PERESTROIKA : Toward a Soviet ‘Miracle’ : Inertia of Conscience and Economy

Mikhail S. Gorbachev’s report to the June plenum of the Communist Party’s Central Committee repre sented the severest criticism of the Soviet economy heard here since the beginning of the 1920s.

The law concerning government enterprises approved by the Central Committee, and the main theses of the radical perestroika (reconstruction) of the management of the economy endorsed by the Central Committee, can be viewed as an important, if not decisive, victory of the reform wing of the party leadership. The personnel changes in the Politburo can also be considered as strengthening party reformers and bolstering Gorbachev’s personal, political base.

Nikolai P. Slyunkov, promoted to full membership in the Politburo, is known as a strong supporter of the economic reforms. Alexander N. Yakovlev, also promoted to full Politburo membership, is known as a supporter of progressive reforms in ideology and culture. Viktor P. Nikonov, named a full member of the Politburo, will now have a better opportunity for conducting reforms in agriculture. Marshal Dmitri T. Yazov, named a candidate member of the Politburo, undoubtedly will support the economic reforms from the military side.

The materials of the plenum require careful study, especially because they are only the beginning of the new and extremely important stage of perestroika of the Soviet economy. We know about the West German, Japanese, Brazilian and Chinese “economic miracles.” We may be standing at the threshold of a “Soviet miracle.” It raises hopes of our friends, satisfaction of our constant partners and anxiety of those who consider themselves our adversaries.

General Secretary Gorbachev spoke at the plenum about the “pre-crisis” state of the Soviet economy. I would say, more sharply, that since the middle of the 1970s, we have been in a period of real crisis. Even though statistics declared a 3%-4% yearly increase in production (which diminished in 1981-82 to 2%-3%), the extensive report-padding of which we learned recently and losses from bad management evidently exceeded these insignificant increases.

During these years we were selling oil and gas to the West so we could buy their grain, meat and butter--items that, according to plan, were supposed to be provided by our agriculture, not Canada’s.

The Soviet economy was saved from a crash only by huge natural resources and a monopoly of foreign trade that isolated the Soviet Union from the world economy. The state of things began to improve slowly in 1983-86 but gains remained small and almost vanished. The statistics again report a 3% to 4% increase; however those statistics include much of the expense for the Chernobyl nuclear accident.

In reality, Soviet economic losses are still exceeding gains in production. The number of industrial, office and professional workers and collective farmers whose lives became better during the last two years is still smaller than those whose lives became harder.

Why is there no acceleration in the economy? And why didn’t reorganization start in many regions and branches of industry? One can find a convincing answer to these questions in Gorbachev’s speech.

The contemplated reforms can be compared with V. I. Lenin’s New Economic Policy (NEP) of 1921-22. At that time, the country was ruined and the question facing Lenin was how to build a new socialist economy quickly. Construction sites were available, rivers and lakes were clean and filled with fish, woods stood untouched, soil was not exhausted and new cities were not yet built. Today we do not need to build but reconstruct, to correct the huge economic mechanism while it’s operating, to destroy habitual methods of work. This requires fighting stereotypes formed during the decades that touch the interest of bureaucratic groups and sometimes of wide masses of population, accustomed to more and more cheap vodka and less incentive for honest and effective work.

It is not surprising that reconstruction has found not only support but resistance. Many leaders and ordinary workers openly and secretly have sabotaged top-level decisions. The majority was waiting, and it regarded the slogan of perestroika as just another in a long series of campaigns they had experienced during the past generation.

It was not only inertia of conscience, but also inertia of the enormous economic system formed since the end of the 1920s as a monopoly, where enterprises had to operate under rigid controls from the top.

Marxist literature has convincing criticism of monopolies and super-monopolies, said to cause stagnation and to hamper innovation. Such monopolies abolish the role of competition and reasonable prices and work by administrative methods rather than economics.

It was assumed, however, that all these harmful consequences of centralization were ruinous only for the greedy capitalists--not for Communist leaders, who would be influenced only by people’s interests and thus would be able to avoid the defects of the anarchy of capitalist production and the vices of monopolization.

The reality turned out to be more contradictory. In the leadership of the Communist Party of the Soviet Union, and in the economic leadership, egotistical and self-interested groups were formed of bureaucrats and technocrats for whom private interests proved to be more important than interests of the country and the people. Of course, in all links of our apparatus of management, there were many people who could be called public servants. But up till now, they have not set the tone for leadership.

On the other side, ordinary workers have become estranged from production and lack personal interest in their endeavors. We encountered the phenomenon of social and political passivity, for which, supposedly, there should be no place in a socialist society. It is not surprising that for so long we walked at the tail of the scientific and technological revolution and that only now are we catching up with “the decadent West” in science, technology and the sphere of information.

This situation must be changed, even though it won’t be a speedy process. It is impossible to destroy quickly management methods formed during decades. We possess neither a well-developed scientific conception nor enough cadres able to work in these new conditions, which demand greater self-reliance and responsibility.

In the decades of directive leadership, not one but several powerful braking mechanisms were formed. For example, we have still not eliminated the dangerous disproportion between production of industrial machinery and the manufacture of consumer goods. This is natural at the early stage of development but now it leads to production for production’s sake and does not satisfy consumer demand for goods and services.

The passion for quantitative indexes led to the production of goods of low quality, needed neither by the people nor by the economy itself.

--We are producing more metal and cement than the United States, but that is more an index of wastefulness than of technical accomplishment.

--Millions of our machine tools and machines are not only too bulky but also lack spare parts. Therefore more workers here are occupied by the repair of their machines than by production.

--We are ahead in world production of timber but behind the majority of countries in the effectiveness of its use.

--The development of transportation dropped behind the development of industry, with output of cars outpacing the construction of good roads.

--We don’t build the necessary number of warehouses for fertilizer, vegetables and grain, and ruin millions of tons of products produced by industry and agriculture.

--Land reclamation sometimes creates more problems than it solves. The lands under cultivation in the country have been declining since 1975 and the quality of the soil on tens of millions of hectares is growing worse.

--The Soviet Union has the world’s biggest army of scientific workers, engineers and physicians. But we are a long way behind the West in science, technology and public health care.

--In some cities, warehouses burst with goods needed in other cities. We transport the same kind of goods from the east to the west and from the west to the east. We are not developing local resources and local industries. We are afraid of people who work a lot and earn a lot. Our future engineers until recently wasted dozens of hours studying the writings--”masterpieces”--of Leonid I. Brezhnev.

One can continue endlessly with such examples.

The party plenum now gives hope for considerable improvement in the economy and correction of the accumulated problems, for development of democracy and destruction of some traditional braking mechanisms, for the advancement of new cadres. Our monopolistic economy would be weakened and the connections with foreign markets would grow.

The economies of Western countries also have a lot of waste. That’s why the general development of the Soviet economy, as planned by the plenum, includes the use of all the achievements of modern science and technology without losing the link with proper socialist values. We must combine advantages of big and small enterprises, state and cooperatively owned property, individual labor activity and joint ventures with both socialist and capitalist firms.

In front of us is a very large and complicated work. After a few little steps forward in the past 27 months, we made a really big stride forward in June--but it is only the first big stride on a very long and difficult road.