Russia A History

by Gregory L. Freeze

  Perils of Restoration

  With Khrushchev’s removal, the ‘old guard’—most of whom had served under Stalin—sought to restore stability and order to the political system. Although initially evincing interest in economic reform, this ‘new old régime’ became increasingly restorationist, even with respect to the persona of Stalin, and averse to extensive change in policies or personnel. Subsequently castigated as the ‘era of stagnation’, the two decades after Khrushchev’s removal were a marvel of contradictions—economic decline amid apparent prosperity, détente and confrontation, harsh repression and a burgeoning human rights movement. By the early 1980s, however, restoration had plainly failed, stagnation devolving into the systemic crisis that would trigger the frenetic reformism of perestroika and final demise of the Soviet Union in 1991.

  From Reform to Restoration

  The regime made the dismantling of Khrushchev’s unpopular reforms its first priority. It abolished the 1961 rules on ‘term limits’ (in favour of ‘stability’ in party leadership) and reasserted the principle of centralization—and, by extension, the power and prerogatives of the Moscow partocracy The new regime quickly abolished Khrushchev’s sovnarkhozy and re-established ‘all-union’ ministries in Moscow, with a corresponding reduction of authority at the republic and oblast levels. It also scrapped Khrushchev’s educational reform, which had proven immensely unpopular. Restoration was the principal theme of the Twenty-Third Party Congress in March 1966, which reinstated old terms like ‘Politburo’ (for ‘Presidium’) and ‘General Secretary’ (for ‘First Secretary’).

  Initially, at least, the regime professed an interest in economic reform. Responding to earlier proposals (most notably, a famous article in 1962 by Evsei Liberman entitled ‘The Plan, Profit and Bonus’) and current assessments of the Soviet economy, the government—under the leadership of Aleksei Kosygin—sought to change the economy itself, not simply the way it was administered. Although favourably disposed towards recentralization, the reforms attempted to overcome the crude quantitative criteria of gross output that purported to show plan fulfilment but actually produced mountains of low-quality output. The reform proposed to measure (and reward) real economic success by placing more emphasis on sales and profits; it also assessed a small charge on capital to ensure efficiency and to limit production costs. In September 1965 the regime adopted plans to rationalize planning and introduce computers, to enhance the power of plant managers, to merge plants into larger production units (ob ′edinenie), and—most important—to replace gross outputs with gross sales. The new strategy also included tighter controls, a stress on automation, and the purchase of advanced technology from the West (for example, the 1966 contract with Fiat to build a plant in Stavropol oblast called Togliatti).

  The reforms yielded short-term gains (especially in labour productivity), but soon foundered on several major obstacles. First, despite the incentives for productivity (e.g. penalties for excessive production costs), it was the State Price Committee, not the market, that set prices and therefore determined costs, value, and ‘profitability’. Second, managers lacked the authority to discharge unproductive or redundant workers—a legacy of caution after events in Novocherkassk. Third, despite lip-service to technological innovation, ‘success’ meant fulfilling quarterly and annual production plans; that low time horizon effectively militated against long-range strategies and drove managers to focus on short-term results. Recentralization meant tighter control by the Moscow partocracy a major impediment to innovation and change. And despite the fanfare about ‘automation’ and ‘cybernetics’, the Soviet Union missed the computer revolution: the number of computers per capita in the United States was seventeen times higher and at least a full generation ahead. By the late 1960s the Soviet leadership abandoned the pretence of economic reform and settled into an unruffled commitment to the status quo.

  As reform at home stalled, the regime intervened to suppress change elsewhere in the Soviet bloc—above all, the famous ‘Prague Spring’ of 1968. After the Czech Action Programme’ of April 1968 proclaimed the right of each nation to follow its ‘own separate road to socialism’, the country was engulfed by autonomous movements demanding not only economic efficiency, but fundamental changes in the social and political order. On 10 August the Communist Party itself drafted new party statutes to require secret balloting, set term limits, and permit intra-party factions. Although the party chief Alexander Dubček promised to stay in the Warsaw Pact (seeking to avoid Hungary’s provocative mistake in 1956), Soviet leaders found the experiment of ‘socialism with a human face’ too threatening and led a Warsaw Bloc invasion on 21 August to restore hardliners to power.

  The regime also had to suppress dissent at home. It had grounds for concern: the KGB reported that 1,292 authors in 1965 had composed and disseminated 9,697 ‘anti-Soviet’ documents (mostly posters and leaflets). It identified about two-thirds of the authors—a motley array that included workers (206), schoolchildren (189), university students (36), state employees (169), pensioners (95), collective farmers (61), and even party members (111). Protest also became public for the first time in decades, as some two hundred dissidents held a demonstration on Pushkin Square, with one demonstrator bearing the sign, ‘Respect the Constitution’.

  Although most dissenters were dealt with ‘prophylactically’ (a KGB euphemism for intimidation), the Kremlin leadership decided to send a clear message to dissidents. In February 1966 it staged the famous show trial of two dissident writers, Andrei Siniavskii and Iulii Daniel, who had published satirical works abroad and, of course, without official permission. The court predictably found them guilty of ‘anti-Soviet’ activity and meted out harsh sentences (seven years of hard labour for Siniavskii, five for Daniel). The KGB boasted that the trial not only evoked an outpouring of popular demands that the ‘slanderers’ be severely punished, but also that it had intimidated the intelligentsia. Simultaneously, authorities launched an attack on Alexander Nekrich’s historical monograph, 22 June 1941, which blamed Stalin personally for the Nazis’ initial success in the war and thus contravened official plans to rehabilitate Stalin. In response, party functionaries campaigned against Nekrich’s study as allegedly based on ‘the military-historical sources of capitalist countries’.

  The repression was harsh but ineffective. When, for example, the regime organized a public discussion of Nekrich’s work at the Institute of Marxism-Leninism in February 1966, the audience openly supported Nekrich and subjected a ‘loyal’ party hack to humiliating insults and censure. Sixty-three Moscow writers signed an open letter of protest against the Siniavskii-Daniel trial, and another two hundred prominent intellectuals sent a letter to the Twenty-Third Party Congress demanding that the case be reviewed. Nor did the demonstrative repression intimidate the intelligentsia or even end public demonstrations: a few days after the invasion of Czechoslovakia dissidents staged a short demonstration on Red Square, carrying placards that read ‘Hands off the ČSSR’, ‘For Your and Our Freedom!’ and ‘Down with the Occupiers!’. Dissent was particularly animated among national minorities. For example, the Crimean Tatars—still denied repatriation and restitution—organized a demonstration in April 1968 that culminated in hundreds of arrests. The Muslim peoples of Central Asia also became increasingly restive; as the KGB reported (after a fierce mêlée at Semipalatinsk in June 1965), Kazakhs resented the fact that Russian was the official language and that ethnic Russians monopolized the best positions in the army, state, and administration.

  Years of Stagnation

  Amid all this turbulence, Brezhnev steadily consolidated his power. An associate observed that, in contrast to Khrushchev, ‘Brezhnev never read anything except Krokodil’, a lightweight satirical magazine that he even brought to meetings of the Politburo. As the years passed Brezhnev also grew increasingly vain, fond of medals and praise. He encouraged fawning and toadying, like that in a 1973 report by the KGB head, Iurii Andropov, claiming that people regarded Brezhnev’s rec
ent speech as ‘a new creative contribution to the theory of Marxism-Leninism’, that it ‘brilliantly reveals the paths and prospects of communist construction in the USSR and inspires new heroic feats of labour in the name of strengthening our multinational state, the unity and solidarity of the Soviet people’. Three years later Brezhnev was awarded the rank of ‘marshal of the Soviet Union’, his fifth medal for the ‘Order of Lenin’, and his second medal as ‘Hero of the Soviet Union’. (Satirists later speculated that he died from a chest operation, undertaken to broaden his chest to hold more medals.) The same year he ‘won’ a Lenin Prize for his memoirs, with this explanation: ‘For their popularity and their educational influence on the mass of readers, the books of Leonid Ilich are unrivalled.’ Popular demand, however, was less than insatiable: after his death, a report on state bookshops disclosed a backlog of 2.7 million copies of unsold, let alone unread, books. After a new constitution in 1977 established the office of president as titular head of state, Brezhnev assumed that position as well. With good reason, A. N. Shelepin argues that ‘Brezhnev was a great, very great mistake’.

  Brezhnev consolidated not only his own power but also that of the partocracy: article 6 of the new constitution formally established the CPSU as the leading force in Soviet society. The party also expanded its presence through sheer growth: although the rate of growth after 1964 was slower, the party none the less increased its ranks from 12.5 million (1966) to 17.5 million (1981), an increase of 40 per cent.

  But the most significant accommodation was Brezhnev’s ‘trust in cadres’ and resolve to end ‘the unjustified reshuffling and frequent replacement of cadres’. In contrast to Khrushchev, who sought to rejuvenate the party through democratization and turnover, Brezhnev left most members in their position until death or incapacitation. As a result, the average age of Politburo members rose from 55 to 68 between 1966 and 1981; by then half were over the age of 70 and would die within the next few years. The pattern was true of the Central Committee: because of the high rate of return (rising from 54 per cent in 1961 to 89 per cent in 1976–81), 44 per cent of the membership of the Central Committee was unchanged between 1966 and 1981, with an inevitable rise in the average age from 56 to 63. Low turnover rates also characterized lower echelons of the party; thus the proportion of oblast secretaries retaining their positions rose from 33 per cent under Khrushchev to 78 per cent in the period 1964–76.

  This partocracy ossified into gerontocracy, devoid of dynamic leadership. It was not only inimical to change but physically incapable; Brezhnev himself, ravaged by ailments and strokes, gradually deteriorated into a breathing mummy. His colleagues were likewise so infirm that, shortly after his death, the Politburo solemnly addressed the issue of age and ‘solved’ the problem by setting limits on the hours and days that its members should work. This ossified leadership invited rampant corruption and crime, not only in the outlying republics of the Caucasus and Central Asia, but also in core Russian oblasti like Krasnodar, Rostov, and Moscow itself. Although the party periodically purged the corrupt (nearly 650,000 lost party membership on these grounds between 1971 and 1981), it did little to stop the rot, especially at upper levels. That decay even touched Brezhnev’s own family, as police arrested close friends and associates of his daughter.

  Economy and Society

  Brezhnev’s stewardship also brought sharp economic decline. Whereas national income rose 5.9 per cent per capita in 1966–70, thereafter it fell sharply, bottoming out at 2.1 per cent in 1981–5. GNP followed a similar trajectory: 6 per cent in the 1950s, 5 per cent in the 1960s, 4 per cent from 1970–8, and 2 per cent in subsequent years. This corresponded, predictably, to a decrease in the rate of growth in investment capital (from 7.6 per cent in 1966–70 to 3.4 per cent in 1976–80, including a mere 0.6 per cent in 1979). The regime deftly juggled statistics to mask the malaise: by emphasizing not physical output but ‘rouble value’ (showing a 75 per cent increase in 1976–83), it took advantage of the hidden price inflation and concealed the modest increase in gross production (a mere 9 per cent in the same period).

  Agriculture was still the Achilles heel of the Soviet Prometheus. Agricultural output at first increased (by 21 per cent in 1966–70, compared to 12 per cent in 1961–5), but thereafter the rate of growth declined (to just 6 per cent in 1981–5). Apart from bumper harvests (for example, 235 million tons of grain in 1978), most crops were mediocre or outright failures. Thus the yield for 1975 was a mere 140 million tons—the worst since 1963 and 76 million short of the goal. And because of limited port capacities, the government could import only 40 million tons, the shortfall causing a higher rate of slaughter and long-term consequences for animal husbandry. A desperate regime made new concessions on private plots and even encouraged city-dwellers to have garden plots. By 1974 private agriculture consumed one-third of all man-hours in agriculture and one-tenth in the entire economy. The private plots were phenomenally productive: in 1978, for instance, they occupied just 3 per cent of arable land but produced 25 per cent of total agricultural output.

  Agriculture became a drag on the whole economy, devouring an ever larger share of scarce investment capital. According to G. A. E. Smith, its share of investment rose from 23 per cent (1961–5) to 27 per cent in 1976–80; allocations to the entire agro-industrial complex (for example, fertilizer plants) increased from 28 to 35 per cent. The United States, by comparison, allocated a mere 4 per cent of investment capital to agriculture. Although total output did increase (the yield for 1976–80 being 50 per cent greater than that for 1961–5), it did not keep pace with demand or rising production costs (covered primarily by gargantuan government subsidies). Subsidized bread prices were so low that peasants even used government bread for fodder. Nevertheless, spot shortages and price adjustments remained a source of hardship that periodically triggered food riots, such as those in Sverdlovsk (1969), Dnepropetrovsk (1972), and Gorky (1980).

  The regime could boast of better results in the industrial sector, yet still failed to match past performance or reach plan targets. It could claim salient achievements like the mammoth ‘Baikal–Amur’ project—a 3,000 kilometre railway north of the old Trans-Siberian and linking eastern Siberia with the Pacific.

  But the general record on output and productivity was dismal. Although the regime periodically spoke of revamping the system, it did little to raise critical indicators like product quality or labour productivity. Far more characteristic was the bureaucratic posturing, the attempt to solve economic problems with administrative decrees (which mushroomed to more than 200,000 in the late 1970s). Increasingly, the main goal was not reform but control, primarily through the formation of central industrial associations to ensure subordination and vertical integration in a specific sphere of industry.

  This decline in industrial growth had many causes. Some were inherent in a ‘command economy’, with all its inefficiencies and bottle-necks, compounded by the incompetence of a superannuated leadership. Moreover, the hidden inflation of the Soviet price system (which allowed plants to reprice essentially the same products) encouraged managers to ignore productivity and avoid retooling that involved short-term costs and unwanted—and unnecessary—risks. So long as the state provided a guaranteed market and set the prices, it was pointless to cut costs or even worry about cost-effectiveness.

  Labour constituted another major problem. The difficulty was partly quantitative: whereas the labour force had increased by 23.2 million in 1960–70, that growth fell to just 17.8 million in 1970–80 and to 9.5 million in 1980–90. For a labour-intensive economy heavily dependent on manual labour, the sharp reduction in labour inputs was devastating. Labour was also maldistributed, being concentrated not in industrialized areas but in backward regions like Central Asia, where the willingness to relocate was minimal. Labour also showed a high turnover rate (25 to 30 per cent) that directly undermined continuity and training. Nor was labour so tractable; strikes, rare under Stalin, openly challenged the regime’s authority. In 1968,
for example, workers struck at twenty large industrial enterprises, chiefly because of grievances over wages and production norms, sometimes because of tactless management and unwarranted deductions.

  Paradoxically, contemporaries saw the 1970s as a decade of unprecedented well-being. The Twenty-Fourth Party Congress (March 1971) renewed the perennial pledge to support heavy industry and defence, but also laid a new emphasis on consumer goods. The Ninth Five-Year Plan (1971–5) even projected higher growth for consumer goods than for capital goods; although that goal was not met, it did signal a marked change. Given the precipitous decline in agricultural and industrial sectors, the ‘mirage’ of prosperity is puzzling.

  Much of the explanation rests in fortuitous circumstances on foreign markets. The primary elixir was oil: after the 1973 oil crisis, the enormous profits from oil kept the leaky Soviet vessel afloat. A simultaneous commodity boom also increased revenues for an economy that exported primarily raw materials, making the terms of trade still more favourable. The surge in gold prices (for example, the 75 per cent increase in 1979) further added to state coffers. Although the USSR had already accumulated a substantial foreign debt (17 billion dollars), that sum paled in comparison with current revenues from hydrocarbon and raw material exports. As a result, the Soviet Union was able to use its hard-currency earnings to pay for the import of producer goods, consumer products, and endless shiploads of grain.

  Alongside this inefficient state economy, a ‘second’ (or ‘black’) economy emerged to satisfy the demand for deficit goods and services. According to one estimate, some twenty million people worked on the black market to supply the demand for 83 per cent of the general population. Because of rampant corruption, repression of the black market became increasingly symbolic and inconsequential. The result was a subclass of ‘underground’ millionaires whose illicit earnings became a prime source of private investment after 1985.