One of the main experiments launched by the Bolsheviks about a decade after they took power was to organize the economy in a completely different way from how national economies worked before. They proclaimed that an economy rationally calculated by the government and guided entirely by a plan and not by a free market with its private actors’ selfish motives was the key to a more efficient and just society. Reality, however, proved that it was almost impossible to put these principles into practice. The result of this experiment was a chaotic system of plans, inadequate due to the poor-quality of statistical data and the computational complexity of planning. Moreover, various interest groups and lobbies constantly adjusted plans through complicated bargaining processes. Finally, spontaneous market elements, both legal and illegal, made economic plans even less functional. The planned system evolved over the course of the Soviet Union's existence and never became either fully planned or fully market-based. Nikolai Mitrokhin, in his solid two-volume monograph, aims to explore how this economy worked, 1960s–80s.
Mitrokhin is mostly interested in political history. He explores what economic goals state leaders had, how macroeconomic decisions were made, which parties and interest groups existed, and how these groups negotiated compromises. His source base consists of multiple memoirs of and interviews with former Soviet (mainly Communist Party) officials, from those at the very top of the governing apparatus, like members of the Central Committee, to those closer to the ground, like heads of industrial departments within regional Party committees. Based on these narratives, Mitrokhin tries to reconstruct how the whole economy functioned, from producing weapons to organizing big construction sites to providing the population with meat.
The story Mitrokhin tells based on these interviews and memoirs is rather well-known. He describes the growing technological inferiority of Soviet manufacturing, the inefficiency of investments, the dependency on western imports, the corruption and half-hearted reforms. His sources also allow him to provide many small details that gives the reader a tangible “taste” of the era and enrich the known narrative of topics such as informal decision-making. He shows, for example how through informal dinners, enterprise directors hoped to lower plan goals or raise the supply of raw materials to their enterprise (1:172–73). According to the memoirs of Egor Ligachev, the former head of the Central Committee administrative department, another important informal decision-making venue was Moscow's Vnukovo Airport. He recalls how, under Leonid Brezhnev, the seeing-off and meeting of the General Secretary to and from his various business trips served as an important ritual when various officials would be invited to discuss different matters, including economic ones (1:199–200). Boris Rabbot, an aide to Alexey Rumiantsev, an economist from the Academy of Sciences, recalled in his memoirs that in the 1970s Yuri Andropov, then the head of the KGB, interested in potential economic reform, met secretly with Rumiantsev and other economists at a safe apartment to discuss workers’ self-management and agricultural development (2:306).
Although Mitrokhin's book is full of such insightful stories told by the former Soviet officials, his source base naturally shapes a specific perspective. By focusing on policy-makers, he deliberately excludes “ordinary people” from the picture. As he explains in the book's introduction, “the average Soviet citizen had a very simplistic and narrow-minded understanding of politics. So his attitudes . . . are certainly interesting but not within the framework of this research” (1:32). Indeed, in some sense citizens everywhere often do not have a direct say in shaping economic policy, and this could ring especially true for the Soviet Union, where they could not influence it through elections and protest movements, and where their economic agency was further limited by the lack of a proper market. And yet, when reading a book such as Mitrokhin's, in which the main protagonists are party functionaries and factory directors, the reader is left wondering about the role of rank and file workers and consumers in Soviet economics. Could employees of the Soviet enterprises feel the consequences of the Kosygin reforms in their own lives, and if so how? To what extent did changing consumer preferences influence state decision-making and negotiations between different interest groups? How, in turn, did various economic measures change popular ideas about the plan and the market?
The book's perspective is also shaped by the author’s focus on measuring efficiency in purely economic terms. This can be seen, for example, in Mitrokhin’s analysis of the results of the Kosygin reform, which gave Soviet enterprises more independence in deciding how to spend their profits. They could spend them either on production development, or on their workers’ wage raises, or on the so-called socio-cultural development. Throughout the book, Mitrokhin emphasizes that many big enterprises ended up sending a huge share of their profits to the socio-cultural sphere. They provided employees with housing (by hiring construction workers at their own expense), culture and entertainment (building clubs, libraries, and stadiums), welfare (building kindergartens, hospitals, and sanatoria) and even food (organizing their own vegetable gardens) (1:117–18; 123; 256–62; 294–97). For Mitrokhin, these expenses represent the epitome of the inefficiency and decay of the planned economy, in which profits were not used for the production growth but rather “wasted.” According to him, enterprise directors invested in social infrastructure only to improve their status among local elites. However, this development could also be seen as a triumph of the socialist economic system, which, perhaps unintentionally, did manage to provide its citizens with ample welfare. Even today, thirty years after its collapse, this is exactly what former Soviet citizens remember nostalgically. Thus, adding the social dimension to Mitrokhin’s account could have perhaps allowed us to see Soviet economic policies and their impact on everyday life in a more comprehensive way.
That said, this book does an excellent job giving a broad overview of late Soviet economic policies pertaining both to stagnation and reforming, and capturing the constant conflict of various interest groups as a major factor of economic policy. Its insights regarding the functioning of the Soviet decision-making process and the rich details about the decision-makers themselves make it an invaluable resource for scholars of the Soviet Union.
