The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Economic Problems in the USSR:
The Bureaucracy Cannot Solve What Its Own Existence Creates

Oct 31, 1983

Criticism of the functioning of the Soviet economy by economists, journalists and government officials of the capitalist world is very commonplace. And it is as predictable as it is frequent. Over the past year, however, there have been a number of public criticisms of the Soviet economy coming out of the Soviet Union itself. Candid admissions about the state of the economy as well as harsh critiques of the functioning of the planning system have even been made public from the new number one man, Yuri Andropov.

In some aspects, the Soviet economy appears strong. In terms of total industrial output, for example, the Soviet Union ranks second in the world only to the United States. The Western press likes to repeat the complaints made by the Soviet leaders that the rate of growth of overall industrial output today stands at the lowest point in decades, at 2.8 per cent. However, the growth rates in the capitalist world are nothing to brag about. Not only has there been generally a slower rate of growth than in the Soviet Union, but in the last years some countries have even experienced an absolute decline in industrial output.

On the other hand, the lack of many consumer goods, and the long lines of people waiting at the stores for what does exist, is also characteristic of life in the Soviet Union. If we look at Soviet agriculture, the problems of the Soviet economy stand out strikingly. The Soviet Union continues to import massive amounts of wheat, making it the largest importer in the world. Certainly there are other countries, even developed ones like England, Japan, and West Germany, which are net importers of agricultural products. But if they are, it is because they are small countries with a high population density. They simply lack sufficient arable land surface. The industrial countries which have more agricultural land surface available, such as France and the United States, are significant net exporters of agricultural products. The Soviet Union is the only relatively industrialized country in the world, which also has the necessary land space available, and yet remains incapable of producing sufficient agricultural output to meet its own needs.

Planning Needs Democracy ...

Within the Soviet Union, the current discussion of the economic problems is focused on the functioning of the economic planning and its inability to be effective.

One significant report that became public in the West this last August was from a meeting in Novosibirsk, held in April, of leading Soviet economists and representatives from the economic departments of the Communist Party Central Committee. This report went so far as to state that the causes of the negative trends in the economy lie, “... in the outdated nature of the system of industrial organization and economic management or simply the inability of the system to insure complete and efficient utilization of the working and intellectual potential of society.”

Yuri Andropov also painted a rather bleak picture of the economic planning system in a speech given before a plenary meeting of the Central Committee of the Communist Party on November 22, 1982. He described a society in which each sector of the apparatus is out for itself, protecting its own interests at the expense of the overall plan. It is a society in which inertia has set in, and one in which no one is controlling the apparatus for abuse and waste. As Andropov states it, “Responsibility for observing the interests of the whole state and the whole people should be enhanced and departmentalism and parochialism should be resolutely uprooted ... another thing is lacking, namely, initiative and the resolute struggle against mismanagement and wastefulness.”

The consequences of this bureaucratic planning are also illustrated by Andropov. Sometimes the problems are stated overtly, other times they are implied in proposals for change:

The problem of lack of coordination between the development of raw-material and processing branches still remains...

I should like to draw the attention of my comrades to the fact that now the question of saving material resources should be considered in a new light and not like “I have saved – good; I have not saved – that’s not bad either”... .

It should become law that any new decision on the same question be taken only after past decisions have been fulfilled or after any new circumstances have emerged... .

To introduce a new method or new technology, production has to be reorganized in one way or another, and this affects fulfillment of plan targets. Moreover, you may be taken to task for failing production plans, but, at the most, only scolded for poorly introducing new technology.

What is the way out of the bureaucratic entanglement that the Soviet economists and leaders describe so well? At least as part of the solution, the activity of the masses of the population is involved. The Novosibirsk report states that “... society has a pressing interest in granting working people greater leeway in their economic behavior... .”

Andropov develops this idea much more fully:

... It is necessary to give a boost to the activity of the masses of working people themselves. Today this is a key task of the party committees, the Soviets, trade union and Komsomol bodies. The party’s ideas, plans and calls become a material force when they get hold of the masses. At present, it is particularly important and necessary that each worker understand that the implementation of the plan depends on his labor contribution, too, and that everyone understand well the simple truth that the better we shall work, the better we shall live. As Lenin emphasized, the greater the scope of our plans and our production tasks “the larger must be the number of those enlisted for the purpose of taking an independent part in solving them.”

And this means that it is essential to further develop socialist democracy in its broadest sense, i.e. to secure a still more active participation of the masses of working people in managing state and social affairs. And, of course, it is needless to prove here how important it is to show care for the needs of the workers and for their working and living conditions.

It is certainly true that planning requires democracy, both on the political and economic levels, in order for it to function efficiently. It is only the mass of the population itself that can control an apparatus, who can recognize all the problems and impose their correction. It is the producers themselves who are in a position to know and to be able to correct waste and inefficiency. It is the producers themselves who can best judge the management of an enterprise, value the introduction of new technology and new methods of production to maximize development. It is the producers themselves who best know what is feasible and what is not, who can coordinate their activities through central bodies, who can make the necessary modifications as a plan progresses. If the producers are the ones to determine the overall goals of the society, if they are the ones who determine the economic plan within this framework, then they will insure its efficient implementation.

... but the Bureaucracy Makes It Impossible

Despite all the embellished words that Andropov and the others issue expressing the need for democracy, it is precisely this they oppose on all levels of Soviet society.

Certainly, if the only issue involved was allowing the workers to have a voice in the implementation of the plan to make it more efficient, there would be no problem for the top rulers of Soviet society. But democracy is not something you can section off, and isolate from one area to the next. It is not possible to allow workers to have a say, even just in the implementation of the plan, without a risk that the workers quickly call into question other aspects of Soviet society as well. To have real democracy of the producers risks that the workers begin to question and challenge the privileges and the domination of the bureaucracy altogether. And since the bureaucracy is not about to encourage the attack on its rule over society, it does everything it can to prevent the process from ever getting started. It suppresses any and all democracy... even when it understands that it is harmful to the functioning of the economy.

The proof of the real position of the leaders of the Soviet Union in relation to democracy is in what they actually propose for implementation. The Novosibirsk report states that, “... the existing system has to be changed by groups that occupy rather high positions in this system... .” That is, they propose that the failures and the shortcomings of the bureaucracy be corrected – by the bureaucracy itself.

If we look at the specifics of Andropov’s new economic measures announced in August, he proposes nothing concrete in terms of the actual participation of the population, despite his speech. At most, some plant managers will be given a freer hand in implementing the plan the central government passes down to them.

As far as the workers are concerned, Andropov has only a harsher labor disciplinary code to propose. Some material incentives may be offered as the carrot for more production, but the bulk of the measures concern the stick, with new punishments for not performing. Workers absent without cause will lose a day’s vacation for every day missed. Damaged goods and lost output due to shirking or drunkenness will be compensated for by a partial reduction in wages for a period of time. Drunkenness on the job will make a worker subject to summary dismissal. And because dismissal carries little consequence in the Soviet Union, where there are over two million unfilled jobs, the workers who are fired for drunkenness or continual poor work, will face a reduced production bonus at the new job for three to six months.

The leaders of the Soviet Union can describe the problems of the economic planning system. They can even state the solution of needing a democratic system of planning to replace the bureaucratic one. But when it comes down to taking action, the Soviet leaders have only one solution to the economic waste and inefficiency due to the bureaucracy – squeeze even more out of the workers.

The Limits of Socialism-in-One-Country

If Soviet society were democratically controlled by the workers, it would certainly improve the functioning of economic planning within the Soviet Union. But even this would not make Russia into a fully developed country or solve its economic problems. For these problems stem most basically from the fact that Russia, whatever the immense progress it has made, remains in many ways an underdeveloped country surrounded by imperialism, and moreover a very hostile imperialism.

Once again this becomes very clear if we look at Soviet agriculture. If you compare the Soviet Union and the Unites States, which have roughly the same agricultural land area available for similarly sized populations, (230 million in the U.S. compared to 270 million in the USSR), you will find that the U.S. produces a minimum of one-third more agricultural output than the USSR. But more startling is the fact that in the U.S. this output is produced with only 3.9 million people involved in agriculture, while the output in the USSR is the work of over 30 million people. That is to say, the productivity of a U.S. agricultural worker is roughly ten times greater than in the USSR.

This difference is not explainable by poor planning or the lack of workers’ democracy in the Soviet Union, though this poor planning or this lack of democracy contributes to the disruption of agriculture also. It is the result of having only half as many tractors in the Soviet Union as in the U.S., and of having those tractors be of a much inferior design. It is the result of not having the necessary trucks or infrastructure, such as paved roads. In Russia there are only 4.8 linear miles of paved roads for every 100 square miles of area. In the U.S. there are 102.8 linear miles of paved roads for the equivalent area. The Soviet Union lacks fertilizer, herbicides and pesticides. It lacks sufficient silos and other storage facilities. It lacks sufficient irrigation, and it lacks the computers that are used in the U.S. to scientifically control agricultural processes.

In other words, the underdevelopment of Soviet agriculture is the result of the retardation and the underdevelopment of Soviet industry. It is an industrial development which is far behind that of the industrialized capitalist countries in terms of relative capacity, of productivity, and of technology.

Even if there were no other problems involved, it would be impossible for the USSR to catch up with the economic development of the imperialist countries and especially of the U.S. The economy of these countries is the result of five centuries of capitalist accumulation based on the exploitation of the whole world. The USSR can rely only on its own strength – that is, on the work of only its peasants and its workers – to build up its economy.

Moreover, the pressures of imperialism continue to set obstacles and impediments to the development of the Soviet economy.

The Soviet Union, just as other countries, is obliged to look to the world market for the things it lacks. Because it doesn’t have the technology and the engineering capabilities itself, it tries to obtain these things from the imperialist countries that do.

First of all, imperialism can, and often does, refuse to allow certain technologies and certain knowledge and products from being obtained by the Soviet Union – for both commercial and for political reasons. Recent examples of this are all the problems and delays in the Soviet Union obtaining the necessary equipment for its new natural gas pipeline, as well as with the periodic refusal to sell American wheat to the Soviet Union.

When imperialism does make available the technology the Soviet Union needs, it is done on terms favorable to imperialism, of course. The establishing of a factory for the production of tractors in the Soviet Union with the licensing and engineering of Ford Motor Company, for instance, was paid for, and is still being paid for, at a high price.

In the cases where the Soviet Union can directly obtain items on the world market, it still comes face to face with imperialism’s domination. It comes into trade relations as the weaker partner, who can only lose out in the exchange of values. When the Soviet Union trades at world market prices, it exchanges as equals goods produced with higher amounts of labor than the goods produced in the advanced countries. The consequences of this for the Soviet Union, as for all less developed countries, is that its economy continues to be drained by imperialism.

Additionally, the fact that Russia is tied into the world market also means that it is not immune from the cycles in this capitalist market. That is, the world economic crisis in the imperialist countries over the past decade also has a restricting effect on the Soviet economy. It is also part of the explanation of why Soviet growth today is at such a low point.

Imperialism’s domination continues to impose itself upon the Russian economy in another way as well; that is, with its continual threat of military attack against the Soviet Union.

To be continually prepared to match the weaponry of imperialism puts a tremendous strain the Soviet economy. To try to match the military expenditures from a weaker economic base, Russia must spend an estimated 12 - 16 per cent of its gross national product on military goods, compared to the U.S. spending 6.2 per cent. And it is this military priority that has also produced tremendous distortion in the Soviet economy. It is the reason why heavy industry, that is, the industries necessary for military production, have been developed at the expense of consumption through light industry and agriculture.

The Problem Is the Bureaucracy Itself

The only way out of this situation of being dominated by imperialism would be the destruction of imperialism, and the establishment of economic planning on the world level. This would be the only way to put the wealth accumulated by imperialism from the whole world at the disposal of all the countries, of all the people. It would be the only way to raise in a few years the economic development and the standard of living in every region of the planet to the level now existing in the imperialist countries, and probably much higher.

But this is a political task the bureaucracy opposes. For it owes its existence to the fact that the Russian revolution remained isolated and that imperialism remained dominant over the proletariat outside of Russia. Nearly six decades ago, in 1924, the bureaucracy openly replaced the internationalism of the Bolshevik Revolution with a nationalist perspective, which went under the name of socialism-in-one-country. This nationalist perspective, which claimed the illusory goal of building up a socialist society within the national borders of the Soviet Union, and which actually has not even found a real way out of underdevelopment, is a dead end for the Russian people.

It is the existence of the bureaucracy itself which is the central problem in the Soviet Union. Because it is impossible for the bureaucracy to reconcile its existence with the need for either world socialism, or even for democratic planning within the Soviet Union, the bureaucracy has no means to overcome the problems even it can identify. The bureaucracy can now and then raise its complaints, and even declare the need for drastic reforms. But all that is ever implemented is a new administrative plan, which at best can temporarily contain problems in some areas, but only to see others appear.

So what is taking place under the new Andropov administration is really nothing new. Andropov is only following the line of Kosygin, Khrushchev, and even Stalin before him. The results are equally predictable.