of interest in Feygin’s approach as he explores how different generations tried to think about ways in which the Soviet system could be improved. Economic debates could easily shade into political ones, which was sometimes dangerous for the participants, although Feygin keeps more of a focus on narrower economic issues.

Crucially he does not dismiss more conservative approaches from within this field. Most of the economists and the managers and political leaders involved were not content with the status quo. They were divided on whether more radical or more constrained forms of change represented the best way forward. But he sees the participants as clever people who, even if they wore the regime’s blinkers, nevertheless have to be taken seriously.

In 1985, the Soviet Union had a population of 285 million. It was 66 percent urban. It possessed a formidable nuclear force as well as satellites in space and over five million students in higher education. Directing this system, for all the deficiencies of its rulers, was a job that required some talent. We get glimpses of a degree of mutual respect that developed as those in the West encountered their Soviet counterparts.

Feygin’s discussion of the economic arguments about the nature of the Soviet system falls into four parts. He first discusses the creation of the Stalinist economic system. This was built around the push to industrialize the economy and build up heavy industry and the military.

Pragmatic concerns dominated. Economic theory was little more than rationalized policy, drawing on the vague idea of the “law of planned proportionate development” and debates (as Feygin puts it) about “the placement of commas in Stalin’s Economic Problems of Socialism in the USSR.”

Industrialization required investment and the suppression of consumption. It violated market logic, and if one reduced the law of value to the narrow idea of market relations, this meant that the law appeared not to operate in the USSR.

Or did it? Neither the leadership nor the economists of the time could decide. Over time — in part pushed by Stalin himself — they leaned toward the argument that perhaps it did after all.

Catching Up

The second phase was that of the Nikita Khrushchev years. Externally the USSR’s main competitor was now the United States. There was also a new degree of interbloc competition aided by the Eastern European satellites, and Soviet leaders saw widening opportunities for influence in the decolonizing world.

Global competition shifted more toward high-technology military competition and a generalized economic competition, with the goal to “catch up and overtake” the West and win the wider battle for influence. Internally too, the economy had gained in scale and complexity, and the privation of the Stalin years gave way to a greater emphasis on consumption.

An opening developed for “economics” as a discipline, and economists found places in new institutions. They began to debate the allocation of resources between branches of the economy, the role of enterprises, and better ways of matching supply to demand or raising the efficiency and quality of production.

During this period, the question of the operation of the law of value came back, and planners gingerly reopened discussion on the role of the plan and the market in economic policy. In practical terms, this culminated in the Kosygin economic reforms of 1964–69, following Khruschev’s downfall, which tried to loosen up the system.

The third phase was that of the Leonid Brezhnev years. When the Kosygin reforms did not deliver the hoped-for improvements, attention turned to the possibility of encouraging “a scientific-technical revolution” that would push the economy forward. Under Brezhnev, there was a wish for political stability. However, through the development of the scientific-technical revolution, Soviet leaders aimed to maintain planning while improving its operation using more sophisticated mathematical and econometric tools, delivering both more guns and more butter in the process.

Soviet theorists, and those involved at more practical levels, were able to draw on similar developments in the West. There was much talk at the time about a degree of convergence between economic systems East and West, and this was not just hot air. Senior Soviet economists, albeit often behind closed doors, tried to follow developments and meet up with their Western counterparts, especially in the field of management research.

Yet this phase also failed to produce satisfactory outcomes. The issue of economic proportions remained, and so did shortages in the Soviet system. There seemed to be diminishing returns to investment. With limited flexibility in prices, there were always consumers able to snap up whatever came on the market, and queues were a familiar part of everyday life.

Playing the Game

With the emergence of Mikhail Gorbachev, there was a renewed attempt to revitalize the system, this time leaning again more toward market reforms. Building a Ruin is a provocative title because in 1985, the USSR was anything but a ruin. Gorbachev and those around him were still looking for new ways to move forward. They had no idea that they would unleash a process that would lead to the system imploding as it did.

Feygin’s account of the final denouement is a little perfunctory. He briefly outlines how the reforms got out of control as new interest groups formed. Perhaps it would have been better for the author to have also reflected more on how to make sense of the bigger processes he describes rather than finishing with some casual remarks on its relevance for China.

But this should not distract us from recognizing the interest of his core discussion. So what can a critical left learn from this?

Critics of socialism argue that it is a cop-out to say that the USSR was not socialist. But it seems clear that in practical terms, those running the system were trying to beat capitalism at its own game. They were not only imprisoned in a competitive logic but also bound by its limited horizons.

Of course, this does not tell us what the Soviet economic system was. To pose that question, as some did in the USSR, was to step outside the ruling order and to invite retribution. The job of the economists that Feygin discusses was to help the system work better.

Yet even some of those who were at the center of these “insider” debates could not help wondering exactly what the USSR was. Feygin in particular instances Yakov Kronrod, who spent four decades or more trying to think not only about reform but also about value relations and the question of alienation and exploitation in the Soviet system (David Mandel’s book on Konrod, Democracy, Plan, and Market, is not cited, however).

In the event, the USSR and the wider Soviet-led bloc collapsed, becoming the “ruin” of Feygin’s title. It failed to catch up with (let alone overtake) the West, and it failed to satisfy the aspirations of its own population. The idea of socialism from above, directed by a plan, has not really recovered. When we think, therefore, of going beyond capitalism, we must think about different ends as well as different means.

A bottom-up, participative system might well be messy in different ways, but it would have to engage people. In the USSR, Soviet workers were never the knowing agents of their own fate. They figured only as a constraint, and possibly when they rioted, as they did in Novocherkassk in 1962, where troops killed two dozen people and wounded seventy (several more were executed afterward). Feygin does mention Novocherkassk, but it is telling that, while “consumption” and “consumer goods” get a lot of references in his index, “workers”  do not feature at all.