Planning, Market & Unemployment

Jim heartfield jim at
Sat Aug 28 01:43:32 PDT 1999

In message <199908280143.VAA12241 at>, Michael Hoover <hoov at> writes

>Soviet central planning system certainly mobilized human (and natural)
>resources for rapid industrialization. Maximum investment was
>channeled into heavy industry (steel, iron, coal, electric power,
>machine building, and military). A kind of permanent war-time
>economy, Soviet economic mobilization was not directed to fulfiling
>individual consumer demands. Central planning system paid less attention
>to efficiency and technological innovation in pursuit of bulk output.
>And it worked.

>Between 1928 and 1975, Soviet growth rates averaged 4.7%/year, even
>including the devastation of WW2. By the 1980s, Soviet oil production
>peaked, new labor force entrants declined, and the environmental costs
>of industrial 'gigantomania' were revealed. The old extensive growth
>model had reached its outer limits.

I tend to think that Hillel Ticktin's argument about the character of the 'planning' system in the USSR carries weight (as in 'Origins of the Crisis in the USSR' Sharpe 1992). Ticktin makes the point that what was called planning was even more chaotic than the free market. Because the plan was simply imposed upon different points of production as an external regulation, those concerns had every interest in meeting the plan in words, but not in fact. Ticktin lists some of the non-use values the USSR produced from shoes you could not wear, to factories without roofs, and spare parts that did not fit. The 'bulk output' was to a considerable degree just plain waste - products that no-one could use. Such products fulfilled the targets, because the targets were paper targets with no real check on quality, or feedback mechanism that would hold managers to account. For that reason the growth rates celebrated by the CIA and the USSR alike should be taken with a pinch of salt. Making junk is not growth. Capitalists who had hoped to make a killing buying up soviet industrial know-how have been gravely disappointed.

>I stated in my previous post (see above excerpt) that *job security
>was perceived as positive achievement not to be dismissed nor to be
>sacrificed*. I should have indicated that, based on data collected from
>public opinion polls that were introduced, this was the view of the
>overwhelming percentage of working people in the Soviet Union in the
>1980s. I spent some time with Soviet sociologists engaged in this
>work back then and they were very clear: professional/managerial
>types were more supportve of 'reforms' than was working class.

I think that in truth the low unemployment was symptomatic of an essential weakness in the soviet economy rather than a strength. Concerns in the USSR hoarded and squandered labour. There was no incentive to save labour in the soviet economy, so managers (rather like NHS and municipal bureaucrats) hung onto as many people as they could, for fear of being exposed to problems later on. Workers had little problem with unemployment, because they were being drawn into industry like water to a sponge. Their problems were more basic: unavailability of basic consumer goods, endless amounts of time wasted in queuing. The problem of absenteeism was not just laziness on the part of soviet workers. Home plots met a substantial part of people's food requirements. The black economy took off precisely because the official economy was not meeting basic requirements. People were clocking on at work, and then sneaking out to do repairs or dig their gardens. -- Jim heartfield

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