Introduction

THE SOVIET UNION

Empire, Nation, and

System

Aron J. Katsenelinboigen

Transaction Publishers

New Brunswick (U.S.A.) & London (U.K.)

New Brunswick, New Jersey 08903

Conventions. No part of this book may be reproduced or transmitted In

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to Transaction Publishers, Rutgers—The State University, New Brunswick

New Jersey 08903.

Library of Congress Catalog Number: 89-28590

ISBN: 0-88738-332-7

Printed in the United States of America

Library of Congress Cataloging-in-Publication Data

Katsenelinboigen, Aron.

The Soviet Union: empire, nation, and system / Aron J.

Katsenelinboigen.

p. cm.

ISBN 0-88738-332-7

1. Soviet Union—Politics and government—1917- 2. Soviet Union—

Economic conditions—1918- 1. Title.

DK266.K354 1990

320.947—dc20 89-28590

CIP

To my dearest friends

Helene and Herbert Levine

with love

Contents

List of Tables ix

Acknowledgments xi

Introduction xiii

BLOCK 1. THE SOVIET POLITICAL SYSTEM 1*

Part One: Russia's Fearsome Past, Stormy Present, and Murky

Future 3

1. Systemic Causes of the Present Crisis 5

2. A Multidimensional Approach to the Soviet Political System 29

3. Who Is Gorbachev? 65

Part Two: The Russian-Soviet Empire 91

4. Expansion of the Soviet Empire 93

5. The Military Imperial Orientation of Soviet Society 111

6. The Structure of the Second Imperial Circle, and How It Might 127

Change

Part Three: Nationalism 147

7. Russophilism 149

8. Some Notes on Soviet Anti-Semitism 169

9. The Soizhenitsyn Phenomenon 207

BLOCK II. THE SOVIET ECONOMIC SYSTEM 219

Part Four: Soviet Economic Mechanisms 221

10. General Observations on Soviet Economic Mechanisms 223

11. Inflation in the Soviet Union 255

12. Corruption in the Soviet Union 269

13 Multicolored Markets in the Soviet Economy 291

Part Five: Conflicting Trends In Soviet Economics In the Post-Stalinist Era 329

14. The Anatomy and Physiology of Soviet Economics 331

15. The Development of Mathematical Economics in the Soviet

Union in the Post-Stalinist Era 361

Part Six: Personalia 389

16. Jews in Soviet Economics 391

17. Nobel and Lenin Prize Laureate L. V. Kantorovich: The

Political Dilemma in Scientific Creativity 405

18. The Story of a Favorite Jew; Or, Aron Katsenelinboigen is a

Proud Name 425

Conclusion 449

Index 465

List of Tables

1.1 Soviet Steel Production, 1945-1988

1.2 Soviet Production of Metal-Cutting Machinery and

Tractors, 1945-1987

1.3 Two-Dimensional Culture Classification

1.4 Evaluation Matrix for the Situation in the Soviet Union

1.5 Some Characteristics of the Soviet System

6.1 The Population of Ideological Groups in the U.S.S.R.

6.2The Population of Major Moslem Regions of the U.S.S.R

in 1970 and 1979

6.3 The Population of the Baltic Regions in 1970 and 1979

11.1I Increase in Average Monthly Wages in the U.S.S.R.,

1950-1987

11.2 Ratio of Total Inventories (Retail, Wholesale, and

Industrial) to Deposits in Savings Banks

12.1 Connections between Mechanisms and the Signs of Reward:

12.2 Relations between Producers and Consumers

13.1 Basic Characteristics of the Colored Markets In the U.S.S.R.

First, I would like to express my gratitude to my sons, Grisha and

Sasha, for translating a large part of this book into English. In truth,

they were not mere translators, but detectives looking for meaning often

obscured by my Russian writing style. Parts of the book were translated

by Ann Kissin, William Scundrich, and Sharon Stefanowicz.

Special thanks go to Valery Chalidze, Boris Moisheson, Vladimir

Shiapentokh, and Alexander Yanov for many discussions concerning

the problems dealt with in the book. Vladimir Shiapentokh deserves an

additional "thank you" for regularly supplying me with articles from

Soviet periodicals. All these gentlemen have had a big influence on my

thinking, and I have internalized their insights to such an extent that by

now it is virtually impossible to draw a sharp line between some of their

thoughts and mine.

I am grateful to Gregory Grossman, Vladimir Kontorovich, Vladimir

Lefebvre, Herbert Levine, Pavel Litvinov, Dmitry Mikheev, Alexander

Radin, Alexander Riasanovsky, Vladimir Tremi, Valentin Turchin, and

Leo Zak, for their comments on some specific issues I touch upon in

the following pages.

For help in the long task of bringing my materials into book form, I

wish to thank Marvin Wachman, whose intervention got the process of

publication started, Katherine Steinberger, who went over the manu-

script and offered helpful suggestions, Frances Frei, Mary Kane, Vita

Kozlov and my wife Gena, whose technical assistance was invaluable.

Introduction

I emigrated to the United States from the Soviet Union sixteen years ago. Since then I have been, and still am, mostly interested in the theory of indeterministic systems and its applications to diverse areas of human endeavor. But all along I have also kept a watchful eye on the events in the U.S.S.R., which, incidentally, have provided me with a lot of raw data for my theoretical ruminations.

Yet, time being a limited resource, I somehow had to justify to myself my preoccupation with the Soviet Union. Of course, there were millions of people there, including my friends, suffering from the lack of democratic freedoms and a falling standard of living. But the situation in China and in many African countries was even worse, and better familiarity with the U.S.S.R. was not enough to warrant a heightened interest in it.

Of course, the Soviet Union is a military superpower, and its military preparations and actions cannot leave any one, especially someone who knows the country well, indifferent to what goes on there. But the current strategic situation is such that the Soviet Union stands alone against the entire democratic world-not to mention the nondemocratic Chinese-and it may seem that the West can safely ignore whatever the Soviet Union does, provided it is well-equipped with both conventional and unconventional arms.

The decisive consideration that helped sustain my attention to events in the U.S.S.R. had to do with the fact that the Soviet Union is technologically one of the most advanced countries and with the fact that it employs new technologies not only for military, but also for peaceful purposes. It is in this regard that the Soviet system seems most threatening to its own people and the outside world alike. New technologies, be they in atomic energy, genetic engineering, or chemical manufacturing, are not an unmixed blessing for consumers-they pack a punishing punch if used carelessly, and can end up hurting people who live far away from the user country. In this sense they are global technologies, and for their proper utilization they require not only an investment in enviromental protection, but also a sophisticated political and economic system. The Soviet system, however, is such that it cannot, even with the most peaceful and consumer-oriented policies on the part of the leadership, reliably avoid the evils inherent in new technologies. The Chernobyl disaster brought all this out with particular force.

The evolution of Soviet society is thus not only an internal problem for Soviet citizens debating the trade-offs between guns, on the one hand, and butter and freedom, on the other; it concerns not only those who are troubled by the unlimited power and ambitions of Soviet leadership in a period marked by the rapid development of super-lethal weaponry, whose mere accumulation might bring the world to the brink of catastrophe; it is, due to nonmilitary but dangerous new technologies, also becoming a vital problem for people all over the earth.

I have not only thought about these problems, but have tried to make my thoughts public in my writings: two full-length books and a host of articles. The two books Studies in Soviet Economic Planning and Soviet Economic Thought and Political Power in the U.S.S.R. were brought out, respectively by M. E. Sharp in 1978 and Pergamon Press in 1980. Most of my subsequent articles on Soviet society came out in different English-language publications in Great Britain, Japan, and, of course, the United States. Still, a good part of what I have written on the subject has either not been published at all, or has appeared only in Russian-language periodicals, primarily in the magazines Vnutrennie Protivorechia and Vremia i My. As far as I know, none of these pieces has been published in the Soviet Union, and only one of them, on Soviet "multicolored" markets, was circulated in the U.S.S.R. through samizdat channels, in reverse translation from the English.

In 1988 these articles were brought together and issued in one book, in Russian, by Chalidze Publications. The book's readership in the West, however, has perforce been quite limited. Because of my belief that it would be of interest to broad segments of the English-speaking public, I decided to have it published in that language, after appropriate updating and a drastic reworking of the content to turn a loose collection of articles into a unified structure. Undoubtedly, I have not been entirely successful in covering up the evidence of my "crime," with the result that the kaleidoscopic nature of the original material will inevitably reveal itself in one place or another.

One common theme running through this publication is the contradictory nature of the processes, past and present, taking place in the U.S.S.R., and the no less contradictory nature of the opinions within the Soviet Union on how to deal with them. Since each possible approach to dealing with these processes has its own backers, some quite strong, it is impossible to make any firm predictions concerning the Soviet Union's future. What I believe is possible is to outline a general framework within which future strategic choices will be made there. To wax cybernetic for a moment, if Ivan the Terrible, Peter the Great, and Stalin wanted to see a stable authoritarian Russian empire made up of stable elements, Alexander II and Nickolas II were prepared to maintain the selfsame empire, but composed of unstable elements. In my opinion, Gorbachev belongs to the latter group of Russian rulers. But, of course, a complex stable structure does not have to consist only of unstable elements - over time, some may become more stable, others less so. It seems to me that, after a period of trials and errors, Gorbachev has embarked on a policy of balancing a greater stability of the inner core of the Russian empire with considerable fluidity throughout its East European periphery.

The book consists of six parts; the first three deal with the Soviet political system, and the last three are devoted to the Soviet economy.

The first part deals with some general trends in the development of Soviet society, focusing on Gorbachev's efforts to replace the present ideocratic system, that is, a one-dimensional system where all powers, including the ideological one, are concentrated, with a multidimensional system. The relevant dimensions, to name just a few, include pluralism, democracy proper (not to be confused with ochlocracy, for democracy presupposes that competent and responsible people will participate in decision-making), separation of powers, and openness. Building a multidimensional society is a very complicated process: accelerated movement along any one dimension may unhinge it from other dimensions and throw the entire system back to its original one-dimensional state. Telescoping the stages in a long process of pluralization seems particularly dangerous: a rapid transition from the publication of ideas and their discussion by professional groups, to the creation of popular organizations and the staging of massive demonstrations in support of these ideas, could result in chaos when the other dimensions, primarily the democratic dimension, lag far behind. Overcoming chaos, as we know only too well, usually entails methods much more draconian than those routinely employed by governments.

In the second part of the book I deal with what I believe is the main impediment to the creation of a multidimensional society in the Soviet Union, the empire. Center stage is occupied by such topics as the impact of imperial interests on the structure of the Soviet system, particularly on its authoritarian political regime and a pervasive militarization of the economy. In discussing the latter point, I stress not so much the direct outlays for the upkeep of the armed forces, however large they are, as the general orientation of Soviet economy toward quick conversion to military production. This factor, and the fact that the branches of heavy industry that strengthen the military potential are developed at the expense of the consumer, are, in my opinion, responsible for the type of society that exists in the Soviet Union and for the problems that it faces today: a deep exhaustion of human, natural, and capital resources. It seems unlikely that the U.S.S.R. can meet its present challenges without changing this tradition of militarism.

However, the empire has been accumulated over the past seven hundred years-to be sure, under different slogans-and it won't be easy for the Soviet leaders to give it up. Hence, in the last chapter in this part of the book I tackle the following question: Is the perestroika launched by Gorbachev merely a breathing spell before a new leap toward greater Russian military might, or does it signify a change of tradition away from militarism and toward heavier emphasis on a consumer economy? Given the prevailing strategic realities in the world, such an economy is hardly compatible with the existence of the empire. On the whole, I tend to believe (and this hypothesis receives a detailed treatment in part 1 of the book) that Gorbachev's objective is not democratization, but a preservation of an authoritarian imperial regime (a constant of Russian history) through flexible means (on the model of Alexander II or Nicholas II).

In the third part of the book I continue to elaborate on this thesis and apply it to the ethnic problems in the U.S.S.R. I describe a spectrum of the strength of ethnic sentiments ranging from cosmopolitanism to chauvinism, with internationalism, patriotism, and nationalism being the intermediate forms.

Among other things, I discuss the prospects for the victory of Russian nationalism and even chauvinism in a situation characterized by imperial stagnation, shortages of consumer goods, an intended increase in the prices of main food staples, the threatened layoffs of millions of workers, and powerful separatist ethnic sentiments. Under these circumstances, and given the still extant Russian imperial tradition, the reactionaries could profit more than the liberals from Gorbachev's policy of activizing the people through glasnost. This view is very different from the conventional one, which welcomes glasnost and only regrets that there is not yet enough of it.

The Russian tradition and its real-life doppelganger, anti-Semitism, play a key role in my argument, and I discuss them at length in this as well as in other parts of the book. I try to show that anti-Semitism continued almost uninterrupted throughout the Soviet period-only the rationalizations for it occasionally changed. Because of poor compatability between the cultures of the Russians and the Jews, it is quite possible that the Jewish problem in the Soviet Union is insoluble.

In the second half of the book I take up several problems concerning the Soviet economic system. The economy is an organic part of the whole Soviet system that is responsible for plunging the country into a crisis. During Gorbachev's rule, the economic situation has not only failed to improve, but it has actually gotten worse, especially regarding the supply of consumer goods. The foundations of the economic system have remained virtually unchanged. A wide-ranging program of reforms aimed at a rapid transition to a market economy, which Gorbachev announced soon after coming to power, has so far proved infeasible.

First, I offer a critical examination of the Soviet economic mechanism as a whole. I also put forward a somewhat unconventional analysis of certain essential features of the Soviet economy, namely, inflation, corruption, and multicolored markets. Soviet authorities have long tried to hush up these phenomena, believing dogmatically that they inhere only in a capitalist economy. They were not supposed to exist, and hence did not exist in the Soviet Union.

Second, I assume that one of the key problems of perestroika lies in the lack of well- thought-out alternative strategies of Soviet economic development. That's why I want to examine the actual effect that Soviet economic science has had on the evolution of the national economy, and suggest some reasons for the conceptual poverty of Soviet economists.

Third, I present a kind of a kiss-and-tell story of the history of Soviet economic science. I was not only an observer, but an active participant in some of the events to be described here.

These three broad questions are treated respectively in parts four, five, and six. In part four I also offer several suggestions for improving the economic system. My major thesis is that what a mature industrial Soviet economy needs to rid itself gradually of the fetters of central planning is an indicative optimal plan, to be drawn up with the help of modern mathematical methods. The shadow prices of such a plan can serve as a first approximation to market prices. This, of course, does not mean that I am against immediate decentralization in certain selected areas of the Soviet economy, especially agriculture and trade.

Marshaling specific arguments for my major thesis, I contrast the conventional "plan-market" paradigm used for analyzing Soviet economy with what I believe is a much richer paradigm of "vertical" and "horizontal" mechanisms ( by "vertical" mechanisms I mean those where there is subordination of some economic actors to others; "horizontal" mechanisms imply the equality of actors). The trouble with the plan-market dichotomy is that it prevents us from seeing a true variety of organizational economic schemes. Vertical mechanisms, for example, may entail not only planning, but also a Keynesian-type macromanagement, that is, governmental interference in the market through built-in economic stabilizers.

In this part, I look closely at one kind of vertical mechanism, which I call deconcentration, and oppose it to decentralized, that is, horizontal mechanisms. A decentralized business concern is an independent organization, financed by its owners. Under deconcentration, hierarchical subordination is retained, but the upper levels of the hierarchy do not interfere as much in the internal affairs of lower levels, and the number of controlling parameters that the lower levels have to comply with are reduced. Explicitly stated, the principle of deconcentration (1) enables us to see how it is possible to construct flexible vertical mechanisms, and (2) helps us to avoid the conceptual error of identifying the economic categories of prices, money, and profits with capitalism. These categories are economic invariants. Functionally equivalent, they differ only in the ways they are formulated-by a central body in vertical mechanisms, or through local interactions, in horizontal mechanisms. The truly schizophrenic nature of Soviet planning reveals itself in the fact that, even with a small degree of deconcentration, the planners cannot construct a price mechanism capable of equilibrating costs and the centrally-determined production priorities.

Among horizontal mechanisms I distinguish primarily between market and nonmarket mechanisms, the latter being represented by universities, foundations, and the like. The market institutions are designed to protect the interests of consumers, by endowing them with the power to determine demand; the nonmarket institutions (not to be confused with vertical mechanisms, for the nonmarket structures can be horizontal) aim at securing the interests of producers, mainly the producers of new ideas. An advanced dynamic economy needs both market and nonmarket institutions. Only their mix will vary at different stages in the economic process, which range from R and D to material production.

Further, among the horizontal mechanisms I point out a special class of what I call "centralized horizontal institutions." These are detailed and binding contracts for the production and delivery of goods between equal actors who operate within the constraints of aggregate parameters formulated by the center. Poor performance by this type of horizontal institution is chiefly the result of various malfunctions within the vertical institutions.

In the fifth part of the book I look at various proposals made by Soviet scholars for improving the country's economy (the crisis in the economy was the chief reason behind Gorbachev's wide-ranging reforms). My main concern in this part is with mathematical economics: I want to show what illusions it engenders and what positive contribution it can make toward improving the system.

The irony here is that professionally sophisticated Soviet economists-who in effect undermine the foundations of official economic science with their modern mathematical models-work on the kinds of problems that tend to strengthen the centralized politico-economic system; whereas their socially more progressive counterparts-the opponents of centralized planning and the champions of more viable market mechanisms-operate within a conceptually outdated framework of eighteenth century vintage, and often confuse a Western market with a Middle-Eastern bazaar.

But most Soviet economists are quite conservative both professionally and politically. Cleaving to Marxist economic science, which so appeals to their common sense, they want to preserve the present system, or, at best, give it a minor face-lift.

With such an intellectual base, it is a daunting task for the nation to attempt a restructuring of its stagnant economy. When the West faced a major crisis in the 1930s, it had Keynes, the Cambridge school, and a good many economists who were sophisticated enough to be able to understand and implement the revolutionary ideas of that school.

Individual human dramas inevitably accompany and mirror great institutional struggles. That is the reason why the sixth part of the book is devoted to a number of Soviet scholars who have greatly influenced the evolution of the economic science in the U.S.S.R. Pride of place here certainly belongs to Leonid Vitalyevich Kantorovich, who was a mathematician, an economist, and a winner of both the Nobel and Lenin prizes. In working on a seemingly small problem concerning the optimal utilization of capacity at a plywood trust, this extraordinary man solved the famous Monge problem. In an equally brilliant demonstration of theoretical insight and, more significant, professional courage, Kantorovich generalized the plywood trust problem to the national economy as a whole: he represented the national economic model as an optimization problem, and saw in the Lagrange multipliers-the parameters of the model to be treated by the then new methods of linear programming-a most important economic category: price. An iconoclast in science, Kantorovich was, however, a political and ideological conformist-a fact largely responsible, in my view, for stymieing his further scholarly progress. Such are the sad ironies of Soviet reality.

I hope that the questions raised in this book will facilitate a better understanding of the current events in the U.S.S.R. The polemical edge in my work is doubtless somewhat blunted now, since glasnost made it possible for Soviet media to delve deeper into certain issues that had received only superficial treatment in the past, among them the problems of the roots of the Stalinist tyranny, and the backwardness of socialism in comparison with capitalism. The rate of thematic widening of glasnost has exceeded all my expectations: Marx and Lenin have come in for criticism and lively discussions are being waged on Soviet foreign policy. Just yesterday these subjects were sacred cows, and it seemed that they would remain off-limits for the foreseeable future.

Glasnost notwithstanding, there are still issues (for example, the fate of the empire, or Gorbachev's personality) that are politically so sensitive as to be virtually closed to debate. The main point, however is that even those issues that are in principle open to debate-the chances for the survival of pluralism, democracy, separation of powers, and openness in a period of economic stagnation; the nature of inflation and corruption; etc.-have received scarcely any serious critical examination in the U.S.S.R. For too may years Soviet social scientists have lagged far behind their Western counterparts, and it is bound to take at least as long a time to close this gap as it took to open it.

I believe that on the whole Western Sovietology is of a much higher intellectual caliber than Soviet Sovietology. This is not only because scientists in the West can speak freely without fear of their countries' internal security forces. It is also because Western Sovietologists have been able to benefit from the broad conceptual progress in the social sciences, from which the bulk of their Soviet colleagues have until now been barred.

Still, there is plenty of room for improvement, especially in terms of methodology, in Western social sciences, too. This is true for both general and particular problems, from the creation of mutidimensional political systems to the study of inflation.

I hope that the present volume, which brings together many of my writings on the Soviet Union, will enable our Sovietologists to sharpen their methodological tools and that it will draw them back once again to certain aspects of Soviet life-past, present, and future-that, unfortunately, no longer cause scholarly controversy. And I hope that the general reader will profit from an encounter with a somewhat unconventional point of view.

Systemic Causes of the Present Crisis

Symptoms of a Crisis or Just a Slight Cold?

The events in the Soviet Union in the past fifteen years that preceded perestroika, give rise to the question, " Are the negative phenomena visible there merely the result of short-term fluctuations, or the symptoms of a deep-seated systemic crisis?" The prevailing viewpoint, shared by Gorbachev, is that the country faces a crisis situation.[1]

The decisive sign of stagnation in the economy was the drop-off, dating from the late 1970's, in the growth rates in heavy industry. The main element in the ideological justification of the Soviet system has always been its ability to sustain a rapid growth in that sector, which was said to be the key to the country's defense posture and to the prospective welfare of its citizenry. To that end, everything else was sacrificed, including the service sector, light industry, and agriculture. But when the growth rates, and occasionally even the net output, in heavy industry began to decline, without any concurrent improvement in the consumer sector, one could legitimately start questioning the efficiency of the Soviet economic mechanism as a whole.

Table 1.1 illustrates the situation with steel, which in the Soviet Union is considered a leading economic indicator, similar to automobile manufacturing and housing construction in the United States.

We can see that the increase in steel production in the 1975-1980 and 1980-1985 periods was only 25 to 30 percent of the increase in the preceding periods. Moreover, toward the end of the 1975-1980 period even the net output declined, from 151, 453 thousand tons in 1978, to 149, 099 thousand tons in 1979, and 147, 941 thousand tons in 1980.[2] The production picked up somewhat in subsequent years, but the growth rates have not changed substantially, especially compared to those in the 1945-1975 period.

True, a decreasing steel production could be a progressive phenomenon, signifying lower steel consumption per unit of output due to its better quality, increased sophistication in the manufacturing of steel products, or the appearance of substitutes in the form of plastics and nonferrous metals.

I do not have the figures on Soviet trends in steel consumption per unit of output, if for no other reason than that most of them are still classified. Faute de mieux, we have to look at what has been happening with steel-related products. For the sake of simplicity, I have chosen two of them, metal-cutting machinery and tractors, which, thanks to their bearing on defense, are of considerable importance for the Soviet leadership. The data in Table 1.2 are presented in physical terms in order to factor out price fluctuations.

The downswing in heavy industry has been so severe that the overall growth of the Soviet GNP has ground to a virtual halt.

The troubled economic situation becomes all the more significant if we realize that it was preceded, and is now being accompanied, by a host of long-neglected and very serious social problems.

In my view, the present economic crisis in the U.S.S.R. is not a transitory aberration, but the result of more than seventy years of exploitation by the socialist system.

A sharp drop in the overall rate of industrial production has been accompanied by such phenomena as the exhaustion of natural resources in inhabited regions, and increasing plant and equipment obsolescence. Demographic problems constitute another symptom of a deep illness of Soviet society: birthrates are falling, the death rate and infant mortality are on the rise. The latter trend has little to do with the temporary problems in infant care, but is rather the result of a general degradation of the entire generation of newborns. The incidence of mentally retarded children has also increased. These demographic trends are linked to growing alcoholism and increased pollution (exacerbated by the lack of appropriate safety equipment in industry), the prevention of which requires significant capital expenditures.

One could cite many other symptoms of a deep illness of Soviet society. Anomie and cynicism are a mass phenomenon. Communist ideology provokes greater indifference than contempt. Heavy drinking (according to a new version of the theory of historical materialism, a new stage has emerged between socialism and communism : alcoholism) and ingrained corruption in places high and low are universally tolerated.

Since the symptoms I've enumerated have been widely discussed in both Western and Soviet literature, there is no need for me to dwell on them here. The mere mention of them is enough for a knowledgeable reader to conclude that there is a deep crisis in the Soviet society. Next, I will try to examine several important underlying reasons for this condition. I do not plan to prescribe radical cures, but the reader is asked to excuse me if I sometimes give in to the temptation to offer tentative advice.

Is The Soviet System Pathological?

What is the role of socialism in bringing about the present crisis of Soviet society? This, it seems to me, is a key question.

Before we tackle it, let us first fix a few concepts: the concept of a healthy versus a sick economic system, and, second, a normal versus a pathological economic system. A healthy system is one in which development corresponds to the wishes of the members of the society (provided they have not been suppressed by the authorities); in a sick system, development diverges from the wishes of the members of the society.

Respecting normality and pathology, Russell Ackoff, with whom Jamshid Garajedaghi and I taught a course on the pathology of social systems at the University of Pennsylvania, opined that a pathological system is distinguished from a normal one by the fact that a pathological system cannot, using the means at its disposal, maintain a normal regime and combat malfunctions. In other words, a system's illness is not an indication that its condition is pathological. Pathology arises when the system is incapable of handling the illness on its own.

Now let us apply Ackoff's idea to the analysis of the capitalist and socialist systems. Marxism, for example, considers the capitalist system sick and pathological. Its illnesses are plain to see: inflation, unemployment, crime, prostitution, homelessness, poverty, etc. According to Marxists, the pathology of the capitalist system is defined by the fact that under capitalism private property reigns, and each person pursues his own selfish interests, which in turn engenders anarchy together with social, economic and political illnesses.

Since under socialism property belongs to all the people, and the system is guided by the State Plan in the interests of the people, Marxism considers it to be normal and healthy.

Of course, this view of the two systems is a radical one- in each, only pluses or minuses are acknowledged. In a somewhat 'softer' version, Marxism would hold that the ills of capitalism are stronger than its healthy traits, and its pathology stronger than its normalcy. For socialism, the judgement would be reversed.

This is precisely the sort of view that reached its peak in the early 1930s. A deep economic crisis that struck the developed capitalist nations; the World War I which preceded it; the moral decline - these were all the results of internal capitalist developments, in no way attributable to communist intrigues. By that time, the U.S.S.R. had embarked upon a large-scale industrialization. Soviet cities were growing, there was a labor shortage, people were singing optimistic songs. The fact that this process was accompanied by the destruction of a strong peasantry followed by an orgy of political trials against the so-called 'enemies of the people,' was put down by Western liberals to 'growing pains.' In other words, if the ills from which the West was suffering appeared to the liberals to confirm a pathological character of Western societies, the maladies of the Soviet system were seen by them as mere growing pains, as minor sores on a normal body politic.

Looking back, it is easy to understand how difficult it must have been for Western liberal intellectuals to identify precisely the pathological and normal cases. Exposes in an ever critical and free Western press only strengthened the perception of an impending doom. Because the Soviet press was under strict Party control, and the annihilation of millions of people was carefully concealed, the liberals could take comfort in the thought that the alleged brutalities were a fiction invented by the enemies of the young Soviet regime.

With the benefit of hindsight afforded by more than seventy years of Soviet rule, we can judge more clearly which system has proved to be normal and which pathological, again, from the point of view of the Western liberal. The West did manage to live through the most critical stage of its illness and recover, even though many sore spots still remain and cause a great deal of trouble. Soviet society has entered a prolonged period of stagnation, and there is no indication now that it will be able, even in the long run, to provide for the development of a kind preferred by Westerners.

To be sure, the picture is not all that simple. We cannot say that Soviet society lacks features that most of its citizens find attractive. Arguably, many people, from the most diverse strata, like the idea of the paternalistic state. The Soviet people are also quite eager to see their standard of living increase, and they resent the fact that the system can't provide it for them. At the same time, the majority of Soviet people, or, more precisely, Russian people, would strongly prefer an enhancement of their country's military might to personal welfare, that is, they would be willing to sacrifice individual material values and creature comforts for collective military interests. It is not easy to evaluate the Soviet system in terms of values shared by the Soviet people themselves, for it is hard to assign proper weights to various components of people's preferences.

My guess is that a Western person tends to see the Soviet system as pathological. For the majority of Soviet citizens, maybe even an overwhelming majority, their system, though sickly, is normal and not pathological. Soviet people by and large tend to believe that their system can overcome the current problems and fulfill their aspirations, with the important proviso that to do so it needs a good leader. Only a small minority of active people, who cherish the ideal of independent initiative, can be said to reject the system. Their sentiments are perhaps shared at the top by a fairly large number of leaders who think that the system cannot reliably secure the enhancement of state power, which is a necessary condition for the enhancement of the leaders' personal prestige. But the majority of people - leaders and citizens alike - are convinced that a Soviet-type system shored up by Stalinist controls ( but without Stalinist excesses ) is more attuned to Russian culture.

At the risk of gross simplification, I would hazard a two-dimensional classification of cultures premised on (1) the nation's craving for leadership and (2) its ability to work without compulsion. Allowing only binary choices in each dimension ( and adding illustrative examples for each type of culture ), produces the matrix shown in table 1.3.

What is it in the mentality of the Russians that makes them opt for authoritarianism? That Russians are a capable people can be amply demonstrated. To cite but one fact among many, recall the rapid Soviet industrialization of the 1930s, which brought forth a huge professional cadre of Russian engineers and workers able to operate and maintain sophisticated equipment. At the same time, it is well-known that the Russians are much prone to drinking, besotted debauchery, and irresponsibility. Apparently, the Russians themselves are aware of their character defects, and hence crave a strong leader who can save them from harmful temptations and channel their energies toward constructive ends; among those ends a militarily powerful and independent Russia capable of repulsing any foreign invader occupies pride of place. The historical record of Russian arms is deeply rooted in the consciousness of the people who have been willing to sacrifice so much in both victory and defeat.

I believe that it is the culture of the nation, and especially its way of resolving the tension between the civil rights and socioeconomic rights, that ultimately determines its choice between capitalism and socialism.

What Do Soviet People Prefer More - Civil Rights or Socioeconomic Rights?

There is much in Russian culture that is in keeping with socialist ideals. This is not to say that all Russians subscribe to these ideals. Far from it. Only that the champions of a non-socialist orientation in Russia have never constituted that critical mass which is needed to replace the dominant value system.

There are many preconditions for capitalism, one of which is the presence of a critical mass of people with a certain value system. A key element in this system is the relationship between man and society. The crux of the matter can be expressed as follows : Does the individual exist for the society, or the society for the individual?

The Protestant ethic, which has nourished the development of some Western countries, and especially that of the United States, is largely premised on the notion that the society serves the individual. This squares rather well with capitalism's cult of the individual.[3] On the other hand, those Christian countries that are Catholic or Orthodox tend to subordinate individual interests to collective ones, and exhibit a fairly strong proclivity for various kinds of socialism, including the corporatist one, that is, fascism. Social structures are by no means uniquely determined by religion, but it may be surmised that the primacy of the individual over the collectivity is a sine qua non of any stable capitalist order.

The Russians tend to operate on the assumption that man is subordinate to society.[4]

When the Russophiles argue against the West, that is, the Protestant capitalist West, they stress the organic unity of Russian society, in which the individual is but a subservient part of the whole body politic.

Where one stands in relation to the man-society dichotomy has many important consequences. Specifically, it affects one's attitude toward civil and socioeconomic rights.[5]

Principally, civil rights are the birthrights that man does not want anyone to take away from him; socioeconomic rights are those rights that man insists be given to him.

In the former case, the individual wants to preserve his right to speak freely, to choose his political leaders, to decide independently where to live and to work. In the latter case, the individual wants someone else to feed, clothe, and, educate him, provide him with housing and medical care, compensate him for his mistakes, and instruct him in the best life to lead.

Each kind of right entails its own form of responsibility. With civil rights, man assumes a personal responsibility for the consequences of his actions, including negative ones. With socioeconomic rights, man has to give up his freedom to satisfy the demands of the provider, for how else can the provider be sure of a proper disposition of his largess? It is not inconceivable for a provider to be motivated solely by philanthropic considerations, but, alas, the charitable impulse is always in short supply, and it runs out particularly fast when the demand for it is strong. When too many people desire socioeconomic rights and personal security, they have to ask the collectives to effect redistribution coercively. In prerevolutionary Russia, these collectives were peasant communities; in the present-day U.S.S.R., it is the whole society.

In a word, the "gimme" types have to be prepared to suffer authoritarianism and to part with their freedom. The hope for sustained, non-coercive charity is unrealistic. The ideal of a "gimme" person is a strict but fair-minded leader who generously dispenses all sorts of goodies to the people.

The leader, however, is after all only a mortal human being, with interests of his own. His interests may sometimes coincide with those of the majority of the people, but they may also diverge. In any event, an authoritarian regime is poorly suited to effect sustained technological progress or the multiplicity of organizational changes that such a progress requires. An authoritarian regime does much better at setting specific, clear-cut goals, and gearing up the entire country toward the realization of these goals. Unfortunately, this pattern of development leads in fairly short order to the exhaustion of the country and, most likely, to prolonged stagnation.

The leader of an authoritarian state has a hard time securing his prestige by a marked and steady growth in his subjects' material welfare. For him, a more reliable and effective path to personal glory runs through outward expansionism. This path is all the more tempting the firmer the leader's grip on the country. His grip is the firmest if he is a hereditary ruler or a liberator. Despairing of any quick results along the road of internal betterment, he pins his hopes on creating a new movement, an expansionist ideology of foreign conquest and subjugation.

This policy enables the leader to satisfy not only his personal ambitions, but also, to a degree, the interests of his subjects. Economic and social resentments are drowned in the roar of patriots proud of their country's military might. The populace acquires a feeling of national superiority, and also a sense of greater security, for a larger and stronger country is less threatened by foreign invasions. For a country like Russia, itself a victim of frequent outside attacks and prolonged occupation, this feeling is especially acute.

Moreover, a policy of expansionism affords the leader a certain safety valve: he can now shunt the active part of the population into the newly occupied territories by granting them land and governmental positions. The potential foci of opposition are thus removed from the mother country, and become the regime's bulwark in the colonies.

The circle is completed: an authoritarian regime driven by expansionism harmonizes the interests of leaders and of a populace composed largely of "gimme" types.

The Soviet experience shows, though, that the recipient may soon discover how self-serving and tightfisted his 'benefactor' really is. With this new awareness, he is likely to switch to the opposite extreme, and instead of praising the dispenser, he takes to lambasting him. The aggrieved party, cheated by the benefactor, the recipient now feels no compunction about gypping him too. There is a ground-swell of immorality and corruption, with most people being convinced that swindling the government is a noble and heroic activity, shunned only by imbeciles.

Such, on the whole, has been the history of the Muscovy Russian state for the past seven hundred years. And today, too, we can expect conflict between civil and socioeconomic rights in Russia. That's why Russian history must be studied thoroughly. I totally subscribe to the proposition that a country ashamed of its past has no future. In judging the past, however, it is not only the end- result of the historical process, but also the process itself that are important.[6]

A leader who champions civil rights will defend his position by general appeals to the requirements of technological progress and economic growth. Some Soviet officials have repeatedly stressed lately that, without civil rights, Russia will not overcome its present economic backwardness, and may even lose its superpower status and slide down to the rank of a Third ( or, as someone remarked pointedly, even a Fifth) World country. Undoubtedly, technological progress is important for maintaining superpower status. Certainly, a country that respects civil rights enjoys better prospects for technological advancement and increased efficiency. Yet, without going into a theoretical discussion of the correlation of civil rights and growing prosperity, I can only say that a supporter of human liberties in the U.S.S.R. would be hard put to parry the arguments of a Russian chauvinist and backer of authoritarianism. To the former's contention that civil rights are needed, if only to keep Russia itself militarily strong, the latter may reply in something like the following manner:

" Why are you trying to scare us with your talk of military backwardness if we don't democratize?! Look at the situation Russia was in at the end of the seventeenth and the beginning of the eighteenth century. It was a backward country, repeatedly beaten by Sweden, which at that time was one of the most influential powers in the world. The Swedish Empire included Finland and the southern Baltic littoral; its expansionist ambitions were enormous. But then came Peter the Great, who rapidly industrialized Russia, built very powerful land and sea forces, smashed the Swedes, and annexed the long-coveted Baltic coast to Russia. Where is your vaunted Swedish Empire now, who remembers it? The Empire created by Peter, on the other hand, has not only been preserved, but also much augmented.

"A similar situation obtained in the 1920s. After World War I, Russia was again a backward country unable to produce modern weaponry domestically. Stalin changed all that in very short order. The power that he helped create was sufficient to rout Hitler and to expand the country both east and west. Russia's might, and the ability to produce modern weapons, did not stop increasing after the war, either. Many in the West believed that it would take us twenty years to make our own A-bomb. In the event, it took us only three years: the first Soviet atomic bomb was successfully tested in 1948. In August 1953 we had a successful aerial test of the H-bomb. True, we did not then have a powerful strategic air force to take the bomb to the target; but we were already close to having a new means of delivery, the missiles. And when, in 1957, we had our first Sputnik shot, the West was shocked, for it lacked anything like it.

"All this was done largely under an authoritarian Stalinist regime. Therefore, we think that the Russian people have a unique national character, more in tune with such a regime, which even today hasn't lost its capacity to preserve and multiply Russia's might. As to the low standard of living, and even human casualties, these are not as important to us as is Russia's power. On this point we are very different from the West. We have been prepared to suffer in the past, and will be ready to suffer again in the future, for a great cause of Russia's glory, provided the country is ruled by a strong leader capable of channeling its power in the right direction."

What is Socialism?

Thus, civil and socioeconomic rights can clash: to secure civil rights, it may be necessary at times to sacrifice socioeconomic rights, and vice versa. But regardless of people's preferences for one or another set of rights, they all want to see an increase in their overall quality of life. Moreover, people belonging to an extraverted culture ( and both Westerners and Russians are extraverts) also want to see an increase in their standard of living, which is an important component of life's quality.

The demands for a higher quality of life may come into conflict with the demands for a higher standard of living. For example, the existence of economic inequality may lower a quality of life of the economically disadvantaged. The socialist principle "From each according to his abilities, to each according to his work" is a quintessential expression of the idea of equal distribution. Indeed, if distribution were to be organized in accordance with just the first part of the principle, considerable inequality would follow as a result of differences in people's abilities. The same would be true if only the second part of the principle were to be used as a criterion for distribution: the work that people perform differs not only in terms of volume, but also in terms of content, that is, in contribution, however defined, that it makes to the national product. What the socialist principle as a whole asserts is that the ratio of individual abilities to individual output, and hence the renumeration, be equal for all actors - more gifted people are expected to produce more than people with lesser abilities.

We should also note that the socialist principle of distribution has no room for a category of savings-generated income resulting from deferred consumption.[7]

An emphasis on economic equality, on the other hand, may deprive people of incentives to produce, and, more importantly, prevent the emergence of those groups of individuals who, having accumulated considerable wealth, can perform decentralized investments into the new and risky ventures in the arts, sciences, and engineering projects. In other words, an economic inequality may prove a necessary condition for welfare growth.

Obviously, equal distribution is easiest if the society is infinitely rich and can secure for all its members an equally high level of welfare. A poor society that puts a premium on socioeconomic rights can attain equality of distribution only at a low level of satisfaction of its members' wants. That the poor's commitment to egalitarianism might clash with the need to preserve skilled professionals should, however, also be taken into account.

There are some well-known theories which purport to reconcile the conflict between civil and socioeconomic rights. Once harmonized, they are alleged to guarantee a simultaneous growth of welfare and quality of life. It is such theories that I choose to call socialistic.[8]

The ideology of socialism challenged the society based on the primacy of civil rights, for the latter, even though it may promote growth of living standards, does not guarantee socioeconomic rights.

If we assume that the goal of socialism, as here defined, can never be completely attained, it becomes, in the terminology of Russell Ackoff, an ideal.[9] The fact that ideals are unattainable does not however preclude a successful movement towards them.

Sweden has probably come closest to the ideal of socialism, and the Swedish experience has of late been studied rather closely by Soviet liberals. But the Swedish model, too, is fraught with considerable dangers. An emphasis on equality and security has produced a highly progressive income tax schedule, cut into the number of rich people, and sharply curtailed the role of individual capital investment. Therefore, one should not feel surprised at the not-too-distant electoral defeats of the formerly unchallengeable Swedish Social-Democratic party. Similar phenomena can be observed in Norway and Britain. All this reminds us that we have to exercise extreme care when dealing with ideals, and never lose sight of the fact that ideals are situations to be striven for, not feasible objectives. Moreover, the attempt to reach an ideal by accentuating only some of its dimensions can result in losses along other dimensions, the slowing down of the motive forces of development, and eventually even in the deterioration of the ideal in toto.[10]

The ordered pairs of rights we have discussed so far represent only the starkers choices; various mixed strategies and compromises between them are also possible, as the experience of the United States and some Western European countries (e.g. the FRG, Italy) so amply demonstrates. The aim of these compromises was not to provide all socioeconomic rights to everybody, but some of these rights (in the US, a minimum hourly wage, social security) to those individuals who have temporarily fallen on hard times (in the US, the system of Medicaid and Medicare). The inequality in these countries has also shrunk thanks to the introduction of a progressive income tax.

Whatever the possible combinations between the civil and socioeconomic rights, on the one hand, and welfare and quality of life, on the other, the key terms in my definition of socialism ( in a descending order of importance) are security, growth of living standards, growth of quality of life, and civil rights.

The parameters here selected make the designation of various countries as socialist somewhat less stringent than demanded by current practice. In my scheme, a country may be considered predominantly socialist if its standard of living is comparable to that of the developed inegalitarian nations, if its citizens enjoy wide-ranging socioeconomic rights and security, and if popular dissatisfaction with a fairly slow welfare growth is less than it would have been in the face of greater inequality engendered by significant increases in production and total material prosperity.

We should not, however, call a country socialistic if it merely declares the primacy of socioeconomic rights, but subsists at a low level of quality of life and a low standard of living, with a sluggish, or even declining rates of growth.

Let us also note that a commitment to socioeconomic rights might be unrealizable due to the lack of adequate resources. The Soviet medical system which, though free, now faces a crisis situation (especially in terms of care for the elderly) is a good case in point. Because of small budgetary allocations to and excessive bureaucratization of the medical system (too many doctors are involved in management, doctors' salaries are low, and it is hard to attract talented individuals, especially men, into the profession), many people are denied assistance; the hospitals are instructed not to admit the people over sixty years of age, and in effect sacrifice the old for the benefit of the working young and the middle-aged.

Thus, it is essential not to confuse easy access on the part of the majority of the people to various goods and services with their guaranteed and free provision. In my view, the former consideration is socially more important than the latter.

The benefits of socialism can be provided in a number of different ways - vertically, by the government, or horizontally, through a compact between private persons and their organizations such as trade unions.

It should be pointed out that a very likely consequence of the pursuit of the socialist ideal is the emergence of a hypertrophied state, for how, without such a state, is the society to guarantee full employment and extract the 'surplus' from the enterprising individuals who could refuse to submit voluntarily to excessive taxation?

Thus, the goal of creating a society that can simultaneously safeguard the growth of living standards and that of quality of life through the (mis?)alliance of socioeconomic and civil rights, could very well be an impossible dream. There are other, more possible dreams, for instance, the one of equity that tries to combine individual civil rights with a minimum of socioeconomic rights.

Different ideals of course do not operate in isolation from each other - they interact, but not necessarily converge. It is quite conceivable to imagine a continuing coexistence of multiple mutually enriching ideals. An American ideal of individualism and civil rights, for example, has not only received a boost from racial anti-discrimination laws, greater freedom of speech, and such legislation as the Freedom of Information Act, but has also been considerably expanded due to the influence of socialism by the addition of various socioeconomic rights.

A few more clarifying remarks are in order concerning the concept of socialism.

Socialists are of course known to look primarily to socioeconomic rights, as the long-running ideological battles between the Soviet Union and the civil rights-oriented Western countries testify. But, paradoxically, it may very well be that socialists should place a major emphasis on civil rights, because the latter presuppose the kind of political system that is best at seeking the level of socioeconomic rights at which the living standards are (minimally) prevented from falling.

Also, I think it would be wrong to call a country socialist if its prevailing value system is militaristic. Even if such a country does well on the score of socioeconomic rights, it still does not fulfill the promise of welfare growth.

Third, as Valery Chalidze pointed out to me, socioeconomic rights, such as a right to work, should not be confused with a corresponding socioeconomic obligation, which, unfortunately, is the case in the Soviet Union. A Soviet man must work, otherwise, he may be branded a parasite and punished.

Finally, a few words about financing socioeconomic rights: this can be done either by appropriate supplements to recipients' income, or by providing services free of charge. The choice, I believe, is a function of the general standard of living in the country, and of its culture. If both are low, the first financing option is unwise: a man given money to visit a doctor may instead spend it on drink, because the consumption of liquor has a greater current utility for him than good health.

Now let us look at some specific developmental alternatives for the Soviet Union.

Combinatorial Sovietology

Stimulated by the ideas of the American political scientist , Edward Luttwak, I offer here a two dimensional matrix linking the primary orientation of Soviet policy - internal or external - with the leader's evaluation of the country's short-term (four-five years) and long-term prospects. Each of the four cells in the matrix carries a value which represents the leader's belief in the possibility of change (for the sake of simplicity, let this value be either optimistic or pessimistic) .

Each decision by the leader is based on his assessment of its overall effect on all four elements in the matrix. Arguments for and against a pessimistic or optimistic evaluation in the matrix can be found in table 1.4.

Each entry in the matrix depicts a pure strategy. In reality, 'mixed strategies' usually predominate. It is not too difficult to evaluate the arguments for and against pure strategies. The weights to be assigned to 'pure' components of mixed strategies are much harder to calculate. Let us now examine some arguments in favor of several possible pure strategies.

In one scenario, the leader evaluates the internal situation pessimistically in the short run, thinking it the result of a deep systemic crisis that cannot be quickly remedied; in another scenario, he also views the long-term internal situation pessimistically, believing that the system is presently incapable of taking radical steps needed to ensure progress in the future ; in the third scenario, he views the long-term external situation pessimistically because the mere existence of three major industrial democracies, (the US, Japan and West Germany) and China's industrialization potentially pose all kinds of threats to Russia; in the fourth scenario, he evaluates the short-term external situation optimistically because his country has an enormous superiority in conventional weapons and at least a parity in nuclear ones. The last optimistic evaluation may encourage the new leader to ally himself the with right-wing chauvinists and seek a solution to the crisis through external expansion, which, unfortunately, is Russia's traditional method of choice. In the event, say, of a successful attack on Iran and especially on China, he would be forgiven anything. Nothing succeeds like success. Victory would make him a hero and overshadow all else, as it did for Stalin, Peter the Great, and Ivan the Terrible .

The essay on Ivan the Terrible in Karamzin's "History of the Russian State" sounds impressively current. What is Ivan remembered for? For a further centralization of Russia, for the conquest of Novgorod and Pskov, Kazan and Astrakhan. That there was an oprichnina (secret police), that he devastated half the country, that he massacred thousands of human beings, all seems secondary.[11] It is no coincidence that Stalin extolled Ivan - after Peter the Great, Ivan was his role model. All three sacrificed their children for the sake of the state, and all three were above any kind of human feelings.

Successful expansionism will reunite the people and win prestige. But unlike Stalin, Khrushchev or Brezhnev, a new Soviet leader will have to execute an aggressive foreign policy not only for political, but also for economic ends. A conquest of Western Europe and the Middle East will bring in considerable new resources. Naturally, the West anticipates such a scenario; the statements of some Western leaders that, in the event of Soviet aggression, tactical nuclear weapons would be used, could hold the Soviets back. Furthermore, Israel's convincing military victory in Lebanon sheds serious doubt on the strength of Soviet conventional weapons; similarly, the Falklands war and the destruction of the Soviet outpost in Grenada, show that the West has the will to fight for its ideals.

In another scenario, a Soviet leader may believe that the U.S.S.R. will, in the future, flourish economically. The availability of significant numbers of educated and talented people, and the existence of an industrial base, may support such an evaluation. At the same time, he may also, for the aforementioned reasons, pessimistically evaluate the internal situation in the short run. In such an eventuality, an extremely complex question arises - how to balance a prospect of a brighter future with a poor situation in the near term. It will be hard to convince the people to accept a continued low standard of living. Without material improvements, a major political liberalization will also be somewhat risky. In this case, it will be very important for a new leader to obtain economic assistance from the West in a form that neither shackles nor humiliates him. For the West to help a new Soviet leader overcome the difficulties of a transitional period will be a rather delicate diplomatic task. If the Soviet leadership could guarantee that the deep liberalizing changes in their system are irreversible, the West perhaps could offer the Soviet Union up to half of what would be saved in reduced arms expenditures to enable it to get through the transitional period.

In the sixth scenario, a new leader evaluates the short-term internal future optimistically by assuming that the military pressure on Russia can be relieved through the lessening of tensions with China or Western Europe. The resources thus freed can be used for retooling the old industrial plant and creating new capacities. By the same token, it is also possible to maintain (and, for stability's sake, even to somewhat tighten) the existing political and economic structure, while reminding the people that a centralized economic system successfully managed the country's industrialization in the 1930s and its reconstruction after World War II. A new leader, however, may also be pessimistic about the internal situation in the long-term and the external situation in both the short and long term. Such a scenario may seem highly attractive to him personally, but dangerous for the nation if the changes he initiates are not accompanied by the efforts to create a free society sometime in the distant future. A resolution of the maturing crisis will only be postponed in this case, with a risk that it could flare up later with a much greater force. Patching up a system full of holes, applying Band-Aids to ride out a storm, is not the safest of policies.

I do not pretend to offer an exhaustive analysis of all possible evaluations a new leader could make of the existing situation; my goal is rather to draw the reader's attention to the paradigm that makes clear the future alternatives open to Russia.

Now let us sum up what has been said so far. The Soviet Union is in a crisis. A deep illness infecting the Soviet society is the result of systemic causes: for more than 70 years, the regime has been wantonly wasting its human, natural, and capital resources. I have noted the alternatives that are available to a new leader - a choice among them will depend on whether he believes that the Soviet society is curable. The key question is, does the Soviet Union possess the strength to overcome its illness, or is the illness pathological? A pathological system is one in which the authorities cannot or will not, and the people are unable to, remove the barriers to development. In this case, only a radical intervention from without can cure the disease .

I believe, I want to believe, that the country has the strength it needs to carry itself out of the crisis, that is, that the Soviet society is not pathological. Cautious optimism is to be preferred to incautious pessimism whenever the latter attitude cannot be conclusively established. The choice is whether to begin the process of structural change or to try and maintain the system as it is. Naturally, as always, there is an intermediate possibility - patching the system. The option, as earlier noted, is a very tricky one, since it could create false hopes of recovery. Patching could be concealed in a guise of semi-liberalism and at first look like a recovery. By the same token, half-measures may produce a mass disillusionment and an even worse spiritual decay.

A central issue among the various future scenarios generated by the concept of "Combinatorial Sovietology," will be the leader's evaluation of the interrelation between expansionism and the country's crisis. Another aspect of cardinal importance which is present in many of the possible scenarios concerns the preconditions for future Soviet growth. Movement toward a free society apparently requires that the country be able in the short term to focus on solving the long-range problems. Of course, an ideal situation is one in which the short-term improvements simultaneously create the preconditions for long - range reforms. However, such a harmonious policy is hard to execute - improvements in the short term, if the country is in dire straits, demand so much energy and mental concentration from the leader, that he has little time to work on longer range problems. Therefore, in a crisis, external aid is all the more important to give him a chance to deal more effectively with the long term. But because it is difficult to verify whether the various policy initiatives are genuinely reformist, the leader may be tempted to use external aid just to alleviate the current problems. (Recall the sad experience of Poland under Gierek.) In other words, a policy of semi-liberalization could be very ambiguous: it could lead to the creation of preconditions for an effective reform in the future, or it could merely be a cosmetic means of postponing the terrible day of the system's unraveling. Therefore, it must be evaluated with the greatest care.

Now we can flesh out somewhat the general typology outlined above. The key variables in my analysis come from a Joseph Berliner's paper on the future of Soviet economy.[12] I broke these variables into ten categories, adding some to several categories where I deemed appropriate. Under this classification, and supposing that only one variable will be utilized in each category, (of course in reality there can be combinations) it is theoretically possible to count 2,688,000 different scenarios. Naturally, many of these scenarios are incompatible, (the study of incompatibility can be of interest in itself) and inevitably only a few of them are truly feasible.

Using the terms of the scheme, the current situation in the U.S.S.R.. may be characterized as follows. I. The erosion of Stalinist ideology. II. A mixture of nationalism and internationalism. III. A preservation of the empire through flexible means. IV. A diminishing role of the Party. V.The erosion of the command model of economic management and a system of hierarchical appointments. VI. Decreasing consumption. VII. A significant role of semi-legal and illegal (corruption, theft) distribution methods. VIII. The development of the country in the interests of several interest groups .

To make the peculiarities of the present period more vivid, let us set it against the preceding, Stalinist period, and a possible future one. The post-war Stalinist era was characterized by the following: I. Stalinist ideology. II. Russian Chauvinism. III. Striving toward world domination. IV. A leading role of the repressive institutions. V. A very strong role of the Party in the economy. VI. A strict command system of economic administration (including the substitution of labor camps for material incentives) and hierarchical appointments VII. A very slow growth in the standard of living (especially in the rural regions). VIII. A significant role of legal unofficial distribution methods IX. The development of the country in the interests of the party bureaucracy.

Which scenario is likely to prevail in Russia over the mid-term? Anticipating somewhat the conclusions of subsequent chapters, I expect the following. The traditional Russian ideology is likely to replace the communist one. Communism is playing an increasingly minor role in the still dominant Stalinist ideology. There are indications that the Soviet people have not only stopped believing in communism, they have actually grown hostile to it . Naturally, in the multinational Soviet empire where the proportion of ethnic Russians is decreasing, a resurgence of the traditional Russian ideology will encounter serious problems. The leading role of the ethnic Russians in the management of the state makes it possible for them, however, to revive this ideology. I should note that there exists an opinion that the young generation of Soviet leaders may be more liberal, and may not follow the traditional Russian ideology. Freedom from marxist dogmatism, a higher level of education and professional culture, desire for contacts with the West, and similar arguments are commonly used to support this opinion. If, however, we recall the general difficulties of introducing a pluralistic democratic ethos in the U.S.S.R., we can expect that the new leaders too may opt for the traditional Russian ideology. From history, particularly that of Germany and Russia, we know that during crises, a country lacking democratic traditions is likely to return to its time-tested national ideology. Erudition and freedom from marxist dogmatism are not insuperable obstacles to becoming a chauvinist. The joint growth of Russian chauvinism and nationalism among various social groups (especially among the intelligentsia), and a deep hostility toward communism, bear out my point. The victory of the traditional Russian ideology may lead to the revival of Russian chauvinism as a basis for dealing with the current ethnic unrest. The issue of the empire is a central one here. The Russian tradition of preserving and expanding the empire was vigorously continued after the October Revolution. Stalin significantly extended the land borders of the empire. Khrushchev and the leaders following him took a new and important step - they began to transform Russia into an empire with overseas possessions. If Lenin and Stalin ultimately dreamed of becoming the rulers of the entire world, the post-Stalinist leaders returned to a more traditional Russian policy of aspiring only to a world power status. However, there are no guarantees that the new leaders of the U.S.S.R. will not want to become global overlords again.

If the nationalist groups win out, a leading role in economic management will shift to the state. The Communist party, as an ideological institution, will be replaced with the Orthodox Church.

A mixed economy of sorts is likely to emerge. Small-scale production in agriculture, as well as in consumer goods and services, will devolve to decentralized private institutions. The major sectors of the economy, where the large-scale enterprises predominate, will retain their centralized structures of hierarchical appointments. We may also expect that the use of the theory of optimal planing will usher in significant changes in management practices. This theory, together with modern mathematics and computers, makes it possible to construct a system of centralized management based on the principle of deconcentration. By deconcentration I mean that the center will not interfere overmuch in the internal economic activities of enterprises, and will considerably reduce the number of parameters by which it plans and judges their activities.

One may assume that the policy of imperial expansion will be supplemented by increases in the production of consumer goods. In fact, Soviet leaders of the Brezhnev type had similar goals, but they have not achieved significant results, as they did not want to change the system. The new leaders may believe that systemic changes will allow them to pursue successfully both objectives.

Finally, a word about the social groups that will likely supervise the process of change. They are the right-leaning intelligentsia, the military, and the Komsomol leaders.

Much time may be needed for the Soviet Union to evolve in the direction of a free society. But it's important to start and, where possible, to make the positive results irreversible.

Notes and References

1. I believe that Gorbachev stated this for the first time in his address titled "O zadachakh partii po korennoi perestroike upravlenia ekonomikoi," presented at the Central Committee Plenum on 25 June 1987:

"Today, when we talk about radical restructuring of economic management, it is vital to recall what the real situation was in our economy back in the late 1970s and early 1980s. By that time the rates of economic growth had fallen so low, as to virtually signify stagnation." (Pravda, 26 June 1987).

2. Narodnoe khoziajstvo, 1980:158.

3. It was quite natural for many establishment conservatives in America, among them Milton Friedman, to criticize President John F. Kennedy (incidentally, the only Catholic ever to occupy the White House) for his famous statement "Ask not what your country can do for you..."

4. This point is borne out even by anecdotal evidence. Over the past fifteen years, more than 150 thousand Soviet emigres have settled in the United States. Every year they have to fill out their income tax returns which, as we all know, contain plenty of loopholes. To use the law in this way to one's advantage smacks to Soviet emigres of illegality; they can't help thinking that even a perfectly legal action must directly serve societal purposes. Moreover, for many Soviet emigres, there is no difference between using the law to one's advantage and breaking the law.

5. In the thoughts that follow I borrow heavily from my private conversations with Valery Chalidze, and from his many publications on the subject of rights. See, for example, V. Chalidze, The Soviet Human Rights Movement (New York: The Jacob Blaustein Institute for the Advancement of Human Rights, 1984).

6. In connection with this, A.Yanov's The Origins of Autocracy (Berkeley: University of California Press,1981) is of great interest here. It attempts to show that the preeminently conservative trend in Russian history, which has endured over the course of many centuries, is the result of a struggle between contrasting and opposing tendencies rather than of the country's monolithic nature.

7.The Soviet economic theory tries to ignore the issue of income from savings. Various attempts to hide behind the facade of 'earned' savings do not turn the trick because, in any case, the income in question does not flow from current work effort. The interest paid on savings deposits in the Soviet Union has almost nothing to do with the official policy of encouraging savings as against current consumption. The real reasons lie elsewhere. One is that the authorities want people to keep their paper money at governmental banking institutions, and not at home, and thus save themselves the trouble of printing more currency. The other reason is that in case there is a run on the banks, triggered by a wave of panic buying or hoarding, the government, using emergency powers, can simply sequester the holdings. This is precisely what happened at the time of World War II.

These days, as the amount of paper money being held by the population accumulates prodigiously, and the shortages grow worse, there is much talk in the Soviet press about devising ways to stimulate savings. One of the proposed measures calls for a sharp increase of the interest rate, which at present equals only two percent.

8. Communism in this regard is different from socialism in that it not only promises a material improvement to the people, but also a satisfaction of all their needs.

9. R. Ackoff, Creating Corporate Future (New York: Wiley, 1981).

10. I call this the "butterfly effect." When the butterfly comes too close to a lamp, seeking more light and warmth, it gets singed.

11. My late mother repeatedly referred to a quote, supposedly by Catherine the Great, to wit: "What are you talking about people for? - people give birth to more people, but land doesn't give birth to more land," referring to the idea that people are expendable.

12. J. Berliner, "Planning and Management" in A.Bergson and H.Levine,ed. The Soviet Economy: Toward the Year 2000 (London: George Allen&Unwin,1983),350-90.

Multidimensional Approach to the Soviet Political System

General Remarks

The Soviet political system was created not in accordance with a specific preexisting blueprint, but rather on the basis of some vague Marxist notions about an ideal future society, conceptualized as a purposeful, controlled system, or, more precisely, as a harmonious, planned system. The exigencies of political life exact a heavy price for such a lack of forethought, giving birth to political systems that are always unpretty, and oftentimes downright ugly- top-heavy structures pinnacled with an omnipotent leader. Such was the system that, in basic outline, was built by Lenin. Stalin only went a little further in the same direction, making the system even more rigid. The post-Stalinist system has totally retained the basic structure created by Lenin and embraced by Stalin. The post-Stalinist leaders though have shown a greater flexibility and have noticeably softened the regime. If, however, the system itself is not transformed, there can be no guarantee of Russia's stable peaceful orientation. What is the place of democratization in the process of the overall systemic transformation?

In disputes over a future political shape of Russia, democracy is usually offered as an alternative to autocracy. The democrats clamor for mass participation in politics; the autocrats insist on having a strong leader when the people are incapable of making decisions by themselves.

Methodologically, this level of discussion is absolutely unsatisfactory. Indeed, nothing could be simpler (or cruder) than to pick one, supposedly dominant, aspect of a complex structure, imagine that it can have only a positive or a negative value, and rate all political systems on the basis of this dichotomous division. A country, then, might be judged democratic by whether it does or does not respect human rights, or whether it limits or does not limit its leaders.

It would be a significant step forward if, instead, we tried to introduce at least a degree of development along the chosen dominant dimension, and to delineate certain transitional phases to represent different kinds of democracies. A mere shift from a binary to a tripartite approach to human rights, for example, will enable us to speak of fully democratic countries, that is,. those countries where these rights are practically respected without exception; semi-democtratic countries, which observe these rights to a significant degree; and nondemocratic countries, which do not comply with these rights at all.

Even this simple shift, from two to three possible states of the system with respect to one parameter, can have important policy implications. Consider, for instance, the conceptual framework of the Carter administration. It started out by dichotomously dividing all countries into democratic and nondemocratic according to their human rights performance. The Shah's Iran, which with regard to that dimension I would rate as semi-democratic, was judged by Carter's administration to be nondemocratic, as well as truly subject to American pressure. The results of this policy were not long in coming.

In truth, however, no single parameter can do justice to the concept of a free society. Instead, we have to represent such a society as a multidimensional entity, and understand that the movement along each axis has to be so regulated as to ensure an overall positive effect for the system as a whole. Too rapid an advance along any single dimension, if uncoordinated with the states of development of the other dimensions, may unhinge the entire system, and throw it back to a condition even more primitive than the original one (below, I will illustrate these points with some specific examples, primarily from Russian-Soviet history).

A degree of the development of a free society is, thus, a function of many independent variables, complexly interrelated. Unfortunately, when democracy is discussed, it's usually looked at as a one-dimensional entity, rather than as a multidimensional one. Therefore, it may be better, when describing a multidimensional entity, to use the term "free society," and reserve "democracy" proper to a more narrow sense, as just one of the dimensions of that society.

The most important dimension, in my view, is pluralism. It has to do with a special mechanism of decision making based on a diversity of ideas. Another dimension, democracy, refers to a number of competent and responsible individuals participating in this mechanism. Democracy in this sense should not be confused with ochlocracy, or mobrule.

Other characteristic dimensions of a free society are the separation of powers in the system (ideological, legislative, executive, and judicial), and the openness of the system (free import and export of information, goods, and people). Only when all these dimensions are fully developed can we speak of real restraints upon the power of the leader; and these restraints are a necessary condition for any long-term progress.

Each dimension is an aggregate that can be further decomposed into subdimensions corresponding to different aspects of the relevant aggregate dimension. I will give some examples of these subdimensions, particularly with reference to pluralism. For the sake of simplicity, I shall use the term 'dimension' disregarding its degree of aggregation. In principle, each dimension ranges over a continuum. But it could be split up into stages or phases, each with its own distinguishing characteristics.

Thus, a free society represents a multidimensional field, with each dimension having a certain number of stages. I have to repeat that the development of a country has to proceed in a rather sophisticated manner along each of these axes, so that the stages across all axes be always in harmony with one another. The effectiveness of a social organization is determined by its ability to form multidimensional systems incorporating many stages along each dimension, and subsequently integrate the processes that take place in the system.

Ideology and Ideocracy in the U.S.S.R.

The Soviet Union was created as an ideological system designed to realize the great goal of building communism. The promises to build communism in a short time, that is, within the life span of a single generation, were given by Lenin, in his famous speech at the 1920 Komsomol Congress, and by Khruchshev, in the 1961 Program of the CPSU. Stalin, too, made similar pledges, but more cautiously. Addressing the Eighteenth Party Congress in 1939, Stalin said:

"We have outstripped the major capitalist countries technologically and in terms of industrial growth. This is very good. But it's not enough. We also have to bypass them economically. We can and must do that. Only if we overtake the major capitalist countries economically, can we hope to completely meet our demand for consumer goods, and take a leap from the first stage of Communism to its second stage.

But this takes time, and lots of it. We can't overtake the major capitalist countries economically in two or three years. This will take a little longer."[13]

Only in the post-Khrushchevian period have the Soviet leaders actually stopped making any specific promises about the timetable for building communism, but the goal itself remains an important part of the official ideology. To be sure, the attitude of both the leadership and the people toward that part of the ideological corpus has changed considerably. In these days of glasnost, there are many shades of opinion on this score, ranging from sincere professions of faith in Communism to its open criticism in the media.

There is one intermediate position between these extremes that, I think, is crucial for understanding the present situation in the country. This position came into its own during the life of Stalin, and since then has remained largely intact. Let us, therefore, call it the "Stalinist Cocktail."

Stalinism, as an ideology, represents a combination of Marxism-Leninism and the old traditional Great Russian ideology (belief in the tsar, the fatherland and Orthodoxy). There is a fairly wide-spread conviction that Stalin created this ideology only after the war's turning point, or even after the war's end. There was, for example, Stalin's famous Kremlin address to the Red Army Commanders on May 24, 1945, in which he raised a toast to the Great Russian people "who are the most outstanding nation among the ethnic groups that make up the Soviet Union."[14]

The Kremlin speech notwithstanding, I think that the above conviction is in error. Stalin started to promote the Russian idea as early as 1924 when he, using anti-Semitism among other means, managed to isolate the party's left wing, that is, the proponents of permanent revolution. However, in the 1920s the ''Russian idea'' was still hidden. It came to the surface at the beginning of the 1930s and blossomed in later years (for more details, see the part 3, " Nationalism.")

Relatives of Alexander Kosarev (a Komsomol leader who perished during the Yezhovshchina) told me that after a meeting with Stalin, (the event occurred in 1934?) Kosarev recounted how Stalin openly insisted that his (Stalin's) person be glorified - of course, not for his own personal gain, but for the sake of socialism. In other words, we see that the first part of the triptych of Russian ideology, the image of the tsar, was being born again.

Another thing that occurred in this period was the rebirth of faith in the fatherland - the second part of the Russian ideological triptych. This is something that is widely known and scarcely requires special examples.

The third part was religion. I know from several prominent historians of the existence of documents, dating to the mid 1930s, concerning a policy change with respect to priests. Subsequently, the Bezbozhnik (Atheist) society and the magazine of the same name were closed down. Signs of this turnaround became more visible after the beginning of World War II, when, in 1942, Stalin received the patriarch and gave him his permission to open seminaries, even though the antireligious Marxist propaganda continued as before.

Dating the revival of the "Russian idea" by the early 1930s, may help us to explain why there was a certain discrimination in the annihilation of various groups during the Great Purges. Why did such writers as Boris Pasternak, Andrej Platonov, Mikhail Bulgakov, Anna Akhmatova, and Mikhail Zoshchenko survive? They all died of natural causes. My theory is that in the heyday of communist ideology, the leader feared 'heretics' rather than 'atheists.' These writers were atheists in terms of communism, inasmuch as they rejected the Soviet ideology in total. Furthermore, they were Russian artists, a not insignificant circumstance, and therefore could be trusted. The leadership understood that these people did not like the Soviet regime, but were not about to do anything bad. Far more dangerous were the heretics, such people as Isaak Babel, because he somewhat believed in the Communist dream but disagreed with the leadership on how they were going about pursuing it. Worse, he wanted to uncover the root causes and find out where things had gone wrong. And Babel wasn't an ethnic Russian. Incidentally, the opposite situation seems to be the case today when the ideological structure is faltering - the atheists are more feared than the heretics. That's why the authorities will be infinitely patient with the likes of Roy Medvedev while suppressing outspoken anti-Soviet dissenters, left-wing and right-wing alike.

In this way, Stalin created an ideology - a kind of 'fulminating powder'- in which such slogans as " The Workers of the World Unite!" "The Workers Have No Homeland," and "Religion is the Opiate of the Masses" virtually coexisted with "For the Faith, the Tsar, and the Fatherland."

It would seem that the Stalinist ideology was internally inconsistent: the three parts of the traditional Great Russian ideological triptych completely contradicted Marxism. It is well known that Marxism does not approve of personality cults, nationalism, and religion. How were the two mutually exclusive ideologies reconciled? Was this not Orwell's 'doublethink?'

Yes, it was doublethink, a phenomenon otherwise known as 'split consciousness.' Common sense people infected with doublethink can hold two or more contradictory assertions at the same time. If this kind of defective common sense is not challenged, it can examine each proposition in isolation from the rest - a sort of ideological 'divide and conquer' perpetrated by the mind.

Let me illustrate this point with an example. In the Soviet Union, the following model of Lenin exists: Lenin was the paragon of modesty; during the Civil War, he refused to accept special food packages, gave away his meager rations to starving children; he was humble in both life-style and dress. At the same time, the Soviet government opens a Lenin museum in Gorki, near Moscow, on the grounds of the former country estate of a Tsarist high official. There, among other things, we are told that Lenin came to Gorki to hunt. How could the paragon of modesty have a country estate where he came for hunting with well-fed hounds? What kind of an impression could this make on 'commoners?' What kind of a hero goes off hunting and stays in a luxurious palace lodge when the country is starving ? But Soviet people readily accept both versions of Lenin as true.

The same phenomenon of doublethink existed on a larger scale: the two mutually exclusive sides of Stalinism, Marxism and Russian nationalism, were 'bought' by the masses. The official Soviet ideology even today differs little from this Stalinist Cocktail.

Glasnost, however, has already spawned a new modification in the official ideological corpus, a democratic one. Such publications as Ogonyek and Moscovskie Novosti run stories that assert democracy as a positive liberal ideal for the country. I am talking about the positive goals, and not merely a criticism of the official ideology, especially its communist element, because the sharpest critics of communism belong not to the liberal camp, but to the nationalist circles. The magazine Novyj Mir, which leans toward moderate nationalism, is a good case in point.

Therefore, I believe it is incorrect to assert that the Soviet ideology is completely Marxist. Moreover, as the ideology evolved , its communist element was increasingly pushed aside. To sharpen the point, let us distinguish between the goal and the means of the communist ideology. By the goal I mean the construction of communism. The Communist slogans have by now turned into the objects of derision. Khrushchev, with his promises to build communism in twenty years, finally managed to kill the communist ideal in the Soviet Union. The shortest Soviet political joke consists of one word, and that word is "Communism." In a popular Soviet film, Little Vera, released in 1988, the heroine openly snickers at communism as a societal goal.[15] This part of the communist ideology is dead as a doornail.

By the means of Communist ideology I mean economic planning and organization. This tenet of communism does accord with the Russian mentality, and many still believe in it. Therefore, when I speak of the 'bankruptcy of communist ideology' I mean that its ideals are laughed at. Many people, however, still labor under the illusion that the existing system is sound, and can even be significantly improved.

Does this mean that the communist part of the Soviet ideology as a whole can be completely ignored? I don't think so, because the leaders continue to manipulate the symbols of the communist faith, albeit mainly for outside consumption: a "scientific" promise of building heaven on earth which Marxism holds out, is ineradicable, and will always attract devout followers. The Soviet leaders though may just as well manipulate the anti-communist symbols, if the interests of the state so dictate. I recall a conversation I had with an old communist at the end of the 1950s, when Khrushchev invited Nasser to Moscow. My friend's outrage knew no bounds: how could they receive such a person in Moscow, place him as a honorary guest on top of Lenin' s tomb, and award him the gold star of a Hero of the Soviet Union after he had annihilated the Communist party in his own country? But Khrushchev well understood that, besides ideology, there were his personal interests, state interests, and imperial interests - and these were the main things.

How did Hitler resolve the ideological problems after concluding the nonaggression pact with Stalin in 1939? A reconciliation of fascism with communism was bound to look impossible in the eyes of the German people, especially after many years of anticommunist propaganda. One of Hitler's underlings - I think it was Rosenberg - proposed to reformulate the essence of Soviet communism as 'the Slavic version of fascism.' This semantic device helped to justify an ideological alliance with the Soviet Union: the Russians did not have communism, but rather 'the Slavic version of fascism.'

In other words, when a politician needs to dress up his actions in some specific ideological garb, he can do it quite subtly, as the example of Hitler demonstrates. Therefore, one should not take at face value the communist rhetoric of Soviet leaders.

Now let us come back to the evolution of Stalinism.

As the role of communism in the Stalinist ideology decreased, its other part, the "Russian idea," gathered momentum and grew to such an extent that it threatened to become the wave of the future. Why is the so-called Russian wing so dangerous? Because it has a long tradition behind it, a tradition only temporarily interrupted by the Bolshevik Revolution, and revived quickly under the Stalinist Thermidor. Therefore, studying the evolution of Stalinism helps us to better predict and understand the future course of Soviet developments.

Is nationalism really so dangerous? The experience of many countries in the second half of the twentieth century is marked by a resurgence of nationalism. I believe in ethnic variety, and know of no better means to preserve it than through the system of nation-states. Nationalist sentiments are not bad in and of themselves, provided they do not turn into chauvinism (incidentally, regressing a bit, recall that if at the beginning Stalin championed Russian nationalism, at the end he became a hard-core Russian chauvinist). The danger of nationalism is that it can grow and change into chauvinism. This is especially true of a large country with a global war-making capability. If such a country in addition finds itself in a crisis, the danger is magnified manifold. Under such conditions, fanatical nationalists and zealots with an abundant emotional charge needed to run the country, could come to power. They would be ready to go to great lengths and to make heavy sacrifices to 'save' the country and satisfy their own interests. Fanatics never doubt the sincerity of their cause. That's what's terrifying. Their chauvinism, just like any other kind of fanaticism, could cause much grief.

But no matter how strong the nationalist ideology is in the Soviet Union, and whatever its attractions for the Russian people, one cannot ignore the possibility that some kind of a liberal ideology may develop there. The country does have a significant liberal intelligentsia which continues the great traditions of Russian liberalism. There is also an alternative of maintaining essentially the present ideology, while reducing in it the role of nationalism. This could be done by replacing the currently Moscow-oriented but indigenously recruited leaders in the Republics with Moscow-bred cadres, who will smash up the separatist elements.

Ideocracy.

The system that the Bolsheviks set up in Russia came to be run by the organization that, in theory, was to be responsible only for the ideological questions. But, as has already been intimated in the previous section, this organization, the Communist Party of the Soviet Union, controls all aspects of societal life, both in space and in time. And this role of the Party is codified in the country's Constitution.

The Bolsheviks were by no means the first people to create an ideocratic system. In the past, these systems have primarily been theocracies headed by religious leaders with unlimited power. For example, almost 150 years, until the middle of the eighteenth century, the Jesuits virtually ran a state within the state in Paraguay. Theirs, however, was a simple control system, because the Jesuits ruled only over the Indians, who themselves did not belong to their order. The Indians were organized around agricultural communes presided over by two Jesuits wielding total authority. Their decisions concerning the internal life of the commune were carried out by the Indians[16].

By contrast, the Soviet ideocratic system is one of the most complex systems of its kind.

The ruling ideocratic party in the U.S.S.R. controls all aspects of societal life both in space and in time. Party leaders have to resolve all issues: Should ballerina Maya Plisetsky be allowed to travel abroad?[17] In what direction should the economy develop? What should be the attitude toward religion? What foreign policy decisions to make? How to guide the activities of the communist parties in the West? Inevitably, they also have to take care of the intra-party activities that concern several million party members. ''Secular" institutions, essentially combining legislative and judicial powers, were set up to promptly implement those decisions that went beyond intra-party issues. These secular institutions, however, were largely staffed by members of the selfsame party.

The party apparatus is organized along geographical lines, and vested with total authority over all organizations within a given territorial unit. Secular institutions are both functional and territorial in nature, with the functional hierarchy being the predominant one: territorially, secular bodies can control only local organizations. However, In a basic unit of control, be it an office or a factory, the situation is the exact opposite of what it is at the top of the pyramid, with the secular leadership enjoying undivided authority.

To manage the system, Soviet leadership thus needs to coordinate the activities of three separate hierarchies: the party apparatus, the secular functional bodies, and the secular territorial bodies. Conflicts of interest between these three sets of actors engender enormous friction and inefficiencies.

Below, I"ll try to show that the Soviet system can hardly be improved without eliminating this triple hierarchy, separating the Party as an ideological body from the State, and drastically modifying secular institutions. It goes without saying that the transformation of the Soviet Union into a free society conceived as a multidimensional entity, will require considerable time and plenty of meticulous work.

An important methodological guideline for such an undertaking was rather successfully formulated by an outstanding Russian literary critic, Mikhail M. Bakhtin. Writing about the poetics of Dostoevsky, he said:

"Thus, no new artistic genre ever nullifies or replaces old ones. But at the same time each fundamentally and significantly new genre, once it arrives, exerts influence on the entire circle of old genres: the new genre makes the old ones, so to speak, more conscious; it forces them to better perceive their own possibilities and boundaries, that is, to overcome their own naivete. Such, for example, was the influence of the novel as a new genre on all the old literary genres: on the novella, the narrative poem, the drama, the lyric. Moreover, a new genre can have a positive influence on old genres, to the extent, of course, that their generic natures permit it; thus, for example, one can speak of a certain "novelization" of old genres in the epoch of the novel's flowering. The effect of new genres on old ones in most cases promotes their renewal and enrichment."[18]

In my political philosophy I adhere to the principle that if an institution appears on the scene and endures for a long time, it must be fulfilling an important integrative function. Therefore, the proposals to dismantle such institutions should not be taken lightly. Moreover, if some institutions have suffered an untimely denigration, or even destruction, we should think of ways to rebuild them.

Pragmatic arguments about the benefits of eliminating a particular institution may prove to be narrow-minded, and fail to take into account the institution's various influences on society's integration. I do not dispute the existence of dysfunctional institutions, primarily those that try to fulfill too many functions at the same time. Such institutions tend to completely dominate the governmental bodies - an ideocracy is an appropriate example. Still, I do think it entirely reasonable to simply destroy them. A more appropriate course would be to concentrate on gradually limiting their power through the introduction of new institutions.

I believe that the radicals, who try to dismantle entrenched political institutions rather than to elucidate exactly what functions they perform and attempt to limit their role, are mistaken.

Thoughts on the Use of Monarchies and Aristocracies

The comments at the end of the last section are particularly applicable to the following two institutions: aristocracy and monarchy.

On the Use of Monarchies.

Seemingly outdated, monarchy can still perform a number of very important social functions. It derives its meaning from representing the nation's enduring values. When the monarch is constitutionally limited and excluded from direct participation in politics, he becomes a symbol of his country's age-old traditions, its history, its character; in other words, everything of which the people are proud. A king's visit abroad is a particularly significant demonstration of these principles, and not, as a rule, a politically-motivated decision.

Although it's not quite de rigueur, academically, to borrow thoughts from the reactionaries-good liberals never quote Hitler approvingly - I cannot resist the temptation to cite an opinion on the importance of monarchy expressed by the famous Soviet mathematician and a Russian nationalist, Igor Shafarevich. In one of our private conversations, he said that the society should have two opposing kinds of institutions - one, to be praised, the other, to be criticized. It is not exactly clear whether it's beneficial to make the same institution an object of love and of criticism. The British monarches, the symbols of national unification and integration, rarely if at all draw critical fire.

If you must criticize, there's the Parliament -- go ahead and criticize the government. But there is also something constant, revered, like the Ten Commandments. The laws can be modified as needed, but something should remain sacred.

The people's genuine love of the monarchy is very apparent in Holland. The king's birthday is a national holiday. The people, dressed in holiday attire, come out into the streets, enjoy themselves, and express pride in their country.

In many places, the love of the people for a monarch ( a constitutionally limited one) also reflects pragmatic considerations. When visiting Thailand in 1983, I attempted to make contact with "the masses." For a tourist unacquainted with the local language, such contacts often boil down to conversing with taxi drivers or the hotel staff, as they know a little bit of English. I asked two cab drivers the same question: "How do you feel about your King? Why do you need him? It seems a waste of money to pay a person who actually has no power!" One of the drivers - both of them, by the way, turned out to be 'monarchists' - gave a particularly curious reply: it was precisely because the king was uninvolved in politics that he was able to be honest. Parliamentarians and civil servants, immersed in the current affairs of state, were corrupt. The king, according to him, was also able to pay more attention to common people.

In addition to its symbolic influence, a monarchy performs a number of important social functions. For example, a British king or queen, being a symbol of the nation, can virtually rehabilitate a formerly stigmatized official by inviting him to a formal reception. This is what I believed happened with Profumo.

The destruction of monarchy in a country where it has existed for a long time is extremely dangerous. It may very quickly be replaced by a different institution, which will perform essentially the same role, but much less benignly. While an established monarchy may have accumulated a vital experience of prudent governance, institutions that replace it often fall into the hands of political novices, who, in their eagerness for abrupt and decisive action, can do much damage to the country.

Let's look at Iran. What was the cardinal mistake of the Islamic Revolution? In my view, it was the destruction of monarchy. Maybe the shah was bad, maybe the dynasty was bad, but it was not right to destroy the institution. As soon as it was destroyed, the resulting vacuum was filled by Khomeini. And in comparison with Khomeini who behaved like a caliph, the shah was an archliberal.

The need to maintain the institution of limited monarchy has been recognized by a number of historical figures, for example, by General Douglas MacArthur, who preserved the institution of the emperor in Japan, and by General Francisco Franco, who transferred power to King Carlos of Spain.

Right after the Revolution, Pavel N. Miliukov declared that the tragedy of Russia was the elimination of the tsar: not the tsar himself, not the dynasty, but specifically the institution. In a country where the personality of the monarch played such a significant role over the course of centuries, this was risky. The Bolsheviks understood the significance of the moment. Nicholas II was replaced by Lenin who exploited the image of "the people's tsar." The famous painting Lenin with the Messengers is the most obvious testimony to this.

In the U.S.S.R., Stalin and other leaders have occasionally been taken for tsars. Once, at a taxi stand in Moscow, an elderly woman came up to me and asked how to get to the Novodevichy Monastery. "I want to pay my respects to Tsar Nikita," she said. "And then," she continued, "I'm going to the Red Square to pay my respects to Tsar Vladimir." I know of a similar story in the Kirov region where, during the war, a woman called Stalin "Tsar Joseph."

Thus, strange as it may seem, I would like to see a restoration of constitutional monarchy in Russia. One should not, however, confuse a constitutional monarchy with a "monarchical constitution." Under the former arrangement, the institution of monarchy is only one of a number of institutions forming the pluralistic political structure, the other being represented by an elected parliament which fills top slots in the executive branch, an independent judiciary, opposition parties, a free press, and the like. Under a "monarchical constitution," the monarch, with the help of his own constitution, more or less creates an illusion of a structurally sophisticated political system. In fact, he alone rules the country, making decisions on major issues, chiefly those of war and peace. Of course, after seventy years of Communism, resurrecting the institution of monarchy in Russia may seem bizarre or even impossible. However, if we consider the rapid gains of the Russian right wing movement and those groups within it that call for the restoration of absolute monarchy, the only thing that will appear bizarre in my proposal is the insistence on constitutional monarchy.

On the Use of Aristocracy.

The modern civilized world universally espouses a negative view of the institution of aristocracy. Of the developed nations, only Great Britain has preserved a system of aristocratic titles. Criticism of aristocracy, of hereditary aristocrats in particular, is founded on the rejection of the idea of an exclusive ruling elite.

First, a few theoretical observations. There is a well-known distinction in economics between public and private goods. Public goods (e.g., national defense, lawmaking) are those goods the amount of which does not diminish with consumption. The amount of private goods (e.g., food, clothing) does diminish with consumption. The production of public goods is the responsibility of the government since they are not marketable products. Private goods can be produced either by the government or by the market.

Looking at history, we can see that the nations with a strong commitment to the production of public goods, had a pretty powerful aristocracy. The existence of aristocracy proved a tremendous long-term boon to them. Why?

If the government is involved in the production of goods, it pari passu is involved in the appointment of people who have to supervise the process of production. As far as appointments are concerned, the loyalty of an employee to his employer is the decisive factor. The professional qualifications of a would-be employee may also seem important, nay controlling, for an employer chiefly preoccupied with national welfare. Actually, the employer's interest in his own power is usually so much stronger than his civic concerns that he easily overlooks the employee's professional defects and concentrates on his fealty instead. This practice, if unchecked, eventually threatens to weaken the national leadership. The performance of dedicated employees suffers because of the fear to voice their opinions; considerations of efficiency give way to considerations of personal safety and the avoidance of any behavior that may provoke the accusation of disloyalty from the employer. If the employee has climbed fairly high in the hierarchy, and has tasted the fruits of prestige and material well-being, the mere thought of forced retirement and loss of benefits is enough to keep him in line.

It was largely the institution of aristocracy that ameliorated the employee's fear of losing his job. Being a member of the aristocracy pretty much allowed one to preserve one's social and material status regardless of one's position. Of course, this guarantee worked only in a nontyrannical regime; under tyranny, no institution could save a disloyal person.

I believe that one of the reasons why the institution of aristocracy has survived almost intact in Great Britain even after the bourgeois revolution had to do with the fact that Britain was an imperial country, mainly interested in the production of public goods. The military and civil service played a vital role throughout the British Empire, in London and colonies alike. The role of the businessman as the producer of private goods was much less important. Although forty years have passed since the collapse of the British Empire, traditional values, as championed by the producers of public goods, have maintained their strength in many ways, and that in spite of the importance of enterprising individuals in modern economic development. The nationalization of British industry was also symptomatic of this condition, recalling in many ways the earlier emphasis on the production of public goods. To the present day, the societal role of the businessman is not highly valued by British establishment, although an entrepreneur may indeed get titled for his economic contributions.

These conclusions, truth be told, are based on anecdotal evidence rather than on serious sociological research. An English friend of mine who shares my views on the role of the businessman in contemporary British society, told me how at a prestigious Welsh annual music festival he observed the well-bred English aristocrats looking disdainfully at those businessmen who arrived in expensive luxury cars (and even helicopters).

In a sharp contrast to England, the United States is a country that has never known an aristocracy. Again, the distinction between private and public goods may furnish part of the explanation. From its very inception the United States stressed the production of private goods. The nation's founders conceived it as a country of independent farmers; it has since become a country in which entrepreneurs, unhindered by governmental bureaucracy, can utilize their talents in the production of private goods. The decentralization of the country, and its avoidance of foreign entanglements, meant that for quite some time the production of public goods was only a small proportion of the national income. Suffice it to note that at the turn of the century, the United States' expenditures on defense were smaller than the total revenue from excise taxes.

Although American economic achievements are considerable, the same cannot be said of the production of public goods. The US political system has yielded largely mediocre leaders over the past three decades. The war in Vietnam and the unsuccessful attempt to free the hostages in Iran, demonstrate that the quality of military leadership also leaves a lot to be desired.

Possibly, the lack of political and military leaders of a number and caliber required by the complexity of modern life and the new global role of the United States, is partly due to an exceedingly high importance that the American value system has long attached to producers of private goods.

What has been said of the imperative to preserve the employees's independence in the sphere of government-produced public goods, holds equally true for those instances when the government is involved in the production of private goods.

When the production of both public and private goods is significant, as is now the case in the majority of developed countries, it is very difficult to maintain a balance in social values and institutions needed to foster a harmonious development.

The institution of the aristocracy had existed in Russia for centuries, and it had struggled long and hard to enhance its autonomy: even as late as the eighteenth century, Russian aristocrats were still subject to corporal punishment. One can easily find fault with Russian aristocracy, especially with those of its members who were close to the last tsar. But on the whole, the Russian nobility could be justly proud of having produced many honorable individuals. After the Bolshevik Revolution, the institution of the aristocracy was immediately abolished. Most noblemen managed to leave the country; many others were killed. Only a small part of the aristocracy miraculously survived.

Nowadays, there is a wide-spread opinion in the U.S.S.R. that aristocracy may be beneficial[19]. For our purposes, it will be sufficient to point out the marked attitudinal changes toward the old Russian aristocracy. In the 1920s and 1930s, people tried to hide their aristocratic roots, fearing all sorts of educational and career complications. In the 1960s and 1970s, the descendants of aristocrats proudly confessed their ancestry to strangers and friends alike, believing that this would enhance their social position.

Although there is no system of real aristocratic titles in the U.S.S.R., the scholarly ranks of "Academic" or "Correspondent Member" of the Academy of Sciences resemble them in some essential respects. These academic ranks are prestigious, and confer on their bearers not only considerable social status but material benefits as well, which benefits, by Soviet standards, are rather significant. The case of Andrej Sakharov, who though exiled to Gorky, was allowed to keep his title of Academic with all its privileges, confirms just how important this title is.

The role of Soviet government in the production of public and private goods will most likely remain an essential one in the observable future. Therefore, I believe that the idea of reviving the institution of aristocracy merits serious attention. It stands to reason that aristocratic titles should not necessarily be hereditary (as is now the case in Great Britain), and that other measures to reduce the negative aspects of the institution may be introduced.

Pluralism and Democracy

I want to stress my belief in pluralism as a key factor in the life of social systems. This is because, on the one hand, the society develops in a situation characterized by a fairly high degree of indeterminism, when even the probabilities of success of various alternatives are unknown, and, on the other, because the members of the society exhibit a wide divergence in their value systems. Given these two conditions, the most dangerous people, to paraphrase a Soviet poet, Alexander Galich, are those " who know the way it must be."

A developed pluralistic mechanism is characterized by (1) availability of different developmental programs; ( 2) selection of one program for a foreseeable future; (3) monitoring the implementation of the program; (4) changing the program if new conditions arise or the program is found to be ineffective in the course of its implementation. The choice as to the actual number of people directly participating in pluralistic decision - making should, it seems, be of secondary importance.

The development of a pluralistic mechanism could start with individuals receiving real rights to criticize the programs professionally prepared by the leadership. The next step is the establishment of legal opposition. The opposition initially should not be charged with the task of elaborating a development strategy as sophisticated as the one being offered by the leadership. What's important in the emergence of organized legal opposition is that the previously atomized criticisms now have a single voice. Pluralism reaches full maturity when there appears an opportunity to elaborate and present a manifold of national development programs, together with suggestions for their implementation. I speak of a manifold here because at this stage we do not yet try and rate the programs. The content of the program is of no importance; what matters is that it exists, and is different. The need for a manifold of unrated programs is dictated by many reasons. One reason, alluded to above, stems from an essential indeterminism of social life. Since the initial cost of developing a manifold of programs is relatively small, free countries have practically unlimited opportunities to engage in that activity.

For new and original programs to emerge, it is necessary to have independent organizations. They have to be institutionalized, and have access to information to be able to offer contrasting and realistic programs; otherwise, they become impotent and can be easily beaten. If only one political party exists, factions within it cannot long survive. It seems that the tolerance for factions is possible only in a multiparty system, in which party leaders fear the potential loss of supporters to the opposition. (Didn't a rise of different branches of Christianity precipitate the appearance of different orders in the Catholic church?)

In turn, a multiparty system requires a variety of independent sources of financing party activities. Any organization sets its own priorities, and a single source of financing can choke off many new programs[20].

Program development is a multistage process. It begins with the creation of new ideas and ends with a detailed blueprint for action. A manifold, of which I spoke earlier, relates precisely to the initial innovation-producing stages of program development. It is here that unlimited pluralism, with independent sources of financing, is vital. The subsequent development of these ideas may require considerable resources to set up independent organizations and, ultimately, political parties. The job of the parties is to transform these ideas into practical strategies and policies.

Though manifolds are essential for long-term progress, at any given point in time only one program predominates-a system simply cannot function according to several programs simultaneously. Prioritizing the programs means that only one of them (or only one combination) is selected, the one needed for the current operation of the system. I am not going to discuss the well known problems of political philosophy that deal with the principles of selecting a program from a manifold (different voting schemes), monitoring the program implementation, and establishing an appropriate mechanism for changing programs.

Thus, pluralism is above all a question of the development of various points of view and a free choice among them. What do I mean by freedom here? All too often freedom is reduced to choosing in the present from a menu of options accumulated in the past. This won't do, for freedom also demands that diversity be created today, out of which one can choose tomorrow. Freedom, therefore, requires two conditions: the existence of a diversity of competing points of view in the present and the provision for maintaining a diversity of views for tomorrow.

Lenin' s principle of democratic centralism dealt only with the first condition: there exists a diversity of opinions, let's choose; the choice having been made, everyone must fall into line. The majority's one-time choice supersedes the interests of the minority, that is, of the very people who today are developing the new ideas, from which we want to be able to choose tomorrow. The creative minority was crushed in the Soviet Union.

I recall a true story told by a friend of mine from the city of Poltava. On one hot summer day, thousands of Poltavians rushed to a nearby river to escape the scorching heat. The trolleys were filled to overflowing. The driver of a trolly asked the passengers at the first stop, "ls the majority going to the beach?" Hearing an agreeable chorus of "da's" in response, he said, "Then we'll travel non-stop." The voices of the minority not headed for the beach were drowned out by the cries of the majority. The image of 'democracy the Poltava style' has stayed with me as a symbol of the principle of democratic centralism.

The Soviet system has nearly always tried to suppress diversity and pluralism, without consideration of means, and nip in the bud any competing views that could challenge the prevailing dogmas of various powers that be.

Pluralism is not just the presence of many viewpoints, it is also their interaction. Therefore, pluralism presupposes a mechanism for replacing one viewpoint with another: the supporters of one position, pursuing their own interests, closely follow the actions of the supporters of competing positions. When one program is selected, the others observe how it evolves; if it's discovered to be leading the country astray, there are other alternative programs on hand to correct or replace it with. That's pluralism as a dynamically operating system.

Comparing a pluralistic mechanism with other possible mechanisms of decision making, reveals a decisive role of the intellectual manifold. The principle of democratic centralism proposed by the Russian Bolsheviks led by Lenin at first looks very similar to a pluralistic mechanism. According to the principal of democratic centralism, decision making has to be based on a manifold. Its transformation into a singular diversity, that is, some particular policy, is carried out in keeping with the majority rule. After the choice is made, everyone must abide by it. But no mention is made of how to ensure these same conditions for subsequent choices, when it becomes necessary to replace the existing program. One can only assume that the manifold for the next choice situation will be created by accident. If we recall that a communist ideology (just like any other monistic worldview) means the acceptance of a single truth, it becomes very easy to destroy various parties and factions within the main party. The manifold degenerates or, at best, is reduced to mere differences of opinion of the members of the ruling oligarchy. The country's capacity for long-term prosperity is thus gravely impaired, if not altogether lost.

What is the relationship between pluralism and democracy? I believe that it depends on the level at which the populace is allowed to take part in decision making (local, state, or federal). Here, when I speak of democracy, I mean popular participation in decision making at the highest level, that is, in deciding upon the issues affecting the development of the entire country. My observations on democracy are less relevant to the lower levels of social hierarchy.

Democracy aims at involving as many people as possible, ideally everyone, in the process of decision making at all levels, and at the highest level especially. But such factors as personal competency, responsibility, and commitment to pluralism are also crucial for democracy. I speak here of competency in a broad sense that involves not just the educated elite, but the grass roots as well. Recall the difference between democracy and ochlocracy, i.e. power of the mob. Perhaps the weakness and even the downfall of many free societies was the result of their inability to put an end to the process of ochlocratization (that is, a gradual involvement of more and more incompetent and irresponsible people in pluralistic decision making) and return to democracy.

There are certain cultural conditions that have to be met before democracy can come into being. One of these conditions - a necessary, but not a sufficient one - is the philosophy of individualism (not to be confused with egotism, with everyone pursuing their own interests while ignoring the interests of others).

What I have in mind is the Western conception of the individual: I am able to be an individual only if I recognize others as individuals. I'm unique and you're unique, and both of us have equal rights which must be mutually respected. Russia does not partake of this tradition. Not coincidentally, the concept of privacy does not exist among the Russians, and their language has no word for it.

But in Russia, in the lore of the Russian village, there is, as Professor Szymon Chodak justly notes, something else: the image of the truth-seeker (pravdoliubets). In the Russian tradition, it is not pluralism and tolerance that are stressed, but rather the Truth, a single, absolute and universal Truth that exists somewhere and must be found. The cultural roots are different in Russia - they are the roots nourished by the striving for unity.

Soviet emigres in the West exhibit the same intolerance and lack of understanding of the need for diversity, for many truths. I have observed these true believers. They are so sincere, so absolutely sure that what they wish for themselves is also good for others, that they accuse their opponents of being the servants of the Satan, that is, the KGB. These people are not in the least cynical, and that's just what's so scary - they can't even comprehend their limitations .

It seems dangerous to give people so steeped in the 'truth-seeking' tradition the right to elect and be elected. They could easily produce a totalitarian regime because they are predisposed to turn to someone who'll tell them, "I know what the Truth is, the single Truth. Everyone else we'll eliminate so they won't interfere with our building of the ideal".

In my opinion, a decisive factor in making pluralism and democracy compatible is the attitude of the masses towards extremist, monistic parties, whether of the right or the left. It is these parties that are especially dangerous at times of crises, projecting an air of knowing the only way out and promising success if given unlimited power, with at least a temporary ban placed on other parties. If the political culture of the nation can resist the siren-like calls of the extremists, then pluralism is compatible with extensive democracy. England did not succumb to the temptation of an authoritarian regime during the Second World War, and nor did Israel after more than forty years of extremely precarious existence.

In many countries the conflict between pluralism and democracy was resolved in a very painful fashion. We know of the German tragedy when, during the Great Depression, the democracy of the Weimar Republic collapsed under the weight of an insufficiently mature political culture - the majority of the Germans voted for either Nazis or Communists.

West German President, Richard von Weitzaker, in a speech on May 24, 1989, commemorating the fortieth anniversary of the establishment of the Federal Republic, said that in his country " the present generation of policy makers is made up of people who learned from history. This generation understands that the tragedy of the Weimar was not that it produced too many extremists too fast, but that for far too long it had too few democrats."[21]

The instability of many Latin American countries (or of Iran under the Shah), is rooted primarily in the conflict between pluralism and democracy, which is often resolved in favor of democracy bordering on ochlocracy. Democracy in these countries is highly developed, what with wide popular participation in elections, demonstrations, strikes, etc. At the same time, the Latin American leaders realize the dangers posed by extremist parties, and suppress them. The membership of the extremist parties is either forced to go underground or stay abroad. A ban on these parties is accompanied by various repressive measures against the liberals, who disapprove of these curbs on freedom.

It was perhaps Russia's tragedy that the February Revolution brought about a mass participation in politics and a sudden rise of many parties, some of them quite radical. The strains of the World War I and the country's political immaturity worked to the advantage of extremist forces. The losers could accuse Marxists, Jews, various external enemies-whoever they cared to-of condemning Russia to misery, but we should not forget that it was not the October Revolution, but the Russian Civil War, in which people had the choice to support either side, that finally established the new regime.

I think that Russia does not have deep pluralistic roots. A contemporaneous introduction of democracy and pluralism there may be counterproductive, and result in the destruction of pluralism and the formation of a new type of dictatorship.

Thus, I believe that it is not in the least pedantic to insist on the difference between pluralism and democracy. These concepts are not synonymous, and under certain conditions they conflict with one another. What does Russia really need more - democracy or pluralism? Which would it sacrifice if forced to make a choice?

I reckon that what Russia needs above all is pluralism. Pluralism creates a diversity of opinions, offers the opportunity to balance competing positions, and effectively replace obsolete viewpoints with new ones. Does all this negate democracy? Not at all. Only at the beginning it is, as it were, a limited, "censored" democracy, with the franchise restricted to those meet age, property, or residential requirements. As the country develops and the people become more experienced and more competent, democracy also develops and broadens.

I believe that resolving the conflict between pluralism and democracy by suppressing pluralism is fraught with many dangers. May be I am wrong, and the introduction of a so-called "restricted democracy" is more effective. I can only fall back on the example of England, the motherland of Western political freedoms. The political history of England after the Glorious Revolution was primarily one of developing pluralism - the initial institutionalization of the loyal opposition was followed by the creation of a two-party system of the Tories and the Whigs. All kinds of views were allowed in England, and it served as a refuge for many foreign radicals - Karl Marx and Mikhail Bakunin, an anarchist, spent a greater part of their active lives there. Democracy in England was limited: the franchise was restricted not only on the basis of voting age, but also that of sex, property status, literacy, and so on. Let us not forget that even in the middle of the last century the great majority of the British population did not have voting rights. Workers were granted voting rights about a hundred years ago, in the 1870s, and women received them only after the First World War.

So, I believe that what a country needs for development is primarily pluralism. I am not opposed to democratization, but I prefer a very gradual one. Democracy is not a state, it is a process that lasts a long time and takes many years to mature. An attempt to establish democracy with one stroke where the people are not ready for it, is counterproductive. If my concept of societal multidimensionality is valid, then It would seem that, instead of the usual arguments over whether a democratic or an authoritarian regime is better for a given country, it would better to consider another alternative: the creation of an elitist pluralistic society as an intermediate stage on the road to a developed free society. Maybe, one should start at a still earlier stage that has the potential to evolve into this kind of limited pluralistic society.

I believe there are important groups in the U.S.S.R. that can accept pluralism. Let us say, for the sake of argument, that there are three broad strata in the Soviet society today: intellectuals involved in arts and sciences; professionals who by and large have scholarly degrees and who are employed as hospital doctors, factory engineers, school and college teachers, or who are employees of the party or the government bureaucracy; and manual laborers: industrial workers and peasants. I would guess that the strength of dedication to the pluralistic ideals diminishes as we move from the first group to the last.

I can easily anticipate opposition to my views concerning the wisdom of limiting democracy in certain countries. We do, after all, live in the twentieth century, and the populace of many places can participate in decision making, or at least has the formal right to vote. The demand to limit participation could set off a wave of popular indignation. But if this demand is restricted to those countries where the population is virtually barred from national decision making, then the real inclusion of even a small stratum into this process can be considered a step in the right direction, and one that might muffle the righteous anger of the dispossessed. This anger will be virtually silenced if we further admit that limited democracy at the national level can be coupled with the inclusionary strategy at the local level[22].

My call for a limited democracy in the Soviet Union might also give rise to an erroneous impression that I look down upon the Russian people, or even insult them with my pessimism concerning their abilities to pronounce upon national problems. I look at this issue very differently. By calling for a slow process of democratization in the Soviet Union, for the step-by-step inclusion of ever greater numbers of people in national decision making, I express my faith in the ultimate possibility of democratic rule in Russia. Haste in this matter can overexcite the masses and plunge the country into anarchy, to which the authorities are likely to respond with a more rigid autocracy, or even wide spread violence. I am not at all sure that the liberals, who profess their sincere love for the Russian people and express confidence in their readiness to participate in national decision making, can really bring happiness to the nation. In the last analysis, it is those who believe in the possibility of an eventual triumph of democracy in Russia, and who now see the first tender shoots of this process, who can do more actual good for the Russian people than can the liberals, despite their good intentions.

Openness in the Soviet Union

In this section I want to look closely at the issue of openness of Soviet society. For now I am interested only in external openness, that is, in Soviet relations with other countries, primarily with democratic ones, and among them first and foremost, the United States. The issue of Soviet internal openness needs special examination, which I will undertake in subsequent chapters.

When today we speak of the countries belonging to the First, Second, or Third World, we use their GNP as our major criterion of classification. The exceptions are well-known emirates of the Persian Gulf, though scoring high on the GNP per capita index, are still grouped among the Third World nations - but for our purposes they can be safely ignored.

I accept this classification as fundamental, but want to add two more. The first is based on the nations' degree of openness. One can distinguish between a one-sided and a two-sided openness, and openness as regards inputs and outputs. By one-sided openness of outputs I mean expansionism, a policy of conquest. By one-sided openness of inputs I mean the attractiveness of a given country to outside conquerors.

By two-sided openness I mean exchanges between a given country and other countries that involve people, information, commodities, services, money. It is this kind of openness which the present section is mainly about.

Nations interact over time, and whatever is true of their interactions in the short-term, may not necessarily hold over the long haul.

My classification only partly overlaps with the one based on the GNP. In the Third World, there is a spectrum of countries of varying degrees of openness, from India to present-day Iran. The main difference between the one-party states of the Second World (Albania, the U.S.S.R., Poland, Hungary,Yugoslavia) also seems to lie in their degree of openness.

The First World countries also differ with respect to openness, be it in their immigration or trade policies. Democracy presupposes openness, but openness does not presuppose democracy. Spain under Franco was an authoritarian, yet, to a great extent, an open country. Western democracies do not erect barriers like the Great Chinese Wall or even a "Small" Berlin Wall, but the forces behind isolationism in some of them should not be underestimated (remember the Monroe Doctrine).

The state's openness has a bearing on its compatibility with other states. Let us roughly divide all nations into two groups: democratic and autocratic. It seems that the most compatible countries are democracies: in the last hundred years, they have not fought each other. The most incompatible countries are large autocracies, mainly because they have conflicting expansionist interests. Relations between democracies and autocracies are more complicated. Long-term stable interactions seem to be impossible because they have different goals and means of development. The short-term and mid-term relations between these two groups of countries can be stable, depending on the state of relations between autocracies. Thus, The US may enjoy a measure of detente with China because of Beijing's bitter feud with Moscow.

The second classification I want to propose is based on the degree of governmental control of national resources. On the edges of the spectrum it is theoretically possible to have a completely free society and a completely totalitarian one. By this classification, the Soviet Union comes close to a totalitarian state: the government there almost totally owns all commodities, natural resources, information, and people. It also totally controls all the inputs (imports) and outputs (exports) of the system, whether they are related to commodities, information, or people.

Bringing all three classifications together, I want to discuss some problems concerning the two-sided openness of the Soviet Union. What does the Soviet Union want from other countries? Do they agree to satisfy Soviet desires? What are these countries willing to receive in exchange from the Soviet Union? What does the Soviet Union want to give in exchange?

I will try to provide some partial answers to these questions. The answers have not been arranged according to the importance of the questions, but rather by the category of inputs-outputs: people, information, commodities (services). All answers are related mainly to Brezhnev's time.

Inputs.

People. The Soviet Union has no problems with immigration: the quality of life in the U.S.S.R. does not encourage people to emigrate there.

The Soviet Union is interested in having students from Western and Third World countries to come and study for several years. Because there is a shortage of labor, the Soviet Union is also anxious to 'import' foreign workers.

The Soviet authorities have a long-term interest in the visits of Western scholars from whom they can borrow new scientific and technological ideas (for details, see the subsection "Information"). Russian hospitality helps to encourage such visits, but other obstacles intrude: many Soviet research centers are obsolete or off-limits to foreigners; Soviet authorities are afraid of the penetration of Western ideology. Conversely, Western scholars who cherish the ideals of freedom often refuse to visit the Soviet Union.

Soviet leaders are of two minds respecting foreign tourism in the U.S.S.R.: on the one hand, it brings in hard currency, and increases the number of admirers of the Soviet Union (a brief visit spent in viewing historical monuments and cultural events inspires tourists to think it's a great country). On the other hand, an expansion of tourism requires considerable investment in the service sector, which, as I show in the discussion concerning the export of nondurable consumer goods, the authorities are averse to undertake. Besides, foreign tourists can be a bad influence on the natives, (for example,, tourists accustomed to Western nightlife sometimes ask for prostitutes) and it is difficult for the authorities to operate with a double standard concerning their own citizens and foreigners.

Information. While extremely hostile to any penetration of Western ideology, the U.S.S.R. generally welcomes the import of Western scientific and technological information. Most of all, the Soviet Union is interested in pioneering scientific ideas, preferably those with proven military applications. The number of scholars in the U.S.S.R. is comparable to that in the USA, but Soviet scholars generate few pioneering ideas - a fact borne out by a small number of Soviet Nobel Prizes winners. The reasons lie deep within the system. While pioneering paradigms anywhere often face opposition from the scientific establishment, a pluralistic ideology backed up by a multiplicity of financing sources and the international academic 'safeguards,' can help prevent the killing of new ideas. In the U.S.S.R., a new idea without a demonstrable practicality can be easily stopped by a bureaucratic system of allocation of resources for R&D, and by an ideological climate in which the innovation can be labeled a deviation from Marxism (for example, the cases of cybernetics, genetics, etc.).

The Soviet Union is interested in importing new technologies, particularly of a military nature. (See section Dilemma in the Productoin of Goods versus the Development of New Technologies in chapter 5).

The Soviet Union is also interested in importing new scientific ideas either because the existing system, with its ideological climate and financing mechanism, does not permit a successful research and development effort, or because it does not have enough resources for current military needs and the development of heavy industry.

Naturally, the Soviet Union wants to separate the importation of scientific and technological ideas from the penetration of Western ideology. That is why the Soviet Union is more interested in importing publications and patent information than in the exchange of scholars. Unfortunately for Soviet authorities, research and development are performed by people, and contacts among them play a crucial role in the field.

Commodities. For a long time after industrialization, the Soviet Union was not interested in sustained importation of goods from non-socialist countries because of its tendency toward isolationism. In addition, the Soviet Union did not have the means to import a great deal from these countries due to the lack of hard currency reserves; the bulk of its foreign currency receipts comes from the sale of gold and oil.

The Soviet Union can try to open the country more to commodities by increasing foreign investments. These investments can be used to expand the production of raw materials ( the reader will recall the debates in the early 1970s concerning the wisdom of American investments in oil and liquid gas in Siberia, and Japanese investments in the coal and timber industries) and industrial goods ( for example, a truck factory built by Ford on the river Kama in the mid 1970s). The Soviet Union, by exporting raw materials and commodities manufactured on the capacities financed (and sometimes installed) by the West, could then pay back the principal and interest.

Such methods of increasing the openness of the Soviet Union toward inputs from the West are, however, limited by the degree of compatibility of countries belonging to different camps. The absence of guarantees from the Soviet Union that long-range contracts will be honored makes Western investments in this country vulnerable. The military orientation of the Soviet Union is another obstacle to investment. Imagine the following scenario. A Western firm expresses its willingness to invest in a new Soviet factory for the production of trucks. The principal and interest could be partially paid off by a certain portion of the output of trucks. These trucks can be passed on by the Western firm to the Oriental neighbors of the Soviet Union. But this firm has to have a guarantee of high quality products. One of the conditions that will allow this guarantee is a systematic control of the technology, which was developed by the Western firm. This, in turn, requires involvement in the managerial body by a representative of the Western firm. But the Soviet authorities cannot agree to such a requirement for a very simple reason: the factory for truck production will also be involved in the production of military goods. It will have not only a plan for wartime, that is, the so-called mobilizatsyonnyj plan, but it will also be involved in peacetime production of goods for the army, along with all the other car and truck factories. But to allow a foreigner to be a manager in a Soviet plant and to have access to extra classified information is impossible. . .

Output.

People. The most difficult problem is to open the U.S.S.R. to an outflow of people, by which I mainly mean emigration. An expansionist country has many reasons to consider emigration as negative: in war, emigres strengthen the enemy, though, of course, they also may be potentially useful as fifth columns in occupied territories.

Russia has a long history of hostility to emigrants. Over 130 years ago Aleksandr Herzen, a Russian writer and revolutionary, in comparing Europe and Russia wrote:

"In Europe a man who lives abroad has never been considered a criminal, nor one who emigrates to America a traitor"[23].

The Soviet Union has had periods when, for different reasons, a limited emigration was allowed. But first a few words about 'compulsory emigration.'

Soon after the October Revolution the severest punishment for a Soviet communist was exile from the world's first communist country - Trotsky's exile was regarded as such a punishment. Later, under Stalin, 'undesirable people' were not exiled - they were exterminated within the country. Not until the 1970s did the Soviet Union return to Lenin's practice of compulsory emigration (for example, Aleksandr I. Solzhenitsyn and dissidents exchanged for Soviet spies and a communist leader). At the same time Soviet leaders practiced 'semicompulsory emigration.' Dissidents whom the government for one reason or another is afraid to isolate within the country (that is, keep them in a prison, labor camp, or psychiatric clinic) were offered a choice: West or East (Siberia); they chose the West.

Voluntary emigration was permitted in limited numbers in the 1920s and in the 1970s and 1980s. The people who emigrated voluntarily were mainly those who did not have a historical homeland in the Soviet Union: Jews and Germans. But these spurts of emigration, as I have mentioned before, were contrary to the aspirations of the leaders.

Long business trips for Soviet professionals and education for Soviet students in Western countries were also inconvenient for Soviet leaders; they were afraid these people would either defect or return with an undesirable ideology. Relatively short trips to the West ( several months) by professionals were more convenient for Soviet authorities, who they were anxious to acquire Western scientific and technological information. But there were many obstacles to this method of acquiring information, both political and financial (the shortage of hard currency). Also, a business trip to the West is a privilege and a reward for a Soviet scholar (it is possible for him to enjoy the life of a free society and to buy consumer goods much cheaper than in the Soviet Union). An added note here is that the political loyalty of the traveler and his devotion to the chief of the organization where he worked were important conditions in gaining permission to go abroad. All this demonstrates why genuine scholars were seldom permitted to visit their colleagues in the West: such trips were the privilege of mediocre scholars. The bureaucrats try to find a respectable excuse for this. One of the former chiefs of the Foreign Relations Department of the Central Mathematical Economic Institute of the Academy of Sciences of the U.S.S.R. explained to me the unofficial position on business trips by Soviet scholars to the West. "Bad scholars," he said, "do not deserve this trip because they will not understand what the Western scholars are doing. It is too dangerous to send good scholars abroad because they can pass on their colleagues' great ideas. The best way is to send abroad mediocre scholars: they can understand the activities of Western scholars and cannot inform them of new ideas."

Mass tourism from the Soviet Union to Western countries and to the Third World has been limited for ideological and economic reasons.

Information. The Soviet Union is eager to export information if it bolsters its national image. The U.S.S.R. spends a great amount of money to export propaganda through radio and print medium, particularly to the propaganda aimed at the millions of refugees from the U.S.S.R. (after the Revolution and, especially, after World War II). The Soviet Union has lost considerable prestige in the communist movement, and has weakened this movement (by exposing Stalin, invading Hungary and Czechoslovakia, etc.). It tries to compensate for this by attracting former Soviet citizens especially if they have nostalgic feelings.

The Soviet Union did not allow the output of any information, by any means, concerning the true situation in the country. The enormous development of the system of classified information was also an attempt to disguise the country's backwardness, but it causes problems as well. It bureaucracy prevents the passing of successful technologies from the military to the civilians. I think that many military technologies, not classified in the West, are super-classified in the Soviet Union and cannot be used in other industries. The Soviet leaders understand this. To the best of my knowledge, Aleksey N. Kosygin, when he was chairman of the Council of Ministries of the U.S.S.R., tried to improve this situation; but the bureaucracy was stronger than he was.

Commodities. The Soviet Union is one of the chief exporters of weapons to the Third World (and also to terrorists in various countries). The export of modern weapons is the best method by which to subjugate countries that are dependent on weapons. It requires the presence of qualified Soviet consultants, spare parts purchased from the U.S.S.R., training in the Soviet Union, and so forth.

The export of weapons to the Third World is accompanied by the export of Soviet industrial goods. These countries, being in the orbit of the Soviet Union, do not have the opportunity to trade with the West, and therefore have to buy Soviet goods. The Soviet Union also stimulates these countries to buy its commodities by loans with low interest rates.

Let us now consider the factors that limit trade between the Soviet Union and the West. These countries do not buy Soviet weapons, which the Soviet Union would not sell to them anyway. So any trade between the Soviet Union and the West is strictly nonmilitary.

Why, then, can the Soviet Union extend not "peaceful" exports? I think a major obstacle was its expansionist policy, as mentioned earlier. Let me be more specific. An increase in the production of nondurable consumer goods requires the development of agriculture and light industry. In turn, this development requires more investment. But the limited money available for investment is used for other industries important for expansionism. Moreover, most equipment in agriculture and light industry can't be converted to the production of military goods; the Soviet leaders prefer to develop industries that can be easily converted. (Obstacles to the export of Soviet durable consumer goods will be discussed later, under the subject 'industrial commodities.')

Now let us look at the possibilities for export from the other edge of the production system - natural resources. The Soviet Union has vast reserves of mineral resources and timber. However, these are difficult to obtain because they are located in remote areas where transportation and communication is not yet sufficiently developed. The Soviet Union needs large investments to develop these resources and expected to get the money from the West. But even if the U.S.S.R. decides to develop these new areas of natural resources itself and to export them to the West, there will be problems. Such export could give the U.S.S.R. a key to the Western economies, with all the consequences that follow from dependency on the Soviet Union. The oil embargo by a group of autocratic countries in the 1970s makes the danger clear. The gas pipeline from the U.S.S.R. to Western Europe's is a similar situation.

The possibility of exporting capital goods is also limited. On the one hand, the export of these commodities can be profitable for the U.S.S.R. because it can produce them on capacities easily convertible to military needs; on the other hand, the volume of import of these goods cannot be dangerous for the Western countries.

The major obstacle to increasing the export of industrial goods is their low quality. There are many reasons for this, particularly the Soviet philosophy of planning based on the idea of continuous physical growth. To promote this growth, managers have to violate technological rules and reduce quality.[24] The military orientation of the country is another cause of the low quality of industrial goods. Quality is characterized by many criteria, including longevity of the product. From the military point of view, tanks, airplanes, trucks, and so on do not have to last long - probably only several months in wartime. Therefore, it is not reasonable to spend extra resources to increase the longevity of military implements. However, in the peacetime it is important to produce tractors, airplanes, cars, trucks, and so on that will last a long time. But this requires additional investment because the factories producing these goods are oriented to the production of corresponding military goods.

Thus, in order to increase the quality of industrial goods, the U.S.S.R. would require a reconceptualization of the whole attitude to the performance principles of the Soviet system: in particular, the aspirations of the leaders to increase the output by any means, the orientation of the country to military needs, and so on, must be changed.

The Soviet Union, continuing the Russian tradition, grows mainly by expansion. As long as the Soviet Union follows this policy it will seek closedness-autarchy. Tactical decisions determine to what extent the country will be open. The Soviet Union under Stalin is the best example of this. When Stalin decided on rapid industrialization, he established friendly relations with the West for a short period; without Western equipment and professionals he could not achieve his goals. It is interesting to note that at this time Peter the Great was Stalin's hero. As industrialization in the rough was finished, Stalin closed the country; Ivan the Terrible became his hero.

Brezhnev declared at the beginning of the 1970s that the relationship between the USA and the U.S.S.R. has to be based on more openness and that this policy has to become irreversible. But this declaration is only a good wish. The Soviet autocratic regime, and its expansionist policy, did not permit the opening of the country to the extent that the openness could become irreversible. This regime opens the country only to the extent that openness is reversible at any time.

Rejection of expansionism as a leading policy is a necessary condition for the openness of the country, which is in its turn a long - lasting factor for development of the country. Certainly this condition is not sufficient for growth. One can easily imagine an opposite situation when rejection of the policy of expanding the empire, and moreover the rejection of the empire itself, might bring economic stagnation for the country. Such situations are linked with the introduction of fundamentalism and isolation of the country (this is Solzhenitsyn's suggestion).

The maintenance in the U.S.S.R. of extraverted values and the striving for growth could be compatible with the openness of the country. Such a concept is consistent with the country's security, but not with expansionism. Certainly, openness makes the country dependent on other countries and less secure. But because other countries also are becoming dependent on the given country, under a certain level of mutual dependence a situation can be reached where each of these countries is secure.

Openness and Pluralism: Contemporary History

It we look at the foreign policy of different countries or of one country at different times, we will see that there are alternatives between requirements for openness of the interacting countries and for a particular country's pluralization. Let us consider this based on an analysis of Soviet-American relations in the period from 1960 to 1980.

The attitude of the Soviet leaders to the problem of openness-pluralism at the end of the 1960s may be determined in the following way. At that time, Soviet leaders understood that liberalization of the country would be dangerous: among other things it would increase political tensions, and diminish the role of the Communist party. Many leaders remembered well the bitterness of Stalin's time and were afraid to revive it. Under these conditions domestic problems, such as the growing need for grain and modern military technology, could be solved by improving relations with the West. (Buying grain and military technology from the West can only help to plug the holes in the old system). The increased openness of the U.S.S.R. was the sacrifice Soviet leaders made for the improvement of the relations with the USA. (The American government's tolerance of the absence of pluralism in the U.S.S.R. was used by Soviet leaders in their subsequent struggles with dissidents). Under Stalin dissidents (even potential dissidents) disappeared without a trace. Under Khrushchev the dissident movement had not yet developed: people believed in the possibility that the country might be liberalized from above. After Khrushchev was dismissed, with the trials of Siniavsky and Daniel, the new leaders announced that they were going to stop the liberal movement. The dissident movement was the response. However, the need to open the country required more flexibility from Soviet leaders in their dealing with the dissidents. The leaders chose Lenin's tactic: they used a 'mixed strategy.' Some dissidents were forcefully exiled to the West (for example, Solzhenitsyn); some emigrated under the pressure of exile to Siberia; others were put in prison, labor camps, or psychiatric clinics. A number of the dissidents were seduced by the authorities: they stopped their activities in exchange for an attractive job, business trips to the West, and other appealing temptations.

By the end of the 1960s the US was looking for new avenues for peaceful coexistence. There were many reasons for this: the unpopular Vietnam war, the burden of armament, and, in particular, the danger of an atomic war (at that time the Soviet Union were considering a preventive atomic war against China). The American government was searching for these new avenues as a way to open the Soviet Union to Western information, commodities, professionals, and tourists, and in return get Soviet scientific information, emigrants, professionals, tourists, and raw materials. Democratization of the U.S.S.R., as expressed by the claim to maintain human rights in the country, was put aside. It seems that the authors of this policy decided that the increased openness of the U.S.S.R. would eventually bring the country to pluralism. No doubt the more open a country, the more the leaders are limited in their antiliberal activities; they fear public opinion in the West. In turn, public opinion in free societies is amplified by the voices of dissidents from the U.S.S.R.. Visiting the U.S.S.R. and talking with dissidents, relatives, and other reliable people permits those in the free societies to better understand the Soviet regime and to see the necessity for its liberalization.

The power of many religions consists in the promise of paradise in the afterlife; whether this promise is upheld cannot be verified. The desire of people to believe in this ideal is so strong that they agree to accept such a promise even with no proof. The desire of many people to see a paradise on earth is also strong. These people are ready to believe that paradise can be built on communist ideology. The Soviet Union declared that it was the first communist nation in the world. A paradise on earth can be tested; people can check its reality. Maintaining a closed country is the best way to prevent friends and enemies of communism from exercising their curiosity to check the construction of paradise. A concession to closeness is the regulation governing the arrival and departure of pilgrims who disseminate the "truth" among the people anxious to have heaven on earth. The openness of the U.S.S.R. to a great extent stipulated the destruction of the myth of a paradise in that country.

A leading American liberal, a man of great talent and irreproachable moral credentials, told me that he became disappointed with the Soviet system in the mid -1960s when he heard the voices from the inside, that is, the protests of the dissidents. Until then, he thought that a virulently anticommunist Western propaganda exaggerated the negative aspects of Soviet reality: if the situation in the U.S.S.R. was as bad as the Western media made it out to be, the Soviet people would have let the world know about it. (Similar benefits of doubt were once also enjoyed by China). Now we have only two communist countries that are completely closed to the Westerners, North Korea and Albania. Naturally, they became the models for some leftist groups in the West.

If a country is authoritarian, it can fairly easily shut itself off from the outside world and, by coercion and persuasion, suppress any protests that appear during the period of openness.

The Nixon and Ford Administrations were visibly successful when the U.S.S.R. opened up. The Carter administration continued the policy of detente, but focused its attention on the problem of human rights. The Carter policy was not consistent. (For example, such an open country with great elements of democracy as the Shah's Iran, was severely criticized for violating human rights; at the same time, the US established friendly relations with China, a closed, undemocratic country). Certainly, the emergence of a liberalized Soviet Union will radically alter the world situation. But even if one supposes that it is possible to liberalize a country from the outside, the process will take a long, long time. Moreover, we may reasonably assume that openness is a necessary stage in this process.

In any case, to maintain peace in the world it is necessary to have democratic regimes in the major countries; outside attempts to democratize the authoritarian regimes require sophisticated strategies. Elaboration of such strategies is made difficult by the dynamic environment of changing leadership and policies in both the West and the U.S.S.R..

The Soviet Union reacted negatively to the human rights efforts of the Carter administration, but because the Soviet leaders wanted to retain the benefits of detente, they were patient. US verbal attacks on the U.S.S.R. were not decisive. Possibly, the US policy of vacillation encouraged the Soviet Union to invade Afganistan. Following the invasion, the American policy changed radically, and Washington imposed a grain embargo on the U.S.S.R., among other punitive measures. The Reagan Administration escalated the confrontation. The Soviet authorities moved to shut off the flow of information from the West, cut down on scientific exchanges, and then took further antidemocratic steps by smashing the domestic dissident and liberal movements.

The confrontation became all the more visible after Yury V. Andropov established himself as head of the party. Under him, an anti-American propaganda intensified immensely. I would even go so far as to say that under Andropov the level of anti-American propaganda reverted to the pre-Brezhnevian time, in the sense that the United States once again was classified as Enemy Number One: under Brezhnev, that 'honor' for all intents and purposes belonged to China. Under Konstantin Chernenko, the situation remained largely unchanged.

A new period in US-Soviet relations was inaugurated by Gorbachev, but this is a subject for the chapters to follow.

Notes and References

1. J. Stalin, Voprosy Leninisma (Moscow: Gospolitizdat, 1953) 618.

2. J.Stalin, O velikoj otechestvennoj vojne Sovetskogo Soiuza (Moscow: Gospolitizdat,1950) 351.

Who is Gorbachev?

I do not claim to have the last word about this complicated question but I feel a few considerations are in order. To begin, let us examine the specific changes in the Soviet system enacted under Gorbachev.

Changes in the Soviet System under Gorbachev

Under Gorbachev, the Soviet political system started to shift. A special effort has been made to alter the political climate in the country and shatter the communist ideology. At the same time, the economic system has undergone but minor changes, in spite of the rather ambitious plans for transforming the Soviet economy in the direction of a market that were proclaimed soon after Gorbachev assumed the throne. In fact, the last few years are marked by a steady deterioration of the economic well-being of the population. Testifying to this are the numerous statements made in mid-1989 by such prominent Soviet figures as Academician Leonid Abalkin, Boris Yeltsin, and others warning of the possible outbursts of massive unrest with all the ensuing consequences if the economic situation in the country does not improve within the next one to two years.

With the current state of the country being what it is (compared to the New Economic Policy (NEP) or to China), Gorbachev's primary concern extended to the transformation of the political system that was rejecting major reforms in the economy. In his own words, political reforms are destined to pave the way for economic changes and should help the country overcome the critical trends in its overall development. Still, the steady deterioration of economic performance has threatened the changes that have taken place in the political realm.

What actual reforms as far as ideology and political structure of the Soviet Union have taken place under Gorbachev, and how extensive is the transformation he has initiated in the political system entrenched in the country?

First let us take ideology. During Khrushchev's era tremendous progress was made in disparaging communist ideology as a result of the denouncing the myth of Stalin. But it seems that Khrushchev himself still believed in the potency of communist ideology; in any case, during his reign and prior to Gorbachev, ideology was not questioned in the official Soviet press. In search of Stalinism's roots, glasnost initiated under Gorbachev opened the question of the ideology which could have and did lead to this phenomenon. Particularly interesting in this respect is a series of articles entitled "The Roots of Stalinism" appearing in four issues (eleven to twelve 1988, one to two 1989) of a popular Soviet magazine Nauka i Zhizn (Science and Life). The author is A. Tsypko, a Doctor of Philosophy who is working (or who did work) in the apparatus of the Central Committee (CC) of the CPSU. In these articles, Tsypko actually questions the essence of communist ideology. For on the one hand, under the banner of class struggle, it brings tremendous destruction to mankind in material as well as spiritual realms, obliterating hard earned accomplishments. On the other hand, this ideology being incapable of constructive activity, poses goals so grandiose that any means of attaining are justified. These articles have made a strong impression upon Soviet liberal intelligentsia and have become the subject of much controversy.

With the decline of communist ideology, there are signs of Russian chauvinist ideology gaining popularity. Novel in this respect, compared to Stalin's time, is the tolerance on the part of the authorities toward organizations openly professing Russian chauvinism (such groups as "Pamiat" and its various offshoots).

The church has come to the fore over the course of glasnost, especially after the pompous festivities in June 1989 commemorating a thousand years of the christening of Russia. Church ideology has been widely publicized. First and foremost, the absolute moral values (as opposed to the relative communist morality) preached by the church have directly or indirectly assumed the status of official acceptance.

But communist ideology is not the only aspect that has been officially and explicitly attacked under Gorbachev.

All evidence points to the fact that Gorbachev wishes to propel this idea by eliminating Soviet ideocracy, that is, by doing away with the "tri-spiral" hierarchy of management primarily by excluding the Communist party. Gorbachev's statements at the nineteenth Party Conference regarding drastic reductions, especially in the central party apparatus, with subsequent reallocation of power to the local Soviets testify to his intentions. I mean Gorbachev's decision to concentrate the power in the hands of the president of the country, that is, the Chief of Supreme Soviet. Symbolizing this transformation is the appointment of the president as the chief commander of the armed forces, a position formerly held by the first secretary of the Central Committee. Communist party remains, with the president as its first secretary. In case the Congress of People's Deputies chooses not to elect the first secretary to the position of the president, it should serve as a signal to the party that its leader is unpopular with the people and should be replaced by the party; the reverse is not stipulated. One indirect confirmation of the declining role of the Communist party is the difficulty of finding people to fill various party posts. Several provincial secretaries speaking at the May 1989 Plenum of the Central Committee have mentioned vacancies in their apparatus and the difficulty of filling them.

Elements of pluralism have also cropped up under Gorbachev, manifesting themselves primarily in the tolerance of open expression of one's disagreement with the current state of affairs and the open criticism of the past. Criticism of leaders, Gorbachev included, became possible, and occasionally even in the official press. Although the bulk of criticism is still directed at the past, the mere fact that the current leadership has been in power for over four years makes contemporary criticism more and more realistic. Under Gorbachev, progress has been made in the institutionalization of pluralism. The official Soviet press has branched into journals and newspapers having diverse orientation, a process especially conspicuous in literary publications. Khrushchev's period gave rise to some diversity in the ideology professed by various journal's (Novyj Mir versus Octiabr in particular) but in the years that followed ideology was again subjected to unification for quite some time. In the course of glasnost, the rift between liberal journals such as Ogonyek, Znamia, and Octiabr and strongly chauvinistic journals like Nash Sovremennik, Molodaia Gvardiia, and Moskva has come into sharp focus; it seems Novyj Mir follows a moderate nationalistic trend (subjecting the current state of things to extremely strong criticism). Keeping in mind the revered status traditionally enjoyed by the printed word and literature in particular in Russia, this variety of literary publications is remarkable, since they form what could be called the epicenters of the development of different political trends. Similar diversity, although more restricted, has surfaced among major official Soviet newspapers. Of course, pluralism in this category is rather limited, for all major newspapers lack independence and are completely subordinated to their respective bodies of power (the chief editors of newspapers are all appointed from above, newspapers' financial dealings are completely spelled out, etc.); all major issues are still subject to a rigid censorship by the party apparatus. The creation of independent publishing houses under the banner of a cooperative enterprise was outlawed by decree that declared this kind of cooperatives illegal.

A more significant development of pluralism occurred with the formation of the so called informal societies (neformaly). These groups meet to discuss various contemporary issues, and they take active measures (by means of demonstrations, for instance) to call the attention of the public and those in power to their grievances.

Institutionalization of a multiparty system in the U.S.S.R. is still very remote. Noteworthy in this respect is a statement made by Vadim Medvedev, the member of the Politburo in charge of ideology, at a press conference in May of 1989. The introduction of a multiparty system in the Soviet Union is mentioned as a meaningful subject for discussion.

Gorbachev's impact on another aspect of society must be examined: democracy per se. Under Gorbachev masses have really gained greater access to the decision-making mechanism. In 1989 the public participated, although via many intermediaries, in the election of the country's president and of the Supreme Soviet of the U.S.S.R. Recent elections have incited the masses to greater activity, since for the first time they were able to discuss their candidates, usually numbering more than one. Mass involvement surfaced especially prominently in voting against those in power even though they might have been the only candidate on the ballot.

Another dimension of society that must be examined is the separation of power. I have already noted one significant step currently in the making: the separation of party and state, transforming the party into an ideological institution. In addition, the greater role of both the Christian church as Islam points to a rather bleak future for the Communist party. Naturally, party chiefs will not concede their power easily. The party apparatus doggedly defends itself against Gorbachev's encroachments. A friend of mine in Moscow has made an interesting observation to the effect that if previously the cooperation among party functionaries was mostly 'vertical' and the conflict 'horizontal,' (since each functionary was eager to please his boss, and competed with his peers for the attention of the higher-ups) now, when the apparatus faces a single bitter enemy, cooperation and mutual help within it have become universal. My friend has observed this phenomenon both at the level of regional party secretaries and district party secretaries in big cities.

Gorbachev maneuvers to appease the party. This is chiefly the result of his personal power games. It was precisely party support that Gorbachev needed in order to be elected by the rather conservative Congress of People's Deputies. The Plenum of the Central Committee of the CPSU, which met before the elections, voted to support Gorbachev's exclusive candidacy for the post of president. This decision obligates all members of the party to vote for Gorbachev (with party members comprising about 87 percent of all the deputies).

But I do not want to oversimplify the situation by reducing Gorbachev's relations with the party only to his power games. Gorbachev simply cannot ignore the functional role of the party in today's institutionally backward Soviet economy. When economic managers operate without adequate monetary incentives, other forms of control are brought to bear upon them: the failure to fulfill the plan may result in punishment of various degrees of severity, from party reprimand to expulsion.

Also, because the Soviet Union lacks administrative economic bodies that coordinate the activities of enterprises belonging to different and, especially, All-Union ministries within a given territorial unit, the party steps into the breach to perform the coordinating mission ( for more details, see chapter's 6 section on "The Double Hierarchy of the Soviet System of Governance.")

Gorbachev's attacks on the party have noticeably weakened its role in the economy. But no alternative institutions have appeared that could accomplish through economic suasion the functions that the party used to accomplish coercively. In view of the worsening economic situation exacerbated by political conflicts, and the enormous problems of building new economic institutions, it cannot be ruled out that Gorbachev would be forced to make some concessions to the party apparatus, relieve the pressure being put upon now, and even enhance its role somewhat.

The postponement of local elections from the fall of 1989 to the spring of 1990 can be viewed as a concession to the party chiefs: in the spring 1989 elections of peoples' deputies, the voters in some parts of the country voted against regional party chiefs even when they were the only candidates on the ballot. (Especially blatant were the elections in Leningrad, when Iury Soloviev, an alternate member of the Politburo, and first secretary of the Leningrad Province Committee of the party, was voted out). At the May 1989 Plenum of the Central Committee which followed the elections to the Congress of of People's Deputies, a number of provincial secretaries expressed apprehension concerning the upcoming fall 1989 elections to the local Soviets. Many of them feared that they would not be elected to the local Soviets, and the ensuing loss of their positions as secretaries. New rules stipulate that a secretary of a province who is not elected to the post of chief of the local Soviet has to give up his post.

One other point exists in support of my hypothesis that Gorbachev is making certain concessions to the party. Gorbachev initiated a well-known campaign against corruption. Trials were fueled (before, during, and after) by much propaganda in mass media and involved rather highly placed officials in the party and the government. Suddenly, in June of 1989 the press announced that one, Smirnov, the second secretary of the Communist party of Moldavia, was unjustly convicted on bribery charges and is now free; a major article by Olga Chaikovskaia in the Literaturnaia Gazeta questioned the lawfulness of the arrest of Churbanov, Brezhnev's son-in-law, who is serving a sentence for bribery. Perhaps these facts are a testimony to certain concessions made by Gorbachev to the conservative fraction of the party.

Separation of judicial and executive branches should, in principle, be promoted by the changes in the charter of the Supreme Soviet of the U.S.S.R., a body being transformed into a continuously working institution. It is hard to say at this point what all these changes will bring. The fact that the Committee of the Supreme Soviet must ratify government appointments (in the executive branch) should, in theory, be conducive to the separation of power. At the same time, it is still unclear how for the membership of this Committee is subject to manipulation by the party apparatus, which can thus maintain its supreme power from behind the scene. Still, Gorbachev's general intent to transfer the bulk of the managerial power from the party to the Soviet apparatus suggests that these committees are independent from the party and will eventually assume its role. Indeed, confirmation of all appointments to the executive branch was previously carried out by the apparatus of the Central Committee.

The problem of ensuring independence of judicial bodies from the party was raised many times, but I know of no real measures enacted to serve this cause.

Openness.

Under Gorbachev, significant changes have taken place as far as openness is concerned.

Let us first consider openness within the country. Migration within the country has basically remained the same: there is an internal passport regime and limited inflow to the cities.

Glasnost has had a great impact upon the openness of information about the country's past, its present political situation and debates about its future. As far as the level of secrecy in the areas of technological and economic data, leaders' private lives, etc., there have not been any significant shifts, although these issues are raised in the press.

Free exchange of goods and services via market mechanisms has gained somewhat as a result of private enterprises known as cooperatives: as of this writing, they employ nearly two million people. But the number of cooperatives is still small, for they are limited in their growth by the overall scarcity of resources (in getting work space, equipment, supplies), fear of being expropriated, and so on. The state moves from one extreme to the other in regulating private businesses and cooperatives, sometimes giving incentives and sometimes imposing severe limitations via high taxes, outlawing certain kinds of cooperatives, etc. As a rule, the masses are hostile to private businessmen, thinking they earn too much money: one of the demands of the striking miners in 1989 was the closing down of cooperative ventures. There is a grain of truth in this antagonism. U.S.S.R. today is characterized by extreme deficit and mixed economy with the dominant role played by the state sector with its relatively low prices on consumer goods. These circumstances encourage semi-legal and illegal activity on the part of private enterprise. For instance, a restaurant owner can buy large quantities of meat at state stores at low prices and sell shish kebab at a high market price. Nevertheless, certain aspects of public animosity toward private business are unjustified. The standard of living enjoyed by private businessmen is much higher than that of the nation as a whole, with the latter suffering from a steady deterioration in their economic well-being. Antipathy toward private business also has its roots in the Russian culture, in traditional Russian antagonism toward the rich, who were regarded as vampires, exploiters, and speculators. The facts that active individuals produce more; that,if there are many active individuals, their high productivity will increase the size of the entire pie thus bettering everybody; and that active individuals only consume a small share of the overall pie, are not sufficient to convince the masses not to feel animosity toward these people.

Let us now consider inflows and outflows from the outside.

Inflows" to the U.S.S.R. There has been a large increase in the inflow of foreigners into the Soviet Union. Here, I speak not only of Western scholars and businessmen: in the last few years, recent emigrants from the U.S.S.R. living in any Western country, including Israel, have been allowed to visit the country without much problem (with the exception of some former dissidents). Until recently, their travel into the U.S.S.R. was unthinkable under any pretext. In some exceptional cases which threatened to explode into international scandal, recent emigrants from the Soviet Union were permitted to go back (as with S. Lerner attending her mothers' funeral). The reasons for easing the restriction on travel into the Soviet Union are many, not the least of which is the desire to acquire the foreign currency so desperately needed by the country. I believe another reason for easing the travel restrictions against former emigrants into the U.S.S.R. is the desire on the part of the Soviet Union to have certain groups of people in the West sympathetic to the country. For many years, these groups were formed from the members of Western communist parties and their sympathizers. These circles have been largely lost since the mid-1950s especially after the denunciation of Stalin in 1956 and the suppression of the Hungarian revolution that same year. In subsequent years, the Soviet Union tried, not without success, to make up for these losses by creating international terrorism. Gorbachev's new policy of closer international ties has forced the Soviet government, at least to a considerable extent, to reject its support of terrorism. Who is there in the West to lean upon? One reserve is the former Soviet citizens now living abroad. Soviet leaders have been making passes at them for quite a while. They made some progress in the 1930s and soon after the end of World War II in their appeal to the Russians who fled abroad after the October Revolution. But these people have grown old, while their children and grandchildren have become largely assimilated. A policy of cajolement has been tried on the Russians and, especially, the Ukrainians who fled to the West via Germany after the war. But many of them collaborated with Hitler and they are scared to visit the Soviet Union; also many of them are now old or have passed away. With the Jewish emigration to Israel, or more precisely to the West, which started in the beginning of 1970s more than three hundred thousand Jews have left the Soviet Union. These people, who are typically young and middle aged, emigrated legally, leaving close friends and relatives in the U.S.S.R. Being deeply assimilated, they have, as a rule, brought over their Russian heritage and maintain an interest in their former country. For this reason, this group is of particular interest to the new Soviet leadership. Closer ties with this group were officially announced in December, 1988 by a member of the Politburo, Minister of Foreign Affairs Eduard Shevardnadze. No one can say for certain when, how, for what purposes, or even which of the new wave of emigrants will be used by the Soviets. But the presence of a sufficiently large group of people sympathetic to the regime provides candidates who, under proper circumstance, may extend favors to their former homeland. Naturally, I do mean to say that every Soviet emigrant visiting the Soviet Union is a potential spy. In fact, the majority, perhaps the great majority, of emigrants visiting the U.S.S.R. come back reassured that they have made the right decision in leaving the Soviet Union.

The flow of information into the Soviet Union from the West has increased drastically over the course of glasnost. Whereas before there was sufficient inflow of scientific and technical information, materials concerned with social and political issues have become much more accessible in the last few years. Jamming of Western radio broadcasting in Russian (and other languages spoken in the Soviet Union) which could be heard sporadically, has once again been suspended; this pertains, for instance, to the Voice of America and the BBC. Jamming of Radio Liberty, known for its sharp criticism of the Soviet system has been suspended for the first time. It has become much easier to bring literature into the Soviet Union, including political and religious literature.

Nothing as drastic has taken place in the import of goods. In fact, the import of consumer goods, especially manufactured goods, has fallen because of a lack of hard currency (more on this below, in the discussion of the export of goods).

The U.S.S.R. still lags in the importation of capital goods and in attracting Western firms into joint ventures. Nonconvertability of the Soviet currency aside, the problem is the payment that Western businessmen can expect to receive in exchange for their goods.

Outflows from the U.S.S.R. Let us now look at openness as far as the outflows from the country. First of all, emigration from the Soviet Union has increased drastically. Just as before it is limited to a few nationalities-Jews, Germans, and Armenians. It seems at this point that an emigration law that would apply to all people except those having access to classified information, etc., is close at hand. If passed, the law should not lead to a mass exodus from the country. Western countries have rigid immigration quotas and basically only a small number of Soviet citizens can gain access to the West. Moreover, by imposing classified status upon the important positions, Soviet leaders can make sure that the most qualified individuals remain in the country. Not too many people are capable of leaving their classified job for unclassified work and then wait several years for the right to apply for emigration.

Whereas emigration has undergone a quantitative shift, temporary travel by Soviet citizens has shifted qualitatively. For the first time, Soviet citizens, no matter what their nationality, have been granted a real opportunity to visit friends and relatives in the West, including Israel. All that is required is an invitation from abroad. The processing of all the relevant documents has been made much simpler (no longer are work references required, no approval by a district Party Committee, etc.). Tens of thousands of Soviet citizens have thus been able to visit the West. Of special note is the recently acquired opportunity for gifted Soviet scholars (of any nationality) to visit their colleagues in the West, provided they receive an invitation with all the expenses of their stay in the West covered. Hundreds of scholars who have never been allowed to go to the West in spite of many invitations have come here in recent months.

Certain changes have taken place in the export of information from the Soviet Union. Newspapers geared toward the West, Moscow News in particular, have become rich in content, painting a very vivid picture of the situation in the country. Non-conformist Soviet painters have been given a chance to show and sell their work abroad. One should note a much greater influx into the United States of various representatives of Soviet culture (writers, poets, actors) who are of special interest to the Russian speaking public, especially from the last wave of emigration. Oftentimes these representatives of Soviet culture are called "paratroopers," since their goal, whether intentional or not, is to stir feelings of nostalgia in their former countrymen. By no means do I mean to insult Soviet cultural figures visiting the West; most of them are decent people. I merely want to note that many of them do not realize the sinfulness of their conduct and do not repent; that is, they do not realize that a very natural temptation to visit the West should not be justified by noble intentions once one has chosen to participate in the "propaganda volley."

There have been no significant changes in the export of goods from the U.S.S.R. Actual revenues from exports have decreased as a result of a drop in oil prices, which represents a major source of foreign currency.

What is our overall verdict of Gorbachev's reforms? Presently I will try to answer this difficult question, but consider that he has been in power longer than the term of an American president. Franklin D. Roosevelt, faced with a very critical situation in 1932, was able to turn the economy around in the first few years of his presidency.

Following a systems approach, we proceed by immersing the above question in a more general problem. This will bring into relief the common features (invariants) of the general and the specific and allow us to distinguish the peculiarities of the problem at hand. Subsequently, in dealing with our initial question, we can integrate the general and the specific aspects. In other words, the fusion of the general and the particular should be avoided in the initial analysis of the problem. It will be achieved when we integrate these features which were revealed in our previous analysis. In our case, the general problem that encompasses the Gorbachev question is the history of Russia.

Invariants of Russian History and the Flexibility of Upholding Them

The history of the Russian state, centered around Moscow for approximately the last seven hundred years, starting with Ivan I (Ivan Kalita) and cotinuing to the present (including Gorbachev's period), reveals at least two invariants: the first is autocracy and the second is the empire. These two invariants of Russian history have been preserved under various political modes known in the Marxist literatures as feudalism, capitalism, and socialism. Feudal Peter I, bourgeois liberal Nicholas II, and communist Vladimir I. Lenin all maintained an autocratic imperial regime in Russia, justifying their actions with very different slogans. Only briefly did Russia betray its two traditions. This was the period that lasted for eight months between February and November of 1917, when a bourgeois republic was created in Russia and events could have led to a disintegration of the empire. But Bolsheviks, headed by Lenin, were quick (almost immediately after the October Revolution) to put Russia back upon its traditional course of autocracy and empire.[25] In this sense, the October Revolution was in fact a counterrevolution for it backtracked from the liberal gains achieved by the February Revolution.[26]

The two features of Russian history have been sustained by very different means under various leaders. Some employed methods that gravitated toward tyranny while others inclined toward liberalism. I want to repeat that the ideological justification of the various methods is not so important. What is essential is which of these methods were used by Russian leaders to preserve and strengthen an autocratic imperial regime. From this perspective the spectrum of Russian rulers includes tyrants such as Ivan the Terrible, Peter the Great, and Stalin as well liberally inclined leaders such as Alexander II and Nicholas II. While all of them strengthened an autocratic imperial state their methods varied considerably. Ivan the Terrible, Peter the Great, and Stalin employed cruel coercive ways. Alexander II and Nicholas II attempted to ease the pressure exerted by authority.

Stalin took the Russian tradition to an extreme. In its autocratic aspect his reign was not original: his reign, just like that of Ivan the Terrible and Peter the Great, turned into tyranny. But the imperial invariant took on a heretofore unseen and grotesque scale. Not only did Stalin reannex parts of the Empire given up by Lenin and drastically augment the Russian empire to the greatest size it has ever known, but it seems that he aspired to make Russia the master of the world and saw himself as the world sovereign.

Alexander II abolished serfdom and instituted judicial reform. During his reign, Russia started to rebuild its industry (for instance, metallurgy based on then modern principles started to develop in Donbass). At the same time, Alexander did not surrender an inch of land; in fact, he annexed Bessarabia, which had been lost in 1855 after the Russian defeat in the Crimean War, as well as new lands in the south of Russia and in the Far East. He cruelly suppressed the Polish rebellion of 1863, demanding more severe punishment for the rebels than some of his associates. Liberal reforms under Nicholas II were quite extensive. He went as far as allowing the Duma (Parliament) to be formed, and allowing the creation of a multiparty system, and he enlisted such outstanding statesmen as Sergey U. Vitte and Petr A. Stolypin in his administration. Still, Nicholas maintained his right as a monarch to be "the ruler of destinies" of the empire (some small territories were lost after the defeat of Russia in the Russo-Japanese War of 1904-1905).

The majority of Russian rulers gravitated toward one of the two extremes mentioned above. For example, Pavel I was closer to the tyrant, while Alexander I was inclined toward liberalism for a considerable part of his reign.

Autocracy, Empire and the Flexibility of NEP

Very pertinent to our discussion is the period of Soviet history known as New Economic Policy (NEP). I claim that, during this period, an autocratic and imperial system headed by Lenin was upheld and strengthened by diverse and flexible means. Within the framework of this section I want to examine the NEP and its peculiar features as well as the difference between that period and the present state of Soviet Russia and China.

When the NEP was started, the great majority of Russians (approximately 80 percent) lived in rural areas and worked in agriculture. The village had its share of the semi-strong and strong peasants known as seredniak and kulaks. These peasants still had faith in the government. The equipment they used was rather primitive: the horse was the draft animal and fertilizers were supplied from domestic animals and horses. Under these conditions, the limiting factor in improving agricultural productivity of peasants was the incentives to work. Therefore, a switch from prodrazverstka to prodnalog (from a surplus appropriation system to a system of tax in kind) in the Soviet village in 1921 gave peasants a tremendous opportunity to increase their output. Similar reforms were initiated in China in the last decade.

A jump in output in the Soviet countryside was accompanied by a rapidly mobilized private trade, which allowed agricultural goods to be transported to the city. The latter is due to the material foundation of trade and, even more importantly, to the experienced individuals who still remained in the country. Allowing small private enterprises considerably (although insufficiently) improved the output of industrial goods needed in the rural and urban areas. The then-poorly developed industrial sector alleviated leaders' fears that labor, equipment, and materials would flow into the private sector.

Although the adoption of the NEP dealt a severe blow to communist ideology (in fact, a number of communists even committed suicide, especially sincere this ideology had espoused drastic curtailment of private initiative and the abolition of a monetary system), communist ideology in general still had a certain appeal to a large part of the population. The era was marked by jubilant victors over the old system, with their supremacy sealed by the victory in the civil war. All these factors allowed a certain loosening of the ideological reigns, since political opposition was knocked out.

As far as the political system is concerned, the already rigid political structure created prior to the NEP was tightened even further. The NEP period is surrounded by a certain romantic haze. People think that along with economic liberalization, the political screws were loosened as well, and various different points of view were permitted in political life. This is incorrect. Such opinions emerge from an inadequate understanding of the fact that the NEP was instituted at a time when political tightening occurred parallel with economic liberalization. Apparently, people apply certain stereotypes by which they associate economic liberalization with political liberalization. I know of no instance when a politically liberal system existed with a nonliberal economic system. But the possibility of the reverse is well documented: it is the experience of Franco's Spain as well as Yugoslavia and Portugal; it was also the experience of the NEP.

In his report to the lOth Party Congress (1921), Lenin introduced a sharp tightening of the political structure along with liberalization in the economic sphere. Right-wing parties had been banned earlier; now left-wing parties (Social Revolutionaries, Mensheviks and others) were banned and, moreover, factions within the only permissible party remaining, the Bolshevik party, were also eliminated. The NEP saw the creation of a monolithic political structure. Within limits, this political structure's development led to a total atomization of society, that is, to the prohibition of any independently formed organizations.[27]

The creation of a rigid political structure under the NEP must not be confused with a rigid ideological climate. Of course, such a political structure sharply limits freedom, but it still can permit some ideological variety in art and science, debates and so on. But what is important is that all these liberties are deprived of an institutionalized basis and, therefore, can be easily liquidated when suitable.

Therefore, irrespective of some ideological liberties and economic liberalization, the creation of a rigid political structure is dangerous because it is predisposed toward the appearance of a dictator, or even a tyrant. Once political power is concentrated in the hands of one person, or even a small group of individuals, and all forms of organized opposition are excluded, it is then difficult to do anything at all to limit the power of the leadership.

Under the NEP, a structure was created that determined to a great extent what was to happen later politically, that is, the appearance of a system that featured one omnipotent leader and that lacked controls over that leader's actions. I do not want to say that the arrival of such a leader was completely determined or that it was ineluctable. Soviet history could have turned out otherwise. But the system created by Lenin and his followers was predisposed toward such a leader's emergence. A more general question: why did they create such a system in the first place? It occurred first and foremost because the system was from its very beginning theocratic, religious, in nature, insofar as its leaders knew the Truth. Once the Truth is known, why permit other alien truths to abound? Why pose the question of checking the validity of the Truth? It's only necessary in this case to conduct inspections to monitor how directives are being implemented, that is, a bureaucratic hypostasis of the Truth. But checking the implementation of directives is something completely different from checking the extent to which the directives themselves are any good. Under the NEP, the apparatus for checking the validity of directives was liquidated. For such checking, an independent opposition is needed, an opposition organized so that it can muster the strength to develop a different opinion and contrast it to the existing one.

Thus, the first invariant of Russian history, namely autocracy, was not breached during the NEP. The second aspect-the empire- was, to a large degree, also upheld. During the Civil War and then during the NEP the former Russian empire had to deal with strong separatist movements of various nationalities. These movements were rather cruelly suppressed, and basically all the territories formerly belonging to the Russian empire were preserved, except for the Western parts of the Baltic region and Poland. I shall discuss this subject in more thoroughly the chapter dealing with the Russian empire.

The present day situation in the U.S.S.R. is completely different. The great majority of the population does not work in agriculture: in 1987 the rural population was only 34 percent of the U.S.S.R. total population, while only 22 percent (this figure accounts for working individuals as well as their dependents) of the total population worked in agriculture.[28] But the relative ratios of rural and urban populations is not really the issue. In the last sixty years a stereotype arose in many regions of the U.S.S.R., especially in Russia proper, that only a fool stays in the village. Therefore, the stronger among the rural dwellers have left the village. Today there are fewer men, and those remaining are oftentimes the old, invalids, or alcoholics. But even those remaining in the village have lost much of their faith in the government and they are apprehensive when it comes to investing effort into enterprises promising long-term rewards.

Also, Soviet agriculture relies primarily on mechanized equipment, not horses. This equipment is better suited for large-scale farming. But what is even more crucial is that agricultural machinery is built to be easily convertible for military use. In addition, modern-day technology calls for artificial fertilizers, herbicides, etc., plus skill in applying them under the conditions at hand.

At the present time, the transfer of trade and light industry into private hands is difficult, for it is requires that skilled labor, equipment, and materials flow into those sectors, and away from the heavy industry that still tops the list of priorities. The rechanneling of resources assumes the most grotesque shape (bribes, theft, etc.), since all the reforms are taking place under the conditions of extreme deficit. Also, many people are afraid to open a own private business. There is no guarantee of keeping the business, because of the possibility of its expropriation; in addition there is also the attitude of the populace toward private enterprise, especially in Russia. The hostility of the populace toward private businessmen-"vampires"-is an age-old Russian tradition, easily revived after so many years of suppressing private-entrepreneurial activity.

I have already mentioned that the official ideology has lost its vitality: people have simply lost faith in it.

So, the present-day situation in the Soviet Union bears very little resemblance to the period preceding the NEP. People, production capacities, and agricultural technology have been severed at the root. Encouraging private enterprise breeds fears that qualified personnel and capital goods will be rechanneled from heavy industry into the private sector. The great majority of the population has become disillusioned with leaders' promises and with the official ideology. Separatist movements in the empire that has grown in the course of the last seventy years have been actively harassing the central authorities. All these factors call for an approach very different from the one used to revive the country at the time of the NEP.

So, Who Is Gorbachev?

We can come to at least two important conclusions in summing up our discussion of Russian history: first, that two invariants have prevailed throughout Russia's seven hundred year history: autocracy and empire; and second, that the ways of upholding these two traditions varied: some gravitated toward despotism with tyrannical leaders, while others inclined in the direction of liberalism with almost liberal leaders.

I believe these two conclusions are sufficient to answer, if only roughly, the question "Who is Gorbachev?" I want to reformulate the question in the following, up-front way. Is Gorbachev a leader who is trying to break the two aforementioned invariants of Russian history and take Russia upon a course of democratic development, liberating subordinated territories whose people seek national autonomy? Or is Gorbachev a leader who seeks to preserve the entrenched Russian autocratic imperial regime by employing more flexible methods than have been employed in the past? I want to note that in speaking of Gorbachev's policies regarding the invariants of Russian history, I mean not his intentions but the actual institutions he has created. Of course, it is hard to separate these two issues, and so I apologize to the reader for a certain inconsistency: sometimes I speak of Gorbachev's intentions rather than examining the actual institutional changes taking place.

Let me make the question, "Who is Gorbachev?" more precise. Is not Gorbachev an autocrat playing the role of a centrist leader using, up till now, a mixed strategy in upholding the Russian tradition, with a certain emphasis upon liberalism? The implementation of this policy has met with great obstacles. Gorbachev's problems stem not just from the bureaucracy, which resists change, but also from the exhaustion of the country, the traditional culture of the Russian people, and a rather low cultural level of the current leadership and their advisers.

Let me say a few words regarding the cultural level of Soviet leaders, and of Gorbachev in particular. Gorbachev was a law student at the Moscow State University. Most of his student years belonged to Stalin's era, a period later marked by a campaign against "cosmopolitanism" and the subsequent elimination or expulsion from the law schools of what scholars there were left and an influx of Andrey Y. Vyshinsky's stooges. Under the circumstances, education and training by an activist of the Komsomol casts serious doubt on the quality of the education received by its graduates as far as an acquaintance with the latest legal developments is concerned. There is no hint that Gorbachev devoted himself seriously to the study of the great works in the area of law. Evening studies at the Agricultural Institute in Stavropol, from which he graduated, probably did not broaden his intellectual range. The career upon which Gorbachev embarked in Stavropol demanded the utmost effort and cunning: he first had to climb to the top of the local hierarchy, and subsequently he had to struggle in the upper echelons of the party apparatus. At the same time, Gorbachev is not totally indifferent to cultural concerns: he genuinely loves theatre, and apparently used to write poetry.

Gorbachev's example is typical of Soviet leaders: they are highly qualified in achieving, expanding and maintaining their power, but their overall culture is rather primitive compare to the demands of managing a complex country with an autocratic regime. In other words, Soviet leaders are experts at political intrigue but are poor statesman.

I know many of Gorbachev's advisers personally. Most of them are gifted people deeply concerned with the situation in the country. They are all over fifty years old, they all received socioeconomic education at Soviet colleges which taught at roughly the level of the beginning of nineteenth century. The governing doctrine of Marxism-the pinnacle of all these sciences-has made the graduates of Soviet institutions ignorant of the great achievements of world thought in philosophy, sociology, economics, etc. In subsequent years these people, for various reasons, also lacked an opportunity to seriously devote themselves to the study of the latest developments in their own fields. Naturally, being actively involved in the reforms, they are bound to learn. But how many years and how many mistakes will it take before they reach the level of modern science if they have to rediscover the paradigms that have been discovered in their respective fields over the last 150 years?

Unfortunately, as far as getting acquainted with the latest developments of world thought, the situation of the younger generation studying socioeconomic sciences and humanities,, has not changed significantly. It will take some time before the criticism of Marxism, which has just started in the Soviet Union, will become constructive, in the sense that students will study world thought after Marx. Individual Soviet scholars in socioeconomic sciences who are on a par with world standards are still very far from Gorbachev or his advisers; moreover, they are prevented from active involvement in teaching the new generation of teachers and students.

But let us go back to the politics of Gorbachev. Assuming that Gorbachev is pursuing a centrist policy with the intention of preserving an autocratic imperial regime using flexible methods, we can give one possible interpretation of Gorbachev's position in relation to various political movements in the country. Gorbachev does not curtail the development even of opposing trends: in case liberal reforms fail he can always saddle a different horse. He is moderate in his support of liberal, conservative and even reactionary circles. This became evident at the June 1989 Congress of the People's Deputies. He gave the first word to Andrey Sakharov, but soon interrupted his rather critical speech, apologizing for not having warned him of a five-minute limit. At the final meeting when Sakharov asked to speak, Gorbachev addressed the audience about granting Sakharov a word. The response was an ear shattering "No!". Still, Gorbachev allowed Sakharov to speak, but when the time limit expired (I believe it was doubled) he turned off the microphone.

At one point, Gorbachev stood up to applaud a veteran of the Afghanistan war who attacked Sakharov for condemning this war and exposing its cruel side. Taking into account the strong patriotic zeal of the county, which justifies Soviet militarism in the eyes of the great majority of Russian people and oftentimes even of the intelligentsia, this demonstrative act cast a shadow upon Sakharov's reputation.

Gorbachev's game is complex perhaps because Gorbachev's entourage includes many leaders who believe in the more rigid methods of preserving an autocratic imperial state. These people extend their utmost support to those who adhere to these views. On the one hand these hard-liners impede a more methodical implementation of the more liberal aspects of Gorbachev's policy; on the other hand, this group gives him an opportunity to support the circles opposing the hard-liners. Gorbachev needs those who oppose the hard-liners in case he decides to demolish these leaders of the hard-liners. One could well maintain that Gorbachev would like to remove some of these men, if only because many of them did not come to power on his accord. At the same time, as long as they are around and hard to replace, and as long as they are under control and make no attempt to dethrone Gorbachev, he can be more tolerant and try to use the results of their work for his own benefit. If necessary (as with the leaders of the liberal front) Gorbachev may try to discredit them just to weaken their popularity and to prevent them from usurping power. Interesting in this respect is the conduct of N. Ivanov, a prosecutor who was one of the instigators of the investigation into corruption in the highest echelons of the government. Ivanov was elected a Peoples' Deputy from Leningrad. In his election campaign, he spoke on Leningrad television naming the people linked to the corruption. Among those mentioned were not only the recently expelled member of Politburo Mikhail Solomentsev, but also Egor Ligachev. Ligachev has been widely regarded as one of the leaders of the right wing, the man who inspired the Russian national-socialist manifesto, although the manifesto first appeared as a letter, by Nina Andreeva, published in the newspaper Sovietskaia Rossiia on 13 March 1988.

At this point I would like to advance some arguments in support of my thesis that Gorbachev is trying to maintain an autocratic empire, using a flexible approach. Testifying to Gorbachev's desire to preserve autocracy is his unshakable intent to acquire dual power both as president of the country and as first secretary of the Communist party. Academician Sakharov, as well as a number of delegates to the 1988 party conference headed by Academicians Leonid Abalkin and Roald Sagdeev, spoke against this merger. Their arguments were quite simple: concentration of power in the hands of one person is fraught with grave dangers, especially if at some future point the power should fall into the hands of a person "unworthy of of trust." Nevertheless, at the party conference Gorbachev's move was adopted by a majority of several thousand votes (only 208 delegates voted against Gorbachev's suggestion) and it is now being carried out in practice. At the May 1989 Congress of People's Deputies it was proposed to have several candidates for the post of president, of having Gorbachev report to the congress on the previous period, to separate the power of the president and the first secretary of the party, etc. All these proposals were rejected and Gorbachev managed through political intrigue to get elected to the post of president and still maintain his position as first secretary.

The empire is by no means being disbanded by Gorbachev. The rather cruel suppression of demonstrations in Georgia and Moldavia, really organized under the banner of political independence, are a testimony to this. It would not be too farfetched to suppose that greater flexibility will be shown toward the Baltic states. Perhaps they will be allowed to leave the happy Soviet family. . . to hold the same status as other Eastern European countries. The reason for this exceptional move may be the still-fresh memory of the coercive annexation of these republics by Russia after the signing of the pact between Stalin and Hitler in 1939. These events were accompanied by many human losses, first and foremost as a result of the massive exile of the native population of these regions to Siberia. As far as the Eastern European countries are concerned, the most rebellious ones, such as Hungary and Poland, may be granted the status of Finland. To sum up, my hypothesis that Gorbachev is not altering the Russian tradition seems to hold: he is sticking to the invariants of Russian history though employing more flexible methods in doing so. Once again, in speaking of Gorbachev's policies with respect to Russian traditions, I do not mean his intentions but the actual institutions he is creating. Here I want to remark that as long as autocracy cannot be replaced, I am in favor of this flexible approach to maintaining the regime,rather than the more rigid methods. Moreover, since flexible ways of preserving an autocratic empire can in principle lead to a democracy, judging this kind of policy becomes ever- more difficult. At the same time, one should not confuse democratization with a more flexible preservation of autocracy so as to be better prepared to employ such methods. And one should not be dumbstruck when the leader resorts to means foreign to the spirit of democracy. Of course, in reality this distinction is hard to spot, for on the surface democratization and flexibility in the preservation of autocracy seem rather similar. The question of whether what is taking place in the Soviet Union is democratization or flexibility in upholding an autocratic empire is very relevant in solving some practical problems of Russian development.

For instance, a share of liberally minded intelligentsia believes that, since the U.S.S.R. is really undergoing a process of democratization, the transformation to regional autonomy may be conducted within the framework of a democratic regime, that is, without the violent demonstrations and ensuing bloodshed that, the radical nationalistic circles are advocating. If the Soviet Union is indeed undergoing the process of democratization, then these liberal circles of intelligentsia would be correct. But if the Soviet Union is really experiencing an autocratic imperial regime, even though supported by flexible methods, then perhaps other groups advocating more radical solutions are right: under the pressure from the populace the government may make considerable concessions. Of course, radicalism may lead to excesses having negative repercussions: very strong jolts in the republics may cause those in power to take a sharp turn and revert back to rigid policies of ruling the country.

The Liberalization of Russia: The Paradox of Glasnost!

From a general standpoint, the reanimation of the stagnant Soviet system that is being carried out in the Soviet Union through the vehicle of glasnost, that is, by activating the citizenry under conditions of greater freedom, is worthy of the respect of all liberal-minded persons.

To be certain, all of these liberal changes are not taking place uniformly. Even as this book is being written, there are already equally apparent signs of opposite tendencies. I have in mind statements made by a number of Soviet officials thought to be sympathetic to the liberal cause, especially Politburo member Alexander Iakovlev, demanding that the screws be tightened.

However, for the purposes of this book I am going to proceed from the extreme case, that is, on the assumption that the campaign of glasnost is developing full swing in the U.S.S.R. and that the appearance of nonliberal articles is also a manifestation of the growing multiplicity of ideas.

Furthermore, and once again proceeding from the extreme case, I will tie the development of glasnost at the present time with the name of Gorbachev. Meanwhile, we must remember that Gorbachev began his activity using the extremely traditional Soviet methods of stimulating economic growth, in particular, attempts to resurrect the Stakhanov movement.

In May of 1985, at Michigan State University, Professor Vladimir E. Shliapentokh organized a one-day seminar devoted to the fiftieth anniversary of the Stakhanov movement in the U.S.S.R. One of the goals of that seminar, according to Shliapentokh, was the verification of the parameters according to which one could judge the intentions of the then-new Soviet leader Gorbachev. Based on how preparations for the celebration itself were conducted, it would be possible to try to judge in what direction Gorbachev intends to develop Soviet society in the near future. I valued Shliapentokh's idea very highly and participated in the work of the seminar with great interest.

It is well-known that the Stakhanov movement embodies the demagogically most primitive methods of economic development. It is also well-known that Gorbachev celebrated this anniversary with great fanfare and took a personal part in the ceremonies. It is likewise known that soon afterwards, Gorbachev started implementing quite a different policy of reviving the economy.

By saying this I in no way mean to debunk the value of attempts to forecast Gorbachev's actions. On the contrary, from this experience one can draw a very far-reaching conclusion: we are now dealing with a very flexible Soviet leader and forecasts of his likely activity require the development of very sophisticated methods.

It is still far from clear in just what direction Gorbachev will evolve. I cannot caution the reader enough to be extremely careful in evaluating Gorbachev's activities, since he is still in the developmental stage as a leader. Just as he evolved rapidly from an ordinary Soviet apparatchik to a revolutionizing figure with liberal leanings, we cannot exclude the possibility that he might well take steps in a different direction should he find himself faced with a rapidly changing set of circumstances.

The method that I am suggesting here for examining the role of glasnost in the modern period of Russia's development is substantially different from the approach that is currently widely accepted. For all intents and purposes glasnost, in and of itself, is seen as a positive development in the sense that most feel that the more it develops and the faster it develops, the better. Opinions tend to differ only with respect to such questions as how sincere glasnost is and to what extent it is sufficient to transform a stagnant Soviet society.

In this connection, an opinion survey conducted in 1987 by the magazine The Nation among a number of renowned Soviet emigres on their attitudes towards glasnost is of great interest.[29] Lev Kopelev, Iurij Orlov, Valery Chalidze, and Alexander Yanov all hold the view that the policy of glasnost that is currently being implemented in the U.S.S.R. not only is not fiction, but it is a significant phenomenon that can easily be seen as the beginning of a democratization of the Soviet Union. Vladimir Voinovich and Zhores Medvedev hold very similar views, but they are essentially more critical in their evaluations of the results that have already been achieved under glasnost. However, all these respondents felt that, in order to truly achieve a democratization of Soviet society, further meaningful steps would have to be taken. In Orlov's opinion the significance of these steps could be so great, and therefore the unwillingness of the Soviet leaders to carry out these measures could be so strong, that he feels that it will not be possible to achieve a true democratization of the U.S.S.R. for at least another decade. Vladimir Maksimov expressed a more extreme view. While he doesn't deny that restrictions on basic freedoms have been loosened recently in the U.S.S.R., he doesn't really see this as a significant development since, in his view, until the time when a legal opposition to the existing regime can be created, it is impossible to speak of any significant changes in the Soviet system.

My views of glasnost are quite the opposite: that is to say, the more widely and rapidly the policy of glasnost is implemented, the greater will be the threat it poses not only to the U.S.S.R., but to other countries as well.[30] My views are basically in line with the considerations advanced in chapter 2 regarding the incompatibility of pluralism and democracy given, especially at a time of crisis, the populace's low level of culture. Needless to say, I am not against increased glasnost insofar as it is confined to hard-hitting intellectual journalism, free-wheeling scholarly discussions, and the like. I only think it unwise to bring glasnost down to the grass roots level, and particularly allow mass organizations and demonstrations or popular publications and statements (especially on TV) designed to stir up ethnic resentments and similar antagonisms.

Bearing this in mind, in the present work I primarily wish to examine the problem of how the mobilization of the Soviet population, accompanied by a relaxation of the regime's strictness, might well lead to the opposite result, that is, to the creation of an even stricter regime, marked by unabashed militarism and chauvinism. Whether Gorbachev himself would become the leader of such a regime (in a more toned-down form[31]) or whether he would be replaced by someone else, is difficult for me to say.

So my hypothesis is that glasnost introduced in the U.S.S.R. under Gorbachev can lead to a triumph of nationalistic policy. Based on the general considerations regarding the conflict between pluralism and democracy, I want to state some considerations supporting my statement.

The process of the activation of the Soviet people taking place under Gorbachev's leadership is seen by many Soviet specialists primarily in the context of a binary approach, that is an analysis finds, on the one hand, a liberal Gorbachev who is trying to mobilize the Soviet citizenry, and, on the other hand, conservatives who want to retain the calm, secure life to which they grew accustomed during the last twenty years of Brezhnev's rule.

Meanwhile, if we go from a binary to a tripartite approach, our task is made significantly more complicated (just as is the case in mechanics when we switch from a task involving two bodies to a task involving three). If we adopt this approach, we can clearly see one more broad and important group-reactionaries. Unlike conservatives, who by definition strive to preserve the status quo, reactionaries seek changes. In this respect, reactionaries and liberals are similar. They are distinguished by the changes that they advocate: liberals push for changes toward democratization, whereas reactionaries seek to establish authoritarian and even dictatorial, chauvinistic regimes.[32]

The sort of three-pronged approach acquires particular significance if we take into account the fact that the transformations being ushered in by Gorbachev are taking place in a period in which the world's last big empire, with a tradition of expansionism and nationalism, including its extreme chauvinistic forms, is suffering stagnation. It follows, then, that the activation that is taking place could be used not only by liberal circles, but by reactionary ones as well. Moreover, the paradoxical nature of the events taking place under Gorbachev consists in the fact that the reactionaries can exploit the opportunities created by restructuring to an even greater degree than can the liberals, since the reactionaries have on their side the sympathies of the masses of the Russian population, which traditionally has supported nationalistic ideas. These reactionaries, being fanatics, can act more decisively and can do a great deal more to promote a rebirth of the Russian people's faith in their future. They can in many ways further the steamlining of the economic mechanism, first and foremost through its decentralization and liberation from the tutelage of the party. Additionally, in aspirations as a world power, they can even more decisively set Russia on a course of expansion, believing in its messianic role as the savior of the world.

In other words, I am advancing the following hypothesis: under the conditions of a stagnating empire with militaristic and nationalistic traditions, the strengthening of glasnost, manifested in the activation of the populace, could lead not to a liberalization of the country, but rather, in the extreme case, to the establishment of a hard-line authoritarian, militaristic, and nationalistic regime headed by fanatical leaders.

Notes and References

Expansion of the Soviet Empire

A Semi-Forbidden Topic

In it's current position, the Russian empire occupies a huge territory -- more that one-seventh of the earth's dry land -- with a population of 290 million people, and a gigantic military potential. This empire consists of several circles. The first circle is the mother country proper, in which the overwhelming majority of the population is Russian. The second circle includes the territories where other nationalities live, for whom the territory is historically their native land and who are entirely subordinate to the Russian dictate. The second circle includes the Soviet republics and autonomous republics. The third circle includes countries that are formally considered to be sovereign nations but that are actually subordinate to Russia, since the latter's troops may suppress any attempt they make to extract themselves from the empire. It is true that the Russian dictate does have obvious limitations here (the absence of an official representative of Russian nationality in the leadership of such a country, the fact that it is not mandatory for the populations to use the Russian language, and the like). The third circle is comprised primarily of Eastern European countries. Finally, the fourth circle includes countries that, realistically observing their neutrality, are located in the sphere of strong Russian influence, and largely depend on it in military matters (for the delivery of weapons and the training of military staff). This group of countries primarily includes, at various times, various developing nations of the Third World such as Egypt, Indonesia, Syria, Somalia, and others.

The Russian empire has many features in common with other empires, but it also has some traits that have had a significant influence on its development. Specifically, there are traits in connection with the colonial empire (the first, second, and third circles) that make the maintenance of the Russian empire difficult: the inclusion in the empire's orbit of territories that are more economically advanced than the mother country (the inclusion, for example, of the Baltic region, Czechoslovakia, East Germany, or Hungary); the close proximity of the main mass of territory making up the empire either to the mother country or the second circle; the development mechanisms of the mother country itself, which are insufficiently efficient compared with the mechanisms of more-developed countries subordinate to Russia, and which therefore lead to the formation of development programs for the client countries which sometimes prove disastrous for these countries: it was not a coincidence for Russia (nor for the English or the French empires) that Europe's role as the gendarme was strengthened.

The democratization of the U.S.S.R. rests on the problem of preserving the empire, as its inhabitants are longing for self-determination. Resolving the issue of freedom in the U.S.S.R. ultimately means allowing its peoples to demand secession from the body of the empire, as well as permitting countries belonging to the third circle to pull out.

The problems currently tearing Russia apart are connected with the deep-seated conflict between the fortification of the last great empire in the world and the stagnation of its society and economy. The crisis situation in which the country finds itself is to a large degree the result of the accepted conception of development, which was founded on the idea of maintaining and expanding the empire. In the list of the Soviet leaders' priorities, second place, after the preservation of their own personal power, has been and presently is assumed by the aim of strengthening the might of the empire. This is the dominant aim, and the economy is subordinate to the goals of the empire.

Such a successful combinative game conceals within itself the threat of a Pyrrhic victory, the unavoidable companion of a combinative game if one disregards the positional strength of the system. It seems to me that this "victory" began at the end of the 1970s; the suspension of growth in heavy industry along with the downgrading of agriculture and light industry, the failures in the military sphere (for example, the complete discrediting of Soviet weaponry during the Lebanese war, the unsuccessful war in Afghanistan, the landing of the West German plane on Red Square), and the inability to withstand seriously Reagan's call for Star Wars seem to me to be the results of the profound exhaustion of the nation's potential. In other words, the current decline in economic activity and military might are not results of present fluctuations, but rather the results of a disfiguring war economy and its accompanying methods of government.

A huge gap has arisen between the needs of the empire, the interests of its inhabitants, and the available natural and human resources, as well as the capital on hand. The country's production has turned out to be insufficient to maintain its status as a superpower able to satisfy the modern military requirements vital to expanding the empire, and to increase its population's standard of living.

In order to overcome these difficulties, it is not enough to improve the economic mechanism. It is of primary importance for the nation to relieve itself of the burden of maintaining the empire.

The force of these conflicts between imperial aspirations and economic capacity to fulfill them had reached such a level that Gorbachev announced his policy of glasnost and perestroika in order to bring ambition and ammunition into an equilibrium. In the course of glasnost, extremely significant aspects of life in Soviet society, which were earlier considered taboo, were immediately brought to light. Amongst these changes, those that directly concern the empire are, as usual, closed issues. This is not to say that the fate of the empire is not being discussed. It is being discussed very seriously, but not out loud.

With the announcement of glasnost, issues pertaining to the empire began to be discussed in an indirect manner. Indirect repercussions of the thorny discussion concerning the dilemma of the Soviet empire penetrate the general press under the guise of topics that seem isolated from this problem. Popular among these topics is the study of local languages and of the Russian language in the various republics. In order to get a perspective on this issue, it will suffice to compare the article "The Slavs: Language and History" published in Pravda on 28 March 1987 ( by Oleg N. Trubachev, a correspondent member of the U.S.S.R.'s Academy of Science) with the works of writers from the non-Russian republics at the April 1987 Plenum of the Soviet Writers' Union, as published in Literary Gazette on 6 May 1987.

In Trubachev's article, it is plainly stated that the Russian language is the dominant language and that local languages should be subordinate to it.

During the Writers' Union plenum, writers representing the Ukraine and Byelorussia mainly addressed the necessity of organizing instruction in the local languages at the school level, since this area of education is appallingly lacking. Boris Olejnik (from the Ukraine) candidly stated that "in several of our regional centers the number of Ukranian schools is approaching zero."

These writers have correctly observed that without the population's knowledge of the local language, the development of national literature in the republics will suffer. It is interesting to note that the writers' presentation was supported by a semi-official, the secretary of the Writers' Union of the Russian Republic, Sergey Mikhalkov.

This does not mean that among writers representing the national republics there were none who supported the russification of the republics. Thus, a representative of Uzbekistan, Ulmas Umarbekov, complained that in the republic "in the recent past, Uzbek writers writing in Russian were subject to discrimination." However, this was the only pro-Russian demonstration by a non-Russian.

When comparing the allowances made in the name of glasnost concerning many economic and social issues and the lack of allowance concerning others, one gets the impression that the current Soviet administration is prepared for rather decisive action directed towards ideological changes at the socioeconomic level, but that it is not prepared for any sort of significant changes regarding the eradication of the empire. This chapter deals with one such change related to the eradication of the empire.

As glasnost gathers momentum, the empire has become more and more a subject of discussion. The greatest revelation in this respect has been the critical assessment of Soviet foreign policy when it was acknowledged to be hegemonic and based on offensive military strategy.

Of greatest significance in the discussion of internal imperial policy has been the medias publicizing of the many regional conflicts flaring up in the U.S.S.R.: conflicts between Armenians and Azerbaijanians over Nagorno-Karabakh, between Abkhazians and Georgians, between Uzbeks and Meskhets, the direct claims for independence on the part of the Baltic republics, etc.

Seven Hundred Years of Imperial Tradition

What then is the principal reason keeping Soviet leaders from parting with the empire? Actually, a very simple answer comes to mind: the fear of losing the prestige enjoyed by leaders of a world superpower. Yes, such an answer may actually prove sufficient to explain the U.S.S.R.'s imperial policies. However, it still appears that there are a number of important factors that aggravate the situation, and that would still interfere with Soviet leaders' rejecting the empire, even if for some reason they discovered that their prestige in world history would increase if they eradicated the empire. One of these key factors is the nation's tradition.[33]

If we look at Russia's history over the past seven hundred years, beginning with Ivan Kalita and continuing up to today's administration, we observe that the empire has continually expanded and strengthened. During this period, not even one other imperial nation was able to maintain its power; but Russia managed to do so.

Along these lines, it is fascinating to trace the characteristics of the more significant Russian leaders all the way up to Stalin as depicted in The Encyclopedic Dictionary. Since it was published in the U.S.S.R. from 1953--55, it largely reflects Stalin's extremely aggressive postwar expansionist policy (I will go into detail about this policy later).

• Ivan I Danilovich Kalita (?--1340): "Great Prince of Muscovy." "One of the first to unify the Russian land under power of Moscow principality."

• Ivan III Vasilevich (1440--1505): "Great King of Muscovy and of all Russia," "great political figure." "Chiefly accomplished the unification of scattered Russian provinces around Moscow into a single Russian government." "Conducted successful wars with Livonia, Poland, Lithuania. Significantly strengthened and expanded the Russian nation."

• Ivan IV Vasilevich Grozny (1530--84): "Great Prince of all Russia," "leading political figure." "During the reign of Ivan IV the centralization of Russia's rule was strengthened into a single autocratic power." "Conquered the Kazan (1552) and Astrakhan (1556) tatar Khanates, seized the entire Volga region and subjugated the Nogai hordes to Moscow along with the Siberian kingdom, annexed numerous peoples in the northern Caucasus region to the Russian nation."

• Peter I Alexeyevich (1672--1725): "Emperor," "Great political figure, general, naval commander and diplomat." "In the sphere of foreign policy P. I waged a consistent battle for access to the sea, as this was a vital condition for the further expansion of the country." "The Turkish War . . . and in particular the Northern War . . . against the Swedes in support of the nation, monumental victories were celebrated all around, at sea and on land. . . . Russia controlled the extremely crucial Baltic seacoast."

• Katherine II Alexeevna (1729--1796): "Russian Empress." "Strengthened the system of serfdom in every way possible." "Under K. II successful wars were waged against Turkey . . . and Sweden; the division of Poland took place, . . . according to which the Ukranian and Byelorussian lands passed to Russia. The Crimea was annexed to the Russian empire, . . . joined under the auspices of Georgia."

• Alexander I (1777--1825): "Russian Emperor." Waged war with France, Sweden, Turkey and Persia." "Under A. I Georgia, Finland, and Bessarabia were annexed to Russia."

• Alexander II (1818--1881): "Russian Emperor." "Confirmed advocate of serfdom," was forced to conduct the emancipation of the serfs in 1861. "During the reign of A. II, the territory of the Russian empire increased due to the annexation of numerous territories of Central Asia and the Far East."

• Stalin (21 December 1879 -- 5 March 1953): "Loyal pupil and brother-in-arms of V. I. Lenin, great successor of his immortal deeds, leader and teacher of the Communist party of the Soviet Union, the Soviet people and the workers of all countries." "In the postwar period fundamental changes took place in international relations. A number of European and Asian countries turned away from capitalism and fortified the foundation of popular democracy as the people took power into their own hands. The end of 1949 ushered in an event of worldwide historical significance -- the formation of the People's Republic of China. Relations between the Soviet Union and other countries with a people's democracy were founded on the basis of fair treaties, relations of friendship, mutual assistance and cooperation."

I will discuss the characteristics of the political leaders that succeeded Stalin and their policies of expansion later.

The expansion of the Russian empire was not consistent, of course, in the sense that situations did arise when Russia was obligated to sacrifice certain territories. These sacrifices were as a rule conditioned by Russia's defeat in various wars (for instance, the loss of a part of Bessarabia after defeat in the Crimean War), the result of political and economic difficulties, and the expediency of selling certain territories (as was the case with Alaska under Alexander II). Usually these sacrifices were only temporary, that is, these territories were quickly returned, often with interest. Thus, Bessarabia was returned to the same Alexander II who gave it away after defeat in the Crimean War. A number of the empire's Western territories, given away by Lenin and quickly regained under Stalin, deserve special attention here.

In this connection, the role of Lenin in the development of the Russian empire and the position of the empire under Lenin after the October Revolution should be observed carefully. The statements that I make below are purely subjective and speculative. My primary goal here is to encourage the reader to reflect on several peculiarities of this period.

It is interesting to recall who, in the period before the October Revolution, made the loudest noise about Russia being a prison for the people and who declared that these people must be freed from Russia. It was the same communists, chief among them Lenin, who after the successful Revolution fought harder than anyone for the preservation of imperial unity, now referring to it as socialist cooperation, as only a unified population could more quickly attain that shining future. Why do separate peoples who already have ties with Russia, they reasoned, need to secede from this most progressive system and establish their own governments when, sooner or later, in accordance with Marxist doctrine, they willl all be living under communism?[34]

Wasn't it because of this endeavor to maintain the empire that the Bolshevik leaders, mainly Trotsky and Lenin, wound up using the tsarist military staff in order to establish the Red Army and win the Civil War? And isn't it these same circumstances that explain the prevailing role tsarist officers played in the development of the Red Army in later years? And wasn't it chiefly these same military men that Stalin liquidated during the great purges of 1937? And wasn't it primarily the survivors among these military men that Stalin freed from the labor camps when the war with Germany began? Wasn't it, then, former tsarist officers who played a decisive role in the Soviet Army's victory over Hitler? Wasn't it these former tsarist generals and other officers who refused to cooperate with Hitler during the war with Russia?

Which of the formerly imperial territories that Lenin gave back after the Revolution again became independent nations (albeit for a short period of time)? The answer: only a few Western territories: Finland, Lithuania, Latvia, Estonia, and Poland. The case of Poland is especially relevant here, because Poland had a long common border with Germany, which at that time experienced a strong revolutionary movement.[35]

It seems ironic that Trotsky, the most outspoken and consistent proponent of the idea of permanent revolution, was opposed to the attack on Warsaw in 1920, averring the inadequacy of Russia's resources, both material and human. According to Trotsky, the chief supporter of that campaign was Lenin. It seems strange that Lenin, who usually followed Trotsky's advice, especially in military matters, took the opposite stance. But let us assume that in that period Lenin was even more radically minded than Trotsky, and wanted to join forces with German revolutionaries by achieving a quick victory over Poland.

The Warsaw episode was a failure for the Red Army. "The outcome of the Polish war," wrote Trotsky, "proved to be a decisive factor in the subsequent development of Russia. The Riga Peace Treaty with Poland cut us off from Germany, and strongly impacted on the fate of Soviets in Germany."

If Lenin were genuinely interested in preserving Poland as part of his new empire, he would have shown his renowned willpower to commit everything to the defeat of Pilsudski, and his customary intolerance, to severely punish any underling who would dare undermine his plans. Even if the defeat were to be acknowledged and a peace treaty signed, it could have been done in such a way as to quickly reposition the Red Army forces and try to subdue Poland again.

In the event, something altogether different happened.

Retreat from Poland, the pullout of the Red Army from Poland, is usually explained by the following argument, a rather strange one for the communists: "the army was cut off from its reserves."

We know that there was another equally weighty cause of the failure in Poland: the South Western Army, in whose command Stalin, as a Central Committee representative, played a leading role, ignored the repeated orders of the High Command and failed to cover the flank of the Tukhachevsky's army advancing to Warsaw. Instead, Stalin, pursuing his own ambitious goals, demanded that the South Western Army move into Lvov. If Lenin had been determined to bring the Red Army closer to Germany, he would have raked Stalin over the coals for insubordination. In fact, he did nothing of the sort. As I recall from my readings on the subject, Lenin just made some sardonic remark, and let the whole issue go at that. Possibly, among Lenin's disciples, Stalin understood him better than all the rest, including Trotsky.

But if we assume that Lenin was not really interested in supporting the revolutionary movements in Western Europe in general and in Germany in particular, the whole Polish episode would look very different indeed.

The suspicion arises that perhaps it was convenient for Lenin to give up these territories in order to create a buffer zone between the U.S.S.R. and the developed Western-European nations that border on them. This suspicion actually has some basis if we assume that Lenin, having tasted the fruits of what it was like to be the champion of the world's proletariat, (having officially become the leader of the Third Communist International in 1919), strove more than anything to retain his own hegemony as the leader of the world's proletariat. Lenin, then, should have been very wary of the revolutionary situation in the developed Western-European nations. He expressed this fear candidly enough in his book Left-Wing Communism: An Infant Disorder, written in April and May of 1920. Lenin had very serious reasons for his fears. The people of Western Europe had experienced the destruction brought about by the monstrous First World War. And it was precisely the communists, not the socialists, who had denounced this war. Also, the victorious Revolution in Russia declared, as one of its first slogans, "PEACE." Victorious revolutions in these countries might push backward, unindustrialized Russia off to the side, in accordance with Marxist theory. Having established a buffer zone, Lenin temporarily relieved himself of the burden of being obligated to assist the proletariat of Western-European countries in his efforts to establish socialist political systems. It is a different matter that in the 1930s, the buffer zone was transformed into a "sanitary cordon" for the purpose of discouraging the penetration of the communist bacillus from Russia to Western Europe.

As we know, Stalin not only retrieved territories given back by Lenin (with the exception of a large portion of Finland, which was exchanged for the Finlandization of the country), but he increased them.

The speculative observations that I have made regarding Lenin's relationship to the empire allows one to understand more clearly the conflict that arose among the Soviet communists soon after the Revolution about the future of the Russian empire. The rift became particularly noticeable immediately after Lenin's death, and it even seems that Lenin himself could not arrive at a final solution, or more specifically, could not arrive at an open solution to this issue. Disagreement divided into the following two conceptions: The first says that humanity's salvation will come through Russia, that is, through Russia's guidance of the international communist movement. Everything that is beneficial for Russia is beneficial for for the worldwide communist movement. This conception is called "the victory of socialism in one country." This view was held by Stalin, Bukharin, Rykov, and others. The second conception holds that world communism will come through international revolution, and if it is necessary that Russia burn in the flames of worldwide revolution in the name of victory, then let it be so. Trotsky, Zinoviev, and Kamenev were adherents of this philosophy.

The first conception, which completely coincided with Russia's historical tradition, prevailed. For many years it predetermined the development of the Russian empire under the Bolsheviks. Russian patriots, the evrazijtsy in particular, judged correctly that the Bolsheviks' communist slogans were not as important as was maintaining and expanding the empire. In actuality, it turns out that they were right in the sense that in the end, particularly beginning with Brezhnev's administration, the communist ideology lost its importance.

Thus, throughout Russia's entire history, leaders of various caliber (the great ones, the outstanding ones, the unsurpassable ones, and even the Teacher of the Peoples and Proletarians of All the World) invariably fortified the empire, although the leaders' motives have very seriously changed. It is precisely for an understanding of Gorbachev's policies that it is important for us to understand the invariance of the tradition of strengthening the empire, rather than become too caught up in the motives that guided previous leaders.

Declared motives for the maintenance and expansion of the empire have been modified by everything from egoistical Russian interests (such as Russia's need to find access to the ocean, particularly ports that are navigable in winter), to the fulfillment of well-meaning missions to assist brother Slavs, to the overall salvation of humanity.

I do not mean to imply that the fortification of the Russian empire always took place with the same degree of intensity and was constantly accompanied by a strict regimen always leading to tyranny. During Russia's history, and even in recent Soviet history, there have been various periods that differed significantly in the rate of imperial expansion and in the corresponding political atmosphere of the country.

Stalinist and Post-Stalinist Imperial Policy

I will compare two periods in the history of the Russian empire under Soviet power in order to demonstrate which significant distinctions in the country's development fall under the category of maintaining the empire and its authoritarian system (not to be confused with a dictatorial or a tyrannical regime)

It is necessary to note that early Russian expansionist policy did not aspire to world domination: Russia aspired to be accepted as a full member in the circle of European nations. Of the many ideologies Russia had an ideology that aspired to Russia's domination over the whole world, believing that Orthodoxy can also be read as "the Slavs are correct" [In Russian the word orthodoxy is made up of the words pravo, 'correct' and slavia, 'believing'; slavia is also the root of the word Slav.--Trans.], that Russia, the only major bearer of Orthodoxy, must rescue the Western world from spiritual desolation, and that "Russia is the third Rome and a fourth one there will not be." However, it was not entirely the ideology that set the tone of Russian imperial policy.

The situation changed markedly after the victory of the October Revolution in 1917. The triumph of the Revolution, whose ideology was internationalist and required expansion over the entire world, was a refracted one that, as I have noted above in discussing Leninist-Stalinist ambitions, assigned primary importance in Soviet foreign policy to the global interests of world domination.

I believe that Lenin belonged to the class of leaders who would give their last breath to support the construction of world communism. However, as far as Stalin is concerned, such a statement is more debatable. Having become the leader of a vast empire that had emerged relatively rapidly -- in less than twenty years, such was its power and capability for expansion -- Stalin may have had the desire to become emperor of the world simply in order to expand his own power. Whether or not this was the case, the empire became powerful enough so that toward the middle of the 1950s, Stalin could seriously begin to hope for a new world war with the expectation of bringing closer his secret dream of becoming a world dictator. (It was apparently not a coincidence that Stalin was not enamored with Charlie Chaplin after seeing his film Dictator which ridicules a man's strivings to become ruler of the world.)

Such a statement is, of course, very controversial; however, it is well-founded. Mainly, in the beginning of the 1950s, Stalin had a huge army experienced in modern methods of warfare, and an industrial complex that could supply this army with modern weapons. The army's size was significantly larger that the armies of the United States and England; France, Germany, and Italy were defeated countries and their military potential was low. Also, the United States' main strength was in its possession of atomic weapons and the means for delivering them over large distances. Stalin had the bomb by 1948 and in August of 1953, (literally a few months after his death), the hydrogen bomb was successfully tested in the U.S.S.R. True, Stalin did not have the means to deliver this lethal weapon to the den of his chief enemy, the United States. But he did have hostages: if it became necessary, he could use this weapon on the United States' allies in Western Europe. The main method was rockets: the first Soviet satellite was successfully launched 4 October 1957. Thus, Stalin had the opportunity to use his advantage in conventional weapons to paralyze the use of atomic weapons. If we also consider the strength of the communist parties in Western Europe, China's triumph, the weakness of Japan and India, and the complete helplessness of the countries on the African continent, then Stalin had a good chance of expanding the empire at least to three continents: Europe, Asia, and Africa; and maybe even very soon, thanks to the power he had achieved, to the Americas.

In this connection, it is interesting to take a look at ideology during the last years of Stalin's reign. In my opinion, it completely corresponds with the assumptions about preparations for a third world war whose purpose was to turn Russia into a worldwide empire, its dominion over the whole world led by Stalin. In this respect, more candid comments were made by G. M. Malenkov, the secretary of the Central Committee, who presented the Current Report of the Central Committee at the 19th Party Congress in October 1952:

It is impossible not to consider the facts of the past. These facts demonstrate that as a result of the First World War, Russia fell away from a system of capitalism, and as a result of the Second World War numerous countries in Europe and Asia also turned from capitalism. There is every reason to believe that a third world war would bring about the collapse of the global capitalist system [prolonged applause].

These are, so to speak, the perspectives and consequences of a war should it be imposed on the people by the war-mongers, the aggressors.

Stalin also participated in this session with a short but expressive speech, in which he appealed to Western communists to seize power in their countries:

The banner of bourgeoisie-democratic freedom has been thrown overboard. I think that it has fallen to you, the representatives of communist and democratic parties, to take up this banner and carry it forward if you wish to gather around yourselves the majority of the people. There is no one else to take it up [thunderous applause]. . . .

The banner of national independence and national sovereignty has been thrown overboard. There is no doubt that it is up to you, the representatives of communist and democratic parties, to raise this banner and to carry it forward if you want to become the leading force of nations. There is no one else to take it up [thunderous applause].

After Stalin's death, the foreign policy of the new administration changed markedly, and its leaders returned to their own circles: to the old Russian aspiration to become a world power, even to become a superpower, but not to the aspiration to supremacy over the entire world.[36]

The new leaders' return to an old Russian policy could be seen not only within the country, as cutbacks in defense expenditures were initiated, but in foreign policy as well: in the summer of 1953 the war in Korea was halted and relations with Yugoslavia began to normalize,[37]in 1955 Soviet troops pulled out of Austria, and in the same years the U.S.S.R. made a bold foreign policy move when it announced that it had no territorial claims against Turkey. All of these actions were accompanied by a shift in the conception of mutual relations between the U.S.S.R. and Western countries. Instead of the earlier notion that a third world war would bring victory to the communists, the new administration adopted the Western point of view that, in the event of a third world war, there would be no victor. In Soviet terminology, this new policy was called peaceful coexistence among countries with different sociopolitical systems.

It is curious to note that the new Soviet administration announced its new focus in foreign affairs rather quickly, literally a month and a half after Stalin's death. This was demonstrated in the unprecedented publication in Pravda, on 25 April 1953 of the complete text of President Eisenhower's address to the American Society of Newspaper Publishers of 16 April 1953. Even the following passage was not cut from the text:

We know that the death of Josef Stalin marks the end of an era. During the course of his uncommon thirty-year reign, the Soviet empire expanded and now stretches from the Baltic Sea to the Sea of Japan, having established its supremacy over 800 million people.

The Soviet system created by Stalin and his predecessors was engendered by World War I. It endured World War II, demonstrating persistence and often striking courage. It has survived to see the threat of a third world war.

Now a new administration has come to power in the Soviet Union. Its ties to the past however strong they may be cannot bind it completely. Its future depends to a significant degree on the administration itself.

As far as I can remember, at least during the course of the past forty years, the complete text of an address by a Western leader (given outside the territory of the U.S.S.R.) has never been published. And what's more, on the day President Eisenhower's address was published, the entire first page of Pravda was dedicated to a commentary on the text of the address. As is apparent from the passages from the commentary cited below, the Soviet administration, trying to save face, guided public opinion to believe that it was accepting many of President Eisenhower's suggestions as a result not of shifts in their own policy but primarily as a result of a change in the United States' foreign policy.

We do not intend to participate in a discussion with the president on his rather strange statement about the end of a particular era in Soviet policy. But we cannot help expressing some surprise over his conclusion that the government of the U.S.S.R. should dispense with continuity in its foreign policy, the success of which has been proven by the entire course of international development.

If one associates the beginning or the end of an era with the appearance of new faces at the head of the administration, we can with much justification speak of the end of an era in U.S. policy in connection with the Eisenhower administration's accession to power. But for some reason, the new president himself unreservedly defends the policies of his predecessor, whom in his time, particularly during the election campaign, he often criticized and not without reason.

Numerous gestures of good will, which according to Eisenhower should attest to the new Soviet administration's striving for peace, were quickly carried out. I have in mind the halt of the war in Korea and the withdrawal of occupying forces from Austria.

Of course it can be said that the change in the pace of the Russian empire's expansion is a secondary matter, that the main issue is the Soviet Union's goal of world supremacy as stated in the communist ideology. However, it seems to me that this is not the case.

I have already addressed the issue of the communist ideology. Now, in reference to the pace of the empire's expansion, I would like to propose the following analogy from the sphere of physics. We know that the transformation of a substance from one form into another, for example from a plasma into a gas, from a gas into a liquid, from a liquid into a solid, is a result of change of the speed of motion of the molecules of which the substance is composed. But it turns out that change in speed brings about so called phase transitions, which correspond to the changes indicated in the composition of the substance. We know from a practical point of view just how important the differentiation of these phases is, as for each of them it is necessary to utilize an appropriate technology: that which is suitable for the processing of liquid is not appropriate for the processing of a solid body.

If we use this analogy in order to observe the issue of imperial tradition in Russia, it can be said that the transformation from a policy of domination to a policy of world leadership was a phasal transformation. This can be seen not only in foreign policy, in relations with Western countries, but also within the empire and inside the U.S.S.R. in particular. These changes are associated with the name Nikita Sergeyevich Khrushchev.

During his administration, Khrushchev conducted the humanitarian action of politically rehabilitating more than twenty million people, although many of them posthumously (here and later I will be referring to Roy Medvedev's book Khrushchev, [Benson: Chalidze Publ.,1986]); he debunked Stalin, one of the cruelest tyrants in history; he freed the population from the Stalinist terror, providing politically inert people with the opportunity "to die in their own beds" (I say this without any kind of irony, since one of the distinctive features of tyranny is people's real fear that they will have no control over their own chances to "die in one's own bed").

Khrushchev took "parcels" (the system Stalin introduced of untaxable second and third salaries) away from the elite and changed the Stalinist law that forbade workers to leave their place of employment.

Khrushchev concentrated on significantly improving the Soviet people's standard of living, alleviating the hunger problem inherited by many regions from the Stalin years, and he was not afraid to purchase grain from abroad.

Khrushchev, overcoming the opposition of the military, carried out a number of measures directed at cutbacks in the size of the army, from approximately 6 million people at the end of Stalin's life, to 2.4 million in the middle of 1961 (pp. 183--84), and he made cuts in the production of large, above-water vessels.

In addition, Khrushchev did more than a little to injure the Soviet economy. The Councils of National Economy, which he created in 1957, were not at all successful from an economic point of view, but they were useful from the standpoint of bolstering Khrushchev's personal power: these councils were under the jurisdiction of the Regional Committees of the Party, where Khrushchev had considerable support. The inculcation of corn everywhere, the struggle with grassland agriculture, the huge investment in virgin lands, the attempt to outdo America in the per capita production of meat and dairy products and other "artistry" brought huge losses to the country's economy.

Khrushchev maintained and expanded the empire using the method of reward and punishment. Under Khrushchev, the rights of the individual republics were significantly broadened and the policy of Russian domination was markedly decreased; this was particularly noticeable in that the phraseology about the Russian "big brother" disappeared from Soviet propaganda almost completely. Similar relaxations also occurred in the relations with countries in the third circle of the empire. According to Medvedev (although in my opinion he exaggerates a bit, to put it lightly), under Khrushchev "the degree of freedom that the socialist countries had in resolving their own domestic and foreign issues grew significantly, and these countries were now able to participate in the international arena not as satellites, but as allies of the U.S.S.R." (p. 106).

In the meantime, in October of 1955 the Warsaw Pact was formed, and in the same year (1956) that Stalin was denounced (after his unmasking), Khrushchev brutally squelched the Hungarian revolution and then clandestinely assassinated its leaders. Khrushchev sharply increased financing for new types of weapons: nuclear missiles and atomic submarines.

Khrushchev's main contribution to the Russian empire was that he created a new, fourth circle of the empire. Russia had traditionally expanded its domain along its borders; even Russia's having acquired land in North America does not contradict this statement.

Stalin mainly conquered territories having a border with the U.S.S.R., with the exception of Yugoslavia and Spain. Perhaps the reason Stalin so quickly disencumbered himself of Spain was the difficulty of ruling this distant country in case the communists succeeded.

Khrushchev was the first Russian "tsar" to begin a constant policy of converting Russia into an overseas empire. Russia had always had the desire to be an overseas empire, but could not afford it during the period when England, France, Germany, the Netherlands, Spain, and Portugal divided much of the rest of the world between themselves. Russia's emphasis was on a land-by-land army; Russia did not have a navy comparable to the other empires of Europe.

In the 1950s, the world situation was radically different. On the one hand, the Soviet Union had become a highly developed industrial society with a large fleet and a long-distance air force and missiles. On the other hand, after the dissolution of the major colonial empires, only one nation, the United States, could oppose the Soviet challenge. Under these conditions, the Soviet leaders decided to embark on a new stage in the development of the empire: conversion to an overseas empire. Incursions into Egypt, Indonesia, and Cuba in the 1950s represented the first steps in creating a Soviet overseas empire.

The Soviet leaders looked in the Third World for countries where the movement for independence had succeeded, but had ended in authoritarianism (such cases have been frequent ). The leader of such a movement has usually been anti-West, because the movement stemmed from the spirit of anticolonialism. The Soviet Union called these leaders brother, and were very friendly to them. Such a leader is a national hero. He can increase his prestige by increasing his people's standard of living; however, this demands considerable time and is not compatible with dictatorship. The most effective way for such a leader to increase his prestige is through military expansion. The Soviet Union is ready to help him with weapons, advisers, and so on. Then, the climax: the leader begins to implement his aggressive agenda; however, his enemies might be powerful and supported by the West, so the aggressor faces possible defeat. The Soviet Union is afraid to interfere directly; the leader changes from a friend of the Soviet Union to an enemy. This leader's resultant hostility toward the Soviet Union can last a short time, or a long time. This three-stage process describes the relations between the Soviet Union and autocratic political regimes in the Third World (such as Egypt, Indonesia, Cuba, etc.) over the last thirty years.

It should be noted that economic aid by the Soviet Union to Third World countries plays a role that is a secondary to military aid. It only partially helps to develop the economy and the culture of these countries; the Soviet industrial projects are usually of low quality. However, the leaders of these countries regard this help from the point of view of increasing their own prestige; this means that the leader' s interest lies in grandiose economic projects that can involve him, and thus immortalize his name. The economic efficiency of these projects is secondary. The fate of such projects is well known (the Aswan Dam project in Egypt is a typical example).

Thus, Khrushchev's policies were extremely contradictory. From one point of view, there was a rejection of the policy aiming for world domination and a proclamation of the policy of being a world leader within the circle of other world leaders. This was accompanied by endeavors to increase the U.S.S.R.'s economic development, including consideration of the population's needs. Simultaneously, the population was stimulated as the insane terror of Stalinist times was removed (the rehabilitation of hundreds of thousands of political prisoners, a marked decrease in the number of prisoners in labor camps, etc.). On the other hand, these stirrings did not mark a halt in the growth of the empire or in the buildup of its military might; they simply marked a significant decrease in the pace of its growth compared to the Stalinist period. It is essential to remember that during this phase, not only were expenditures on new types of weapons, particularly nuclear missiles and atomic submarines, not scaled down, they were increased.

These measures had their effect, and for a time, they increased the nation's potential. However, the political structure of the Soviet system and its methods of authoritarian rule were preserved in their entirety, defense expenditures gradually began to increase again, the exhaustion of the country's resources continued, and people gradually became used to this new life-style; a certain degree of political toughening on the part of the regime from the mid-1960s on led to many of the people becoming even more cynical. In the end, all of this predestined the drop in the nation's potential and the systemic stagnation of the late 1970's. Also, during this period of Khrushchev's reforms, a particular group of people developed who were anxious about the fate of their country. They embodied all the contradictions of the Khrushchev era, and they are now the inspiration behind the restructuring of Soviet society.

In subsequent years, Soviet leadership pursued its imperial policy. Even at a time of detente when Brezhnev was in power, the empire was held together by rather cruel means (the strangling of Czechoslovakia in 1968), and it even expanded (the invasion of Angola in the 1960s). Brezhnev's rule from this point of view culminated in the Russian invasion of Afghanistan at the end of 1979.

Gorbachev took over the country at a time when its size makes it difficult to sustain, much less expand, the empire. In the next chapter, I want to consider some of the problems encountered by Gorbachev along this path, first and foremost being the the country's militaristic orientation, a factor largely responsible for its exhaustion and the current crisis.

Notes and References

The Military Imperial Orientation of Soviet Society

In the past, the creative energies of the entire Soviet society went into the conduct of an aggressive foreign policy and the continual accumulation of military power. The signs of a pervasive militarization lay ready at hand anywhere in the U.S.S.R.: propaganda about military events, compulsory military service, and so on.

Only recently, after Gorbachev came to power, has this policy been opened up for public discussion, and certain official statements have been made about a shift from an offensive to a defensive strategy in Soviet military doctrine. A serious debate was launched on the issue of a voluntary professional armed forces. The war in Afghanistan has been criticized, albeit halfheartedly. Only time will reveal the true significance of these initiatives.

In this chapter I would like to concentrate on certain economic aspects of Soviet militarization. I will present some methodological observations on this issue, deliberately avoiding any entanglement with statistics, since the latter require a separate, complex inquiry. I only want to note in passing that the U.S.S.R. obviously does not publish statistics on this topic. When Western economists travel to the U.S.S.R. in order to research an issue never before researched in the U.S.S.R., one has to listen to Professor Vladimir Treml of Duke University in order to appreciate how hungrily Soviet colleagues pounce upon what has been declared "top secret information."

To be sure, there have been some minor exceptions lately: statements about the cost of the Afghan war, Gorbachev's pronouncement concerning direct Soviet military expenditures at the Congress of People's Deputies, and deputy Nikolaj Shmelev's remarks at the same forum on Soviet help to the Caribbean countries.[38]

The question of the cost of the empire is an extremely interesting topic for Western Sovietologists. The RAND corporation have recently published research on this issue[39]. Interesting calculations regarding direct Soviet military expenditures were done by Igor I. Birman.[40]

The structure of expenditures on the maintenance of the empire is multifaceted. A significant amount is extended to the countries in the fourth circle of the empire, Cuba in particular. Economic relations with the third circle of the empire are rather complicated: there is very contradictory data concerning the economic exchanges between the U.S.S.R. and Eastern Europe, and which side benefits from these exchanges. Whatever the case, it is obvious that the the U.S.S.R. derives the greatest benefit from the Eastern European countries by imposing a huge military burden on them, forcing them to share the costs of imperial expansionism.

Huge as the U.S.S.R.'s expenditures on the maintenance of the imperial periphery are, the lion's share of the empire's costs lies in Soviet economy's military orientation.

The economy that has been created in the Soviet Union is a military economy. This is not an easy point to prove, if only because one needs a good deal of documentary evidence related to Soviet military expenditures. I will, however, provide my own definition of military economy, which I know to be somewhat different from the conventional one.

Let us first take two extreme situations. On the one hand, there is a peaceful tribe of shepherds, isolated in hard-to-reach mountains. The notion of peace economy fully applies to this tribe, with its war expenditures being equal to zero. The other extreme is a country in a state of deadly conflict with its enemy - as was, for example, the situation of the U.S.S.R. at the time of the war with Nazi Germany. In this case the nation can be said to operate under a war economy: practically all expenditures, from the food for the workers to the production of tanks, are war related. Between these two extremes there is a wide spectrum of different degrees of militarization.

The Soviet economy was organized in a manner that rendered it prepared for war and, ultimately, an offensive war. The goal was clear enough and everything else was subordinate to it. A system emerged which drew up plans for the nation's development and administrative methods and oversaw the realization of these plans.

Such is the functional nature of the Soviet economy.

If we now look structurally at Soviet military expenditures, they turn out to be all the country's expenditures minus the production costs of consumer goods and services, which would be cut back in the event of a war. To develop this point further, let us divide Soviet military expenditures into three parts: direct, conjugated and indirect expenditures.

The category of direct expenditures includes direct outlays for arms production, construction of military installations, and payments to military personnel. Apparently, this part of military expenditures is reflected in the official Soviet statistics under the heading of the "defense budget." The statistics, however, conceal direct defense expenditures for the construction of new arms factories, and most importantly huge outlays for scientific research and design work not directly under the auspices of the Ministry of Defense.

Conjugated military expenditures are the additional costs of peacetime production called for by the need to sustain a militarized economy. For example, from the military point of view it is necessary to give priority to tractors whose production can be easily converted into the production of tanks. These tractors should have tracks, a lot of power, and need not last very long. For many years the production of tractors with tracks predominated, even though it is generally more efficient to use tractors on wheels if only because they do less damage to the soil.

By indirect expenditures I understand the costs associated with the nation's general militaristic orientation, that is, with the policy of maintaining an economic potential for the satisfaction of defense needs. The military-economic potential includes such items as steel, oil, coal, steel cutting equipment, all kinds of transportation equipment and facilities, etc. In this case, the objective of steel production, for instance, is a greater output of the same. These expenditures are extremely difficult to calculate but they make up a huge part of the defense burden.

From the standpoint of the process, the Soviet militarized economy faces the task of finding reasonable adjustments to peacetime production. The adjustments consist mainly in using the available capacities in a manner that minimizes the costs of their possible rapid conversion to military production. The need to produce consumer goods in a militarized economy is dictated by at least two reasons: on the one hand, it is important that these means be utilized, if only for the workers to gain some experience, and, on the other, it is essential to provide the population with consumer goods in order to stimulate their interest in work. I reiterate that this is nothing more than an adjustment of a military economy to peacetime needs.

Thus, in the U.S.S.R. we are dealing with a rather entrenched system - one which has it own particular logic - of a military economy during peacetime. Of course, in managing this sort of integrated economic system the usual difficulties arise, and certain economic and political issues must be resolved. Problem-solving, however, often takes a rather perverse form.

From the standpoint of genesis, the Soviet militarized economy has, from the onset of industrialization in the 1930s, been perpetuating the traditions of Russia's economic development, which also exhibited a very strong military bias.

There is another possible classification of Soviet military expenditures based on the time factor. Thus, we can distinguish the tactical costs (direct expenditures on arms and personnel, minus a large sum for direct military research and developement) related to the first strike capability that can be used on a short notice, ultimately in the very first hours of hostilities, and the strategic costs ( indirect expenditures on building a military-economic potential, outlays for research and development without immediate military applications) incurred with a view to gaining a long-range military advantage. Between the tactical and the strategic costs there is a separate category of intermediate military costs that are largely equivalent to conjugated military expenditures, since a rapid convertibility of industry could become a telling consideration as early as the first few months of the war.

The impact of militarization upon the structure of the Soviet economy

Dilemma in the Amount of Production of Different Consumer Goods.

In the U.S.S.R. a major role in the planning process is played by the division of industry into groups A and B. Group A involves the production of the means of production, i.e. capital goods. Theoretically, any intermediate commodity and any unfinished consumer good are "means of production." Thus, all processes except for the final production of consumer goods should be regarded as production of means of production. Group B includes branches of light industry which produce consumer goods and intermediate products. This division of industry makes sense because of differences in the structure of production of various consumer goods.

Among consumer goods Soviet planners favor those that employ the technologies easily convertible to the production of military goods. During a war the production of consumer goods decreases rapidly. Production capacities for consumer goods are differently convertible. The least convertible are the capacities involved in the production of food and clothing (that is, nondurables), which are classified as Group B activities. The most convertible are the capacities for the production of durable goods such as cars and radio-electronics. These are classified as Group A activities.

One of the most surprising phenomenon in Soviet economic history is a relative (and absolute) decrease in the production of some non-durable goods. This was particularly true of the period of industrialization in the 1930s. Even now this process is in evidence, but not to the same extent as before. If one compares the production of consumer goods in Russia before and after the revolution, one will notice a tremendous growth in the production of durable consumer goods (there were practically none before the revolution) but a very slow growth in the production of important nondurable goods.

Although there was a shortage of important consumer goods such as food and clothing, the government has increased the production of durable goods such as television sets. In the beginning of the 1970s the ministry producing televisions insisted that their output be increased. This was truly an unprecedented case in the history of Soviet planning: an industrial ministry asking for a larger plan. In the Soviet Union managers lean over backwards "to get a smaller plan" since their well-being depends on their being able to fulfill it. The demand to increase the plan for the production of televisions was motivated by the desire to increase the capacity for the production of electronic goods - a capacity with ready military applications. Consumer demand for more television sets was weak for a simple reason: the price of a new set was approximately equal to two months' average salary. Families with sets did not rush to replace them. Another factor was the tradition of a country with a low standard of living where durable goods are typically not thrown away. Families without sets could not afford them any more then than they could before.

As it happened, the effort to increase production was largely successful. To make it successful the planners had to alter the typical methods of Soviet marketing and introduce some western practices. In effect a trade-in market was created. For every old television traded in (practically all old sets were discarded), a certain sum was paid which could be used only as a downpayment for a new television which could be bought on credit.

Dilemma in Production of Various Capital Goods.

Since the capacity to produce means of production is versatile to some extent, the U.S.S.R. first develops capacities that can be easily convertible to arms production. This process was clearly in evidence in the 1930s. The industrialization that was then undertaken was motivated by the decision to increase the production of those means of production which could be used to produce arms.

The "tractor-fertilizer" controversy is a case in point. Soviet agricultural scientists in the early 1930s proposed to increase the production of chemical fertilizers. The technology of fertilizer production, however, is of little potential military value. On the other hand, in order to use mechanized technology in agriculture effectively, it is necessary to have qualified operators, fuel, repair services, etc. The U.S.S.R. had none. The capacities for the production of agricultural machines could, however, be easily converted to the production of tanks, grenade launchers, etc. As a result, during the period of pre-war industrialization, the output of mineral fertilizers was very low and the output of tractors was rather high. The results for Soviet agriculture are well known.

After Stalin, the situation gradually changed. The output of mineral fertilizer increased step by step with the output of tractors. An interesting question is how sensible these policies are for the development of Soviet agriculture in light of how much they are determined by the preferences of the Soviet military-industrial complex.

Dilemma in the Production of Goods of Different Quality.

Soviet commodities usually do not meet world standards of quality. Such a situation has an effect on trade between the Soviet Union and Western countries.

One of the reasons for a comparatively low quality of Soviet non-military goods is the orientation of production toward the fast conversion to military goods. An increase in the quality of goods may require technological processes not used at all in the production of arms. This is because higher quality usually requires (a) technological operations and equipment which are not necessary in the production of lower quality goods, (b) technological operations and equipment which largely can not be converted to the production of arms.

Thus in the production of many types of goods a dilemma arises: whether to increase quality and consequently sacrifice capacities that could be used in the production of arms. The dilemma is obvious in the production of tractors; it is also characteristic of the production of planes, automobiles, etc.

In designing a tractor, for example, the following question arise: How long should it last? During the war, tanks did not last more than a few months. In comparison a tractor may last for years. In order to produce long-lasting tractors, extra investments are required. For example, ball-bearings, an important part of tractors, may require extra technological operations for polishing, etc. These operations require considerable financing but, in the time of war, the resultant equipment is not necessary.

Another aspect of tractor quality is repair. The lifetime of tanks during war is very short; a large number of spare parts is not needed. For the production of tanks, the balance between mechanical and assembly workshops is different from that for the production of tractors. It is not surprising, therefore, that in the Soviet Union there is a chronic shortage of spare parts for tractors. The factories that produce tractors manufacture only a small percentage of spares which the number of tractors would dictate. Chronic shortages of spare parts result because, on the one hand, a relatively great need for spare parts follows from a low quality and short life of machine components and, on the other hand, because the structure of capacities at tractor factories is mainly determined by their conversion potential for the production of tanks.

Shortages of spare parts sent by the tractor factories have to be compensated for in other ways. An active "compensatory" role is played by provincial party bodies, which are responsible for the delivery of agricultural products. Party bodies force enterprises of different branches of industry in their region to produce spare parts for agricultural machines. The additional expenditures of producing spare parts at non-specialized enterprises are very large. Sometimes, too, heads of collective farms illegally purchase spare parts from producers. The additional sources of supply notwithstanding, the amount of spare parts do not fill the need of the agricultural community. One result is that about 40 percent of tractors are not in working order: they are cannibalized. The situation feeds upon itself: by cannibalizing some tractors one can supply a certain number of working tractors with spare parts.

A few remarks are in order concerning Soviet metal-cutting equipment. Statistical abstracts do not publish data on the structure of metal cutting tools. However, these tools are designed mainly for rough processing. As a resullt, shortages of equipment for precise processing often arise in machine building for light industry. For example, modern looms require equipment of a high degree of precision. The lack of this kind of equipment in Soviet textile machine factories stems from the fact that most of it goes to military aircraft factories, which end up producing the looms.

Recall that in the Soviet Union a great deal of information is classified, and bureaucracy is universal, so that to change the capacities of military factories to nonmilitary production is very complicated and therefore very often not done. Meanwhile, enterprises that produce many kinds of agricultural machinery and equipment for light industry can very successfully convert their capacities in wartime to producing large quantities of unsophisticated weapons, such as grenade launchers. And, hence, they are favored.

Dilemma in the Design of New Productis Versus the Development of New Technologies.

In the manufacture of weapons, (or any other products) it is useful to distinguish the design stage from the stage of technological implementation. The Soviet Union has reached a relatively high level of sophistication in the design of many kinds of weapons, but lags far behind the West in new weapons technologies. The disparity can be partly explained by the fact that while the types of weapons produced number in hundreds, different kinds of equipment and technological operations required by the production process can easily number in tens of thousands.

Soviet leaders prefer to spend their resources on the design of the most advanced types of weapons. The design process is organized pretty efficiently. For every specific new weapon system there is at least one leading design bureau. Each bureau has an experimental factory for the manufacture of prototypes. After a trial period, the prototype is sent to a main factory for line production. The factory and the bureau together develop several technological versions of the design for line production. Afterwards, the design and the technology are passed on to other factories for large-scale production.

To set up a similar system to design new technologies and equipment requires a huge amount of resources. In all branches of industry in the Soviet Union, especially in the military branches, one can see large technological research institutes. There is a separate set of bureaus for the design of general - purpose equipment. The specialized bureaus are concentrated directly in those branches of industry that use the equipment.

It is a poor experimental base that is the weak point of Soviet technological design process. Not only is the investment in such a base costly; Soviet experimental workshops and enterprises are not being fully utilized for their main purpose. Current production plans always enjoy a top priority in the Soviet Union, and the ministry (if the enterprise is experimental) or the factory (if it is an experimental workshop) demand from experimental enterprises (workshops) to concentrate first on meeting the current needs, not on research and development.

The quality gap in the design of weapon systems and technologies results in greater weapons costs, and hinders the development of advanced systems.

It is well known that the more specialized the equipment, the lower the unit costs of production because, for example, specialized equipment may be easier to automate. But specialized equipment could hinder improvements and changes in commodities because it is more expensive to alter than less specialized equipment.

Most Soviet batch production factories are ordered to use general-purpose equipment. This equipment makes it very easy to go from one product to another. Such flexibility, however, is associated with very great unit costs. At Soviet mass production enterprises, there is a large percentage of specialized equipment. This equipment restricts the possibilities of product improvement but enables the manufacturer to produce goods at a relatively low cost per unit.

The differences in truck and aircraft manufacturing illustrate these contrasting cases. In the main workshops of Soviet truck factories the proportion of automatic and semiautomatic equipment has reached approximately two-thirds of the total. This automatic equipment has a very low level of flexibility. It has, as a result, become a hindrance to the development of large-scale production of new types of trucks. The fact that truck designs in the Soviet Union are modified so infrequently is in part due to the fact that it is very expensive to change the equipment. It is noteworthy that stagnation in Soviet truck production technologies could become a major bottleneck if and when it is decided to convert truck factories to the production of military goods.

Aircraft manufacturing in the U.S.S.R. is another case altogether. There is no system to mass produce a counterpart nonmilitary product. In general, the manufacturing of aircraft is characterized by medium or short production runs. The share of automatic equipment at aircraft factories is very small. General-purpose equipment predominates, and it is comparatively easy to shift to the production of new kinds of products. The existence of such equipment gives Soviet aircraft factories the ability to adapt very quickly to changes in aircraft design. Little specialization of equipment and low automation levels, however, result in high unit costs.

One way to solve this dilemma is to develop aggregate tools, that is, specialized equipment easily assembled from general-purpose building blocks. Tools can be assembled and disassembled to meet the factory's changing needs. Even though the Soviet Union was one of the pioneers in the field of producing aggregate tools, the introduction of these tools into industry has been relatively limited. The use of general-purpose equipment is still dominant today.

The general technological stagnation of Soviet enterprises fuels a great interest that Soviet leaders have in Western technology. Soviet leaders preferred to spend their money on new technologies for those branches of industry that historically had to convert to the production of military goods and, more important, on technologies that can also be used directly in the production of weapons. For example, a factory for the production of heavy trucks on the Kama river (Kamaz), whose technology and equipment was bought mainly from the United States, produces trucks that can be directly used for military purposes. Moreover, the production technology for many parts of these trucks can be used directly for the production of parts for weapons systems, for example, tanks, mobile missile platforms, and so on.

Dilemma in the Implementation of Economically Effective Technologies.

Technologies can vary with respect to their vulnerability in the event of war. An economically more efficient technology could be more vulnerable in the military sense.

During the Stalin era, the railroad transport system primarily used steam engines. The railroad system was considered to be the most important transport system and was developed rapidly. Steam engines, in spite of their relatively low economic effectiveness, were a more effective type of locomotive in the military sense because they could run on many types of fuel. Diesel engines were considered more vulnerable: they can run only on a special fuel. In addition, in the Stalin era it was thought that, in case of war, oil resources should be saved for airplanes and tanks since they can not use any other fuel. Engines using electricity were not convenient for the military since one break in an electrical line would cripple a large part of a railway electric engines. Therefore, they were not widely used in Stalin's railroad transport system.

In the post-Stalin period, the structure of railway engines was radically changed in a very short time. Most of the locomotives now have diesel or electric engines. Though the steam engines are no longer in use, they are still being kept as a war reserve. Their number is currently much less than that of diesel and electric locomotives.

Dilemma in the Allocation of Industrial Installations.

The location of enterprises in the U.S.S.R. is determined to a large extent by the desire to secure military invulnerability.

From the military point of view, the question of locating enterprises in the U.S.S.R. centers around the problem of distributing the production between the western and eastern regions. It is argued that such a balance will make the supply of military goods relatively more secure in the event of war.

In Soviet economic literature of the 1920s and 1930s, animated military discussions were carried out regarding the relative importance of economic goals. Unfortunately, many works written on then-current problems have been lost. (They were simply removed from libraries as works written by "enemies of the people.") The literature that remains, however, we can get the essence of the problem.

In comparing predictions presented in the 1920s and 1930s with what actually occurred, it is interesting to note the arguments by which economists of the 1930s justified themselves. Thus, for example, Berezov, argued that the development of the eastern regions would be advantageous even from an economic standpoint.

In spite of economic inefficiency, it was decided to develop the eastern regions for military reasons. World War II showed that these regions played a decisive role in securing the U.S.S.R.'s victory, and that the right decision had been made. A second question remains open: were large parallel investments in western regions wise? The simultaneity of these parallel investments determined the overwhelming pace of industrialization, with all its negative consequences.

During World War II, the U.S.S.R. lost a large part of its industrial base when the western regions were quickly occupied. Part of the equipment was evacuated to the east, but a great portion of the capital invested in western regions was lost. In spite of these losses, the Soviet Union not only won the war, but also emerged in a strengthened military posture. This suggests that parallel investments were unnecessary even from a military perspective.

The questions of the 1930s remain alive today: the debates concerning the construction of the Bratsk hydroelectric station, the Baikal-Amur railroad, and similar projects in eastern regions, or over huge investments in agriculture in the central regions mentioned in the current five year plan, always touch upon the issues left unresolved in the controversies of the 1930s.

The factors taken into account in allocating industrial installations may not make any sense if we ignore military considerations.

Toward the end of the 1940s, the important question of whether to organize the mining of lignite in the western U.S.S.R. (in the Smolensk area, for example,) was raised. It was not economically effecient to mine low-calorie coal in difficult conditions. Miners' wages are among the highest in the U.S.S.R.. In political terms, the party regarded miners as a group most devoted to Soviet power. The lack of developed industry in this area and the corresponding structure of the population were thought to have aided the enemy's advance through the country.

A military orientation has permeated the fabric of the Soviet economy. It exerts a strong impact upon the ability of the economic system to improve itself; the introduction of an effective market mechanism must be practically ruled out with such a strong militaristic bias in the economy. The point is that a monopoly of producers as well as of consumers (monopsony) precludes an effective market mechanism. The government in a peace-oriented economy in peace time has a monopoly upon the consumption only of the final products required by the army: tanks, airplanes, military uniforms, and so on. The volume of consumption of these goods in peacetime is not sufficient to strongly deform the market. In a militarized economy, even in peacetime, the government must oversee the convertibility of production capacities and the creation of economic potential based upon such primary products as steel, oil, coal, electricity, metal-cutting equipment. These considerations force the government to intervene not only in the acquisition of final products needed by the army but also in planning the output of capital goods. Otherwise, resources might be diverted from increasing the output of the required capital goods to increasing the output of consumer goods. In other words, we can say that the level of control over the output of capital goods represents a criterion by which we can recognize a military-oriented economy.

Ways to Change the Country's Military Orientation

My remarks here have been brief and necessarily somewhat anecdotal. The foreign policy of the Soviet Union is in many ways free of the sort of domestic constraints present in a more democratic society. It exercises a strong and often dominant influence on economic policy with regard to such things as output levels, choice of technology, and location of industry, as well as in overtly allocating large amount of resources to military needs. In so doing it imposes enormous costs on the Soviet economy in general. For this reason, Soviet foreign policy should be considered a principal determinant of Soviet economic affairs and a principal cause of economic problems. In my opinion, the Soviet Union will be unable to implement any significant changes in the country or the economy without a major reexamination of its military doctrine, without rejecting militarized economy.

Nevertheless, Soviet economists involved in restructuring the economy have underestimated the crippling impact of the military factor upon economic performance. Even as progressive a Soviet economist as Nikolaj Shmelev, in his celebrated article "Payments and Debts" minimizes the significance of this factor when he addresses the issue of defense expenditure. Here is what he writes on this topic:

It is essential to consider clearly that the reason for our difficulties lies not only and really not so much in the heavy burden of defense expenditure and in the extremely costly scale of our nation's global responsibility. Given reasonable expenditures, even remaining material and human resources may be entirely sufficient for the maintenance of a balanced economy oriented toward technological progress for the satisfaction of the traditionally modest needs of our population.[41]

In order to halt economic stagnation and to guide the economic process in the direction of stable, long-term development, the first thing Gorbachev may have to do is to renounce the primary goal of the nation's development: the marked growth of military power in the name of strengthening and expanding the empire.

From here, the Soviet Union's most pressing problem is determining what strategy the nation's leader will adopt. If the problem is presented in its extreme forms, the following two alternative courses arise.

The first is the combinatorial course in which the goal of the nation's development is to continue to view the strengthening of the military might of the empire as the nation's top priority. Possible courses of action include (1) decreasing defense expenditure for a few years in order to use resources, which would then become available, to update capital, improve the quality of production, and increase the population's wellbeing; (2) changing the methods by which the economic system functions and stimulate the population; (3) decreasing foreign expenditures on the maintenance of the empire.

The second course is the positional course, in which the purpose of the nation's development is to create the potential for peacetime development. Possible courses of action include (1) rejecting the empire; 2) orienting the structure of production and power to peacetime production; (3) gradually creating a pluralistic, democratic, open system, with separation of powers; (4) maintaining the level of defense so that it is adequate should the country be threatened with attack.

The second course is obvious enough, but it runs counter to the aspirations of the current leadership. My hypothesis, that Gorbachev aims at strengthening an autocratic imperial regime using a flexible approach, points to the first course as a more realistic one.

It seems to me that the revitalization of the economy, if it is even possible, will prove to be totally insufficient to overcome the difficulties that have arisen in the U.S.S.R.; these difficulties are already too serious, because they have been engendered not by some sort of coincidental fluctuations of temporary significance, but, as I have said earlier, by the country's military imperial orientation.

Gorbachev, as the leader of a large imperial superpower, understands that one of the most important economic moves for the stimulation of the economy is cutbacks in exorbitant military spending. The time is right for this, since no one in the immediate future seems likely to attack the Soviet Union: Western countries could but do not desire to, while China would like to but is presently unable. Furthermore, during the 1930s when production was not very high, even under more temperate domestic policies than Stalin's, it would have been difficult to reconcile the accumulation of great military power with peaceful needs; nowadays, when the scale of production in the U.S.S.R. has attained a considerable level, it is possible under a temperate domestic policy to direct a significant portion of resources towards peacetime needs while still leaving sufficient resources for direct defense purposes. It goes without saying that the means saved from such a reorientation of resources could also be utilized for the growth of military power.

I believe that Gorbachev can take decisive action to cut back military production, to help the exhausted economy, but . . . . This "but" embodies the crux of the matter. Not only will expenditures on research on the latest types of armaments (which can be called nonconventional weapons) not be reduced, they may even be increased. Expenditures on the production of the usual (that is, conventional ) weapons, may be reduced, as may expenditures on those types of nuclear missiles that have already become traditional (which can be called semi-conventional weapons). Under this type of system the size of the army may decrease noticeably, particularly the size of construction battalions and traditional types of troops. It is exatly what was done by Khrushchev in 1957-1959 (See chapter 3 pp.117-118).

Many supporters of the military will of course protest these cutbacks. But perhaps they could be told: "We are implementing all these reductions in order to boost the strength of the country in the future. Do not be afraid that we are changing the Russian empire's great tradition of strength and expansion. Since we are preserving the authoritarian state, this is a guarantee that we will need military strength. Only the introduction of a pluralistic democratic mechanism with a separation of powers and an open society can pose a threat to our goals. Only under such a system can military efforts be limited, only under such a system can the country grow and develop while not resorting to expansionism. And you must also understand that without reducing defense expenditures, without reorienting a significant proportion of resources to peacetime needs today, we will not have a sophisticated industrial base to fulfil military requirements tomorrow. A certain amount of resources deferred from defense expenditure, of course, will have to be used for the production of consumer goods, otherwise we will not be able to stimulate the people to work well." Then we can expect that a certain number of military men will waver, and finally agree with the arguments of their senior colleagues, all the more so as in return for their support they will be rewarded personally with promotions and the prospects of a speedy succession to positions of power in a healthy party.

Thus, I believe that the development policy proposed by Gorbachev is primarily a political breather, directed toward the preservation and strengthening of the empire. A respite in the arms race is sure to prove extremely important for the nation's overall development, particularly if the rejection of expansionism and a bent toward demilitarization is accomplished in an irreversible manner (while still taking the real threat of attack, say on the part of China, into consideration, of course). But in order to change the traditional policy of Russia's development, considerable effort is required, effort that may prove to be beyond Gorbachev's strength, and beyond the strength of any of the country's leaders. Moreover, it is not even known whether there exists a solution to this problem, if we accurately weigh such a factor as the population's political culture.

Notes and References

The Structure of the Second Imperial Circle and

How It Might Change

Diversity of Cultures in the Soviet Union: The Hierarchy of Regions

The governance of large societies, of necessity, entails the concept of decomposition. The basis upon which a societal system is subdivided into a hierarchy of blocks may be either regional or ministerial. A hierarchy may be established on the basis of any one of the following three principles: (1) managerial strengths, that is, the ability to solve various problems that may arise in the region; (2) technological principles, that is, either the strength of internal linkages in the region, which can help to reduce the burden on the higher level of the hierarchy, or the homogeneity of the technological processes, which helps to concentrate professionals in a certain region to as great an extent as possible; or (3) social factors, that is, the national and cultural integrity of the inhabitants of the region. In the Soviet Union, all of these criteria have been taken into account in the formation of regions. At the top level of the hierarchy-particularly for the formation of economic regions-the second criterion was used. The formation of union republics and autonomous republics was based upon the third criterion. Provinces and districts were organized on the basis of the first criterion.

The highest level of the regional hierarchy may be formed on the basis of the type of ideology accepted by the majority of inhabitants. Ideology means that system of values by which the majority organizes its behavior. The classification of ideologies utilized in this analysis is based on the classification of personalities proposed by Russell Ackoff and Fred Emery.[42] This classification is based upon an analysis of the personality of an individual in terms of the two relations that can exist between him and his environment: (1) the extent to which his environment affects him (environmental responsiveness), and (2) the extent to which he affects his environment (environmental affectiveness). From the standpoint of an individual's response to his environment, one can distinguish between an objectivert (a man responsive to his environment), and a subjectivert (one who is not responsive to his environment). From the standpoint of an individual affecting his environment, we can distinguish an externalizer (a man who is inclined to change his environment in accordance with his needs), and an internalizer (one who, by changing his internal world, adapts himself to the environment). By classifying personalities in these two terms (that is, his individual's response to the environment and his affect on the environment), four personality types can now be distinguished. Two of them accordingly represent extreme cases, that is, the completely introverted personality type, a subjective internalizer, or the completely extraverted personality type, an objective externalizer. Two other personality types represent intermediary cases: the objective internalizer and the subjective externalizer.

My personal opinion is that in the Soviet Union three ideological types prevail: subjective externalistic, objective externalistic, and objective internalistic. The subjective internalistic ideology is also to be found in the Soviet Union, but it does not prevail among any of its national groups. The Baltic people could be characterized typically as subjective externalizers, Slavic people as objective externalizers, and Moslems as objective internalizers. In conformity with this classification of the Soviet population one can distinguish regions: first, objective externalistic, encompassing the present-day territory of the Russian Federation, the Ukraine, White Russia and the Caucasus (with the exception of Azerbaijan); second, subjective externalistic, that is, the Baltic Republics; third, objective internalistic including the territory of Central Asia and Azerbaijan.

In Soviet literature there is no such classification of the regions, but its acceptance enables us to immediately detect differences in the development processes in different parts of the Soviet Union. In the first place, there is a noticeable difference in rates of population growth among various national groups (see Table 6.1).

Without stopping to elaborate the relationship between ideology and rate of population growth, let me draw attention to certain of the consequences of this relationship. The rapid growth of the Moslem population in the Soviet Union compared to other groups has first and foremost raised the issue of how to maintain a high rate of growth for Soviet industry. It is known that Moslems traditionally have not been technological innovators. The industrialization of the Moslem regions of the U.S.S.R. was accomplished primarily by Slavic peoples. Even at the present time the Slavic population plans an essential role in these regions. Table 6.2 illustrates the role of the non-Moslem population in Moslem regions[43].

Slavic people predominate among the nonnative population of Moslem regions and are actively involved in industry, occupying a disproportionately high proportion of the skilled jobs. This fact must be taken into account in the analysis of the Soviet experience of industrialization in Moslem regions, particularly given the fact that large territories with Moslem populations are now entering the industrialization stage and attempting to imitate the Soviet experience.

It should also be noted that the rapid growth of the Moslem population is creating problems for the Soviet Army. Moslems traditionally are less prepared to use modern weapons, and furthermore, are ill equipped to serve in the colder regions of Russia. (Let me remind the reader that in accordance with the pre-Revolutionary Russian tradition, individuals from one region are drafted into the army and sent to serve in other regions. This system was designed to enhance the political stability of a multinational empire, and its usage continues in the present-day Soviet Union.[44])

Demographic changes in the Baltic regions raised other difficulties for further industrialization. The Baltic republics are a potential source of workers, who are necessary for industrialization to proceed, but the growth rate of the Baltic population is low.

The continuous growth of the nonnative population in these areas threatens the Baltic peoples with the loss of even that limited degree of political autonomy that they now possess. The sad experience of the disbanding of the Karelo-Finnish Republic in the 1950s because it lacked a sufficient percentage of native population serves as a constant reminder of what the Soviet leaders can do to union republics. In light of this, the Baltic peoples view with trepidation the further industrialization of their region. As is apparent from table 6.3, the proportion of native people in these republics is already rather low. I cannot vouch for the validity of the following information, but it is nevertheless interesting in that it illustrates Baltic people's attitude to the industrialization of their region by the introduction of more Slavic peoples. My Estonian colleagues told me that, at the end of the 1960s, the leaders of Estonia, during discussions with the central government concerning the future industrialization of this region, said that Germans would be sent to Estonia. The Germans under discussion were those who lived in the Altai region and in Central Asia; whose number totaled 1,800,000. As is well known, these Germans live in the regions to which they were deported from the German Volga Autonomous Republic soon after Hitler attacked the Soviet Union.

The next level in the hierarchy of regions is formed on the basis of the nationality of the native population and on the basis of whether the region has a border with a foreign country. It is on this level of the hierarchy that the union republics are formed. There are fifteen such republics, which form the main regions in the Soviet political and economic system. Economic relations between the central government and the regions represented by the union republics are institutionalized to a large degree; that is, the regions have central committees of the Communist party (with the exception of the Russian Soviet Federative Socialist Republic [RSFSR]), councils of ministers, and so forth. However, the recognition of the union republic as the major regional subdivision results in great planning problems. Some republics (such as the RSFSR) are much too large and others (such as the Baltic republics) are much too small. For example, the population of RSFSR in 1987 was 281,690,000 and of Estonia, 1,556,000. The result is that for planning purposes the territory of the Soviet Union is subdivided into so-called economic regions. These regions are formed on the basis of their internal economic linkages or the homogeneity of the conditions under which they function. There are eighteen of these economic regions in the Soviet Union including, among others, the Central non black earth region, Volga, Ural, Western Siberia, Baltic, Caucasus, and Central Asia. However, these economic regions are not supported by managerial institutions. Khrushchev made an attempt to support these regions by the introduction of several institutions, such as planning institutions. However, his ideas were never brought to complete fruition.

The existence of union republics also creates severe political problems, which are linked with the growth of nationalism and these republics' aspirations to become independent. The growth of nationalism is aggravated by the development of an intelligentsia among the various national groups, persons who are better able to express the feelings of their people and to find a way to fight for their independence. This process is accelerated by Russian chauvinism, which is opposed by the native peoples of the union republics. In the political struggle with Russian chauvinists the spokesmen for other nationalities argue that their states were established earlier than the Russian state. For example, in 1947, the 800th anniversary of the founding of Moscow was celebrated as symbolic of the establishment of a centralized Russian state.[45] Before Stalin had been laid in his final resting place, the Georgian Union Republic had begun to celebrate the 1,500th anniversary of its capital Tbilisi.[46] Several years later, in 1968, Armenia commemorated the 2,750 anniversary of the establishment of its capital Erevan,[47] and at the beginning of the 1970s Uzbekistan celebrated the 2500th anniversary of the city of Samarkand.[48]

The Presentation of a Region in the Mathematical Models of the Soviet Economy: Political Aspects

An economic system may be described by a variety of methods, including a scalar optimization model and an equilibrium model.[49] The equilibrium model emphasizes the existence of a set of participants, each of whom aspires to increase the value of his objective function on the basis of the principle of Pareto optimality. One could say that the participants in an economic system are its regions. Let us denote a region as r, such that r=1,...,R. The objective function of the region f_r(x)_r could be given on the set of the final goods that are consumed by the participants: the vector of these products is denoted by x_r/=x_r{x_r¹,...,x_rⁿ}. Every region has its own limits on the production of final goods. Let us denote the vector of these goods by y_r=y_r{y_r¹,...,y_rⁿ} and the set of the constraints by Q_r where y_rÎQ_r. One could assume that each participant realizes his output by using prices. Let us denote the vector of prices p where p={p₁,...,p_n}. The revenue of the region, py_r is a budgeting constraint on the purchase of commodities of the sum px_r, px_r£py_r. Naturally the total consumption of goods in the system x=Sx_r could not exceed their production y=Sy_r , where x£y.

This model also assumes the usage of a very important principle of the distribution of income among the participants. In accordance with this principle, the income of a region belongs to that region. Meanwhile because the region is a part of a larger economic system which has expenses for the production of public goods or for the redistribution of income to achieve certain social goals, it is necessary to redistribute the income in the system. If L_r is the coefficient of the redistribution of income of a certain region, then the final income of a region will be L_r(py_r). The coefficient L_r could be more or less than 1. It is only important that S L_r(py_r)= Spy_r. The problem of redistribution of income in a system is external to the economic system and is determined by the social organization of the society.

As a whole, the model of equilibrium which also involves redistribution of income could be expressed in the following manner (the state could be one of the participants of the system):

Model 1: f_r(x)_rﬁ extr.

y_rÎQ_r

px_r£ L_r(py_r) S L_r(py_r)= Spy_r

x£ y

Another method of describing an economic system is based upon the introduction of a global criterion of optimality for the whole system. This criterion could be formed on the basis of the same set of final goods as the objective functions of the regions. Let us denote this criterion F(x). The set of constraints could be noted by Q/Q»Q_r. As a whole this model would be expressed in the following manner

Model 2: F (x)Þ extr.

xÎQ.

These two methods of describing an economic system under certain conditions are convertible, as has been demonstrated by Abraham Bergson[50] and Gerard Debreu[51]. The model of equilibrium under very natural conditions when px=py_r (that is, when the income of the participants is completely used; this assumes that the objective function f_r(x)_r is not saturated for at least one product) can be converted into a scalar optimization model of the following form:

Model 3: F(x) = F [( f_r(x)_rm_r] Þ extr.

yÎQ

x£ y

where m_r corresponds to the weight of the participants. This weight is determined by the income that the participant receives and the nature of his objective function.

Traditionally, the models of equilibrium and scalar optimization were used to describe different economic systems, distinguishable on the basis of the class of mechanisms that they use in their performance. The equilibrium model has been used to describe market economies while, the description of planning systems, models of scalar optimization have been used. Enrico Barone, Fred Taylor, Oscar Lange, and Abba Lerner undermined this approach to the description of a planning system by demonstrating that prices and money could be used in both market and planning systems. The discovery that it was possible to convert one method of describing of an economic system into another finally established the independence of a method of describing of a system from the class of mechanisms used in the performance of the system. This provides a basis for the separation of the method of describing a system from ideological considerations. Meanwhile, the above mentioned method of describing an economic system became very important for the planning system itself. The point is that by using the scalar optimization method to describe a system without making clear the weights of the participants (see Model 2), it is possible to disguise the problem of the distribution of income among the participants, in this particular case, among the union republics. Practically speaking, in describing an economic system by means of Model 3, we also assume a certain method of distributing income. This means that we assume that the weights of all participants are equal. This equality in turn assumes as a rule that all of the resources of the participants belong to the whole system.[52] When the economic system is described by an equilibrium model (Model 1), the extent to which a region's income belongs to the region becomes clear. From this standpoint, two different points of view have emerged among the Soviet economists who are involved in mathematical modelling of the Soviet economic system. The pioneers in the area of the application of mathematical methods to optimize the allocation of resources[53] used only the models of scalar optimization, both ideologically and heuristically since they regarded these as the most appropriate for a planning system. Since that time, certain Soviet scholars have continued to develop this point of view. On the basis of my experience in communication with Soviet economists, I would argue that, at the present time, the typical political orientation of these scholars lies in the direction of supporting autocratic regimes, and that they are less liberal people.[54] At the same time, in the Soviet Union other scholars developed a description of the Soviet economy, based upon equilibrium models, certain of which emphasized the spatial aspect of the problem, designating as a region either a large part of the Soviet territory (west or east)[55] or a union republic[56] In unofficial discussions among Soviet economists, attention was paid to the fact that territorial distribution may be based upon the assumption that resources located in a given region belong to all of the given population or society. This assumption is less painfully received by the population of a country with a homogeneous national attitude (China, for example) or where diverse nationalities have intermingled (the United States, for example).

In countries where there are many nationalities, and they are territorially isolated, the redistribution of income among the separate territories invokes quite a painful reaction from the population of regions that have better resources. One reason for the appearance of a centrifugal force in multinational empires is that the population of a given territory feels that it is being exploited by the center, which takes for itself the income from the resources of that area.

What sort of relations should there be between the center and such national structures? In principal, the unification of nations may be based upon several of a variety of principles, such as those upon which are built such diverse organizational types as the British Commonwealth of Nations, the Common Market, and the Council for Mutual Economic Aid; here one finds a rich spectrum of relations.

I will note that relations between the U.S.S.R. and East European, socialistic countries within the limits of COMECON are based upon the principle that each country receives an adequate income from the resources at its disposal. A very real question then arises: Why should the relations between the socialistic republics within the boundaries of the U.S.S.R. be built on the principle of redistribution of income between the republics?

In any case, the using the equilibrium models which involves participants represented by the union republics, could result in the growth of nationalism in those areas. In the model it is made explicit that the government withdraws a part of their income from the union republics, and this creates the impression that Russians exploit other union republics. The paradox of the situation lies in the fact that the standard of living in the union republics (with the possible exception of White Russia) is noticeably higher than in Russia (RSFSR).[57] Moreover, the standard of living of the native peoples in many union republics, particularly in the Caucasus and Central Asia, is higher than that of the Russians who live in these areas. This is a result of the fact that the major sources of high income for the native peoples are the sale of fresh fruits and vegetables, and the participation in the secondary economy. As was mentioned previously, the greater part of the Russian population in the union republics is involved in heavy industry and works in large enterprises.

The fact that the Russian population has a lower standard of living than other nationalities is a source of some concern to the nation's leaders. The central government in recent years has taken steps to help equalize the living conditions of people in RSFSR and in other union republics. On the one hand, the Soviet government announced programs for the non-black earth zones of central Russia.[58] On the other hand, in recent years the central government has taken energetic steps to control the level of living conditions in several union republics, most noticeably in Georgia, by introducing severe restrictions on the exportation of fruit and strict penalties for participation in the secondary economy.

Certainly the higher level of living conditions in the union republics compared to the RSFSR does not preclude the possibility that were these republics to be independent from Russia, the people in these republics would attain an even higher standard of living. However, the problem of the extent to which Russia exploits other union republics is quite complicated and outside of the scope of this presentation. Without minimizing the importance of the economic factor in the nationalist movements in the union republics, I would argue that the centrifugal forces are to a great extent motivated by the desire of the union republics to be separated for political reasons; freedom is an independent good. Of course, certain social groups base their desire for independence on other considerations. For example, some leaders of the Central Asian republics could complain that they can be leaders of Soviet delegations only to second and third-ranked countries, whereas the leaders of a neighboring country would be greeted in the main Western countries as the heads of independent countries.

The Double Hierarchy of the Soviet Governing System

The Soviet system is governed by two hierarchies: ministerial and party. Union ministries manage those factories that have significance for the entire Soviet Union. These ministries are subordinate to the Council of Ministers of the Soviet Union and are located in Moscow. If an enterprise is significant only for a union republic, it will be managed by a ministry that is located in that republic and subordinated to the republic Council of Ministers. There are, in addition, ministries that are located in Moscow and are regarded as union-republic ministries. This means that in certain cases the republic ministers are subordinate both to the ministers in Moscow and to their local Council of Ministers. The interrelations between the ministries located in Moscow and those in the union-republics are chaotic. Art, rather than science, reigns here. There are now laws regulating the relations between the union ministers and the republics. In the legal codes, very little is said about relations between the republic Council of Ministers and the corresponding union-republic ministers. As a result, for example, out of twenty-eight Ukrainian union-republic ministries in 1971, nineteen had individual charters, while the rest operated without any legal document. Due to the absence of sufficiently developed legislation, relations between the union-republic ministries and the republic Council of Ministers are unequal. In general, it appears that the powers of U.S.S.R. union-republic ministries are greater in heavy industry than in light industry[59].

Naturally, to order the relations between the center and a republic is not an easy task. On the one hand, conflicting technological and territorial factors must both be taken into account in the attempt to solve managerial problems; however, on the other hand, there exists the problem of the appropriate division of political power between the center and a republic, and the socioeconomic relations between the two.

In order to understand the mechanism of economic control in the U.S.S.R., and, in particular, the structure of relations between the republics and the central power, one must take into account the role of the party apparatus. Bearing in mind that factories that have significance for the Soviet Union as a whole are not subordinated to the ministries located in the union republics, one can imagine very complicated problems arising in the interrelations between all of the enterprises located in any one region. If only the ministerial hierarchy existed, the problems of interrelations between the enterprises subordinate to different ministries but in the same region could be solved through the apparatus of the Council of Ministers of the U.S.S.R. But at this point the second hierarchy, which is territorially organized, enters the picture with an impact on all participants. It is well known that the party plays a great role in the Soviet Union, regulating virtually all aspects of the society's life.

In certain respects, the party duplicates the activities of the ministries (for example, managerial appointments). However, it needs to be pointed out that in the absence of certain economic bodies, the party apparatus fulfills very important economic functions including the coordination of enterprises located in a given region and not subordinate to different ministries. The interrelationships between the arty apparatus, the managers of enterprises, and the ministries are quite complicated. Party organs are responsible for the fulfillment of plans by all enterprises within a given republic regardless of their departmental subordination. In this sense, the party organizations are allies with the enterprises found in their territory in their desire to receive a smaller plan from the center. Along with the party organs, responsibility for the fulfillment of the republic plan, the party obliges the enterprises to produce commodities that they would not produce under other circumstances, but that are needed for other undertakings of the republic. Specifically, this relates to the industrial enterprises, which are obliged by the local party organ to produce spare parts for agriculture, to send workers, and drivers to the harvest, and so on. These jobs are not taken into account in the plans for industrial enterprises. Because the managers, even of a union factory located in the territory of the republic, are both appointed and fired with the assent of local party organs, they naturally prefer not to argue with the party, and they agree to fulfill the party requirements. Moreover, a manager must often appeal to the party apparatus for help in solving current problems. For example, let us assume that a worker who is valuable to his factory commits a crime and is arrested by the police. If the crime is minor (for example, stealing from the factory, hooliganism, etc.) the manager may ask the party leader of the region to order the police or the judge to releases the worker.[60]

Thus, we see fundamental inconsistencies in the Soviet mechanism for the management of a region. Naturally, the leaders of the country are informed about these inconsistencies, but they look at the improvement of management mechanisms primarily from the standpoint of their political interest in strengthening their power. The validity of this statement becomes apparent if we keep in mind that, on the one hand, many factors affect the political stability of the leaders of an autocratic society in which all aspects of the life of the society are determined by the center, and that, on the other hand, there are absolute limits to the amount of time that the leaders can devote to the solution of problems. They cannot work systematically more than sixteen hours per day. Thus, one can conclude that reorganization of the management system in the Soviet Union is, first of all, directed toward the strengthening of the leaders' power. In certain cases, the reorganization of work may be to the economic advantage of the system, in others to its detriment. Let me illustrate this with an example of the reorganization of the managerial system concerning the regions.

In September 1953 Khrushchev was appointed first secretary of the Central Committee of the Communist Party of the Soviet Union (CPSU). Within a few years he managed to appoint his people to the party apparatus, primarily at the level of provincial committee secretaries. Many of them were promised considerable career advancement in the event of the defeat of Khrushchev's opponents. The strength of Khrushchev's opponents lay in the economic organization. Khrushchev then proposed the creation of the regional economic councils: Sovnarkhozy. Through these councils, Khrushchev attempted to disperse his opponents and to deprive them of the old economic ministerial apparatus. Upon being appointed to the regional economic councils, not all of the executives from the old apparatus got good new jobs. Moreover, the supervision of the economic councils passed into the hands of the provincial (oblastnye) party apparatus. And as already been noted, Khrushchev had his people in the regional party apparatus.

The tremendously rapid reorganization of the ministries into Sovnarkhozy in 1957 brought many negative consequences, among them a sharp reduction in the quality of management, complications in the organization of the Sovnarkhozy, complications in the system of supply, and so on. For example, let us consider the case of the ball-bearing factories. These factories, more than fifteen of them, were subordinate to the Chief Department for Ball-Bearing Production of the Ministry of Automobile and Tractor Industries. The apparatus of the chief department was sufficiently qualified to elaborate a general policy for the technological development of these factories and to help them solve their current problems, particularly if the factory in question was new. The chief department coordinated with the buyers the specifications of the ball-bearings that were needed. After the ministry was disbanded, the ball-bearing factories were distributed among many Sovnarkhozy. Each Sovnarkhozy managed only one or two ball-bearing factories and therefore was not able to maintain a sufficient number of qualified workers to provide the same services as the former chief department. Furthermore, the factories' rights to solve their own problems were not affected by the organization of the Sovnarkhozy; it should be obvious what kind of problems they experienced in the factories.

After Khrushchev became the de facto one-man ruler, combining the duties of first secretary of the Central Committee of the CPSU and chairman of the Council of Ministers of the U.S.S.R., he began spending a considerable amount of time on foreign policy (including travel outside the country) and on resolving other general problems. He had to transfer a considerable amount of the routine party work to Frol R. Kozlov, second secretary of the Central Committee of the CPSU. The second secretary of the Central Committee of the CPSU is a rather powerful figure. He decides many routine matters and, in practice, possesses enormous power. The secretaries of regional committees must turn to him for their daily needs and, hence, are largely dependent on him. As shown by Stalin, who actually performed the role of second secretary under Lenin, such a person can be the first claimant to the post of first secretary of the Central Committee of the CPSU.

I cannot guarantee the accuracy of what is stated below, but supposedly at a session of the Politburo in 1962, Frol R. Kozlov (with the support of Politburo Member Mikhail A. Suslov) demanded that Khrushchev should share power, that is, that he should cease holding the two leading posts; he hoped to win the post of first secretary of the Central Committee of the CPSU. The stormy Politburo session ended with Khrushchev's victory. Kozlov was removed from the party leadership and soon died of a stroke.

Meanwhile, it became clear to Khrushchev that the party apparatus lay largely outside his control. It would have been difficult to replace the many regional committee secretaries. At this point, Khrushchev carried out this well-known reorganization of the party apparatus and the regional economic councils. After dividing the regional party committees into industrial and agricultural branches, he reappointed the secretaries of the regional committees. But the main thing he achieved was that, while he essentially retained the officials from the old apparatus, he divided them and set them against each other. Thus, for example, what kind of friendship could there be between secretaries of the industrial and agricultural regional party committees, if only one of them could be the first to greet Cuba's leader, Fidel Castro, when he visited the region?

With regard to the regional economic councils, Khrushchev hastened to remove them from the power of the regional committees. The number of economic councils was sharply reduced from 105 to 45, and they became zonal. They were subordinated to the secretaries of regional committees only as organizations situated in their territories.

The reorganization of the party apparatus and the system of management instituted by Khrushchev in 1962 did not help him to maintain his power. On the one hand, Khrushchev aspired to dictatorship, to independence from the party apparatus. Yet, on the other hand, he was charitable enough to his enemies to merely relieve them of their high positions, granting them instead either diplomatic posts abroad or retirement pensions. Under these conditions, the leaders of the Party apparatus were comparatively easily able to unite and dismiss Khrushchev.

The Soviet leaders who succeeded Khrushchev in 1964 soon returned to the old system of management by ministers and revived the old system of unified provincial committees of the Communist party. Perhaps one of the main reasons for this reorganization was the perceived need to concentrate power in the center in order to counteract centrifugal forces. (This is especially pertinent if we keep in mind that the new leadership was collective, that is. it had no dictator.) Very soon, however, Brezhnev also tried to increase his power by reorganizing the system of management. This reorganization of industry in the U.S.S.R., which was based on the introduction of associations (ob'edineniia ) is also, evidently, largely of a political nature. I do not want to belittle the role of associations, which in principle may prove to be effective organizations of decentralized management, the serious suspicion remains that associations are also intended to destroy the old central economic apparatus and to subordinate the management of industry to the local party apparatus. It is enough to recall that the apparatus of ministerial chief departments (glavki), which the associations are meant to replace, includes approximately two-thirds of the apparatus of the ministries. We also know that the associations can be interlocked and distributed through the entire U.S.S.R. From what has been said, one can try to formulate a hypothesis about who among the country's collective leadership finds this reorganization advantageous and who resolutely resists it.

But the fact that Brezhnev has been unable to introduce the associations into many branches of industry demonstrates that he probably had less political power than did his predecessors, who easily reorganized the system of management upon their succession to power. Gorbachev strives for a decentralized mechanism that eliminates, or at least greatly restricts, the Party's and ministries' managerial role. The political considerations behind Gorbachev's strategy have already been mentioned. I only want to note once again that, besides purely substantive reasons, Gorbachev is also driven by the desire to enhance his own power position, since his chosen course allows him to shift the blame for economic problems onto the local Soviets elected by the popular vote.

Alternative Solutions of the Imperial Problem

As we have seen, the Soviet control system rests on the principle of national administrative regions. On the one hand, this allows national cultures to develop; on the other, it fosters separatist centrifugal forces.

The growth of nationalism cannot fail to disturb the leaders of the U.S.S.R. who continue the old Russian policy of strengthening and expanding the empire. This process could be stopped by several methods. One method would be the elimination of the union republics. Such a move could be based upon the notion that a new nationality has appeared in the Soviet Union; regardless of their former nationality, all people could be referred to as the Soviet people. On the other hand, this would necessitate the reorganization of the system of management, so that the principle regions would be the previously discussed economic regions. These in turn would have to be provided with certain kinds of institutions, such as, Supreme Soviets, Councils of Ministers, and Central Committees of the Communist Party. The possibility of designating regions as the basic political units of the Soviet Union was a subject of discussion in the 1920s, the idea having been proposed by Professor Aleksandrov. The possibility of eliminating the union republics and substituting economic regions on the ideological basis of a united Soviet people was again a subject for very serious discussion in the middle of the 1970s during the preparation of the new Soviet constitution. However, as we now know, the traditional point of view prevailed: the Soviet Union is an empire headed by the Russian people.

With a sincerity unusual for his administration, Leonid Brezhnev spoke about this dilemma at the time the draft of the new Soviet constitution was being discussed.

Let me address the issue of those proposals which the Constitutional Commission regarded as essentially incorrect.

As is well known, a new community of people has emerged in the U.S.S.R.: The Soviet People. On this basis, several comrades,their number of course, is small came to an improper conclusion. They proposed the introduction into the constitution of the concept of a unified Soviet nation; either the liquidation of union and autonomous republics or a sharp reduction in the autonomy of the former, depriving them of their right to withdraw from the U.S.S.R. and of their right to external relations. In the same direction, there are proposals to eliminate the Nationalities' Council and to establish a one-chamber Supreme Soviet. In my opinion, the incorrectness of such proposals is obvious. The sociopolitical unity of the Soviet people in no way signifies the disappearance of national differences. Thanks to the consistent carrying out of Lenin's nationalities policies, we, in the process of building socialism, simultaneously, and for the first time in history, were able to solve successfully the nationalities' question. The friendship of the Soviet peoples is inviolable; in the process of the construction of communism they are steadily coming closer together to the mutual enrichment of their spiritual lives. But we would be setting out on a dangerous course if we were artificially to force that objective process of the rapprochement of nations. Lenin insistently warned against this, and we will not deviate from his precepts."[61]

It was not by accident that the first line of the previous anthem was preserved in the text of the new national anthem of the Soviet Union, which was accepted at the same time as the new constitution: "Unbreakable union of freeform republics/Great Russia has welded forever to stand."

The available evidence indicates that Gorbachev is also disinclined to use the idea of a Soviet people to try and integrate the empire. He will either opt for a federation, with separate national regions enjoying much greater rights, or, should the centrifugal forces get out of hand, revert to a much more rigid system headed by the Great Russian people.

Notes and References

Russophilism

The current trepidations experienced by the Soviet empire and the future of the empire boil down to the problem of nationalism, both Russian and regional. This part of the book is devoted to russophilism, which is really the principal issue.

The prominent Soviet historian and publicist Alexander Yanov can rightfully be considered a pioneer in this area. As early as 1968, when almost nobody else understood the impending danger of russophilism, Yanov opened the discussion on slavophilism with his article "The Mystery of Slavophile Criticism," published in Literary Issues.[62]

After tracing how the slavophile movement historically evolved from liberalism to chauvinism, Yanov also calls attention to the new slavophiles.

In his book on the Russian right-wing movement published in the late 1970s[63] and in particular in his new book on this topic[64], Yanov examines the ideological tenets of the russophiles in detail and from a long historical perspective.

Some of Yanov's ideas are open to criticism: in many ways I share the views of those who cannot accept his practical proposals concerning the conduct of Soviet-American relations and am of the opinion that Yanov oversimplifies the question of how the West should relate to Soviet readers in general and to liberal readers in particular. However, in my opinion, these disagreements with Yanov should not be allowed to obscure the central theme of his work, his innovative approach to understanding of danger of russophilism. The very fact that in Western literature this question has not been given its due consideration makes it all the more fitting for us to pay particular attention to Yanov's works.[65] I do not mean to imply by this that the russophiles will necessarily triumph, but, it seems, that to discount the role of the russophiles, to dismiss them as an insignificant phenomenon, would be a dangerous oversight.

Local nationalisms, in my view, are the direct result and consequence of Russian nationalism and express the local aspirations to be independent from Russia.

And, finally, I will pay particular attention to the question of anti-Semitism insofar as it represents another very peculiar side of russophilism. All forms of nationalism seek their antipodes. In different countries various ethnic groups are singled out for this purpose, groups that are generally felt to be standing in the way of the development of the national spirit. The russophiles by virtue of historical peculiarities have chosen the Jews. The Jewish problem in the U.S.S.R. is further aggravated by the fact that Soviet Jews lack any territorial base in the country (the same is true, though, for some other ethnic groups, for exampe, the Germans), but unlike these other territorially deprived nationalities, the Jews do (did in the past and will probably in the future) have an important influence on the development of the country.

Patriotism, Nationalism and Chauvinism

I have heard it said many times that nationalistic tendencies in Russia will be the salvation of the country. Just like other nations, the Russian nation has a right to its own self-identity and its own indigenous course of development. Moreover, insofar as it is in Russia's own self-interest to liberalize and to keep in step with the developed democratic powers, a renewed Russia, after throwing off the shackles of communist doctrine, will gradually adopt that course. And it is precisely those Russian nationalists who are true believers who will take the country down that path. Thus, in the Soviet political strategy, room is made for a combination of moderate Russian nationalism, liberalism, and a disposition towards peace.[66]

Before embarking upon this topic, I feel a few definitions are in order. Love toward one's nation ranges over a broad spectrum characterized by the following rough subdivisions. One extreme exhibits a radical phase which could be called cosmopolitan, that is, an individual regards himself as the citizen of the universe and refusies to acknowledge belonging to any one particular nationality. At the opposite pole is the chauvinistic band of the spectrum, this is, a person considers his nation as being not only superior to all others, but believes his nation must rule over all other peoples and people who violate the harmony of this arrangement must be expelled by whatever means, including extermination.

Between these two extremes there are at least three intermediate phases. Starting from the cosmopolitan pole, we can pinpoint the next group the internationalist group. An internationalist is a person who combines love for his own country with equal affection for other countries. The next group can be designated as patriotic. Here, a person asserts, and proudly so, his attachment to a particular nation. But he believes that his people are no better and no worse than the others, merely different. The fact that other people belong to other nationalities and are proud of it is just as reasonable as his own pride in his group.

Next comes the nationalistic phase. Unlike a patriotic state of mind, a nationalist holds that the nation to which he belongs is the best one. Still, he feels no animosity toward other peoples and does to not wish to subordinate them.[67]

Nationalism of the last kind branches into two subclasses. The first emphasizes the distinctness of a given group, its profound difference from other nations. This outlook is characteristic of Russian ruralists (pochvenniks). Their anti-Western sentiments are rooted in their belief that the Russian system of values, with its emphasis upon collectivism and spirituality is completely opposite to Western values based upon individualism and mercantilism.

The other mode of nationalism is based on the idea of a particular nation evolving in the same way as many other developed nations but managing to achieve better results along the same path. This type of nationalism will be considered in greater detail when I discuss Academician Dmitrij Likhachov. At this point, I only want to note that this outlook is rather moderate and tends to gravitate strongly toward patriotism.

I have no doubts whatsoever that in the Soviet Union there is an appreciable number of such liberally inclined patriots and even moderate nationalists. Proceeding from the general view that the preservation and development of variety is essential to the development of any system, I am very sympathetic to the desire on the part of a given group to preserve its unique self-identity. (At the same time, considering the consequences that occur as a result of the division of the world along ethnic lines, I can appreciate the merits of arguments in favor of doing away with nationalities and creating a single human nationality.) However, the danger does not come directly from this kind of patriots and moderate nationalists. In a period of crisis for the empire, to the forefront come not the moderate nationalists, but their more radical brethren: Russian chauvinists. Moreover, the nationalistic circles that, in principle, might align themselves with the liberals, to a significant degree become the allies of the chauvinists insofar as the chauvinists express the interests of the country that is very dear to the nationalists. The nationalists sometimes find it difficult to deal with the chauvinists' coarseness, staunchness, and lack of refinement, but they are attracted by the chauvinists' resolve to defend the greatness of the nation. This is precisely what happened with the Germans when Hitler came to power.

This discussion about attitude toward one's homeland is illustrated by my dispute with George Gibian, a professor at Cornell University. Our debate was initiated by my article "Will Glasnost Bring the Reactionaries to Power?."[68]

Professor Gibian kindly mentions that my article draws attention to dangerous tendencies in the U.S.S.R.'s era of glasnost. But his appreciation seems merely polite, for obviously he thinks that I have made some very essential errors, and he goes on to lodge objections that, if true, would nullify my article. In particular, he accuses me of failing to differentiate between various types of slavophiles. In addition, he holds that I "tar everybody with the same brush of anti-Semitic reactionism."

How shall I answer these allegations? I believe a scholar should not rush to accuse his opponents of making errors, but should try to understand their position and the assumptions under which that position might be correct. Only after this attempt has been made is it time to express disagreement with basic assumptions.

Let me, therefore, clarify the assumptions of my article, in order to see whether Gibian's criticisms hold up. Gibian is completely right in saying that, historically, Slavophiles have held many different opinions, and that I did not discuss these differences. But the assumption of my article was that, in addition to being many faceted, the russophile movement is also in some way a single movement; and on that assumption, I sought to emphasize the aspects that make it a unity. Those aspects are the special status that russophiles accord Russia among nations; and Orthodoxy among religions, and the championing of authoritarianism as the appropriate type of regime for Russia. Undoubtedly, the weight given to each aspect varies from one russophile to another.

Thus, I agree that the present Russian nationalists include different groups. As a matter of fact, I noted this in my article: "No doubt, an appreciable number of moderate nationalists do live in the Soviet Union, and do believe that Russia would benefit from political liberalism." But the Soviet Union lacks elections in which such beliefs can be transformed into power. Therefore, I concentrated my attention on the reactionary groups of nationalists.

I did so on the basis of two further assumptions: first, that the Soviet empire is (in Gorbachev's words) "on the eve of a crisis," and second, that in a period of crisis, moderate nationalists "tend to become allies of the chauvinists, attracted as they are by the latter's ideals and resolve." Looking at Russian nationalism not as a pollster but as a political scientist, I expressed fear that the fanaticism and sincerity of the chauvinists would overcome the resistance of their more moderate brethren. In a time of emergency, the moderate Russian nationalists might well end up following the reactionaries, even while expressing disgust at their fanaticism and immorality.

Such are the assumptions under which I posed the question whether glasnost might bring to power a reactionary regime. I remain convinced that it is not an idle question.

A second aspect of Gibian's criticism also merits a response. He says I leave out "those in the Soviet Union who have spoken out for a generous conception of Russianness - who reject and militate against xenophobia, anti-Semitism, and anti-Asian prejudice, and who stress the tolerant tradition of the Russian national heritage." He particularly cites Academician Dmitrij Likhachov as "the most prominent and vocal advocate of such Russian patriotism." Gibian calls my failure to mention Likhachov's generous conceptions "a glaring error."

No doubt, Likhachov is dedicated to Russia, and he is doing great things to develop Russian culture, to bring together Russia and the West, to criticize Stalin's era (when he himself was in prison), and so forth. Nevertheless, I hope that Gibian has had the opportunity to read the long interview that Likhachov gave to the liberal journal Ogonyek[69] concerning the millennial anniversary of Russia's conversion to Christianity. Westerners and nonspecialists might find this interview innocuous enough. But to readers familiar with the Russian skill in making points by indirection, it is anything but "generous Russianism." Let me give some examples.

"To the extent that Christianity is international, it is a great religion," says Likhachov. "I do not want to mention religions belonging to one folk. There are several such religions, but it is a great deficiency of these religions." This is someone who rejects anti-Semitism?

"The state simply cannot live with divided beliefs," Likhachov maintains. "This was a multinational state and that is why it required an international religion." This is an advocate of tolerance?

"Novgorod did nothing to unite Russia because it was a republic; the Metropolitan of the Russian world moved to Moscow [an autocracy] ,and Moscow became the symbol of the spiritual integration." This is an advocate of democratic rule?

Likhachov says that from the baptism of Russia came a "synthesis with the culture of the Byzantine empire, the most advanced country of that time." This "most advanced country" was then ruled over by Basil II, a ruler perhaps best noted for having put out the eyes of fifteen thousand prisoners of war.

In an article entitled "Russia," published after the interview, Academician Likhachov reiterates the theme of Russian superiority, but this time compared to world culture in general.

The Russian land created its own artistic styles during the ancient period of its evolution prior to the era of Peter's reforms. After Peter, Russian culture became part of the global development of art in the West constantly transforming artistic styles arising in the West and resounding in Russia. Resounding and how! In Russia every style assumed not only its peculiar but also its ultimate form. [My underline. A. K.][70]

For all these reasons, I would not count on Academician Likhachov to represent the forces of liberalism in a time of systemic crisis.

But let us go back to the main topic of the present section: to the history of Russian nationalism in the Soviet period. In the context of the present work, I feel that it is permissible to use the terms russophiles, nationalists, and chauvinists as synonyms. I understand that there is an essential difference between these concepts, but with respect to those historical events that I will cite, the various aspects that define these three terms are tightly interwoven. Meanwhile, when chauvinism can be singled out as such and when it is advisable to do so in the context of our discussion, I will make it a point to use the term chauvinists.

Russian Nationalism (Some Soviet History)

The opinion that the sharply expressed Russian nationalist tradition was interrupted by the October Revolution and resurrected by Stalin only during the Second World War, and then used by him in the postwar period, has gained wide acceptance.

In my view, the nationalist tradition was never interrupted. Only its forms and its strength changed. Lenin preserved the empire, though he justified it with communist slogans. Under Lenin's rule the concept of "the victory of communism in one country" as opposed to "permanent revolution" had already begun to take shape. Translated into laymen's terms, the first concept signified that world communism could be achieved only under Russia's leadership; the second meant that, for the sake of the triumph of world communism, even Russia could be sacrificed. After Lenin's death the leading advocates of the first point of view were Russians, Bukharin, Rykov, Tomsky, and Uglanov; Stalin, who joined their ranks was not a Russian, but at least was of the Russian Orthodox faith. The leading advocates of the second point of view were Jews: Trotsky (Bronstein), Zinoviev (Radomyslsky), and Kamenev (Rosenfeld). Of course, the first group prevailed. By 1927, the Politburo had been swept clean of Jews; only in 1930 did Stalin bring his protege Lazar M. Kaganovich into the Politburo.

On 12 December 1930 Stalin wrote a letter to the poet Dem'ian Bedny in which he accused him of "slandering and defiling the Russian proletariat," of "debunking the U.S.S.R.," and of portraying "laziness and the yearning to lie around on the stove" as "practically a national character trait of the Russian people in general," all at a time when "the workers of countries throughout the world are applauding the Russian [the emphasis is Stalin's] working class, which they recognize as their leader." However, these were thoughts whose time had not yet come, and this letter was published for the first time in 1952 in a 13-volume collection of Stalin's writings[71].

But if at the beginning of the 1930s Stalin still had reservations about praising the great Russian people, by the middle of that decade he began praising them quite openly.

The first document known to me with respect to this is a 1934 letter entitled "On a Few Mistakes in Illuminating the History of the U.S.S.R." and signed by Stalin, Kirov, and Zhdanov. What was the point of this letter? Recall that the Marxist historical school of Mikhail Pokrovskij, with its slogan "The History of Russia without the Tsars," was dominant at this time. This view did not suit Stalin. The image of the tsar had to be reintroduced. Stalin, in fact, did reintroduce it. Here we see the glorification of Alexander Nevsky and Peter the Great, who were constantly portrayed and evaluated as victorious leaders.

It is curious to note which historians Stalin elevated at this time: Victor Tarle, Sergej Bakhrushin, Boris Grekov, and Mikhail Tikhomirov, that is, men who were neither Marxists nor party members. They were placed at the head of Soviet historical science in order to give a base to a return to traditional Russian ideology.

Soon afterward, in order to be done with his right-wing confederates once and for all, Stalin concocted the accusation against their leader, Bukharin, that he had slandered the Russian people and demeaned the role of the great Russian people. The height of that campaign was the declaration, in a lead article in Pravda dated 27 January 1936, that the Great Russian people had given the world Lomonosov, Lobachevsky, Popov, Pushkin, Chernyshevsky, Mendeleyev, and "such giants of humanity as Lenin and Stalin." Quite a brilliant stunt: to portray Bukharin, a Russian aristocrat by blood, as a slanderer of the Russian people, and Stalin, a Georgian, who spoke Russian with a very heavy accent, as the great son of the Russian nation![72]

Thus, Stalin began propagandizing the idea of the Great Russian nation even before the Second World War.

Nationalist propaganda came into full bloom after the war and was signaled by Stalin's toast to the Great Russian people at a dinner held on the occasion of the Victory Parade on 24 June 1945. This campaign of praising the Russian nation as an "older brother" was accompanied by an unabashed anti-Semitism campaign under the guise of a struggle against cosmopolitanism and against all sorts of Jewish plots, particularly that of the Jewish doctors.

Even though the nationalist propaganda was toned down after Stalin's death, its foundations were nonetheless intact. The nationalist tendencies continued to develop, particularly during the period of Brezhnev's administration.

Under Stalin these nationalistic principles were declared openly, and in this matter it was as though the entire apparatus was legally shifted into nationalistic activity; in the years that followed, on the other hand, the nationalists had to search for new organizational forms of legal activity. Such legal slogans and organizations were indeed found.[73]

In the Brezhnev period Russian nationalists hid behind the slogan "Preserve the Treasures of Russia's Past." What can one say? A concern for the treasures of Russian culture certainly deserves everyone's respect and appreciation. The fact that the bureaucratic system did not appropriate sufficient funds for the preservation of these treasures, and that as a result they fell into ruin, is not something dreamed up the Russian nationalists. The question is, what was behind this campaign? Is it not that the All-Russian Society for the Preservation of Historical and CulturAl Treasures with its staff in a church on Kalininsky Prospect, had turned into one of the active nationalistic and anti-Semitic organizations?

When Andropov came to power, one of his first official acts was to streamline this organization. A lengthy article appeared in Izvestia analyzing the financial problems of the All Russian Society for the Preservation of Historical and Cultural Treasures. Several articles on Russian nationalism also appeared in Pravda. Specifically, Pravda published a story by the renowned author of detective novels, Iulian Semyenov, in which, under the guise of a conversation between a Soviet intelligence officer and members of the Gestapo, nationalism and anti-Semitism are condemned.[74] There was also a humoresque, which, in a brilliantly witty style, poked fun at monuments to Russia's pseudo-heroes.[75] This is all testimony to Andropov's antinationalistic policies.

In saying this, I in no way wish to whitewash Andropov. His antinationalistic course was accompanied, first of all, by unabashed militaristic and anti-American propaganda, including such steps as the destruction of a Korean airliner. This is evidence once again of how opposite tendencies can be meshed together in a bizarre fashion, that is, how one can carry out a course of expansionism by declaring the unification of various nations into one multinational empire with a large and growing proportion of people who are not of the native nationality. However, this sort of decisive action on Andropov's part demonstrates that significant anti-russophile forces exist in the country even today.

However, all of Andropov's antinationalistic measures have not served in any serious way to diminish feelings of nationalism among the people.

Russian Nationalism in Its Present Stage

Outwardly, Gorbachev does not seem to encourage nationalism. However, it is under his rule that a campaign has begun from above to replace personnel, a campaign that Egor Ligachev, at that time the second secretary of the Central Committee of the CPSU, has called a policy of "the regional replacement of personnel." This means that in the republics the control of Russian personnel will be tightened and that advancement will be given first of all to those representatives of local nationalities who have studied and received training in Russian regions (or, at the very least in Slavic Regions).

Rather sharply expressed russophile tendencies have begun to receive greater coverage in the press. Especially zealous are such russophile journals as Molodaia Gvardia, Nash Sovremennik, and Moskva. It seems that Novyj Mir assumed a peculiar nationalistic stand (but far from chauvinistic) geared toward creative intelligentsia, that is, toward presenting profound criticism of the existing socio-economic system and communist ideology, professing a religious orthodox Christian renaissance, and so forth.

The battle against alcoholism is one of the main campaigns for "clearing the air" begun by Gorbachev.[76] Without a doubt, drinking has become a serious impediment to Russia's further development. The russophiles did not fail to immediately take advantage of the situation in order to find the legal means with which to develop nationalistic propaganda. To this aim they use the new, mass-circulation journal Sobriety and Culture. The basic position taken by the journal is that there has been no tradition of alcohol consumption in Russia: this was invented by the enemies of the Russian people. In Russia there was a tradition of drinking tea! And the journal is full of praise for this particular beverage: it recommends various ways to brew it, it includes photographs of people dressed in traditional Russian clothing seated around a samovar, and so on. To complete the nationalistic picture, the journal printed an article exposing a country in which the problems of alcoholism and drug abuse truly are growing. The reader might expect that this country would be, if not Sweden or Finland, then at the very least that bulwark of imperialism, the United States. But alas, in strict keeping with the nationalistic standard, a rising tide of alcoholism, as it turns out, is characteristic of Israel! In V. Demin's lengthy article on the upsurge of alcoholism and drug abuse in Israel entitled "The Logic of Violence-The Logic of Degradation," a theoretical basis is provided for this phenomenon.[77] It goes something like this: What can you expect from Zionists-Fascists-Imperialists who destroy innocent people? How else can they react to their evil deeds than by increasing their consumption of alcohol and narcotics?

The position of major newspapers, especially the "first of the first" newspaper Pravda, is rather ambiguous. In this respect, an article in Pravda that stands out by virtue of its frankness is that of Oleg N. Trubachev, a corresponding member of the Soviet Academy of Sciences[78]. This article details quite openly and frankly, as is only proper during a period of glasnost, the "more than modest position of the Russians" and the "demeaning of the independent historical past of the Slavs" in the works of certain Western historians. Without any semblance of verbal equivocation, Trubachev writes about the grandeur of the Russian language compared to the languages of the other nationalities that comprise the U.S.S.R. Finally, Trubachev's article contains a panegyric directed towards Aleksandr S. Pushkin's famous poem "To the Slanderers of Russia." This poem, which praises Russia's role as a hangman, was written by Pushkin in 1831 immediately after the suppression of the Polish uprising by Nicholas I.[79]

On 21 August 1988, Pravda devoted an entire page to an article by Vera Tkachenko entitled "The Motherland Was Given to Us One Time Only, and to Our Death"; in the middle of the article looms a photograph of rural Russia, with birch trees - the symbol of Russia. During Stalin's time, an article bearing this title would have appealed to Soviet citizens to love Russia because it is the best country on earth with the most progressive political system: socialism. This article preaches suffering, mysticism, and irrational nationalism. It calls for a Russian to be proud of being able to share the hardships with his country, to be buried in his motherland. Public reaction to this article was published by Pravda on the 7 September 1987. In spite of some critical reviews, the great majority of responses to Tkachenko's article were positive.

An eruption of nationalism took place on 13 March 1988 with the publication in Sovetskaia Rossiia of an article, taking up an entire page, that sadly enough, became widely known as a letter by Nina Andreeva. This article was actually a manifesto of Russian national-socialism.

I also want to mention the appearance of a russophile newspaper, Literaturnyj Irkutsk. While it is not a major newspaper, its repute extends beyond its local region, if only because it is headed by a well-known Russian russophile writer named Valentin Rasputin.

But the main thing that I wanted to focus on here is the new, spontaneous phenomena, occurring from below in the Russian nationalist movement, which have developed during the period of glasnost.

The old movement for the preservation of historical treasures has grown even stronger and taken on even sharper forms.[80] From all indications, the All-Russian Society for the Preservation of Historical and Cultural Treasures has turned into a bureaucratic organization. In the early 1980s, for some reason, at the Ministry of Aviation Industry a new organization, Pamiat, was created as a society for history and literature buffs, but the program of this organization is essentially the same as that of the All-Russian Society for the Preservation of Historical Treasures. Whereas at the head of the previous society stood such luminaries as the hero of Stalingrad, Marshall V. I . Chujkov, and the extremely talented writer V. Soloukhin, at the head of Pamiat we find such people as the hysterical photojournalist Dmitry D. Vasil'ev, whom nobody knows, and the psychologically imbalanced doctor of economic sciences Valery N. Emelyanov, (who brutally murdered his wife and was acquitted after doctors declared him mentally ill), the author of a book published in Paris under the title Dezionization.[81] Pamiat operates not only in Moscow, but in other cities as well, including Leningrad and Sverdlovsk.[82] In Moscow this society organized its meetings, in which huge numbers of people participated, in the halls of the club of the "Dynamo" factory, the Gorbunov club, and so forth. They accompany their activities related to the preservation of historical treasures and the environment with unabashed anti-Semitic propaganda. The book Protocols of the Zionist Wisemen is the bible of this society. Excerpts are read from it at its heavily attended meetings.

On 6 May 1987, four hundred members of the society organized a demonstration near the Kremlin and demanded a meeting with Gorbachev and Boris N. Eltsyn, a candidate to the Politburo and a secretary of the Moscow branch of the party. Eltsyn agreed to a meeting and the demonstrators, escorted by militiamen, marched down Gorki Street to the headquarters of the Moscow Soviet. On 3 June 1987, Izvestia wrote that the members of Pamiat who took part in the meeting came away quite pleased with it. On 17 May 1987, the liberal newspaper Moscow News published an article about this meeting entitled "Let's Talk as Equals." Let us take Mr. Eltsyn's word when he said in June 1989 that he considers his meeting with Pamiat to be a spot upon his biography.

A number of newspapers have come out against Pamiat. Among them: Izvestia, with an article published on 3 June 1987 entitled "Where Pamiat Leads;" Komsomol'skaia Pravda, with an article entitled "In a State of Poor Memory" published on 22 May 1987, Soviet Culture, with an article entitled "On True Values and False Enemies" published on 18 June 1987, the magazine Ogonek, no. 21, (1987), in an article "What Are You Making a Fuss Over?" and others.

In spite of some clamor in the press, which has diminished in recent years, Pamiat actively pursues its course. It is especially active in Leningrad, where in 1988 they have organized numerous meetings in Rumanzev Gardens attracting large crowds; the authorities did not interfere.

In the last 2 years, a rift has developed in Pamiat, caused not so much by the ideological platform but by the choice of means in the struggle for power. One group which split from Pamiat is headed by an artist, Igor S. Sychev. I do not know the what the attitude of the so-called Informal Russian Cultural Fund is toward Pamiat, but its platform is basically the same. In the winter of 1989, this fund organized a series of concerts of Russian choral music that took place at the Krylia Sovetov stadium in Moscow. Metropolitan Uvenal came to bless the three thousand people who attended one such concert - this is probably the first official blessing of such a large crowd since the Revolution. Not bad in themselves, these concerts are accompanied by russophile propaganda. For instance, the deputy editor of the journal Molodaia Gvardia, Viacheslav Gorbachev, made a speech at one such concert and spoke to the audience about the predominance of Jews in the native art and sciences.

During the time of Gorbachev's rule a pro-Western orientation among the country's youth in the area of art and culture has been stirred up. This orientation is manifesting itself in the emergence of hippies, punkers, modern jazz music and so on. At the same time anti-Western movements among the youth have also risen sharply. These movements were linked in the beginning to the Liubers, young people from the town Liubertsy located outside of Moscow.[83] These were young guys who were in very good physical shape, who were into bodybuilding, and who were trained in karate techniques as well. They even have their own trademark form of dress: lightweight jackets, often not in keeping with the season, wide checkered pants, and narrow black ties. These young men for the most part did not use drugs. Every evening they came into Moscow and chased hippies, punkers, and heavy metal devotees, often beating them up and stealing their fashionable clothes and jewelry.

Perhaps the following couplet from the Liubers' anthem confirms their superpower nationalist character:

We were born and raised in Liubertsy,

The center of raw physical force.

And we believe that our dream will come true.

Liubertsy will become the center of Russia.

Who was behind these Liubers, who was orchestrating their activities so well? How were they able, given the conditions of Soviet life, to find the resources for sports halls, trainers, and so on? These questions remain unanswered.

Liubers left the scene rather quickly: perhaps they were mobilized into the army and send to Afghanistan. According to reports in the Russian weekly Nedelya Liubers made excellent soldiers.

But a holy place is never empty. Soldiers coming home from Afghanistan replenish the ranks of "Afghan Veterans" rather conservative people. Special troops trained to disband street demonstrations were recruited from this group. Moreover, in Moscow, and even more so in Leningrad, there formed fascist groups made up of youth who worship the cult of Hitler.

Finally, in discussing the development of russophilism at the present time, one cannot ignore what is happening in Russian Orthodox Christianity. I in no way mean to suggest that Christianity is closely linked to authoritarianism; the development of Christianity in liberal Russia is entirely possible.[84] But, alas, Christian ideas in Russia, to a great degree due to the fact that they are presented by the Orthodox rite, can be exploited for the establishment of a nationalistic ideology: Russia and Orthodoxy merge into one, since Russia is the only large country representing Orthodoxy.

It is well known that from the middle of the 1930s and particularly during the Second World War and after it, Stalin did a great deal for the reestablishment of the Russian Orthodox church. I cannot vouch for the accuracy of the data, but I recall the following figures: in 1939 there were five hundred churches in the U.S.S.R.; in 1953 there were eleven thousand.

After Stalin's death, the Orthodox church would not give up its ground and began gaining more and more momentum, especially in the 1970s when disillusionment with atheistic ideologies grew. Under Gorbachev, religious movements, and most of all Orthodoxy, are gaining strength. This is evidenced by a number of facts. In the summer of 1987, the patriarch of the Greek Orthodox church, Dimitros, visited Moscow. This was the first visit of its kind in four hundred years. Dissident priest Gleb Iakunin, who was first relieved of his parish and then arrested, was recently given a parish not far from Moscow. In 1986 the Moscow Seminary admitted five times as many new students than in 1985.[85] The celebration in 1988 of the millennial anniversary of the adoption of Christianity in Russia elicited a new wave of religious fervor.

During his visit to Paris in July of 1989, Gorbachev admitted that he had been baptized and that his mother attended church.

In 1988-89, national press published a number of articles in which a few prominent Soviet citizens such as the mathematician and member of the Academy of Sciences Igor R. Shafarevich (Moskovskie Novosti) and writer Iurij Nagibin,[86] who, incidentally, hold radically different political views, openly admitted to being religious. Delegates from among the deputies included priests clothed in cassocks; all this received wide publicity through the television and the press.

Roots of Russian Nationalism

Nationalistic ideas--even manifestations of it in its most extreme forms--are nothing new to Russia.[87] Such ideas found expression even in pre-Revolutionary Russia in the doctrine "Russia is the Third Rome and There Shall Be No Fourth." However, in pre-Revolutionary Russia the majority of the intelligentsia did not share this view. The intelligentsia believed more in liberal ideas, believed that the country could achieve greatness by following a pro-Western course. And we know, of course, that the sympathies of a significant number of liberal-minded intellectuals lay with the Bolsheviks.

After the Revolution, a substantial portion of the intelligentsia came to believe that the Bolsheviks were grooming Russia for greatness, and that the new social system that they were creating would be the best in the world and would serve as a model for development to the rest of the world. In this sense, the Bolsheviks accomplished a revolution after giving legal status to the idea that Russia would leave its provinciality and be transformed into the center of the world. The concept of the triumph of socialism and then of communism in one country only served to strengthen this ideology.

Some Russian intellectuals supported the Bolsheviks because they were continuing the great traditions of Russia by strengthening and expanding the empire. These intellectuals quite reasonably felt that the communist slogans that the Bolsheviks used in their noble task were merely temporary: slogans come and go, but the empire is forever. The successes of Russia in the area of industrialization, the victory over fascist Germany, Stalin's creation after the war of a gigantic war machine, --all of these facts served to strengthen their belief that Russia was the best country on earth.

Thus, over the course of the seventy years since the Revolution several generations, for various reasons, have believed that Russia is the best country on earth.

Even the liberal, pro-Western Russian intellectuals felt that Russia could outstrip the West, using the West's own methods. The last Soviet leader who tried to use this idea was Nikita Khrushchev. He wanted to build communism in the U.S.S.R. as the best system in the world. He apparently still believed that, in the contesst between the two systems, socialism be the victor.

After Khrushchev's removal from office, the new leaders demonstrated a respectable realism and immediately set out to forget about the utopian, propagandistic program of building communism. The slogans about the competition between the two systems were mothballed. I would like to point out in passing that the Scientific Council on the Competition between the Two Systems of the Soviet Academy of Sciences, created under Khrushchev, was disbanded.

Soviet leaders of the post-Khrushchev period no longer claimed to be better than the West.

The new Soviet leadership does still sometimes permit itself a few statements about the superiority of socialism over capitalism. Gorbachev, for instance, told Margaret Thatcher: "The socialist system has many times and in many ways demonstrated its superiority over capitalism. This is not boasting, it's just hard fact. And many of the possibilities of the system have yet to be unveiled and put to use."[88]

These same views were expressed in even starker terms by the secretary of the Central Committee of the CPSU, Alexander Iakovlev, in an interview that he gave to Natan Gardels for the quarterly journal New Perspectives. Iakovlev, giving very high marks to the advantages of the socialist system, stated bluntly: "We must again surprise you people in the West. And that time is just around corner. We will surprise you."

I share Flora Lewis's view that in these statements by Soviet leaders one can find a certain wounded pride. They continue to clutch at the belief that the present system has enough potential to make them worthy rivals of the Western powers and to preserve the empire's prestige, but it is not very likely that they still believe in the superiority of socialism over capitalism.

It seems to me that at the present time, when we already have considerable experience with the building of socialism not only in the Soviet Union, but also in China and Eastern Europe, very few members of the Soviet intelligentsia believe in the superiority of socialism over capitalism. In the 1960s a considerable number of intellectuals, who had been raised to believe in the superiority of socialism, wanted this idea to be put into practice and wanted the Soviet Union to truly become a free, prosperous country and a great world power. For a long time they linked this possibility to a liberalization in the Western mold. However, Brezhnev's rule, which locked the existing system in and set in motion the persecution of liberal dissidents, resulted in their dispersal and left this intelligentsia with no belief in the possibility of a successful, pro-Western development.[89] Russophiles were also subjected to persecution, although to a much lesser degree. Only a small fraction of russophiles, those who through their actions opposed too strongly the canons of authority, experienced persecution.

A certain portion of the Soviet intelligentsia, having despaired of seeing their country achieve greatness by following a pro-Western course and perhaps influenced by the liberal politics of the new Soviet leadership, will return to their former ideals.

However, another portion is trying to find its former ideals in the Russia tradition. "We are different and better than the West. Our values are better than those of the West since they are devoid of mercantilism, individualism, and vanity." This is what the russophiles were saying 150 years ago, and this is what many of them are saying again now.

There is a great deal of evidence of a growing russophile movement within the Russian intelligentsia.[90]

I remember that in 1978 when S. was emigrating from the Soviet Union, he told me that one of the main factors contributing to his decision to leave was the feeling that he was not needed there. Even among his close Russian friends, who up until then had been pro-Western, he noticed a strong shift towards russophilism.

In a letter received in Israel from a prominent Soviet scholar in the U.S.S.R., dated 3 October 1986, it is stated:

This is a new phenomenon in our lives which began soon after your departure [that is, approximately in 1983-A. K.] and I take it very seriously. A certain indicative reorientation in the mindset of the Russian intelligentsia has taken place. The era of "Westernizing" and democracy, or aspirations for such, have gone completely by the wayside. At the end of the seventies one could still see remnants of this era, but now the dominant trend in the mindset of our colleagues and compatriots is Russian patriotism, ethnic awareness, etc.

Thus, the complexity of the situation lies in the fact that russophilism is developing under circumstances. On the one hand, among the members of the Soviet intelligentsia, there is profound disillusionment with liberal ideas and a disbelief both in the ideas of pedantic communism and in the idea of the possibility of developing the country along the lines of the free Western societies: on the other hand, there is a tradition, which has become dominant since the Revolution, of believing that Russia is the best there is.

Notes and References

Some Notes on Soviet Anti-Semitism

Historical Comments

Throughout Soviet history, Jews have been persecuted, though the persecution has gone on under various banners: the struggle against Trotskyites, against cosmopolitanism, and against Zionism. Naturally, the scale of the persecution varied over time.

Mass Anti-Semitism goes back a long way in Russia. Here I am talking only of anti-Semitism inspired from above. The first serious signs of anti-Semitism in the Soviet period appeared, I think, in mid-1924. It was then that Stalin began to move quickly against Zinoviev and Kamenev, the two other leaders who were quite instrumental in his political survival after Lenin's death. According to Yakubovich, it was Stalin who suggested that Kamenev be removed from the chairmanship of the Council of People's Commissars, and replaced by Nikolai Rykov, and ethnic Russian. Stalin argued that it was unwise in a Russian state to have a Jew, Kamenev, head the Council of People's Commissars, or, more precisely, to let a Jew hold the chairmanship of this post jointly with that of Workers' and Peasants' Defense Council. These two positions, as we know, were once jointly held by Lenin. The Politburo approved Stalin's motion. Behind the scenes, again according to Yakubovich, Stalin allegedly told Rykov, "We shall get rid of the Jews." And indeed, just three years later, in 1927, there was not a single Jew left in the Politburo. Only in 1930, when Stalin brought his own underling, Lazar Kaganovich, to the highest policy-making body, was there again a Jew in the Politburo.

In the following years, the repressions against the Jews intensified. Professor Boris Moishezon told me in private conversation that in his opinion, based on the analysis of the documents from the 1930s, the term Trotskyite was that time associated with the Jews. I share his opinion.

An indirect confirmation of this is the following unique fact relayed to me in the mid-1960s by V. Kaplan. She told me that in 1937 (or in1938) her husband Kaplan was removed from his post in Stalin's staff, where his job was to edit the leader's works. Others of the same nationality were removed from their positions on Stalin's staff at about the same time. Subsequently Kaplan worked as an editor in a union publishing house, and only after Stalin's death did he transfer to the Party Committee for the City of Moscow.

In the early 1930s the Kaplan family was very good friends with Alexander S. Shcherbakov. By then, Shcherbakov played an important role in the party, and was appointed in 1934 as its representative to the Writers' Union of the U.S.S.R. In 1936 he moved to Leningrad (he was appointed the second secretary of the Leningrad Province Party Committee), and then to the Ukraine. When in Moscow on official visits Shcherbakov would usually stay with Kaplans. During on of his visits to Moscow from Siberia to a meeting with then-all-powerful Peoples' Commissar for Internal Affairs, Nikolaj I. Ezhov, Shcherbakov did not stay with the Kaplans. He called them and apologized for having to stay at the Savoi Hotel (presently the Berlin Hotel), where he was being guarded by a man from the NKVD. He promised to call Kaplans after the meeting. The call never came. This was a very troubled time, and there was nothing unusual in a person not coming home after a meeting with Ezhov. The Kaplans were understandably worried. Early in the morning, Kaplan's wife went to the hotel. Being a close friend, she woke Shcherbakov up and asked him why he had not called. In response, Shcherbakov reluctantly (or, maybe only sleepily) mumbled something about his meeting with Ezhov, who had spoken about the many Jews in the ranks of the enemies of the people: Trotskyites. Kaplan's wife said, "How can you think that, you know it is not true!" The subject of the conversation quickly changed. They stayed together until 2 P.M. talking about various things, when they were joined by Kaplan. I believe that was their last meeting.

The anti-semitic policies of the 1930s, however, touched only the next-highest layer of the hierarchy: The members of the Central Committee and party leaders of the provinces (oblasty). Until 1936-38, six Jews were the secretaries of the regional party committees in the Ukraine. After the Great Purges, there were none. There was not, as far as I know, a single Jew besides Kaganovich, who after 1937 held an officially elective party office of at least the level of provincial secretary.

The Soviet Jewish population as a whole began to feel the impact of official anti-Semitism during World War II. This expressed itself, inter alia, in a restriction in the admission of Jews into the best universities and colleges, in particular, into the newly reestablished Department of International Affairs at the Moscow State University. I personally experienced discrimination during the war, when I was a student at the Uzbekistan Institute of National Economy in Samarkand. As the institute did not have a graduate course, and I wished to continue my studies, I decided to transfer in 1944 to the School of Economics at the Moscow State University. My friends from Samarkand, who had returned to Moscow, told me by letter that I would be unable to do this because of the restriction on the admission of Jews to the university. Nevertheless, with great difficulty, I obtained an interview with the dean of the School of Economics, Professor Ivan D. Udaltsov, who questioned me on a wide variety of subjects, including whether I had any relatives in the trade-union movement in Odessa in 1905. Needless to say, I was refused admission. I was able to transfer, with considerable difficulty, to the Moscow State Institute of Economics, from which I graduated in 1946. Of the nineteen graduates of the institute, I was the only Jew recommended for postgraduate work, although there was no shortage of Jewish graduates whose ability was considerably greater than that of the students recommended for such work. However, it should be pointed out that several young Jewish men, who had graduated form the institute before the war and who had by then returned from the front, were accepted along with me. Thus, even prior to the creation of the State of Israel, there was noticeable anti-Semitic discrimination in the U.S.S.R.

The official anti-Semitic discrimination was greatly intensified in the mid-1940s in the so-called struggle against Cosmopolitanism. The purpose of this struggle was not only to liquidate Jewish institutions and their leaders but also to remove Jews from management positions, from the party apparatus, and from Soviet cultural life.

The official anti-Jewish campaign of the late 1940s was linked with an attempt to accuse the entire Jewish population of disloyalty to the U.S.S.R.1 It is particularly interesting to consider in addition the information received from the well-known Soviet specialist in international finance, the late Academician Joseph A. Trakhtenberg. According to him, sometime around February 1953, after the "Doctors' plot" had been announced and before Stalin's death, the Editor-in-Chief of Pravda brought together a large group of prominent Soviet Jews, of whom Trakhtenberg was one. He suggested that they sign an appeal to the Soviet Jewish population to convince them of the necessity of moving to Siberia. They were offered this rationalization as the experience of the postwar years had shown, there were many Jewish renegades, saboteur, and the like who had sold out to the Joint and other Western intelligence organizations. According to Marxist-Leninist doctrine, the objective cause of this phenomenon was that the Jews lacked their own working class and collectivized peasantry. The Soviet government wished to help the Jews to correct their mistakes and to create the appropriate conditions for them to build their own working class and collectivized peasantry in Siberia. Trakhtenberg told his close friends that he refused to sign the appeal.

The policies of the Soviet government towards the Jews in the post-Stalinist period have been fairly well described, and I do not with to dwell upon them at great length.

What's New in Anti-Semitic Policy in the U.S.S.R.

The main point is that Russia's historical anti-Semitism was inherited by the U.S.S.R. With the exception of a short period under Lenin, the anti-Semitic policy of the Soviet government has increased. In particular, the attempt to resolve the Jewish problem in the U.S.S.R., where, right after the Revolution, it would seem that optimal conditions for the preservation of Judaism should exist, ended tragically. Throughout the entire course of Soviet history, the destruction of the Jews was carried out under the most varied of campaigns. Anti-Semitism reached its peak at the beginning of 1953, when Stalin planned a mass exile of Jews to Siberia. In subsequent years, though there were ebbs and surges in anti-Semitism, it basically maintained a high level.

Before 1986, the anti-Semitic policy was conducted directly by the Soviet government. For many years the authorities had been orchestrating anti-Semitism from above: officially, in the guise of combating Zionism, and unofficially, through oral directives to various organizations. Anti-Semitism from below was tightly controlled, and the masses were not allowed to express it in an organized way. There were, of course, uncoordinated acts of anti-Semitism committed by individuals that went unpunished, but they scarcely affected the larger picture.

In the last three years, during glasnost, the situation has changed dramatically. For the first time in decades a number of national newspapers, for example, Izvestia, Sovetskaya Kul'tura, and Komsomol'skaya Pravda, ran stories condemning anti-Semitism in the Soviet Union. The word Jew with a neutral and even positive connotations, made its appearance in the print media. The government also took a number of steps to alleviate the situation of Jews by sharply increasing emigration, releasing many long-time refuseniks, allowing Jews to freely visit their friends and relatives in the West, including Israel. Also, former Soviet Jews who have emigrated in the last twenty years are now allowed to come back and visit. The Jewish Cultural Center opened in Moscow, Hebrew can be taught, and Jewish theater troupes are springing up.

Whatever the explanation is for all these changes, the changes themselves, in my view, are real.

Still, this evidence is not sufficient to conclude that the Soviet leadership has now wholeheartedly committed itself to eradicating anti-Semitism. There are other facts that directly or indirectly point to the complicity of government agencies, or at of least some very powerful individuals, in whipping up anti-Semitism. We can at best speak only of the leadership's halfhearted commitment to fight anti-Semitism.

First, Soviet leaders, and Gorbachev in particular, have never publicly denounced anti-Semitism in the country. In fact, Kanovich - a deputy to the May Congress of People's Deputies (1989) - prepared an appeal concerning the growing anti-Semitism in the Soviet Union. This appeal, signed by about two hundred deputies (I believe Boris N. Yeltzin was the first to put down his signature) was handed over to the congress Presidium directly through Gorbachev. Of the numerous appeals made at the congress, this one was never read out (in spite of persistent reminding to so).

Secondly, such perfectly official magazines as Molodaia Gvardiia and Nash Sovremennik are actively engaged in anti-Semitic propaganda variously masked by accepted communist ideology. Some newspapers are not far behind. Of special interest is the publication of 13 March 1988 in Sovetskaya Rossiia of a piece that virtually amounted to a manifesto of Russian national socialism.

Officially, this manifesto was submitted in the form of a letter written by Nina Andreeva, who has a teaching position at the Lensovet Leningrad Technological Institute. From the point of view in which I am interested, I would like to draw your attention to the following principles of the manifesto:

Another peculiarity of the views of the "left liberals" is a blatant of masked cosmopolitan tendency; a certain national "internationalism." I read somewhere that after the Revolution, a delegation of merchants and industrialists came to the Petrosovet to see Trotsky "as a Jew." They wished to address to him their complaint regarding oppression on the part of the Red Guard. Trotsky declared that he was "not a Jew," but an internationalist, which highly perplexed his petitioners.

Trotsky's understanding of "a national" was tinted with shades of inferiority and narrow-mindedness in comparison with his idea of "an international." He therefore emphasized "the national tradition" of October, wrote about "the national in Lenin," affirmed that the Russian people "have not received any kind of cultural inheritance," and things of this sort. We are almost embarrassed to say that it was just this Russian proletariat, whom Trotsky belittled as "backward and uncultured," who committed, in Lenin's words, "three Russian Revolutions," and that the Slavic peoples were in the vanguard of humanity's battle with fascism.

What I have said is of course in no way meant to minimize the historical contribution of other peoples and nationalities. As it is said today, it only lends support to the body of historical truth. . . . When students ask me how it could be that thousands of small villages in Nechernozemia and Siberia were depopulated, I reply that this, too, is a high price to pay for Victory and the rehabilitation of the national economy, as is the irretrievable loss of an enormous number of monuments of Russian national culture. But I am still convince: downplaying the significance of historical consciousness results in a pacifistic waning of national defense and patriotic consciousness; also, the desire for the slightest display of Great Russian national pride is written down as chauvinism.

I am also disturbed by militant cosmopolitanism, now associated with the practice of the "renunciation" of socialism. Unfortunately, we are reminded of this only when novice proponents of this movement create some kind of outrageous disturbance in front of the Smolny or the Kremlin. And what's more, they have gradually trained us to see in this phenomenon a kind of almost innocuous transfer of "place of residence," and not a classoriented or nationality change or shift; the majority of the member of this movement have completed undergraduate and graduate education on our public funds. Overall, many are inclined to view "renunciation" as a certain manifestation of "democracy" and "human rights" since "stagnant socialism" has interfered with the blossoming of individual talents. So then, if in there in the "free world," genius and enterprise are not valued, and haggling with one's conscience does not hold particular interest for special agencies then we can turn back. . . .

As we know, Marx and Engels designated entire peoples as "counterrevolutionary" during particular periods of their histories, depending on their concrete historical roles. I am emphasizing, not classes, not stratas, but precisely peoples. From the basis of a class point of view, they did not hesitate to assign vivid characteristics to a variety of peoples, including Russian, and Poles, and also to the nationality to which they themselves belonged. It is as if the founders of the scientific-proletarian philosophy are reminding us that in the brotherly circle of soviet people, each people and nationality should "preserve the honor of their youth," and not allow themselves to be provoked into nationalistic or chauvinistic attitudes. The national pride and worthiness of all peoples should merge into an internationalism of one socialist society.

It is important to note the fact that among the people named in the manifesto, negative connotations are used exclusively in connection with those of Jewish heritage, such as M. Shatrov, A. Rybakov, Trotsky, Iagoda, Dan, and Martov (listed in the order in which they appear in the text).

This letter threw the Soviet propaganda machinery into a virtual state of paralysis for twenty-four long days. Regional newspapers, with the single possible exception of Tambovskaia Pravda reprinted it. Various party conferences, held in Leningrad, approved it. And only on 6 April, 1988 did an article appear in Pravda, taking up the entire second page and severely criticizing Andreeva's manifesto. It is hard to say why a Moscow media outlet ran Andreeva's letter, why for over three weeks it not only went unchallenged, but was actually welcomed in many places, why all this occurred when both Mikhail Gorbachev and Alexander Yakovlev were away from the capital. The entire story remains shrouded in mystery.

The important thing, however, is not these media deviations from the general party line against anti-Semitism, though they too merit attention. What is important is that, in the last three year, despite official half-measures to combat anti-Semitism, the practical responsibility for keeping anti-Semitism alive has been delegated to the people. To this end, and organization like Pamiat has been allowed to come into existence (even if it was not deliberately created by the authorities, it was not banned either). Because Pamiat received a lot of attention in the Western press, I need not dwell up it here. But Pamiat is by no means the only unofficial society of its kind. For example, the Independent Russian Cultural Foundation advocates similar program (see section Russian Nationalism in Its Present Stage, chapter 7).

In recent months, information from the U.S.S.R. includes not only all sorts of anti-Semitic public statements by members of the group Pamiat and others like it, but reports of anti-Semitic actions on the part of the population. Such incidents have even been reported in the print media.

The newspaper Moscow News, in its 29 May 1988 issue, reported an act of vandalism by two intoxicated men, Pavel Liashchenko (fifty-four years old), and Alexander Ershov (thirty-five years old) who defaced forty-six memorials, sixteen of which were completely destroyed, in the Jewish section of Vostriakovsky Cemetery in Moscow. Newspaper called the action a crime, but it also presented the vandals as educated family men (one of them is an associate professor at the Shakhtinsky branch of the Novocherkassky Polytechnical Institute, and and other is a senior engineer at the same institute.) with spotless records, members of the communist party, who committed an act of vandalism atypical of themselves.

Having gone into a bit of detail on what happened and definitely establishing that the defaced monuments were indeed located in the part of the cemetery reserved for Jews, the author of the article in the paper evaluates the events thusly: "An investigation and thorough follow-up did not reveal any evidence that may have supported nationalistic motives on the part of the criminals. I am firmly convinced that this was a drunken row and not an act of anti-Semitism."

The newspaper further announces that these vandals are to be tried, and that they will compensate for the damage caused, estimated at several thousand rubles.

It is emphasized in the newspaper that these two thugs, who have themselves admitted their guilt, will simply be tried as vandals. In reality, if the two were to be tried for anti-Semitic actions, who knows what consequences might result from this type of judicial process in such times of stagnation and growing licentiousness of the masses?

The development of glasnost has led to the russophiles expressing their anti-Semitic ideas very openly, fearlessly, and sharply. In their unwashed form, these ideas are usually expressed in the samizdat literature; for the most part the official Soviet press still does not allow such ideas to be published openly. Needless to say, even in earlier times the russophiles expressed their ideas openly through samizdat. But before, this was true primarily of russophiles who were outsides of the establishment: Shemanov, Skurlatov, Osipov, and others. Now it is russophiles who belong to the establishment whose ideas appear in the samizdat. I am referring to the correspondence between State Prize laureate Victor Astaf'ev, one of Russia's most talented contemporary writers, and renowned Soviet publicist and researcher Natan Eidel'man, a scholar of Russian history and literature. In his response to Eidel'man, Astaf'ev expresses his great-power views and accuses the Jews of being responsible for many of the evil deeds perpetrated in Russia during the post-Revolutionary period, including the brutal murder of the tsar's family. In his response, Eidel'man tries to reason with Astaf'ev and suggest that he look for the causes of these unfortunate occurrences in themselves, rather than in the Jews. Another work commands attention: The book by a prominent Soviet mathematician, a corresponding member of the Academy of Sciences of the U.S.S.R., Igor R. Shafarevich. The work is entitled Russophobia. It first appeared in samizdat. In 1989 it was published in the West by Posev, and eventually it found its way into the Soviet journals (Nash Sovremennik, in particular). The author asserts that the Jews, being "a small nation," represent a major evil for modern day Russia. The work lives up to the best traditions of anti-Semitic propaganda, resorting to many old stratagems: accusing the Jews of wanting to control other peoples, for example. The only thing lacking in the book is the accusation that Jews perform ritual murders!

Anti-Semitism in the U.S.S.R. is currently being fueled by yet another development. Accusations, directed against the Jews that they had plunged Russia into the October Revolution with disastrous results, have a long history. Considering that the highest echelon of the revolutionary leadership (after Lenin) included many Jews (Trotsky, Zinoviev, Kamenev, Sverdlov, Uritsky, Volodarsky) makes Jewish involvement in the October revolution undeniable. It is quite another matter to blame the Jews for the fact that the Russian people and other nationalities inhabiting the Russian Empire carried out and accepted the revolution. As long as Soviet ideology banned all doubt as to the progressive nature of the October Revolution, all these accusations regarding the excessive role of the Jews were not pertinent. During glasnost, official Soviet press has questioned (although rather timidly) the expediency of the Revolution for Russia. This development makes accusations voiced against the Jews for their participation in the Revolution more dangerous: for now, these accusations have some official backing.

However, the history of the Jewish people reveals that in addition to these general causes, unabashed anti-Semitism, including pogroms, is oftentimes sparked by a current event. For example, one the assassination of Alexander II by an organization with some Jewish members sparked pogroms. At the present time, the burial of the remains of the Tzar family, brutally murdered in 1918 in Ekaterinburg might spark an anti-Semitic eruption. Allegedly, the remains of the family were recently discovered by a Soviet journalist Riabov; this discovery was announced in the Soviet mass media. Orthodox church wanted to have a splendorous funeral for the remains of the innocent victims. Evidence of Jewish participation in this operation was widely publicized. Allegedly, the person in charge of the execution was Jacob Urovsky; he received his orders from the local authorities, in particular, from another Jew Philip Goloshchekin, who, in turn, received his orders from the Chief of the Central Executive Committee, Jacob Sverdlov - a Jew.

How dangerous life has become for Soviet Jews can be gathered from the address of N. Iukhneva to the colloquium on the Ethnography of Petersburg-Leningrad, held on 7 June, 1988.2

Iukhneva, who has a Ph.D. in history and who is a leading scholar at the Institute of Ethnography of the Soviet Academy of Sciences, focused her remarks on "the growth of aggressive nationalistic and anti-Semitic sentiments in contemporary Russian society." She pointed to the rumors of impending Jewish pogroms circulating in Moscow around the time of the celebration of the millennium of Russian Christianity. Leaflets were being distributed in Moscow calling for pogroms. (Iukhneva read the texts of two such leaflets.) Jews found letters with threats in their mailboxes. Having citing these and a number other facts, the speaker concluded:

Moscow is now perched on the brink of ethnic violence. Let us hope that this won't happen. But what we have rumors, threats, leaflets that are in and of themselves dangerous symptoms of deep-seated problems.

Why am I saying all this in the address devoted to Leningrad? Because the concern are the same. Last year, in Leningrad too there was vandalism at a Jewish cemetery; in Leningrad there are also telephone threats; in Leningrad we again have roaming youth gangs in Mussolini-like black shirts with painted white bells. They show up at scholarly meeting and form an appropriate backdrop to the speeches of their leaders who sloganize about Russia for the Russians, the purity of blood, the unmasking of Jewish-Masonic or Zionist plots. It is our duty to do everything we can to prevent violence in Leningrad.3

In August 1989 leaflets calling for Jewish pogroms were distributed in Mosow. Direct threats of Jewish pogroms were made in Leningrad, in Moldavia, and so on.

According to reports from Moscow, Jews there have started, albeit sporadically, to set up self-defense groups.

The permission that people received under glasnost to express their views, coupled with a much-reduced fear of doing so, has led to the resurgence of the tradition of grass-roots anti-Semitism. Popular participation in anti-Semitic hysteria is extremely dangerous in a period of spiritual crisis, economic stagnation, pervasive food shortages, unusually high prices on liquor, and the future prospects of even higher prices for consumer goods and massive layoffs of which Gorbachev speaks quite openly.

Although Gorbachev himself apparently regards the idea of the Great Russian people with a certain amount of approval, there is, however, no grounds for accusing him of anti-Semitism. One must also remember that Gorbachev, as do many other political leaders under the conditions of a tense political struggle, tries to maintain a centralist position between the radical liberal circles and the nationalist socialists. The liberal program put forward by Gorbachev to reorganize society is incompatible with anti-Semitism, and he apparently is unwilling to give up this plan. Glasnost has given him the opportunity to directly reject the realization of any kind of anti-Semitic actions and to balance himself politically, shifting anti-Semitic fervor to the reactionary circles and masses and counting their growing anti-Semitism as one of the costs of democracy. More concretely, this means that Gorbachev's policy, in the event of extreme necessity, may allow him to "let off steam" through the anti-Semitic acts of the masses. This is, of course, a very risky game, since given the current situation, the masses may themselves initiate anti-Semitic actions, even if Gorbachev preferred not to allow this at the particular moment. They chose the events in Nagorno Karabakh demonstrate that the nationalistic sentiments of the masses are extremely difficult to control. In addition, Gorbachev's rivals may even organize Jewish pogroms, which would place him in a very difficult position both at home and abroad.

Current events in the U.S.S.R. lead me to believe that Russia now stands on the threshold of a new explosion of anti-Semitism.

What are the consequences for Jewish people in the Soviet Union and for Jewish organizations in the West? The answer is quite simple: while the situation is still favorable, Soviet Jews should emigrate as soon as possible, without waiting for pogrom to take place. Organizations in the West who handle Jewish emigration from the Soviet Union face a harder dilemma. Because emigration from the U.S.S.R. has become much easier, and because many longtime refuseniks are now being released, it is no longer so necessary for Western Jewish organizations to concentrate primarily on these issues, as they have quite correctly done before. It will be recalled that Soviet authorities have also removed many obstacles to the development of Jewish culture in the country. These phenomena pose a challenge to Western Jews: to refocus their attention on new ways of helping their Soviet brethren. Many Jewish leaders, taking note of the recent positive changes, suggest that the main efforts be directed toward assisting Soviet Jews with their cultural advancement in Russia itself. Since some positive changes have indeed taken place, these suggestions deserve to be taken very seriously.

Still, to base strategy on the evidence of positive changes alone is too risky, because of the presence of other, opposite trends, some of which I have tried to outline above; these other trend, furthermore, appear to me to be so strong as to require Jewish leaders to concentrate on getting as many Soviet Jews out of the country as possible.

Even if the Jewish organizations come to agree with my assessment of the current contradictory situation of Soviet Jews, I am not so naive as to think that they would immediately move to implement my suggestions in practice. There are considerable obstacles to such a shift in policy. American Jewish organizations have long been pressured by Israel to do everything they can to increase the number of Soviets Jews going to Israel. That some Israeli leaders regard those Soviet Jews who do not go to Israel as a "lost cause," strikes me as a very narrow-minded position, when viewed from the long-term perspective of Jewish history. Beside, Israel might experience difficulty absorbing several hundred thousand Soviet Jews at once. And the moral side of the whole issue is too obvious to be discussed here.

The fact that most Soviet Jews still do not want to move to Israel naturally complicates launching a drive for a massive emigration from the U.S.S.R.

It goes without saying that Israel badly needs an influx of European Jews, and that only Russia can be considered to have a serious potential in that regard. It seems unlikely, however, that this goal can be achieved in any direct fashion. Soviet Jews are deeply assimilated. It is quite difficult for a Jew who was not born in Israel and does not have strong roots there, and who can live comfortably in the Diaspora, to move to a country that is viewed as a besieged fortress and that demands an enormous inner commitment and a strong sense of faith in its long-term survival and prosperity. To achieve increased emigration to Israel requires time and deep changes in the people's psychology which is every bit as objective a constraint, as is scarcity of land and other resources.

If the emphasis is thus maintained on the development of the Jewish people as whole, the present situation would seem to demand that the major efforts of Western Jewish organizations be channeled toward rescuing Soviet Jews while it is still possible. This does not rule out trying to strengthen Israel as the main center of Jewish life. Considerable efforts will also be needed to establish a close relationship between would-be Soviet emigrés and Israel, even should they decide not to settle there.

Causes of Anti-Semitism

To gain a deeper insight into the Jewish predicament in the Soviet Union and its possible resolution, it seems worthwhile to examine the issue from a more general perspective, to examine the causes of anti-Semitism and ways to respond to them.

The causes of anti-Semitism have been widely discussed in the literature. A nonspecialist writing about the subject is motivated by ignorance, ambition (the latter reflecting his faith in the nontriviality of his methodology in discussing this age old problem), or perhaps both. As a nonspecialist, I would like to think that my observations on the subject belong at least to second category.

It seems to me that any social phenomenon that has persisted throughout periods of time measured in centuries must have heterogeneous roots; that is, it must find support in the most diverse segments of the population and have roots in a variety of causes that may be intertwined in the most peculiar manner in each individual group.

Indeed, if we look at the phenomenon of anti-Semitism, we see that the most diverse groups of people in a given country, sometimes motivated by very different reasons, have expressed anti-Semitic sentiment. Urban and rural populations alike have been infected with anti-Semitic spirit; educated as well as uneducated classes; intellectuals and "people of the earth"; poor people as well as middle and wealthy classes: persecutors and the persecuted; slaves and free citizens; lumpen and proprietors.

The causes of anti-Semitism are many and diverse. Among the most significant are the religious motives (in countries belonging to the Christian world expressed in such accusations as being responsible for the crucifixion of Christ, or performing ritual slayings of infants) and the fear of being unable to compete with the activeness of the Jews. This fear assumed a variety of forms: general fear before the all-encompassing cooperation among the Jews in conjunction with their ability to penetrate all sphere of social life, from business to politics4; fear of the Jews grabbing the choice professional positions, perhaps taking native women due to their ability to achieve a better standard of living and to their greater responsibility and respect toward their wives and children.

In some cases these fears were not rationally unfounded. The most grave danger was that Jews might take over a particular sphere, especially if this sphere was vital for society's well-being. For instance, if too many Jews become shepherds, doctors, or traders, and they then decided to leave the country and return to the Promised Land, this will cause disruptions in the life of the country by depriving it of essential personnel.

Here I want to refer to a wonderful essay by Z. Zhabotinskij: "Four Sons." The author notes that at the basis of anti-Semitism is the conflict between the fact that initially, when the Jews settle in the territories of other nations, they are willing to perform work that is important to the native people but that, for various reasons (including the lack of know-how to do these jobs, especially complicated ones), is considered "repulsive" by the natives. Eventually, the native population becomes familiar with these tasks and one day discovers that the Jews are too powerful in that rather important area. This leads local authorities to devise all kinds of tricks to get rid of the Jewish domination. This is what happened to the Jews in Egypt where they agreed to become shepherds "for every shepherd is an abomination unto the Egyptians"5; the same took place in the Middle Ages when Jews turned to trade and money lending.

These reasons for anti-Semitism can arise from direct contact with the Jews, a situation characteristic of the so called everyday anti-Semitism, or from widespread notions of the dangers that the Jewish race holds for other peoples (especially if the Jews settle within the territories of other nations but in isolation from them). For instance, in pre-Revolutionary Russia, everyday anti-Semitism was prevalent in the western part of the empire, in the pales where local inhabitants came in contact with the Jews. Here envy was combined with religious superstition and myths of the Jews as devils. As for the greater share of the Russian population, their contact with the Jews was rather limited and the roots of their anti-Semitism were primarily religious (the crucifixion of Christ), superstitious (the ritual slayings), and based on widespread notions of Jews as the Devil's race capable of inflicting tremendous harm. It was only after the Revolution, when the Jews left the pales and settled in the cities, that everyday anti-Semitism became the prevalent form among the masses of the Russian population.

The diversity of groups infected with anti-Semitism, as well as the variety of its causes, can be observed throughout the ages and in all different countries. Of course, the composition of the groups of people engulfed by anti-Semitism, the strength of various motives (sometimes a particular reason may be absent altogether for instance, antipathy against the crucifixion of Christ in non-Christian countries), and, especially, the severity of anti-Semitic sentiment changes depending on the culture of a given country and the particular situation it finds itself in.

All this leads me to conclude that anti-Semitism represents an extremely difficult problem. Is there a solution at all? Can anti-Semitism ever disappear?

In science, before solving the problem one attempts to establish existence of a solution. It was characteristic of seventeenth and eighteenth century science, which achieved outstanding results in many different fields of human endeavor, to believe in the absolute possibility from the construction of perpetual motion machine to the creation of utopian social systems where all people will be forever happy. Nineteenth century science is more sober, limiting the bounds of what is possible. During the first part of the nineteenth century, with the advent of thermodynamics, the impossibility of constructing a perpetual motion machine becomes clear. Galois's outstanding work of 1821 revealed that equations of degree greater than four cannot be solved in radicals (by means of a formula); many other discoveries in mathematics concerned proofs of the existence of nonexistence of a solution, irrelevant of the actual methods of finding it. The social sciences were less fortunate. I know of only a single rigid proof of the impossibility of solving a specific social problem: it pertains to democratic methods of decision making; the proof was conceived by K. Arrow in the second half of the twentieth century.

I cannot claim to have a rigid proof of the impossibility of eradicating anti-Semitism. I only want to note that it seems to me to be a farfetched possibility. In fact, such specific causes of anti-Semitism as a priori false accusations of ritualistic slayings can be dropped; much of the responsibility for the death of Christ can be lifted. Envy towards the Jews can be subdued as directed specifically against the Jews and reduced to general envy (in all its might) of one human being towards another.

The argument that the Jews are capable of capturing key positions in society, thus threatening its well-being in case they decide to leave, can be countered by showing that the number of Jews in each country is too small to capture a critical mass of the key positions of power; besides, at the time of exodus, unlike a forced extradition, the majority of Jews remain in a given country. Moreover, Jewish presence can be considered beneficial in that it forces local population to become more active. Imposing quotas on the number of Jews in certain fields creates the danger of unqualified native population streaming into that area, willing to accommodate their superiors in fighting the so-called Jewish domination. I realize the ambiguity of all these argument, since the socioeconomic sphere defies a clear-cut formulation of the conditions under which protectionism is more advantageous than free trade.

Nevertheless, a number of features attributed to the Jewish character and used in the rational justification of anti-Semitism cannot be overcome in principle. I want to discuss one such anti-Semitic argument prevalent among a very specified segment of the population: intellectuals. It seems to me that the argument advanced by this group plays a particularly important role and largely renders eradication of anti-Semitism impossible.

Intellectuals, the Programming Sphere, and anti-Semitism.

First, a few words about the intellectuals. More than any other group, intellectuals not only observe but can also conceptualize the demands of the situation for the future developments of society. The distinguishing role of the intellectuals lies in the integration of a society, in conciliating the authorities with the masses. Intellectual ideas transform into a force used by the authorities to legitimate and expand their power.6

This does not preclude other groups, holding different views formed on their own according, from playing a very significant role in the life of the country. These groups may in turn influence the intellectuals, providing them with empirical data. But it is the intellectuals who represent the driving force behind the ideas consumed both by those in power and by the masses.

Although sometimes intellectuals repeat the same argument as other groups, they also come up with more sophisticated arguments based on actual fact, that reflect some very real aspects of life, and their concern cannot be written off easily.

It seems that intellectuals are capable of advancing arguments in favor of anti-Semitism that have a real basis and are difficult to rebuff. These arguments are directed specifically at Jews and touch the deep core of the Jewish outlook on the world. Therefore, as long as the Jewish culture continues to exist we should not expect to overcome them. Only by accepting the attitudes (and especially the religion) of the host nation can the Jews hope to put an end to anti-Semitic persecution. Moreover, certain groups of intellectuals may adhere to racial theories of anti-Semitism, that is, that there are distinct genetic characteristics of the Jews. (I shall consider this point below.) In this case, the solution of the problem lies at worst along the lines of the annihilation of the Jews or, at best, along the lines of their expulsion from the country.

Before proceeding to discuss these problems, I want to make the following remark. There exist certain spheres of society which would, if penetrated by foreign elements with a radically different system of values, present grave dangers, for they are in a position to affect the system of values of the country as a whole (of its major ethnic group), diverting it from its inherent course of development. To clarify the statement, let us distinguish between the "programming sphere" and the "executive sphere" of society.

The programming sphere includes all activities related to the formation of society's genetic code and its transformation into subsystems, which form the foundation of all the diverse social structures and their mechanisms of operation. These two functions, that is, the creation and transformation of the genetic code, interlinked and having a feedback on on another, comprise the programming sphere.

Areas comprising the core of the creation of the genetic code are primarily those connected with culture: ideologies, art, and basic science; areas such as mass media, education, political and economic leadership (especially at the higher levels of the hierarchy and at key positions), and so on, embody the system of code transformation linked to the first one by mutual interactions.

The executive sphere encompasses all activities, mental as well as physical, dealing with the transformation of nature according to the ...passed down... genetic code. The executive sphere may create feedback that affects the genetic code.

Thus it is the infiltration of the Jews into the programming sphere that is considered most dangerous to the development of the native ethnos, since the Jewish system of values may affect its genetic code. It is precisely in this sense that the Jews of the Diaspora are viewed as viruses, which, as we know, have no protein membrane of their own but penetrate the host cell, changing its genetic code.

There is abundant evidence for this attitude towards the Jews. It assumes many different and most phantasmagoric forms such as the documents know as "protocols of the Learned Elders of Zion." Interesting in this respect is a letter (dated June, 1987) circulating in the U.S.S.R. and addressed to Plenum of the Central Committee of the CPSU. The letter is signed by three rather prominent members of Russian intelligentsia: V. G. Brusova, Ph. D. in art history, member of the Union of Soviet Artists, and recipient of the RSFSR State Prize; G. I. Litvinova, Ph. D. in law; and T. A. Ponomareva, member of the Writers' Union of the U.S.S.R. An excerpt from this letter, which denounces the reasons for the "exploitation" of the Russian people in the U.S.S.R., reads:

Statistics, objective and scientific, indicate that the much greater sphere of positions at the top of the social pyramid is presently occupied by individuals belonging to the Jewish race. . . .

Every one of us knows from his own personal experience that an illegal possession of the "brain trust" is not a wild fantasy of the "the Learned Elder of Zion" but is the most real of realities. A flagrant overtaking of all key, leading positions in economics, science, and culture, "accelerated" social growth, have all become a sad reality. . . .

What has this "international," actually "Jewish brain trust," bestowed upon us? It has bestowed upon us uncountable damage to the national economy, trade, ecology, and culture. We were forced to count all these losses and "mistakes," and their scope was too great. It bears responsibility for the destruction of agriculture, the dissolution of "unprofitable villages," the antihuman projects of altering the course of northern rivers, the destruction of Volga; Baikal is under siege. One experiment after another, each one throwing us back, making the flywheel of the powerful Soviet economy perform idle motions. Our system is the most progressive in the world, and we cannot even feed ourselves; at one time we fed all of Europe, part of Africa and Asia with a plow and a cart. It turns out we cannot survive without the help of capitalist powers. And the people work in the sweat of their brow struggling with new unsolvable problems with suck our finances, labor power, deeper and deeper into the disastrous whirlpool, inflicting greater and greater crises, like alcoholism and drug addiction, series of catastrophes, and so on and so forth.

A new heroic effort is called for now to pull the country out of its crisis and to clear the way for progress through perestroika. All this is taking place because "internationalists" refuse to acknowledge the traditions and the life-style of the people or the land, which is not at all dear to them (how much of our best flood lands have sunk under water forever!) nor with the man himself. Are Russians at the GOSPLAN capable of thinking up a scheme to ensure workers' wages from the sale of alcohol? No. This is the historically well-known shadow of a publican robbing and turning people into drunkards.

And the degradation of theater, the proliferation of rock music, the charlatanism in painting? And desertion to enemy countries US and Israel and an almost triumphant return!

No, let us not be "at the leading edge," let us not be so hasty in our decisions, we shall not experiment with the most precious thing we hold so dear: our motherland.7

What is this mysterious Jewish system of values that is capable of penetrating the programming sphere and that the intellectuals fear so much? It is the parity of man and God in the Jewish mentality.

The values inherent in the Jewish mentality reflect the concept of parity between the Jew and the forces of the universe. This quality of the Jewish outlook is especially vivid in Judaism. It is reasonable to think that this religion agrees with the Jewish mentality: it is doubtful that there could fail to be a lack of a strong correlation between the type of mentality and the chosen religion. It follows from the most sacred source of the Jewish faith the Torah that man is comparable with God as the master of the universe. In fact, it follows that this Jewish trait should be understood in the broad sense, that is, not only with respect to God, but also with respect to the environment, including the leaders of state.

An opposite to the Jewish system of values could be based on two extremes: either the subordination of man to the forces governing him (be it God, a leader, or both) or the superiority of man over the forces of the universe. Most religions and ideologies profess the first kind of attitude; in fact, I know of no other religion which claims any kind of equality between man and God. A system of values proclaiming man's superiority to the forces of nature corresponds to communist ideology in its pure form. But its actual implementation in many countries is accompanied by the instituting of authoritarian regime, which is prone to the dangers of transforming into an ideology directed at subjugating man to the forces governing him, that is, an ideology fundamentally foreign to a great number of Jews.

To substantiate my point regarding the Jewish system of values I want to quote some passages from the Torah.

Authors of the Torah had a concept of man as created in God's image and after God's likeness.8 God Himself is presented not as a frozen omnipotent and omniscient force, but as an evolving entity. Man, endowed with creative powers and free will, expands God's power. It is by the people and through the people that God implements the subsequent development of the universe.

Moreover, the role of man is so great that God stands on a par with some chosen ones and concludes a covenant with them. According to the covenant, God promises to multiply the nation coming from Abraham and make Abraham the father of many peoples; in return a Jew agrees to obey God's commandment obliging all Jewish makes to be circumcised.

In principle, a contract between an omnipotent God and man can turn into a pure formality introduced purely for demagogic purposes. For instance, in the U.S.S.R., enterprise management makes a yearly contract with the union, a contract that is supposed to reflect the interests of the workers. But this contract is really an empty formality, since the unions are under the complete control of the government, which is this case is represented by the party and the managerial body.

A sufficient condition for a genuine contract between man and God is that is be based on God's acceptance of His own imperfection, on the one hand, and the greatness of man and man's indispensability for God as an independent force, on the other. Moreover, the contract becomes ever-more feasible if a certain equality, physical as well as intellectual, is established between the two sides.9

Man's physical strength is affirmed in the legend about the struggle between Jacob and God.10 God could not overcome man in this struggle but could only inflict a minor wound: "and the hollow of Jacob's thigh was out of joint." And God said to Jacob: "Thy name shall be called no more Jacob, but Israel: for as a prince hast thou power with God and with men, and hast prevailed."11

"And Jacob called the name of the place Peniel: for I have seen God face to face, and my life is preserved."12

Whatever the interpretation of this passage is, even assuming that Jacob struggled not with God but with an angel, Man still was physically on an equal footing with a heavenly force.

Man's intellectual comparability with God is affirmed by the authors of the Torah in the most general terms in the description of Adam after he tastes from the Tree of Knowledge: Adam even becomes intellectually equal to God. What distinguished Adam from God is that Adam is mortal; Go banished Adam from the garden of Eden so he would not taste from the Tree of Life and become immortal.

And the Lord God said, Behold, the man is become one of us, to know good and evil: and now, lest he put forth his hand, and take also from the tree of life, and eat, and live for ever.

Therefore the Lord God sent him forth from the garden of Eden."13

The authors of the Torah tell other stories confirming the intellectual comparability between man and God. When God was enraged at the disobedience of the Jewish people during their stay in the dessert and decided to annihilate them and replace them with another nation originating from Moses, Moses argues with God and persuades Him to preserve the people.

And the Lord said unto Moses, How long will this people provoke me? and how long will it be ere they believe me, for all the signs which I have shewed among them?

I will smite them with the pestilence, and disinherit them, and will make of thee a greater nation and mightier than they.

And Moses said unto the Lord, Then the Egyptians shall hear it, (for thou broughtest up this people in thy might from among them;)

And they will tell it to the inhabitants of this land: for they have heard that thou Lord art among this people, that thou Lord art seen face to face, and that thy cloud standeth over them, and that thou goest before them, by daytime in a pillar of a cloud, and in a pillar of fire by night.

Now if thou shalt kill all this people as one man, then the nations which have heard the fame of thee will speak, saying,

Because the Lord was not able to bring this people into the land which he sware unto them, therefore he hath slain them in the wilderness.

And now, I beseech thee, let the power of my Lord be great, according as thou hast spoken, saying,

The Lord is longsuffering, and of great mercy, forgiving iniquity and transgression, and by no means clearing the guilty, visiting the iniquity of the fathers upon the children unto the third and fourth generation.

Pardon, I beseech thee, the iniquity of this people according unto the greatness of they mercy, and as thou hast forgiven this people, from Egypt even until now.

And the Lord said, I have pardoned according to thy word."14

The Jewish attitude toward God as an equal force (in some sense), the defiance and rejection of idols, all find an explicit manifestation in the Torah in a very critical attitude toward the leaders of state. Evidence for this can be found in the sermons concerning the future king of the Jews in the Promised Land addressed to the Jews during their plight in the desert.

When thou art come unto the land which the Lord thy God giveth thee, and shalt possess it, and shalt dwell therein, and shalt say, I will set a king over me, like as all the nations that are about me;

Thou shalt in any wise set him king over thee, whom the Lord thy God shall choose: one from among thy brethren shalt thou set king over thee: thou mayest not set a stranger over thee, which is not thy brother.

But he shall not multiply horses to himself, nor cause the people to return to Egypt, to the end that he should multiply horses: for as much as the Lord hath said unto you, Ye shall henceforth return no more that way.

Neither shall he multiply wives to himself, that his heart turn not away: neither shall he greatly multiply to himself silver and gold.

And it shall be, when he sitteth upon the throne of his kingdom, that he shall write him a copy of this law in a book out of that which is before the priests the Levites:

And it shall be with him, and he shall read therein all the days of his life: that he may learn to fear the Lord his God, to keep all the words of this law and these statutes, to do them:

That his heart be not lifted up above his brethren, and that he turn not aside from the commandment, to the right hand, or to the left: to the end that he may prolong his days and his kingdom, he, and his children, in the midst of Israel."15

All in all, it follows from the preceding discussion that anti-Semitism can hardly be overcome, that the Jews will for various reasons be incompatible with at least a great number of the surrounding peoples.

I want to note in passing that the category of compatibility as a general systems phenomenon is rather unresearched. Medical science achieved major progress in this area, both theoretical and practical, only in this century. I mean the classification of compatible blood groups essential in blood transfusions; organ transplants accomplished first by donor selection and then by the subsequent integration of the transplanted organ with the host by means of medicine, and so on. Still, the problem of compatibility is one of the least-researched areas of medical science, not to speak of psychology or the social sciences. These observations apply equally well to the problem of the compatibility of different ethnic groups.

How can the "Jewish problem" be solved under these circumstances?

Way of Dealing with the Jewish Problem

First I want to make some methodological remarks. The solution of the Jewish problem, that is, the preservation of the Jews as an ethnic entity, has many aspects to it. I want to examine this issue within the framework of the more general problem in which the Jewish problem is immersed.16 The general categories to be prioritized are at least the following:
1. humanity
2. the Jewish race
3. the Jewish state
4. the Jewish family
5. the Jew as an individual.
Assigning priorities to these categories, simple combinatorics shows that there are 120 five factorial possible combinations. There exist 120 different groups of people (of course, different in size) distinct in terms of their system of priorities. For instance, one group would place development of the Jew as an individual at the forefront, then the Jewish family, the Jewish state, the Jewish race in fourth place, and mankind in fifth Place. Another group might assign top priority to mankind, and then in receding order to the Jewish race, the Jewish state, the Jewish family, and the Jew as an individual. All these differences manifest themselves at a very practical level, splitting Jewish public opinion right down the line. As far as Jewish emigration from the U.S.S.R. is concerned, the first group will assume interest primarily in those Jews who emigrate to Israel, perhaps even thinking it blameworthy to help Jews not going to Israel; next they will evaluate the Diaspora Jews in terms of the latter's views and willingness to extend help to Jews not going to Israel; finally they will be strongly opposed to sending Israeli invitations to non-Jews desiring to leave the Soviet Union through that channel. The second group will proceed to resolve the problem first by advocating for human rights in general, viewing human rights as a major avenue for Jewish emigration from the Soviet Union; second, they will defend the right of a Jew from the Soviet Union to settle in the country of his choice; next, they will encourage Jews to go to Israel; then they will support Jewish upbringing in Jewish families, and finally they will help an individual Jew to maintain his Jewish identity (by giving him the necessary books, for instance).

It is impossibly to say which of these 120 groups is right. I believe all of them are needed. Nevertheless, a specific historical situation may call for the advancement of a particular group as being more conducive to expanding the variety of ethnic groups comprising mankind.

So, let us for the sake of definiteness proceed to analyze the Jewish problem from the general to the specific and examine some major issues within this framework.

First of all, I want to note that I am a proponent of the concept of that a diversity of ethnic groups is essential and that the Jewish problem must be solved by preserving the Jewish race as a distinct ethnic group. I understand that I cannot prove the validity of my point of view. However, I reject the opposite point of view that all ethnic groups ought to be mixed together and that assimilation is the true path, for general philosophical considerations.

It can be said that differentiation is the chief direction of development; integration accompanies this process. It is of course very tempting to integrate on the basis of homogeneity, of unification. However, such a system cannot develop and, in the end, would not be able to grow or survive. At least, in the past such systems have failed to grow or survive, whether unorganized or organized, social worlds. It can be supposed that this will also hold true for the future, if only because on the one hand, no system can completely anticipate the future, and because on the other hand, one can function optimally in an undistinguished world, preserving variety and the possibility of changing proportions between objects, depending on the situation that arises.

Current achievements in the field of genetics substantiate the opinions of conservative scientists that genetic features predispose one to a certain culture but do not determine it. Interesting in this regard is the book by Charls Lumsden and Edward Wilson, Genes, Mind, and Culture, in which the authors claim "the first attempt to trace the development of genes through cultural consciousness." Their conception "is constructed in such a manner as to include all types of cultural systems, beginning with the protocultures of macaques and chimpanzees, up to modern human culture, as well as cultures that can be born only in the imagination.17

Naturally, when speaking of genes and culture, one must be extremely cautious, as it is easy to get wrapped up in all kinds of primitive racial theories. Firstly, it must be remembered that certain genes influence a person's character, which, in turn, creates a predisposition to a certain culture, but does not strictly determine it. Further, from an evolutionary point of view it is advisable to observe the presence of the entire developing diversity of the genetic structure and the diversity of cultures of undifferentiated value that correlate with them as an initial unit. From a global, evolutionary point of view the preservation and multiplication of both a diversity of genes and a diversity of cultures is of principal importance.

Advocating variety in the given sense, I propose the no object within this variety can be compare with another. Only in a concrete situation and from a certain point of view can such a comparison be accomplished and can the importance of the object be ascertained. But such a comparison is only a point in time, and the dominant issue remains the preservation of diversity.18 I understand that of itself, the preservation of diversity embodies a threat. The attempt to preserve a particular ethnic group requires extremely guarded relations with other ethnic groups, if only in order guard against mass intermingling, as the intentions of another group with a different set of values are not always clear. Clearly, it is here that we observe the biological roots for the wariness of certain ethnic groups towards others.

The problem of preserving diversity becomes particularly complicated, given the mechanism of selection, because the process of selection focuses on the search for the best in a given situation. The selection mechanism may turn out to be so strict that it may at times even destroy diversity. The presence of a variety of ethnic groups and their inequality in the face of conditions brought on by a certain historical situation may, because of selection, lead individual groups to strive for exclusiveness. This is a particular danger for large nations, in which chauvinism may become a threat to the existence of humanity. Therefore, I have a certain degree of understanding for the arguments of those who advocate an intermingling of peoples. Nevertheless, considering the arguments I have introduced in the beginning of this chapter, it appears to me that the solutions to the problems of humanity lie in the preservation of a variety of ethnoses as biological and sociocultural groups,19 and the augmentation of this variety of ethnic groups through their successful integration, not unification.

From this point of view, it is essential to resolve the Jewish problem by preserving the ethnic group. Indeed, acknowledging the necessity for a manifold of ethnic groups does not determine how they should be organized. The preservation of the Jewish race poses questions regarding its spatial structuring. In the extreme, an ethnic group can either be scattered throughout the world or be concentrated in one region. In general, the existence of a home territory does not exclude the possibility of living in other areas. Neither does it close the question of what the proportions between the populations in the home territory and the peripheries. In other words, here arises a well-known problem of the Jewish state versus the diaspora. The problem defies an unequivocal solution, for neither alternative can be proved to be the test.

I do not know the critical size of the home territory or the critical number of people that would in effect reduce the role of the Diaspora to zero. In principle, the presence of statehood for a given ethnic group does not at all mean that^...all eggs should be put in one basket."

I realize that acknowledging the need for Diaspora is subject to strong criticism, for it create the danger of Jewish annihilation, especially at times when host countries experience troubles and look for a scapegoat to appease the native population. In principle, such appeasement can take place in any country. For instance, scapegoating in the Soviet Union, which proclaimed the most favorable conditions for the preservation of the Jewish race, has led to many tragedies.

Furthermore, there is a danger that the Jews in the Diaspora will be assimilated with the native population. Moreover, my defense of the Diaspora is inadvertently colored by the personal desire to justify my decision to live in the Diaspora.

Still, I risk thinking that there are considerations in favor of combining statehood and the Diaspora, particularly if the territory of the state is not very large and it is surrounded by a very hostile environment.20 These considerations include the financial help extended to the Jewish state by the Jews living in wealthy countries; the influence of the Jewish lobbies in establishing friendly relations with Israel, and so on and so forth. For instance, according to Theodor Mommsen's History of Rome, the strength of Judea was that the Jews had, together with their own state, major settlements in the most developed cities of the day: Alexandria and Rome.

The danger of assimilation of the Jews in the Diaspora is not so clear-cut. The assimilation process in one group of Jews in the Diaspora is accompanied by the strengthening of the sense of ethnic identity in another, especially prominent with the appearance of the Jewish state. Of course, the ratio between these two groups varies from country to country. Perhaps, in free countries where Jews are not afraid to show their ethnic origin, those rejecting assimilation and strengthening their ethnic background comprise the greater share of the Jewish population. This is visible in the United States, where one can scarcely doubt the growth in interest in Judaism among Jewish youth in the past 30 years.

The Soviet leadership has done everything possible in order to assimilate the Jews. As early as the middle of the 1930s Jewish schools were closed in central Russia, and after the Second World War they were closed in the Ukraine and Byelorussia. At the end of the 1940s, the central Jewish publishing house and the newspapers that it published were destroyed, as were Jewish theaters and such. The more well-known Jewish writers and poets were arrested and killed in Stalinist torture chambers.

Nevertheless, the complete assimilation of the Jews was not accomplished. This is because the assimilation processes of one group of the Jewish population were accompanied by an increase in the ethnic self-awareness of another, reinforced by the presence of a Jewish government and world Judaism. However, the main reason why the assimilation of Jews in the U.S.S.R. has been unsuccessful is because of the presence of strong anti-Semitic tendencies in the country.

Thus, in the past several decades the growth of Jewish youth's interest in Judaism can hardly be doubted. I call this latest phenomenon "the double pyramid effect": It is usually believed that the older generation, the grandfathers and grandmothers, are more conservative and religious, and more closely preserve their ethnic heritage. Their children are usually less inclined toward this, and their grandchildren become complete atheists with no regard for their heritage. In the meantime, we see the opposite tendency. The grandfathers and grandmothers of today, having grown up under the conditions of the assimilators' ideas and having been fertilized by the anti-Semitic mood of the masses, were led to forget their Jewish heritage. They attempted to solve their problems by rejecting the ideas of their Jewish-oriented parents. But they still cherished a hope of adapting to the milieu of their fathers. Their grandchildren, to a large extent, understood the illusion of such methods of problem solving. Thus the pyramid is upside-down---there is the tendency that its tip will again be Judaism.

Let me put forth some thoughts on the attempt to generalize the history of the Jews in the Diaspora.

There arise four possible combinations generated by two factors: the degree of hostility of the environment toward the Jews, and the size of the Jewish population. In rather simplistic terms, the degree of hostility can be denoted as either strong or weak, and the size of the population as either sufficient or insufficient in having the critical mass to preserve the Jewish identity.

Under favorable surroundings but with the size of the population small (in a sense of lacking the critical mass needed to maintain distinct identity), Jews dissolve among the native peoples. This is what happened with the old Jewish settlements in China. Despite hostility from the environment, Jews in sufficient numbers can preserve their ethnicity for a limited period of time. An example of this situation are the Jews of Spain during the time of the Inquisition, when they managed to survive as Marranos. Perhaps this is also true for Russian Jews, especially if we account for the emigration of the active part of the Jews having Jewish identity. The combination of favorable conditions and sufficient size is evident in Jewish communities in England, the United States, and some Latin American countries. Nevertheless, the historical perspective of this experience is too narrow to make any definite conclusions about the prospects of the Jews in these countries. A hostile environment in conjunction with a small population practically leads to the disappearance of the Jews. Modern-day Poland is an example of this situation.

All this leads me to conclude that the Jewish problem probably defies solution if the Jews want to stay an independent ethnic group in a foreign country. It means that there is the need for a Jewish state.

It is stressed in the Torah that the Jewish people ought to have a land of their own, and God promises this and leads them to the land of Canaan.

Of course, the last thesis may be disputed. The Jews survived in the Diaspora, as did the Gypsies (who had no land of their own) and the Armenians. But past experience, both of the Jew and non-Jews, is no guarantee for the future. The lack of statehood could, in certain critical situation be fatal for a particular ethnic group, especially with the development of inexpensive means of mass destruction and the imbalance between the strength of the armed killers and their defenseless victims.

I further believe that statehood is a necessary (but perhaps insufficient) condition for the stable long-run maintenance of an ethnic institutions stemming from it. History show that without statehood and without their own territory, Jews have repeatedly become the objects of oppression, ranging from attempts at their direct physical annihilation (at times very successful) to their expulsion from the country where they lived. It is enough to recall the Torah to illustrate this. Some rulers even invited Jews to live their lands and created favorable conditions for them to do so. But then, when the Jews became strong and began to play a noticeable role in the country's growth, at best they were asked to leave and at worst, attempts were made to exterminate them.

Thus "Abraham dwelt in the land of the Philistines many years as a stranger."21 He lived there in peace under King Abimelech. Then, in the days of famine, Abraham's son Isaac, came to the land of the Philistines. He was received joyously. Isaac flourished in his affairs.

And the man waxed great and he grew more and more until be became very great: he acquired flocks and herds, and a large household, so that the Philistines envied him. And the Philistines stopped up all the wells which his father's servants had dug in the days of his father Abraham, filling them with earth. And Abimelech said unto Isaac: Go from us; for thou art much mightier than we. And Isaac departed thence.22

Joseph, who ended up by Egypt by accident, was singled out by Pharaoh. Joseph's fame was great and he did much for the flourishing of Egypt and the strengthening of Pharaoh. When Joseph informed Pharaoh that his, Joseph's, father and brothers had come to Egypt,

Pharaoh spoke unto Joseph saying: Thy father and thy brothers are come unto thee; the land of Egypt is before thee; in the best of the land make thy father and thy brothers to settle; let them dwell in the land of Goshen. And if thou knowest any able men among them, then make them rulers over my livestock.23

After Joseph died, the children of Israel were fruitful and increased abundantly, and multiplied, and waxed exceedingly mighty; and the land was filled with them. Now there arose a new king over Egypt who knew not Joseph. And he said unto his people: Behold, the people of the children of Israel are too many and too mighty for us; come, let us deal shrewdly with them, lest they multiply and it come to pass that there befallenth us a war, they then join themselves unto our enemies and fight against us, and gain ascendancy over the land.24

Then Pharaoh charge all his people, saying, "Every son that is born ye shall cast into the River.25

The end of this story is well known. Jews succeeded in leaving Egypt, overcoming enormous difficulties in the process and under the threat of complete disappearance.

The "Joseph Model," as Professor Boris Moishezon termed it, is instructive through and through. It has been frequently replayed; in just this century, quite successfully in Germany, the U.S.S.R., and Poland. Who know where it will flare up next?

Thus I share the opinion of those who believe that a Jewish state is needed. I also agree with those who had already realized by the end of the nineteenth century that it is needed now. There was time when God promised Abraham the Land of Canaan for the great nation that shall spring from him. But God said that the time has not come yet, that three hundred years are needed "for the iniquity of the Amorites is not yet full."26 The Holocaust demonstrated the validity of the Zionist perspective that the time for establishing a Jewish state had arrived.

Let us further assume that all my arguments in favor of combining the Diaspora with the Jewish state are wrong, and that all Jews ought to live in the Jewish state. There are still difficult problems arising in this connection concerning the creation of such a state.

I anticipate the question of a perplexed reader: "What is all this discussion about the creation of a Jewish state since such a state, namely Israel, already exists?"

Indeed I share the opinion of those who believe that a Jewish state is needed, and needed now. I also share the opinion of those who see in Israel the best solution to this question at present (more on this point later.) However, I cannot consider this solution the only possible one as far as solving the problem of Jewish statehood as a whole is concerned.

The establishment of a Jewish state could go in at least three different directions: with a view to the past, the present, or the future.

With a view to the past, the establishment of a Jewish state is linked with Israel, the land of our ancestors, the Promised Land. This great idea managed to grab hold of millions of Jews and to succeed. In 1948 Israel was created. In a short period of time, Israel established a democratic system (in spite of a hostile environment and frequent wars), introduced its own agriculture and industry, and put together the pride of Israel: one of the best armies in the world. This is just one more proof that the potential of this nation is so great as to be able to handle new fields that for ages were thought of as foreign to the Jewish people.

On the road to realizing this idea enormous difficulties were encountered, because the state was created among hostile Arabs supplied with modern weaponry by the great powers. Israel, even if it gathered all the Jews, would be hard pressed to produce all the various kinds of modern weapons in quantities sufficient to rebuff possible Muslim bloc countries; the size of the territory makes Israel even more vulnerable.

Take into account that the Arab countries have a culture that predisposes them toward authoritarian regimes and rather awkward economic development and aggression; their economic prosperity is ephemeral, for it hinges on the abundance of one natural resource: oil.27 Israel, on the other hand, possesses a culture predisposed toward pluralistic democracy and its counterpart, effective economic development and a peaceful foreign policy. Therefore, Israel will, for a long time, represent and unpleasantly successful model for Arab countries.²⁸ The military dependence of little Israel on a great power in an age of advanced armaments will remain strong, yet great powers have their own interests and may sacrifice their satellites for the sake of these.

Economic problems and the military danger aggravate the problem of attracting and keeping Jews in Israel when they are not faced with any immediate danger in the Diaspora. These problems complicated the everyday lives of Israelis and make the task of combining this everyday life with a general attachment to the great idea of statehood significantly more difficult.

Looking toward the present, a Jewish state could be created by the purchase of land (I believe projects were made to buy land in Kenya, Canada, or elsewhere). However, the idea of creating a Jewish state by this means was not realized further, because there was no tradition to uphold it. For this reason, aggravated by the difficulties of existing in what might well be a hostile environment,) the set of solutions to the problem of Jewish statehood through Jewish autonomy within the borders of an existing great power is unacceptable. It should first of all be noted that the large democratic countries do not have such autonomous national entities: these countries primarily develop a culture innate to that country. If an ethnic group with its own history, and especially its own land, happens for some reason to be situated in the territory of such a country, it separated into an independent state; an example of this is the separation of Norway from Sweden. Autonomous national entities do exist in authoritarian empires, but their stability always hangs by a thread because the government nation attempts to assimilate them for the purpose of controlling them (it is good to have unity of language and culture) as well as for the purpose of preventing separatist movements. Therefore, even if Soviet Jews had received the Crimea instead of Birobidzhan because it is still within the totalitarian Soviet Union, life would nevertheless have been unbearable there. Moreover, autonomy within authoritarian empires can be revoked at any time.

With a view toward the future, a Jewish state could be created using pioneering ideas based on new technological means. Let's say, for example, a state could be established on floating artificial island, with inexpensive thermonuclear energy drawing a unlimited water resources. Already today, on a small scale, such artificial islands are used for the extraction of oil, and it has been suggested that they might be built in the coastal water of Japan and Saudi Arabia on a larger scale. But maintaining the equilibrium of large-scale floating artificial islands would require a lot of energy.

Other fantastic ideas of a Jewish state speak of Jews settling in space.29 This method is perhaps fraught with even more difficulties, in view of the problems of adapting human physiology to prolonged stays in outer space.

These kinds of outrageous ideas draw on the Jewish pioneering spirit and might be attractive for a number of Jews who have actively joined in civilization. Recall that the Jewish pioneering spirit has a long history, perhaps longer than the idea of the Promised Land. If we study the biblical history of the Jews, then it's clear (naturally in the sense of a hypothesis) that the Jews have been carriers of innovative ideas. Moishezon's series of articles entitled "The Riddles of Ancient Civilizations" in the journal People and Land nos. 1, 2, 3, is enormously interesting in this connection. Let me just cite one excerpt from this series, reminding the reader that anthropologically Jews belong to the Armenoid type.

Approximately 12,000 years ago sharp changed in the life of people of the earth began. The first dwellings appeared and the first fortified settlements, as well as decorations and rock vessels. The first steps were taken toward agriculture and animal husbandry. Archaeologists call these events the "Neolithic revolution." The beginning of the neolithic revolution is now connected with the so-called Natufisk culture on the territory of Israel. There the first city was found, the town of Jericho.

Contemporary data on the development of the Neolithic and subsequent cultures so that, viewed as a whole, it was a process which was constantly expanding in time and scope. New hearths arose and vanished, but in the course of time the Neolithic revolution encompassed all new areas. First northern Mesopotamia and the southern regions of Anatolia, Greece, and the Balkans, and later the Trans-Caucasus, western and northern Iran, southern Tukmenia and southern Mesopotamia were included. From about the seventh century b.c. in Anatolia and northern Mesopotamia, cultures began to develop in which pottery and the beginning elements of metallurgy can be found. These cultures correspond to the so-called Halkolite epoch. From them, once again waves of progress spread to the west, east, and south.

The next archaeological period is the Bronze Era (from 4000 b.c.) which it seems, undisputably had its source in the Gassul-Beersheva culture and the subsequent cultural centers of northern Syria, Sumer, and the Caucasus. An analogous picture is drawn as well from analysis of the archaeological and ancient written record of the so-called Iron Age (from about 1200 b.c.). Aside from the spatial and temporal continuity of the development begun by the Neolithic revolution, archaeologist have found a variety of further links and coincidences of style in cultures separated from one another, in addition to simultaneity in a number of significant changes and innovations. It sometimes seems that the process of humankind's progress was only locally determined by freedom of choice and coincidences, but as a whole was as if coordinated and directed. Such an almost mystical sensation can be made rational if we assume the presence of a certain continuity and connection with some stable portion of the active human element, which intuitively goes beyond the unanimated evidences of archeology.

The evidences of ancient sculpture described earlier and the deformation of skulls as early as Neolithic times, as well as the anthropological correlation between metallurgical centers, simply and clearly point in only one direction: the stable portion in the process of cultural evolution in the Neolithic and subsequent eras, that which determined their continuity and connection, was a people anthropologically belonging to the Armenoid type. Moreover, the Armenoid representation of kings and gods and the connection between the Armenoid deformed heads with their conception of nobility makes a still-stronger assumption highly likely. In very ancient times (approximately from 10,000 years b.c.) the Armenoids were one and the same as the upper class, at least in the central part of the Near Eastern cultural center, and their expansion basically corresponded with the process of that center's widening.30

I have briefly described the arguments for and against the creation of a Jewish state according to three possible criteria. In summary the idea of founding a Jewish state based on the first criterion, a view toward the past, succeeded because it was based on a very powerful tradition and, moreover, was technically attainable. The second criterion, the view to the present, apparently failed because in it there was no cementing idea flowing either from the past or toward the future (but connected with the past), and the pragmatism of the present prevailed. The third criterion, a view toward the future, may have a potential for survival from the point of view of exploiting tradition, but it must first of all become technically feasible. Thus for example, for floating islands in open waters cheap energy is needed in great quantities. Controlled thermonuclear reaction is a potential source of unlimited cheap energy from independent (in the sense of not belonging to anybody) water. But alas! How many more years will it be until this is possible? Scientists put the earliest date in the twenty-first century.

Thus, only the first path to creating a Jewish state remains realistic; the one that was realized. Furthermore, assume that the Jewish State of Israel is the sole solution to the problem and that all Jews, that is, all Jews not wanting to assimilate, must live in Israel. How can one organize a mass exodus of Jews from the Diaspora to Israel, if they are not yet faced with a critical situation in Diaspora countries?

It is extremely difficult for me, not having been born in Israel and not possessing deep roots there, and with the opportunity to live under favorable conditions in the Diaspora, to move to country that is a besieged fortress requiring toughness of spirit from the newly arrived and enormous faith in the possibility of a long-term blossoming of Israel. The immigration of Jews to Israel requires time: time to change the psychology of the people---a factor as objective as their situation in the Diaspora.

The Torah contains many deep reflection on the psychology of Jews faced with radical decisions. When God led the Jews out of Egypt to the Promised Land, he could have, brought them immediately by way of a short path through the land of the Philistines. Another path was chosen and here is what the Torah has to say on this point: "Now when Pharaoh let the people go, God did not lead them by way of the land of the Philistines, although it was nearer; for God said, 'The people may have changed of heart when they see war, and return to Egypt.' So God led the people round-about, by way of the wilderness at the Sea of Reeds."31

As everyone knows, it took the Jewish people forty years to walk through the wilderness to the Promised Land. This was a punishment to all who had scorned God. They were frightened by difficulties, since they had grown up in Egypt in slavery; they were afraid of enemies; they had tasted the benefits of the good life, which they had had before the arrival of the last Pharaoh. Torah speaks on this point:

Your carcasses shall fall in this wilderness; and all that were numbered of you, according to your whole number, from twenty years old and upward, which have murmured against me.

Doubtless ye shall not come into the land, concerning which I sware to make you dwell therein, save Caleb the son of Jephunneh, and Joshua the son of Nun.

But your little ones, which ye said should be a prey, them will bring in, and they shall know the land which ye have despised.

But as for you, your carcasses, they shall fall in this wilderness.

And your children shall wander in the wilderness for forty years, and bear your whoredoms, until your carcasses be wasted in the wilderness.

After the number of days in which ye searched the land, even forty days, each day for a year, shall ye bear your iniquities, even forty years, and ye shall know my breach of promise.32

Conclusion

This is not to excuse myself from the moral guilt for leaving the U.S.S.R. on an Israeli visa and yet not going to Israel.

It was my right to leave the Soviet Union and go to any other country that I liked and that was prepared to accept me. But the entire question was how to emigrate. There is an ugliness in much an emigration first of all because it was accomplished through a lie. Of course, much can be said to justify my decision on this point. First of all, the ban on lying is not one of the Ten Commandments (the Torah mentions the unacceptability of lying only in the book of Leviticus, 19:11): and how much our forefathers lied, especially in foreign lands.33 But for me, a lie is a lie regardless of its purpose. And if a man is too weak and happens to lie, he should not justify it but repent.

In leaving the U.S.S.R., I also used the slogans under which a group of steadfast Soviet Jews began the campaign for permission to emigrate to their historical homeland, to the Jewish state. They could resoundingly say to me: Why didn't you organize your own movement for emigration from the U.S.S.R. but not to Israel? It seems to me that such a question has serious foundations.

The Soviet leaders were not allowing Jews to go to Israel. They were cynically selling Jews, who were regarded as government property34 to the U.S. in exchange for détente and the benefits arising thereby. Of course, formally it was more comfortable for the Soviet leaders to permit the Jews to go to Israel. It gave them the opportunity to deprive those emigrating of Soviet citizenship even before they left, and so to avoid all kinds of trouble that the emigrants could cause it they should want to return or to visit friends or relatives in the U.S.S.R.

This revocation of citizenship played upon public opinion, for the revocation was dependent on emigration to a state with whom the U.S.S.R. did not have diplomatic relations.35 In the eyes of other Soviet peoples having their historic homeland within the borders of the Soviet state, the emigration of Jews to Israel justified Jews' right to emigrate (as it did for Germans; Armenian emigration was explained by the fact that they were not born in the U.S.S.R. but was brought there by their parents after the Second World War). Moreover, if Lithuanians or Ukrainians wanted to leave, the government could always claim that these were within the boundaries of the U.S.S.R., and that if they want to reunite with their countrymen then they may be invited to return to their homelands in the U.S.S.R.

Fortunately, starting in October 1989, Jewish emigration from the Soviet Union has taken a different course. While still in the Soviet Union, Jews are now allowed to specify the country where they wish to emigrate. Presently, new problems have confronted the Soviet Jewry. Fearing unrest stemming from worsening economic conditions, nationalistic unrest in the republics, and the possibility of Jewish pogroms, the number of Jews who want to emigrate right away has risen dramatically, perhaps of the order of two hundred thousand. The problem now is which countries can and are willing to take these people in such huge numbers.

What conclusions are to be drawn from all that has been said? The reader should once more reexamine his views on the place of Jews in the world, should try to better understand the strengths and weaknesses of various conceptions guiding a Jew in preserving his ethnicity of choosing his country of habitat. But in any case, whatever his personal choice is, let it not be regarded as the sole possible path for solving such a complex problem.

Notes and References

The Solzhenitsyn Phenomenon

I want to conclude this part of the book with a short chapter devoted to Aleksandr I. Solzhenitsyn. His art, it seems to me, synthesizes our discussion of the two previous sections. I regard Solzhenitsyn as a Russophile of nationalistic variety, meaning that he considers the values of the Russian people to be diametrically opposed to Western values. In addition, he shares the anti-Semitic views of those who hold the Jews to be at the root of all Russia's misery.

In my opinion, some of the most interesting criticism of Solzhenitsyn, revealing his contradictory nature, comes from the pen of Alexander Yanov. I therefore chose to present my views of Solzhenitsyn as a critical review of Yanov's ideas. Our discussion here will be limited to Yanov's latest thoughts on the subject, expounded in the Russian version of his book Russian Ideas and the Year 2000.[91]

This book contains the result of many years' reflections on the fate of Russia, the future of its peoples, on Russia's attitudes toward the West, and so on, as well as observations on the role the russophiles play in the resolution of these issues. Probably one of the most interesting issues raised by Yanov in this book is the theme of Solzhenitsyn: it occupies more that one-sixth of the book. In analyzing the work of Solzhenitsyn, Yanov concentrates on past and present ideals common to all russophiles and on the specific ideals characteristic of certain circles. Not all of Solzhenitsyn's ideas are shared by other russophiles, and a few of them, as for example his suggestion that the empire should be disperse, even generate animosity. Russophiles who wish to preserve the empire, or even to preserve Russia alone, cannot concur with Solzhenitsyn that it would have been advantageous for Russia, surrounded as it is by industrial and industrializing nations (especially such a forbidding enemy as China), to become an agrarian nation. (I do not wish to exaggerate the role of these differences of opinion. The views of extremists before they come into power can differ markedly from the more sober views that they may adopt after gaining power. Thus it was the Bolsheviks, for example, who before the Revolution were the most blatant critics of the Russian empire, which they claimed represented the imprisonment of the masses. Not long after the Revolution, however, they did everything possible in order to preserve and even to expand the Russian empire.) What's more, the basic political orientation of Solzhenitsyn's works harmonizes with the needs of today's russophiles, and is at least close to them in the method of reiterating the past views of slavophiles.

Yanov makes use of a special literary device in order to illustrate the close ties between Solzhenitsyn's views and the views of the slavophiles of the past century. First, Yanov quotes Solzhenitsyn and Aksakov, a nineteenth-century slavophile with corresponding references. Here's the text of the quotes:

You (the leaders of the U.S.S.R.) have unshakable power, a strong, separate closed party, the army, the police, industry, transport and communications systems, mineral and petroleum resources, a monopoly on foreign trade, control of the value of the ruble---but let the people breathe, think and develop![92] "The people want one thing for themselves: the freedoms of life, spirit, and speech. Because they do not interfere in state power, they do not wish the state to interfere in the independent life of their spirit."[93]

Then Yanov writes:

Doesn't this tirade sound as if it had been written by one person? Only the first part, by the way, belongs to Solzhenitsyn. The second part was addressed to completely different leaders at a completely different time. One-hundred-thirty years ago, Konstantin Aksakov recommended to the leader of the orthodox government the same thing that Solzhenitsyn recommends to the Soviet leaders: Take for yourselves complete power, but give the people complete freedom. The people will not interfere in politics---Aksakov and Solzhenitsyn promise---they only want to "breathe, think, and develop" freely.[94]

As Solzhenitsyn has admitted and as Yanov has later shown, slavophilism has a typical fundamentalist, anti-Western character. These views are not only the prerogative of Russia/U.S.S.R.; they exist and even flourish in several other countries.

It is probably even insulting to Solzhenitsyn, the greatest Russian writer of this century, that he's called "Ayatollah Solzhenitsyn". But is this really unfair? Solzhenitsyn's program, which he repeatedly announces ("Letter to the Leaders of the Soviet Union," a speech at Harvard,) and with his literary works of recent years differ very little from Khomeini's views before his ascension to power. What Solzhenitsyn would do if he became the ruler of Russia, the spiritual leader, is not very difficult to guess.

Solzhenitsyn-esque fundamentalism and anti-Western sentiment, which are the keystones of his view of the world, emerge most clearly in his conviction that, in the urban, industrial path of Western development, the true path of Russia's development lies in the people's return to the soil. Unfortunately, Yanov, concentrating on the more important aspects of Solzhenitsyn-esque fundamentalism, fails to bring out this point with adequate emphasis. In my view, without a rather precise understanding of this point it becomes more difficult to understand the intricacies of Solzhenitsyn's view of the world and the reasons underlying his anti-Western bent, regardless of whether Solzhenitsyn himself expresses these views distinctly or indistinctly (explicitly or implicitly). I will therefore mention that Western development has been extroverted, that is, focused on the attainment of individual happiness mainly through social changes based on scientific and technological progress, and on the dynamics of the social organization of society. This of course presupposes the development of the individual; the primacy of the individual is recognized. In other words, society exists for the individual, the individual does not exist for society (this will surely grate on my Russian-speaking readers). We are talking about the development of the individual, not of the egotist; that is, about the development of the human being who also recognizes others as human beings, and who does not view them simply as "cogs in the wheel" existing only in order to play out his whims.

In contrast to the course of Western development is introversion, with a focus on the internal development of the individual. This course is naturally associated with conservative production and an immobile political system.

The complexity of the situation lies in that the conservative position has a valid point. It has hardly been proven that a nation's focus on its industrial development is the only true path. Technical progress can lead to uncontrollable consequences not only in connection with environmental pollution, the potential destruction of humanity from nuclear missiles, or its potential incineration by lasers installed on satellites. The danger of technological progress hails from the impossibility of proving that significant technical achievements will be used for the good of humanity: we say that research on the acceleration of subatomic particles will not lead to a global conflagration, that discoveries in genetic engineering will not yield ubiquitous invisible monsters, and that computers will not lead to the development of humanity on some blind course, but we cannot guarantee it. More than two thousand years ago the Indians understood the danger of technical progress, and built a civilization that rejected technical development and focused on the individual's internal development.

In saying this, I do not wish to refute the expediency of an industrial course of development. I simply wish to say that one should not be so ambitious and arrogant as to believe that the Western model of the development of civilization is the only feasible one.

On the other hand, one should not suppose that the introverted, "rural" course of development is the only true one. The absence of scientific and technological progress leads not only to illness and hunger, but in a longer time-frame, it threatens the existence of humanity because of possible cosmic catastrophes. (In regard to this, I'd like to mention that one of the greatest contributions of Russian philosophers and scholars consists of the creation, development, and practical realization of cosmic philosophy. I have in mind primarily the names of two well-known Russian: Nikolaj F. Fedorov and Konstantin E. Tsiolkovsky.)

The course of development one or another country elects to follow during one or another period of its history is the choice of the people themselves. Do the Russian people want to follow Solzhenitsyn's course? He does not even entertain the thought that the Russian people could choose another course. He is imbued with the faith that the rural course has been preordained by Russia's fate and history. As Yanov demonstrates, Solzhenitsyn does not allow for the possibility that the patriotism of the Russian people permits various viewpoints regarding the country's course of development, and that it is impossible to prove or disprove that one of them is true or false from a universal standpoint.

Under these conditions, the pluralistic mechanism, in conjunction with the democratic one, to a large extent supports the people in the free choice of the course of their development and its shifts during times of change. Richly quoting Solzhenitsyn, Yanov notes that political pluralism is alien to Solzhenitsyn, a profound believer in the existence of a single true path in the development of humanity. Solzhenitsyn's basis for such views lies in his disregard for philosophical pluralism. Yanov rightly recalls the words from Solzhenitsyn's article "Our Pluralists," "there is one truth."[95] It is possible that, in the foreign term "pluralism," at the basis of which lies a conception of the impossibility either of proving or disproving the validity of answers to cardinal questions connected with one or another general course of development, Solzhenitsyn sees undertones of the Russian word pluvat' (literally 'to spit', meaning to degrade or disregard in some negative way).

All of Solzhenitsyn's judgements, as analyzed by Yanov, do not simply concern the reworking of an ideal for the development of Russia. Yanov analyzes them in a broader sense in critically evaluating Russia's current situation, while also searching for the sources that have led to the present state of affairs. There is no denying that the Bolshevik Revolution has brought Russia more than a little grief and, in the end, has plunged the country into stagnation. Everything leads back to the question of where to seek the causes that resulted in the victory of the October Revolution. The answer to this question is closely interwoven with the matter of where to look in order to find a way out of current difficulties.

Yanov demonstrates in detail that Solzhenitsyn does not view the causes of modern Russia's dilemma as having come from within Russia herself, but rather from the influence of the pernicious West, which introduced a foreign element into Russia: Western communistic ideas.

Here we can already see the beginning of a tendency to look to Jews as the cause of Russia's misfortune. In this book, Yanov demonstrates most convincingly that Solzhenitsyn is infected with anti-Semitism. It is sufficiently clear from the examples of Israel Lazerevich Parvus (whose real name is Gelfand) in Lenin in Zurich, and Dmitry (Mordekxaya, Mordke) Bogrov in The Red Wheel that Solzhenitsyn seeks the diabolical powers that, like dark whirlwinds, have been sent to destroy Russia, primarily in Jews.

Yanov presents a detailed examination of the book Lenin in Zurich in a separate section. Here, Solzhenitsyn openly says that Lenin was alien to the genuine interests of Russia, that he was only half Russian (he was actually only one-quarter Russian). Also, Yanov convincingly demonstrates, using numerous references to the book in question, that the primary source of evil was a man who stood behind Lenin, who "according to Lenin's own confession, surpassed him in every aspect." This man was Parvus. Properly speaking, Parvus was not even a human being, but, as is evident from the epithets bestowed on him by Solzhenitsyn and quoted by Yanov, a being with "a brilliant behemoth head," "a seismic feeling of inner nature," "a ruthless and inhuman mind," who in addition had "wandered about Europe as Ahasverus for 25 years." But according to Solzhenitsyn, the Devil can take on various forms. And so, in The Red Wheel Solzhenitsyn paints a portrait of another Jew, Mordke Bogrov, who, having murdered Russia in the presence of Stolypin, confesses to the "shrill and steady three-thousand-year summons" of his race.[96]

This is how Yanov analyzes Solzhenitsyn's devilization of Bogrov (the figures in parentheses correspond to the volume number of Solzhenitsyn's collected works as published in Paris in 1983, and the page number of the corresponding quotation):

The devilization of Bogrov, if one can express it this way, occurs gradually, is introduced carefully, at first using barely noticeable features. Here Bogrov hunches over "to crawl silently and unseen between the revolution and the police" (12:124). After a few more pages his companion suddenly sees him "with his two upper canines elongated, slightly protruding forward when his upper lip was raised during conversation" (12:131). Again after a few more pages he will creep along a pole: "a completely smooth one without a notch, without a jag. . . without any support" (12:138), "rubbing against it with his whole body to crawl off into improbability" (12:141). A page further his similarity to a snake increases: Bogrov "with a compressed and elongated head always slightly bent to one side, and with lips constantly parted" (12:142). Neither a forked tongue nor venom is mentioned yet, only "the narrow head, a little to one side" (12:143), only "he bewitches like the singing of a rare bird, neck extended, and at such moments even seems kind to his enemies" (12:144), although---and here the metaphor becomes dangerously candid for the first time---"he wanted only to let fall a drop of enfeebling poison between them" (12:144)

Now there is no doubt in the reader's mind: before him is a snake. And Bogrov continues to creep along the fateful pole, "he twisted, writhed" (12:157) with his "bewitching glances, his faintly striped head a little to one side" (12:158). The author even senses "how the muscular coils are already tired" (12:163). But all this time "the few drops needed for that fateful moment should be stored up, overflowing---in the mind? in the gut? in the tooth" (12:249). This is how Stolypin sees Bogrov, when the "fateful moment" at last unfolds: to bite "he moved as if wriggling, thin and long, in a tail-coat, black. . . a long-faced, young Jew" (12:248). He has bitten, "gliding by on his black back, he ran off" (12:249). The image of the Jew has merged with the image of the snake. Is the snake only to be understood in the biblical sense?[97]

Accusing Jews of being an alien influence is not new for Russia. Neither is the russophilic bent of an author; even such great writers as Dostoyevski were not strangers to anti-Semitism. Theirs was not ordinary anti-Semitism, it was ideological. The opinion that Dostoyevski's anti-Semitism stemmed from his belief that the Russian masses were God's chosen people is very widespread. This philosophy turns out to be incompatible with the conception of the chosen people held by Judaism, a religion which was a precursor of Christianity.

The overglorification of the rural lifestyle, anti-Westernism, anti-Semitism, and monism, which have been discussed above, do not play such a great role in Solzhenitsyn's philosophy, or indeed in the philosophy of slavophiles in general, simply by chance. On paper, it is relatively easy to criticize the West, Jews, and pluralism and to glorify one's native people. This is logically associated with a nation's sense of morality: it is theoretically more difficult to draw parallels between a people's morality and an urban industrial society. It is not simply by chance that Yanov, again lavishly quoting Solzhenitsyn-esque anti-Western statement, concludes with Solzhenitsyn's quote that "a society in which political parties function cannot increase its morality."

In actuality, Solzhenitsyn and the russophiles perfectly understand the necessity of a revival of morals. Indeed, without a revival of morals it is difficult to anticipate successful long-term development. Morality, with its unconditional requirements such as "Thou shalt not murder" and "Thou shalt not steal," provides each individual with a basic notion of proper behavior in light of the unknowable future. It provides the individual with the opportunity to fashion his moral potential so that he is not caught up in the immediate effects of the moment. Morality provides (especially to good people) the understanding that one is not meant to know what catastrophic results may be caused by the murder of even one dishonest person in the name of the salvation of a thousand others.

The point, however, is not that democratically oriented groups do not notice the vitally important role of morality. The people who compose these groups demonstrate higher moral ideals through their own behavior. Academician Andreg Sakharov and others concerned with the fate of Russia focus primarily on the creation of political and legal conditions that preserve the individual. The history of humanity has demonstrated that, if political and legal structures guaranteeing the sanctity of the individual are not created, and the individual's fate depends largely on the grace of the leaders, then, even given the most refined structures for maintaining morals, political leaders will not be saints. An overwhelming majority of leaders will not restrain their power but will suppress the individual and make a slave of him.

Yanov thoroughly observes Solzhenitsyn's evolution and reveals how, repeating the famous tenets of certain russophilic circles, Solzhenitsyn rejects the creation of a political system in which the leaders would be checked by the political participation of the people and reinforced in designated political institutions, and becomes a vehement advocate of an authoritarian regime. This thought deeply penetrates all of the chapters that Yanov has devoted to analyzing Solzhenitsyn's works. In particular, Yanov notes that his praise of the authoritarian regime involuntarily leads Solzhenitsyn to the old slavophilic idea of "two freedoms": internal and external. Solzhenitsyn, also, believes that one may be dependent politically, but that this is not so important: it is important to preserve internal independence and spiritual freedom. In summarizing Yanov's criticism of Solzhenitsyn's views, it can be said that an internal freedom coupled with an external lack of freedom is the ascetic's destiny. But to build a world assuming that every person can become an ascetic ignores the enormous force exerted by the limitations built into our psychological nature, since the emotional disposition of an individual is largely genetically predetermined to resist slavery; blessed are those who are free of the predisposition of cultivate in themselves asceticism.

Is stands to reason that if there is only a legal system, and morals are absent, society may wallow in bureaucracy and callousness. Incalculable paperwork would be created, as people were forced to run back and forth to judges in order to resolve their differences. Hostility among people would increase although it would take on legal forms. But a certain remark made by Valery N. Chalidze, a staunch defender of rights, comes to mind: the greatness of rights is that they create minimal guarantees for the defense of the individual.

Overidealization of the rural lifestyle, and particularly of the fact that it is accompanied by morality, largely determines relations to the intelligentsia and to education in general. The term obrazovanshchina [a derogatory term for an intellectual with a superfluous education---trans.], demonstrating an extremely negative view of the intelligentsia, was widely used by Solzhenitsyn's quick hand.

Yanov, again using many references to Solzhenitsyn's texts, criticizes his obrazovanshchina in some detail.

In attentively reading obrazovanshchina, it is simply impossible not to notice sentences such as; "a loss of education is not life's most significant loss, and recommendations on how to create a new "sacrificial elite," a new nucleus of people "reared not so much on libraries, but on moral ordeals." It turns out that educational qualifications and number of works published are entirely meaningless since we are reaching the people along with "half literate advocates of religion."[98]

Yanov attempts to reveal the reasons behind Solzhenitsyn's disdain for the intelligentsia and for education. He finds them in Solzhenitsyn's attempt to negate the existence of a contemporary Russian intelligentsia, because it is oriented in a direction alien to russophiles---that is, in the direction of Europeanization, anti-isolationism, and antimessianism.[99]

I share Yanov's opinion regarding obrazovanshchina. But it occurs to me that this phenomenon may have a deeper origin. Education is a very contradictory process, especially if the education is focused on the natural sciences to the detriment of the humanities and the social sciences. Actually, in this instance education may promote the destruction of century-old values, as it fosters the opinion that morality as an absolute value is meaningless, that all values are relative to the current situation. And it must be admitted that the natural sciences may foster the formation of undesirable goals, having acquainted himself with great attainments in the spheres of science and technology, pride may get the better of a person, and it may begin to seem to him that everything is possible. If a ruralist may create a utopia by calling for simplicity and humility, then an obrazovanshchina may also create a utopia, only with different features, that is, promising paradise on earth with an abundance of goods and the unlimited subjugation of nature.

What's more, an education is the natural sciences, particularly falling on primitive philosophical soil, may promote the formation of quasi-primitive rationalism, since it creates the illusion that everything can be rationally explained and created. This type of illusion is the best accomplice in creating a utopian paradise on earth based on strict regulation. Here we already see a step toward the authoritarian regime, which must embody such strict regulation; democracy cannot do this, because it is too chaotic. And so Solzhenitsyn unexpectedly closes with those he hated, the communists infected by the West: the extremes have truly come together!

Thus, Solzhenitsyn is entirely consistent: overidealization of the peasant, morality, and obrazovanshchina.

But the opposite point of view can also be adopted; that is, it can be demonstrated that education does not foster only the creation of utopia. It is precisely a high level of education in the natural sciences that leads to the understanding that not everything is possible, that not only is a perpetual motion machine impossible, but so is a social construction as similar to it as communism is. (Just as a perpetual motion machine presupposes the absence of hindering forces of friction, so communism suggests that resources are unlimited and will not hamper the creation of an abundance of everything that is needed.) It is precisely a high level of education that enables one to understand the great idea of God, in the sense that one understands that the most complex mechanisms reveal an order in the development of the inorganic, the organic, and the social worlds, in counterbalance to the oversimplified notions that at the basis of development are only arbitrary changes (although the role of these should not be ignored either).

It is precisely a high level of education that permits an understand of the enormous role of morality as an institution of development an indeterminate world. We are indebted to the great wisdom of the fathers of American democracy for the creation of a political system, a rarity in its time, that is tolerant of different viewpoints and that provided a haven to Solzhenitsyn. What would Solzhenitsyn have done without a democratic society? Would he have died on a cross, another great martyr? They would not even have given him this---they would have disposed of him on the sly, condemning him to anonymity as authoritarian regimes have done time and time again with people no less talented.

Solzhenitsyn's psychological portrait also emerges from the citations used in the book to analyze his political views.

The impression is created that Solzhenitsyn considers himself a prophet who has come to return Truth to the world. I have tried to understand the origins of this belief, and have come to the conclusion that they lie in his unusual fate. Solzhenitsyn served as a military officer during World War II and came out of it alive, when the majority of his fellow officers were killed; Solzhenitsyn endured Stalinist work camps and remained alive and active, when many others did not survive the camps or were broken by the experience; Solzhenitsyn survived the cancer ward from whence very few emerge alive; Solzhenitsyn preserved much that he created during these years, and, under conditions that were not conducive to creativity, he produced new works that earned him fame not only in Russia but the world over.

As a human prophet who knows the Truth, Solzhenitsyn is intolerant of other views. This intolerance even sometimes leads to conflicts with his own precepts, mainly with his rule that no person should live according to lies. This may be too sarcastic, but one well-know Soviet dissident noted rather aptly that, in Solzhenitsyn's address, he calls for people not to live according to lies but with rights and also with restrictions.)

I think that Yanov is correct in accusing Solzhenitsyn of not following his own precepts. Solzhenitsyn claims that, to Yanov, "everything Russian is hateful," and that Yanov "is published only in Young Communist and other even more trivial publications."[100] I have know Yanov for more that twenty year. Only rarely does one meet a greater patriot of Russia; he is a person who is deeply devoted to Russia's interests and who wishes her success. Yanov certainly considers himself a Russian person, if Russianness is determined not by gene but by participation in the nation's culture (in the broadest sense of the word.) To me, and I feel that I am a follower of Judaism to a large degree (I mean, of course, in the sense that it is common to all mankind), these characteristics are particularly palpable. Yanov was not an insignificant journalist in the U.S.S.R. He has been published in the central press, particularly in the Literary Gazette. One of the articles he had published in this newspaper, "On the Roads of Smolenshchina," which expresses the pain of central Russia's depopulation, brought him to light as one of the leading Soviet journalists, one of those who are able to express the poignant problems of the country's development in spite of press censorship. Yanov has been published in New World, a journal that brought Solzhenitsyn fame. And by the way, as far as I know, Yanov has only published one article in Young Communist. But is was an unusual article, which enthusiastically circulated from person to person. The article was dedicated to the great Russian political figure Aleksander Herzen. Residing in the West, Herzen was not afraid to express his disapproval of Russia's suppression of the insurrection in Poland.

The reader may inquire in bewilderment: "Is it really so courageous to speak out against Russia while living in the West?" Yes, this was incredibly courageous of Herzen, because Russia's imperialist action was widely supported by Russian society. The Russian public considered the great Russian patriot Herzen's statement antipatriotic. Far away from one's homeland, having given it all your service, one must possess considerable bravery to be rejected bot only by its leaders but by the public as well.

I think that Alexander Yanov also has courage, having thrown down a challenge to the great Russian writer, who does not share the democratic ideals of Russia. Here is how Yanov himself writes about it:

For the people of Russia (myself included) Solzhenitsyn was (and for many still is) the nation's conscience, a symbol of that of which we ourselves are not capable. The point here not only concerns artistic talent or legendary courage, the point also lies in the role Solzhenitsyn has played in the spiritual emancipation of the country, and in my own emancipation. The tragedy consists in this person turning up in the ranks of "the new Russian right." I am not saying that this fact itself is indicative of the enormous power the tradition of the right has in Russian culture. . . I want the reader to understand clearly my outlook on Solzhenitsyn. It is embodied in the following question: Why has this person who has done so much for me later betrayed me? And not only betrayed me, but cursed me along with the Russian intelligentsia which he curses?[101]

I will risk a reply to Yanov's last question. It seems to me that Solzhenitsyn has not betrayed Yanov. As a critic of communism, of the godless tyrant Stalin, Solzhenitsyn was perceived by liberal-minded people as their ally. But criticism of communism and Stalin can of course come from the opposite position, from the position of fundamentalism, which had begun to be observed early in Solzhenitsyn's works.

As the African saying goes, "if a crocodile eats your enemy, it does not mean that he is your friend." In general, one should not create idols!

References

General Observations on Soviet Economic Mechanism

In my analysis of the Soviet economy I intend to adopt a general systems approach. It will be recalled that a system can be analyze from multilateral perspective.[102] Generally speaking, among the many facets of the system are the function (in the name of what); the institutions between the function and the necessary ingredients (including energy and information) - structure; the transformation of primary ingredients into final product - process; the tools used to implement the process - operator; and the impact of the system's prehistory on all the aspects mentioned above- genesis. In principle, all these aspects are independent variables. This means that if one aspect is fixed others still maintain a certain degree of freedom. Systems vision consists of multifaceted analysis. Unnecessary arguments among scholars in the same field frequently arise as a result of the system being narrowly viewed from a single perspective.

Function, Structure, and General Properties of Soviet Economic Mechanisms

The economic system created under Stalin and, in principle, remaining to the present day, was functionally oriented toward the country's expansionist development. The economic system's structure and operating mechanism have been formulated for this purpose. The pervasive impact of militarization on Soviet economy is described in chapter 5.

The economic system designed to fulfill this function exhibits an amazing mixture of economic structures of various types.

To use Marxist terminology, these structures correspond to economic formations. The top layer of Soviet bureaucrats lead a life that is nearly communist, what with its declared principle "from each according to his abilities, to each according to his needs." Most Soviet urban dwellers live in a quasi socialist universe, otherwise known as the system of state capitalism, which combines the socialist principles of planning, job security, and pay equality with such capitalist institutions as the labor and consumer goods markets. But the Soviet economic system also had aspects of state feudalism, with all sorts of coercive supraeconomic devices to limit the freedom of workers: in 1940, for example, the workers' freedom to change jobs was sharply curtailed. In agriculture, "state feudalism" was introduced with the creation of the collective farms, the kolkhozes. In construction, especially in remote areas, "state slavery" was preponderant in the form of labor camps. Here, it seems, Stalin acquired two new sources of mass slavery: his own prisoners of war and supposedly serious criminals, that is, those condemned for minor offenses to inordinately long sentences.[103]

This analysis of the Soviet economic structure is strictly at odds with a traditional Marxist approach.

According to the accepted Marxist socioeconomic doctrine, a consistent shift of formations takes place. Each of these formations has its characteristic economic structure. For example, corv'ee is a structure characteristic of feudal society. It is therefore awkward, from the Marxist standpoint, to discuss the fact that an essentially feudal structure functions in the socialist epoch.

But structural formations in society arise because a specific mode of functioning generally corresponds to the existing conditions. Analyzing the development of socioeconomic systems from the standpoint of goals and the conditions of their development, it is possible to see how in every concrete historical situation a synthesis of the various structures occurs. These structures can appear or disappear, depending on how social goals and conditions change. From this point of view, one can say the following: In conditions when an extraordinary task comes to the fore, when important resources are scarce, and when the level of development is low, it might be expedient to use such management mechanisms as slavery and serfdom. If the private economy remains, the worker can either refuse to hand over the article that he has produced or he can produce less. Although we shall not dwell at length on the conditions that demand slavery or corv'ee, we can note the specific advantages of the corv'ee and quitrent systems. Under the quitrent system, the laborer owns his own product and turns over a part of that product, in one form or another, to the lord. On the other hand, under corv'ee, the laborer must carry out direct obligations; the product of his activity clearly does not belong to him. Moreover, it is easier to pressure the serf into fulfilling obligations on the lord's estate than it is to seize the product of the serf's labor. The corv'ee system provides that a small allotment of land will be left to the laborer in order to keep him alive. Therefore, one cannot generalize to a claim that quitrent is more effective than corv'ee. Everything depends on the conditions underlying the two structures.

One may assume that under the conditions created in the 1930s, the introduction of corv'ee in the form of kolkhoz production was one of the most convenient means of confiscating agricultural output in order to carry out a policy of rapid industrialization. (An entirely separate question, however, is whether such rates of industrialization were necessary).

As far as the slave structure is concerned, it too can be used in the Soviet Union. Through the use of the labor-camp system, an enormous project of opening up new regions was undertaken. If the regime were to implement these projects in a capitalist fashion, it would have to incur considerable costs to encourage the workers to move to remote areas, and to make these areas truly comfortable to live in. If adequate resources are lacking, it is much cheaper to forcibly relocate the workers to the newly developing regions, and create the conditions there that are just barely sufficient for their short-term survival. High mortality rates among the conscripted workers can be easily offset by new cohorts of similarly relocated personnel.

To sum up, we can say that each country forms its economic system as a synthesis of all the possible economic structures taken in various proportions.

Now let us move to the main subject of this chapter and see how the Soviet economy functions in practice.

Every economic system encounters a variety of conditions reflecting the availability of natural resources, technology, culture, worker qualifications, level of mass production, and so forth. Given this variety of conditions, the operation of an economic system can be organized according to either of the two extreme principles: the unification of all conditions and the subsequent creation of an appropriate, unified mechanism, or the formation of a variety of mechanisms corresponding to the variety of conditions. It is also possible to create one type of mechanism to suit all different conditions. It is very difficult for a bureaucracy to deal with a variety of conditions and mechanisms. Therefore, one finds that the desire to unify conditions and mechanisms is typical of bureaucratic management systems. One readily sees that in the Soviet Union there is a tendency towards unification. The communist ideology facilitates aspirations along this line by asserting that all complexity in the management of economic systems is temporary, that is, typical only of the transitional period from capitalism to socialism and from socialism to communism. The ideal for the communist is a society in which everything will be organized in a simple way, because all of the needs of the people will be satisfied and the system of production will be directly oriented towards the satisfaction of these needs.

Because the modern economic system is so complex, Soviet leaders must pay attention to the variety of conditions and to the efficiency of various mechanisms. At the present time this variety is formed randomly rather than on the basis of a sound economic theory. As a result, one sees many inconsistencies in the actions of the participants in the Soviet economic system.

What is needed is a sophisticated theory that ordains not only the ways of constructing individual economic mechanisms - planned or market-type - but also a method of synthesizing them.

The Soviet Planning System

The Soviet economy rests on total planning. I do not wish to contribute to an abstract discussion as to whether planning is good or bad in general. My purpose here is only to pinpoint some negative aspects of planning, which I think are important and about which I believe I can say something new.

Planning Technological Progress

Soviet economic theory contains no clear-cut notions about how to organize the production and implementation of new technological and scientific ideas. The Soviet centrally planned economy has been incapable of intensive growth based on technological advances. This system was best, above all, for accomplishing the extraordinary tasks of quickly creating a military potential with the help of largely existing technologies, that is, for extensive growth in pursuit of one clearly limited goal.

Because of a monolithic ideology and a single source of financing for science, it is difficult to expect the emergence of pioneering ideas, even if there is enough broad cultural tolerance for upstarts who challenge the scientific establishment. It is no surprise that the ratio of Nobel Prize winners to the total number of scientists in the Soviet Union is so pathetically small. Even if pioneering ideas appear first in the West, they may go begging in the U.S.S.R. for a long time. This is true not only of the hoary cybernetics and genetics, but also of such fairly recent revolutionary breakthroughs as the tectonic theory in geology. New scientific ideas get taken up only when they show a significant operational potential of a military nature. Then and only then does the Soviet military intervene and insist that there is an urgent need to finance the innovation. I do not know of a single new scientific idea of any real importance - whether born in the West or homegrown - that was given a green light without powerful prodding by the military. It is the military men who can champion the new because they are responsible for the armed might of the country - a matter of utmost import for the leaders, second only to their own political survival.

Technological innovation through the plan also encounters great complexities. Under centralized planning the head of an enterprise is evaluated based on plan fulfillment. It is extremely difficult to determine whose fault it is if a production plan goes unfulfilled: if the plan assumes the introduction of a new technology, it could be the boss's fault, but it could also be due to glitches in the new equipment. Planning for familiar equipment is another matter; here, it is easier to fulfill the plan and to fix blame in case of failure. I think that the closeness of the relationship between Soviet leaders and those who create new military hardware is also conditioned by the leaders' desire to have reliable people they can trust to advise them on the reasons for possible mishaps in creating the new. But is it possible for the leaders of a country to be close to all the creators of the new?

Hierarchical economic systems, generally speaking, are most efficient in situations where the goal is reasonably clear, and where what is needed is for the center to concentrate resources for the most promising projects, and to coordinate the efforts of the participants. But in the field of R and D there is a need for parallel and independent research and design organizations.

It cannot be overemphasized that parallelism in the field of R and D is not an accidental phenomenon, but one one that inheres in the very nature of uncertain processes. Even when the probable calculations of costs and benefits are theoretically possible, it might make sense to pursue several alternatives simultaneously until it becomes clear which one is more advantageous. I base my conclusions on a pretty elaborate class of mathematical models generally known as "multiproject bandit processes."[104] The need for parallelism is still more apparent in basic R and D, when we may not have even a probabilistic knowledge of costs and benefits, and have to rely instead only on the known predispositions of different scholars to one or another type of research.

Commonly, economists view parallelism as a guarantee of efficient competition. They are right: in certain situations, competition can be a sufficient condition for parallel efforts. But even when it is not, it may still be wise to follow a multitrack policy because of the lack of information, and vice versa.

Being aware of both causes of parallelism is alone sufficient to improve even an essentially centralized economy. But the next decisive step on the road to progress has to await the appearance of decentralization and a multiplicity of independent economic actors personally responsible for their actions.

Within the framework of hierarchical mechanisms, parallel research is usually dubbed duplication of effort. In this context the term acquires a negative meaning: one of the main functions of the Committee on Science and Technology, which manages science in the Soviet Union, is to "fight against duplication." I am not saying that duplication is good in all cases, but in the area of R and D the absence of parallel organizations presents far greater dangers.

Parallel research could might be organized within the framework of a hierarchical mechanism. But the experience of the U.S.S.R. and Germany during Hitler's time shows that parallel investigation under a hierarchical mechanism is a very rare phenomenon. It takes place primarily in the design of military technology. At the same time, such organized parallelism also has some serious disadvantages because it is accompanied by a system of appointments.

Hierarchical mechanisms in R and D are particularly dangerous in totalitarian countries. In these countries, the concept of a leader (führer) for the system as a whole is duplicated in all other areas as well. That is why hierarchical mechanisms have a tough leader whose authority is indisputable.[105]

Long-Range Planning

A glaring gap in the Soviet planning system is in the area of long-range planning.

In the U.S.S.R. one could see only a single attempt to put together a realistic long-range economic outline by Stalin in his speech in 1946. His proposal mentioned only the goal, that is, the output of a certain volume of basic products (steel, pig iron, oil, coal) during the next ten to fifteen years. I do not know of a plan (or a program) that tried to show a way how to achieve this goal. The well-known Soviet twenty-year plan for 1961-1980 was announced by Nikita Khrushchev as the new program of the Communist party of the U.S.S.R. This plan was a sheer political hoax. Its promise to build communism in 1980 was a bad joke.

In the beginning of the 1970s another attempt was made to prepare a twenty year plan for 1971-1990. This plan was to replace the party program, which had proved a total fiasco. After Khrushchev, the leaders became more cautious. They asked both the State Planning Committee and the Academy of Sciences of the U.S.S.R. to prepare an outline of this plan. To the best of my knowledge, according to the preliminary report prepared by the Academy of Sciences, the Soviet Union would be unable to reach the level of output of the US by the year 1990; that is, after seventy-three years of socialist revolution the country with the most progressive socialist economic system cannot reach the level of output of a country based on an obsolete capitalist system.

From this standpoint, it is interesting to note an important feature of Soviet long-range plans. If a plan is announced for one year or five years it is possible to utter in the plan's preamble some meaningless words to the effect that the plan is geared towards a further improvement in the standard of living of the Soviet people, and so forth. In a plan of greater scope, it is necessary to specify the qualitative changes that the plan will bring; these changes have to conform to the greater advantages that the propaganda claims a socialist economy has over a capitalist one. Here a conflict arises in the Soviet society: whether to sacrifice the realism of the plan in the name of the ideology, or to stop any preparation of long-range plans in the name of that same ideology. In the U.S.S.R. it is impossible to develop a realistic long-range plan that could satisfy the ideological requirements: the system is too inefficient.

One could argue that the Soviets could develop a classified long-range plan. To the best of my knowledge, the U.S.S.R. does not have such a plan. It seems to me that the major reason for the absence of these plans lies in the overall structure of the Soviet system and of its planning mechanism in particular. Concentration of short-, mid-, and long-range planning in one organization guarantees that the first two will be given priority over the last; the chief of the organization simply does not have the time to think of long-range problems.

I myself had an opportunity to verify these observations when, many years ago, I tried to get the U.S.S.R. Gosplan interested in the implementation of the ideas of optimal planning. The main objection I ran into was that, due to severe time constraints, Gosplan had to concentrate on current and five-year plans. It is characteristic of these plans that they demand special attention to the issues of technological feasibility and input-output balancing. This approach by the planners is largely determined by the rigidity of the plan. Even in a five-year plan, approximately 80 percent of capital investments is determined by unfinished construction begun during the previous years. Only 20 percent of investment can be varied. In reality, however, a considerable portion of this sum is also determined by the past because it is necessary to have blueprints to start the construction; the preparation of these blueprints takes several years. The portion of expenses allocated for the preparation of blueprints for new plants is relatively small compared to the total amount of investment. If that is the case, does it really make much sense to bother about an optimal allocation of resources? Wouldn't it better to focus on balancing the bulk of resources within the framework of five-year plans?

In other words, rational utilization of resources within a limited period of time (for example, five years) requires, first of all, that the outputs that are predetermined by the past (unfinished construction and existing blueprints) be balanced. The managers are aware of the concept of the existing mechanism of planning performance. This helps them to be more ingenious in balancing inputs-outputs. The elaboration of new concepts, which opens up new avenues in selecting new projects, is quite foreign to the practitioners: they do not have the time to do it. For selection they use old fashioned methods like extrapolation, segmented political insights, and so on. But in the long-run, that is, from the standpoint of long-range development, decisions regarding new projects determine the efficiency of the economic system. In particular, these decisions determine the possibilities of new projects to be undertaken in the next five-year plan; this, in turn, determines the flow of construction in the next period, and the cycle continues.

Soon after Khrushchev came to power, he split up the State Planning Committee - Gosplan - and organized the State Economic Council--Goseconomsovet along with it. The job of this council was to develop long- and mid-range plans; Gosplan was to concentrate on one- and two-year plans. But after a couple years these two organizations were reunited. To the best of my understanding, the reason for this merger was the following: generally speaking, in a totalitarian system all spheres of society are controlled by the leaders. Especially in large countries, the leaders do not have the time to seriously discuss long-range problems because they have to spend most of their time on current issues. Naturally, there were frictions between Gosplan and Goseconomsovet. The members of the Politburo had no time to resolve conflicts between these two organizations.[106]

Let me repeat again that in this book I do not touch upon many other shortcomings of Soviet planning. Very briefly, one such shortcoming has to do with deliberate imbalances in the plan between supply and demand, when the former consistently lags behind the latter. The interested reader can find a fascinating treatment of this problem in the works of the Hungarian economist Janosh Kornai.[107]

Anomalies in the Soviet Hierarchical Economic mechanism

Another set of problems in the Soviet economy concerns the processes of plan formulation and implementation.

Planning in physical terms predominates in Soviet hierarchical-type economic mechanisms, in which the role of the price mechanism is drastically reduced. An economic system based on such a mechanism is appropriately called a command economy. But the greater role of monetary parameters does not mean the introduction of a market. It only means that the participants have more independence in their internal activities because they are faced with less rigid external constraints. Here, it is important to draw a sharp distinction between the notions of deconcentration and decentralization. Decentralization refers to horizontal interactions (excluding, of course, the centralized ones). Deconcentration stands for greater flexibility within the set of vertical interactions.[108]

Concentration is at least a three-dimensional notion of breadth, depth, and length. By the breadth of concentration I mean the number of external parameters pertaining to the economic unit and controlled by a center. By the length of concentration I mean the number of levels in the hierarchy controlled by a center. At different levels the breadth of concentration may be different. By the depth of concentration I mean the extent of intervention by the center in the internal activities of the controlled unit.

The Soviet economic system exhibits an excessive degree of concentration along each of these three axes: enterprises are overburdened by the number of centrally-determined controlling parameters; upper levels of the hierarchy penetrate deep within individual enterprises, even down to the level of setting the wage schedule for their workers; upper echelons largely control the internal activities of subordinate organizations, including their system of appointments and management structure.

All these issues were hotly debated, but never resolved, when a major package of economic reforms was proposed in 1965. The emphasis then was on deconcentration, whereas today, under Gorbachev's perestroika, it has shifted to decentralization, that is, to the market.

It is well known that a hierarchical system assumes some common and specific features at different levels of the hierarchy. Mistakes made in forming this hierarchically organized mechanism in the Soviet Union could be understood, first of all, as a result of the fact that isomorphic processes of management common to all levels were carried out in different ways. This will become more clear if we examine the nature of these mistakes. They are (1) a violation of the hierarchical principle in setting price, and (2) a lack of coordination in aggregate parameters, both in real and in monetary terms.

In the Soviet Union the hierarchical principle of planning input-output in physical terms is fairly systematic, that is, the higher level of the hierarchy hands down a plan to the participants at the next lower level of the hierarchy. However, if one examines the planning of prices, a completely different picture emerges. A central planning agency - in this case the State Committee on Prices - skips many levels and directly sets prices on all products produced by the factories. The factory's planning department sometimes sets prices on all products produced at the level of workshops, thereby violating the hierarchical principle of planning.

I also want to remind the reader that prices are not flexible because they are set for long periods of time.

Price as an economic phenomenon is used only in the interactions between the factories. At higher levels, for example, in the chief departments of the ministries, or in the ministries themselves, interactions are perceived by the participants as a part of state management. At levels of the hierarchy lower than the factory, for example, workshops and sections, relations between the participants are perceived as being purely technical. The view of the factory as a focal point of the hierarchy is not unfounded. It arises from the fact that, as a rule, a Soviet factory is defined as an enterprise delimited by a certain territory. Superior levels of the hierarchy, chief departments and ministers, are located far from the factory in the capital of the country or of the union republic. The lowest levels, workshops and sections, are located inside the factory. The physical separation of the factory makes exercising complete control over it impossible; this contrasts with the highest and lowest levels of the hierarchy where such control is possible. Central planners are forced to spend a lot of time and resources setting prices on the commodities that are consumed within a ministry. For example, in the Ministry of Chemical Industry approximately one-third of all kinds of items (not to be confused with absolute volume of production) are intermediate goods that are consumed within the framework of the ministry. However, the State Committee on Prices sets prices on all of these products.

As already mentioned, prices of products consumed within the factory are set by the factory. This method of price setting has its weaknesses. Generally speaking, at the point of equilibrium the price of any one commodity has to be the same for all consumers. Certain products that are consumed within one factory could be produced by other factories and also consumed within them. In that case, prices of the same commodity will be different in different factories. The disadvantage of this is obvious: factories have no information that can help them determine the economic efficiency of being self-sufficient with respect to a particular product. I know of cases in which chief departments of ministries tried to avoid such problems. For example, during the 1950s the Chief Department for the Production of Motorcycles and Bicycles of the Ministry of Automobiles and Tractors, introduced internal prices on all kinds of instruments produced in the workshops of the factories subordinate to this head department.

Let us now consider another violation in hierarchical mechanisms, a violation that results from lack of coordination in the aggregation of products in physical and monetary terms. Planning in physical terms is associated with different degrees of aggregation according to the level of the managerial hierarchy. The higher the level the greater the degree to which consumed and produced goods are presented in aggregate form. Disaggregation of aggregated inputs-outputs is realized by contracts between factories. As matter of fact, the price mechanism does not involve these processes of aggregation and disaggregation. The Committee on Prices sets prices for all factories and for all the goods they produce, even to the point, say, of setting prices for each variety of fishing hooks.

During the Soviet economic reform of the middle 1960s much attention was focused on developing direct links (priamye sviazi) between enterprises. But in many cases this process was rooted in the imperfections of the planning mechanism based on the hierarchical line, and in the inability of this plan to ensure proper conditions for direct interaction between the links. Let me specify what I mean.

In devising direct links it is necessary, above all, to fulfill certain material prerequisites (materials, equipment, etc.) in the plan. This provides for a certain flexibility among the participants. For example, in order to ensure flexible relations between shops and factories manufacturing footwear, there must be, at least in the factories, readily available means to convert from one style of footwear to another. Considering that a particular type of footwear is maintained for a long time, current alterations are merely a matter of changing a few details, so the manufacturing technology does not have to be altered in any major way. Given the technology of footwear manufacturing, it is necessary above all to have the means to alter those parts of the shoe having the greatest versatility. This versatility may be attained by using alterable metal lasts. The existing process of shoe manufacturing utilized less versatile wooden lasts. The capacity to manufacture these lasts was thereby limited. Moreover, output was further reduced in connection with a partial switch by the enterprises producing wooden lasts to the production of furniture necessitated by an acute demand stemming from an expanding housing construction.

Incidentally, interactions at the same level are guided by the principle "Money talks," which is termed in the Soviet Union "Control by a Ruble" (kontrol' rublem). This means that the activities of the factory are partially controlled by other factories, which purchase its commodities. One does not see this type of control in the Soviet Union at levels higher or lower than the factory.

Schizophrenic Character of Soviet Economic Mechanism

I think that the anomalies of the Soviet economy outlined above are generated primarily by the disjunction between the monetary and physical aspects of the mechanism of its functioning.

One of the main reasons that the need for consistent planning at all levels of the hierarchy is ignored lies in the fact that the Soviet economists do not understand that prices are dual variables, which serve as a tool to help form and implement the plan. Soviet economists, both in theory and in practice, separate the process of planning in physical terms from the setting of prices. They assume that the task of planning of input-output in physical terms must balance supply and demand. They conceive of prices as mere production costs, which should be calculated on the basis of the labor theory of value. Because it is impossible to avoid prices in the course of planning in physical terms, the use of the wrong prices could lead to a great waste of resources in the national economy. For example, planning in physical terms is based on the range of technologies offered by the design bureau. However, in developing these technologies design bureaus are guided by obsolete prices, which they use to avoid economically ineffective solutions.

At the same time, in the Soviet economic system there are managers endowed with common sense. These people usually have enough common sense to set logically formulated goals (the nature of these goals from the standpoint of humaneness, for example, is another matter). Meanwhile, their common sense is not sufficient to formulate a relatively effective, internally unified mechanism of performance; they have created instead a disjunct, schizophrenic mechanism.

The common sense of these people is sometimes enough to avoid the absurdities engendered by the disparity between the goals set and the schizophrenic mechanism for their attainment. Sometimes they, or at least their subordinates, become the victims of the mechanism they themselves have created. The following examples, somewhat sketchy but based on facts taken from Soviet practice, can serve to illustrate this point (the figures cited are arbitrary).

The first example bears out the adequacy of common sense to combat schizophrenia with sensibly formulated goals. In the U.S.S.R. at one time there arose an urgent need to increase the production of plastic parts for bombs, a kind of item very important to the country.

The government instructed one of the plastic plants to increase production by approximately one-and-a-half times in a very short period. It was impossible to meet this target using an extensive approach - by expanding production capacities through the installation of additional presses - because this would require time: the plant would have had to construct new production buildings, order additional equipment, and wait for the new equipment to be manufactured. The realization of the target might have been drawn out for several years.

The plant's engineers took another course that enabled them to meet the target in a very short time. They recognized that pressing was the limiting link in the production of plastics. The initial temperature of the molding powder significantly influences the length of this process. For this reason, the engineers decided to install high-frequency current generators near the presses, use them to preheat the powder, and thus raise the productivity of the presses. And indeed, press productivity was essentially increased and production rose to the projected level. The management and engineering personnel of the enterprise had successfully coped with the important task and were awarded the State Prize.

But when the plant's economic indicators were analyzed, it was found to be deep in the hole. First, output per press operator had declined. Under the previous, longer pressing cycle, one operator tended two presses; but under the new conditions, with the shorter period of pressing, a press operator was unable to serve two units, and additional labor had to be hired. Since the number of press operators doubled while the productivity of the presses increased only one-and-a-half times, output per operator fell.

Second, the cost of production increased, since the wages of a press operator remained the same although the output per operator dropped. The wage level remained unchanged because the intensity of the operator's labor was not decreased, since additional operations involved in heating the molding powder had to be performed. The cost of production was also increased by the increase in expenditures per item on electric power: expenditures had to be made on technological power for preheating the molding powder. Even though overall output at the plant expanded, the reduction of the overhead per item could not compensate for the increase in these expenditures.

The transfer prices remained the same. According to the established principles, the prices reflected average costs across all plants producing similar items, plus a small profit. While the given enterprise cost of production increased appreciably, the plant started operating at a loss, with all the ensuing negative consequences (for example, absence of the managers' fund). The other plants, which stuck with the old technology, continued to operate in the black.

Thus a single measure received two different assessments: the plant had to be simultaneously pardoned and executed.

The overall economic mechanism of functioning created by the government demanded that the plant be "executed" - after all, the plant had begun operating at a loss. At an important conference organized in the course of a government campaign to improve the economic indicators of enterprises, I myself witnessed a tongue-lashing administered to the management of a plastics plant by district party authorities for poor economic performance.

Naturally, if the regular principles of supply and demand were brought to bear on the situation, the enterprise that managed to increase rapidly the output of an important commodity would not only have registered no loss, but would have instead shown a profit.

Common sense, however, does not always win out. Sometimes, Soviet leaders become the victims of the illogicality of the very system they have fathered.

In the mid-1960s, the country was overstocked with expensive suits. Under such circumstances one would expect a clearance sale of the product that has already been manufactured. In addition, production of the unmarketable goods would be curtailed. Contractual relationships between shops and enterprises were employed in an attempt to determine the best assortment for the items to be put on the market. However, even with the means for expanding the manufacturing of less expensive suits being available at the clothing factories, it turned out to be fairly difficult to implement in actual practise. Like in a famous parable of a camel created by a congressional committee, the monetary reference points used in the Soviet economic system and those for which the workers stand tend, for a variety of reasons, to gravitate in different directions. There is no clear-cut way to coordinate the efforts of these people. Let me clarify this point.

It is known that in the U.S.S.R. the most important monetary reference point for the leaders are the growth rates of industrial output. These rates are measured by the gross output (in fixed prices) of the respective industry. This indicator has also an important ideological significance in showing the advantages of a planned system. If we recall that, other thing being equal, the greater the cost of component materials, the higher the price of the product, it follows that a decline in the production of expensive suits results in a reduction in gross industrial output. The top workers of Gosplan who were responsible, above all else, for attaining high growth rates in production, received this idea of cutting down the output of expensive suits with disfavor.

Moreover, one of the major sources of the U.S.S.R.'s budget revenues is the turnover tax levied on consumer goods. In order to protect the financing of various state budget needs from the possibly "irrational" behavior of consumers, a turnover tax in the U.S.S.R. is collected at the point where commodities are transferred from industry to wholesale trade, or from wholesale to retail trade. It is never collected at the stage of sale to the consumer. In the U.S.S.R., the turnover tax on expensive commodities is often higher than on inexpensive goods. From what has been said, it becomes clear that, if there is a reduction in the output of expensive suits, there will also be a shortage in the revenue part of the budget. Under these circumstances one should not expect officials in the Ministry of Finance to support a decree calling for the curtailment of the production of expensive suits.

The concern of the Soviet banking system is that it has limited credit for unmarketable goods. Moreover, the bank has a cash plan that depends on money proceeds from the population. Under these conditions directors of the bank would applaud all enactments intended to expand the production of such goods as inexpensive suits.

The most important indicator of success in retail trade in the U.S.S.R. is fulfilling a plan for selling the commodity. Trade workers, therefore, would naturally be interested in escalating the production of inexpensive suits. Moreover, the availability of marketable goods reduces the retail sale storage problem .

Thus, on the one hand, decreasing the production of expensive suits could weaken the significance of such an important indicator as the growth rate of gross industrial output, and it could reduce the revenues in the budget. On the other hand, it would be likely to improve the cash plan and reduce unwanted inventories in the shops. More important, the population would be protected.

What are the country's leaders to do under these circumstances? In a story lamenting an excess inventory of expensive suits, one national newspaper urged that their manufacture be terminated, but, it added, without damaging the interests of the state. In reality, this meant that the factors of output growth and budget revenue had won out.

Since Soviet retail organizations have a legal right to refuse unmarketable goods supplied under contract by a distributor, it may seem that the situation could have been resolved peacefully, without administrative interference. In fact, however, these contracts can be ignored. As long as the manufacturer keeps his promise to produce certain goods, the retail organization has to accept them. If it refuses, the supplier won't have the money to pay its workers' wages. The party functionaries, fearing a political bombshell, would come hard upon the recalcitrant retailer and force him to take the merchandise.

Roots of Schizophrenia in Soviet Economic Mechanism

Every economic system wants to have adequate and precise information about its significant economic parameters. But in practice the following dilemma arises: whether to derive approximate figures on the basis of an elaborate concept or to calculate exact figures on the basis of a less-developed concept. The approximate figures are estimated on the basis of intuition by people involved in economic activities; the exact figures can be obtained by formalized procedures and eventually by computers.

What is attractive in a market mechanism is its informal character in general. Meanwhile, it is assumed that each participant has the ability to measure the magnitude of economic parameters in the course of interactions. At the same time, the disadvantages of a market mechanism, for instance, the imperfect coordination of activities, manifest themselves in the inexactness of the measurements of these parameters. Here, the problem of improving upon these methods of measurement arises. One way to solve the problem is to create a mechanism of centralized planning on the basis of a nationalized economy, but this is an extreme approach. Such methods are typical of Marxists and, as with any radical view, they are important in developing new avenues of thought. Meanwhile, this approach is rather limited, for it ignores the diversity of mechanisms vital to the performance of a developed economic system.[109]

The simplification of economic reality seen in radical views is also a result of the assumption that economic parameters are easy to measure. Marx and Engels believed that, in the communist society of the future, it would be a simple matter to measure both the desires of people and the resources needed to fulfill these desires.

When Marxist ideas of creating a new society began to be implemented in the U.S.S.R., the first step was to form a rigid, centralized economy with all resources distributed by the center -- down to the final bolt. Such methods were called "War Communism" and were practiced during the period of the Russian Civil War. At that time the goal of production was clear, and the variety and scope of outputs were tremendously reduced. Toward the end of the 1920s the U.S.S.R. began to develop into a modern industrial society, using centralized planning mechanisms. Immediately the problem of setting goals for mid-term plans arose. When Soviet leaders had to set these goals in the realm of consumer goods and services, they faced a number of problems resulting from the lack of a developed concept of how to measure the utility of different consumer goods and services. Fortunately for the Soviet leaders, the goals of the system were oriented toward military needs. This allowed the leaders to avoid the complicated issue of measuring the utility of consumer goods and services. Instead, this problem was replaced by a relatively simpler problem concerned with the production of basic capital goods: oil, steel, electricity, tractors, and so forth. Production of consumer goods and services was regarded as a "boring" constraint.

The Soviet planners also avoided the important problem of measuring cost-benefit at the macrolevel, and instead focused their effort on balancing in physical terms the output of basic goods with the inputs of necessary resources. I do not want to play down the role of cost-benefit analysis at the macrolevel (for instance, planners need for measuring the rate of growth), but these problems were of secondary importance compared to the more vital problem of increasing the output of basic capital goods.

Cost-benefit analysis was explicitly formulated at the microlevel. Engineers whose task is to select the best technologies and managers who measure deviations from the planned inputs-outputs have to know how to compare costs and benefits. To do this a price system must be elaborated. But Soviet economists did not know how to set prices in a planned economy. They were faced with the following dilemma: either to set prices on the basis of the Marxist labor theory of value, or on the basis of the theory of marginal utility. This dilemma gave rise to many ideological controversies. Marx and Engels rejected the price mechanism under socialism altogether. However, they thought that, under capitalism, prices gravitate towards average cost and orbit around it depending on demand and supply at each moment of time. In 1940, Stalin, acting on Lev A. Leontiev's advice, stated at a meeting with a group of Soviet economists that the "law of labor value" was operating in the Soviet economy, but in a modified form. I want to emphasize that adoption of the labor theory of value as a tool for setting prices was not merely a bow to the Marxist ideology. I think the viability of the concept of "labor value" and its acceptance by the overwhelming majority of Soviet economists and politicians to the present day is not simply lip service paid to the governing ideology, but has deep roots. The labor theory of values seduces people by its simplicity, by the illusion of the ease of measuring average labor spent at producing a certain commodity. But measuring labor costs leads to a lot of problems, for example, how to reduce skilled labor to unskilled labor, how to link the time of production of a commodity with labor expenses, how to divide labor expenses among indivisible goods, and so forth.

Of course one could say that all these difficulties are to be expected since, every concept has its unresolved problems. Moreover, if one examines the theory of marginal utility, one is struck by the impracticality of measuring the utility of goods having a different usage. Furthermore, how can one add shoes to butter from the standpoint of their utility? It is a different matter when the common denominator that determines the value of all different kinds of products is labor expense! In this case everything seems clear and certain!

Thus, Soviet planners chose average labor cost as the basis for setting prices. On the one hand, these expenses are distinct from the utilities of the product, and on the other hand, they do not take into account such things as the costs of natural resources, the scarcity of the factors of production, or the time of production. When Soviet planners try to direct the activities of the factories via such prices, they create serious conflicts. In many cases it was impossible to link the necessity of producing a certain item, even if that item was needed for military purposes, with the costs of production. In principle, a Soviet planner can adjust these prices to the prices of equilibrium, but this will immediately give rise to a number of methodological problems: if the law of labor value is used in a planned economy to set prices, then planned prices should correspond exactly to the labor value. At the same time, one cannot vary these prices around the labor value, because in the plan, supply and demand are in equilibrium.

But methodological puzzles were not the main obstacle in introducing a proper pricing mechanism into the Soviet economy. If necessary, Soviet leaders could easily adapt ideology and methodology to their interests; they do it under the banner "the creative elaboration of Marxism." The major obstacle in establishing a proper price mechanism is really the inability to implement the market mechanism. Lack of a flexible economic mechanism, aggravated by disjoint setting of prices and inputs-outputs in physical terms, has lead to a waste of resources even in cases where Soviet planners have tried to set prices closer to the product's marginal utility. For example, before World War II the Soviet government sharply increased the price of copper. At that time there was a great shortage of copper which was needed for military use. Higher price on copper impelled engineers to reduce the usage of this material in different kinds of electrical machines. As is often the case with a bureaucracy, it is difficult to both introduce new prices and then change these prices under new conditions. The higher price on copper was not changed for many years. This led, for instance, to higher costs for electric motors, which then required more electricity because less efficient materials were substituted for copper in the motors.

Thus, the choice of the class of economic mechanisms is, to a great extent, determined by the ability to make adequate measurements of the processes taking place in the system. The temptation to use planning mechanisms instead of market mechanisms is also based on the illusion of being able to easily measure these processes. In turn, this illusion creates another illusion: that the intuition of the people involved in a planning mechanism can be replaced by formalized procedures.

In reality the contrary is true: development of formalized procedures for managing the economy is tremendously difficult and, if possible at all, can take a long time. Attempts to go beyond the area where formalized measurements of economic parameters do work leads to the formation of inefficient economic systems.

Alternative Scenarios for Improving the Soviet Economic Mechanism

For a Soviet liberal, the major challenge facing his country today is how to effect a transition from a highly industrialized but politically authoritarian imperial regime to a free society with a market-type economy. The present Soviet leadership, it may be argued, wants to preserve an authoritarian imperial regime, but through flexible means, including a market economy. In my opinion, such a regime is not easily compatible with a market, if no other reason that it induces excessive militarization and, as a result, a hypertrophied state that acts as a sole monopsonistic buyer of weapons systems and intermediate products.

A major assumption that I make in discussing the various "optimistic" scenarios is that the Soviet Union will shift to a peaceful economy, that is, to an economy that in peacetime is geared toward the production of consumer goods, and in which the defense burden does not reach the critical mass that deforms the entire system (for details, see chapter 5). I further assume that in time Soviet leaders may come to realize that, given the prevailing strategic realities in the world, Russia alone cannot confront militarily all the developed countries and an as-yet an undeveloped China. The Soviet leadership may hence decide to enter the world community as an equal partner, and to rely on international cooperation to increase the welfare of its own people rather than attempting to subvert other nations through intimidation. Under these rosy assumptions, it makes sense to ask how the Soviet Union may evolve a more sophisticated mix of economic mechanisms. Otherwise, for a militarized economy, it is difficult to argue against a rigidly hierarchical system whose planners run everything from R and D to production and distribution.

In light of this, the views expressed by Marshal Nikolaj Ogarkov during his tenure as first Deputy to the minister of defense and chief of staff of the Soviet Army are of particular interest. Because they represent an extreme method of solving domestic problems, based on total militarization, I have below reproduced the full text of his suggestions on the improvement of the centralized mechanism.

"In our country during peacetime construction, as in other countries, a certain part of the armed forces is on continuous alert, that is fully staffed with personnel and military technology, and the remaining part is prepared for immediate deployment. If the aggressor should unleash a conflict, personnel and technical resources kept in reserve and assigned to specific units and battalions must arrive to support them within an exceptionally short time frame. Because of this, the issue of constant readiness for the immediate mobilization of land-based troops and naval forces gains extreme governmental significance.

In earlier wars, as we know, this issue was not as crucial. The element of surprise was already playing a definite role in World War II. Now, it has become a factor of strategic defense. The question of the timely transfer of the armed forces and the entire national economy to a wartime posture, of their mobilization within a brief time period, is now much more significant. Therefore, supplying the troops with manpower and technical resources predetermines the necessity of party members to plan precisely -- during peacetime -- the measures of coordinated action between soviet and military organs.

Today as never before, completely coordinated mobilization of the armed forces and the national economy is absolutely essential, particularly the deployment of human resources, transportation, communications, and power, in order to support the stability and vitality of the country's economic mechanism. In connection with this, continuous effort in the area of improving the industrial connections of those enterprises that produce basic sorts of armaments is also necessary, as is the autonomy of such industries in the case of a war. Such industries should be completely supplied with energy and water resources as well as with other vital resources from existing reserve equipment and materials. Further improvements in the preparation of the national economy to mobilize itself are necessary, because the close interdependence of the mobilization of the armed forces, the national economy, and the civil defense mechanisms is the most vital condition for the complete support of the country's defense capabilities at the necessary level.

The concentration of all efforts toward the attainment of the goals proposed, taking into consideration the changing conditions of modern warfare and the difficulty of mobilization, is impossible without a stable system of centralized leadership of the country and of the armed forces. We do have a certain amount of experience in this area. The creation during World War II of the State Committee for Defense and the committee for the Defense of Cities near the Front have been completely justified. It is only natural that we must consider this experience. In future wars, if the imperialists don't engage us, the role and significance of local party members, and of soviet and economic organs in the solution of defense problems, will increase significantly."[110]

Marshal Ogarkov's prescriptions remind us that there is no such thing as a universal, ready-made economic system for each and every country, including Russia. There are too many national idiosyncrasies, cultural and otherwise, for such a universal scheme to be practicable. I do not believe in the convergency theory, which implicitly holds out a promise of an ideal system, to be constructed out of the best elements of the already existing ones. I do not deny, of course, that there are convergent processes at work in the industrialized countries. I only want to underscore that there are also some very important divergent processes there that reflect a dissimilarity of national circumstances.

It is on a possible integration of the common and the particular that I pin my theoretical hopes. The concept of economic invariants (that is, universal economic institutions relevant to all mechanisms) together with an analysis of individual national circumstances, could serve as a theoretical foundation for a systematic study of economic mechanisms. Among these invariants are relations (for instance, coercion), organizations (such as mediators), and parameters (for example, prices). Of course, the formation of these invariants is accomplished differently in different mechanisms.

The majority of Soviet scholars and practitioners do not understand the role of prices, money, profit, competition, inflation, and so forth as invariants. Unfortunately, some scholars in the Western countries are of the opinion that all of these institutions are the exclusive prerogatives of Western market economies. However, these institutions are economic invariants; that is, they could be incorporated into any kind of economic mechanism. From this point of view, what distinguishes different mechanisms are the processes by which these invariants are introduced. In horizontal mechanisms, invariants are a direct result of the interactions among the participants. In vertical mechanisms, they result from actions taken at higher levels of the hierarchy. Failure to understand that monetary parameters are actually invariants led to some false ideological discussions. For example, the people who regard profit as a market institution accuse the proponents of deconcentration of Soviet economic mechanism of an attempt to revive capitalism in the Soviet Union. The supporters of deconcentration are forced to spend a lot of time developing ruses in order to prove that institutions of a Western market economy could occasionally be used in the Soviet economy.

A synthesis of the invariants and the particulars requires an open system, for in an uncertain world it is in principle impossible to settle once and for all on the best scheme. To avoid the lure of monism, we need a pluralistic mechanism of a kind adumbrated in Chapter 2. The best guarantee of a successful long-term development is a pluralistic mechanism, and not some enlightened and wise ruler. It is this mechanism that offers a rich array of alternative economic strategies, from which the nation, in a given situation, can choose a single alternative or a combination of several. It is, lastly, a pluralistic mechanism that enables the nation to monitor the progress of the selected alternative, and to change the alternative if it proves inadequate either because of its own faults or because of changed circumstances.

Now I would like to put forward one economic strategy that I believe might be suitable for the Soviet Union in a transitional period, while at the same time creating preconditions for progress beyond the transitional stage.

For the purpose of this discussion I divide all economic mechanisms into the vertical and horizontal mechanisms.

This division represents only a dichotomous expression of a possible spectrum of relations between the participants from the standpoint of the degree to which one is obligated to follow the instructions of the other. Verticality implies that the instructions from one participant to another are of a compulsory nature; horizontality assumes equality of the participants.

The presence of vertical mechanisms is usually associated with the presence in the economic system of an omnipotent government which coercively plans the activities of the participants. In many cases, and especially in the Soviet-type economies, government involvement in the economic system is linked with such vertical mechanisms. However, one can imagine a government that merely regulates the activities of the participants or even a government that could offer an indicative plan.

Planning mechanisms include methods of elaborating plans (that is, methods to elaborate goals and to collect the necessary information regarding constraints), methods of choosing between plans at any given time, and methods of stimulating participants to follow the plan (which may range from rewards to participants who follow the plan, to censure of those who fail to follow the plan, to the physical annihilation of participants who do not fulfill the plan). In principle, that one participant has more power than another does not mean that the former must oppress the latter, that is, must obligate him to follow his plans exactly. Strictly speaking, the idea of indicative planning, which was used in Japan and some Western European countries, is an example of a similar type of agreement between a state and its economic units.

In Soviet economic literature one can find suggestions that the existing compulsory system of relations between different levels of the managerial hierarchy, which is called planning, could be replaced by contracts. However, the implementation of such recommendations is impossible, if only because managers at a given level are reluctant to impose a fine on their superiors, who have appointed them.

The market belongs to the class of horizontal mechanisms, which includes two other polar types of mechanisms different from the market. We shall call these centralized horizontal mechanisms and decentralized horizontal mechanisms of a nonmarket type. Centralized horizontal mechanisms are distinguished by the fact that the manager sets aggregate economic parameters, within which participants directly interact and/or organize mutual control of their output. In this case, the role of horizontal economic mechanisms is reduced to the disaggregation of these parameters and to providing the higher echelon of management with additional information to help control the activities of the participants.

Decentralized horizontal mechanisms of a nonmarket type are characterized by the fact that the feedback omits a monetary evaluation of the results of producers' activities. Mechanisms of this type, for example, operate in the production of public goods. But they are especially relevant for the initial stages of R and D, when it is the producer of new ideas who has to be protected from the consumer, even if the latter is an expert in the field. The reason is simple: often, only the innovator can be a true judge of what he creates. Western countries, and especially the United States, benefit greatly from having a host of institutions that protect the innovator: for example, tenure positions for university professors; individual high-risk ventures that are facilitated by a wide availability of work space, (a garage, a basement) materials, tools, and so on.

The situation, of course, changes radically beyond the initial stages of R and D, when it becomes easier to judge the value of the new. This is true of consumer goods, materials, and equipment, but equally of projects that lend themselves to expert evaluation. Together they account for the lion's share of all goods and services being produced by the nation.

A market mechanism per se is a peculiar type of a horizontal mechanism, that forces producers to compete among themselves for the favor of consumers; the institution of money helps the consumer to gain control over the producer and thus, ultimately, protects the consumer's interests.

It cannot be overemphasized that a market is not a bazaar. A bazaar is a simple structure that directly links buyers and sellers. The mediating institution between buyers and sellers - contracts, stocks, wholesale trade, built-in economic stabilizers - distinguish a market from a bazaar. In a primitive economy, the bazaar alone may suffice, but a modern industrialized society cannot get by without a sophisticated market.

The recent zeal for the market shown by Soviet reformers is partly due to their incorrectly equating it with the bazaar; otherwise, they would have been much less sanguine about the early prospects for introducing the market in the U.S.S.R. Possibly, the backers of perestroika were also misled by the experience of the NEP in the 1920s, when there was not, in fact, much difference between a market and a bazaar in Russia. The NEP meshed rather well with the Soviet economy of that time, and proved itself reasonably successful.

A bazaar of sorts, along the lines of existing collective farm markets, is possible in the Soviet Union even today: parts of the service industry and the retail grocery trade suggest themselves as the most likely candidates. However, expanding the scope of the bazaar won't be easy: this kind of trade is not popular among the people, and the coexistence in a mixed economy of the bazaar and state structures is fraught with tremendous abuses.

Thus, it should be noted first that the concept of vertical and horizontal mechanisms is much broader than the more commonly employed scheme of plan versus market mechanisms.

Horizontal mechanisms, viewed systemically, play a decisive role in human development generally, and not just in economics. Even in biology we can see that the right and the left hemispheres of the human brain interact horizontally, without a supervising agency. In developed societies, horizontality is evidenced in the interactions of ideological institutions (for example, churches), programmatic institutions (such as political parties), legislative, executive and judicial powers, and information-gathering institutions that monitor the activities of the above bodies (for example, media). Internally, however, these institutions may and in fact usually do rely importantly on vertical mechanisms.

It seems to me that if there were no need for technological progress and its realization via people (rather than angels or computers), the present level of scientific development would enable me to announce optimistically that it is possible, in principle, to create a nearly ideal vertical mechanism with central planning (which would even take randomness into consideration). Modern computers and a mathematical theory of optimality (developed for the Soviet economy) might have lent some credence to my "optimistic" prognosis.

The situation in economic science in this regard reminds me of that in physics on the eve of the 1940s, when it became clear that an atomic bomb was possible in principle.

But as long as the technological progress plays an ever greater role in economic growth, and is accomplished by human beings with limited opportunities to know each innovation individually, and with human passions (the drive for prestige, monopoly, and so forth), a mechanism is needed that will give R and D the opportunity to develop under these conditions.

Only lately have Soviet economists have started having doubts about economy's orientation toward equilibrium (optimality). Like their Western counterparts, Soviet economic models, even if they included an endogenous technological progress, were concerned exclusively with equilibrium (optimal) states. Schumpeter's ideas about the vital importance of disequilibrating processes (which are to be balanced later by equilibrating processes) spontaneously generated by innovators were recently spotlighted in a Soviet review article of Western economic literature[111]. It will take some time before Soviet economists fully appreciate the significance of Schumpeter's insights for an R and D-driven economy. First, they will have to come to grips with the problems of a mixed economy and the government's role in the market place, before moving to the issue of the horizontal nonmarket institutions and their contribution to the initial development of new ideas.

The creation of societal conditions for R and D, in turn, involves the sphere of production. For scientific progress, a pluralistic political society is needed with a pluralism in the sources of financing for new ventures. The effective application of scientific-technological advances is best accomplished by independent persons (or collectives) who are prepared to take the risk of introducing something new. In other words, it's a matter of the need to have independent organizations in the production sphere.

Provided there is agreement on the vital importance of decentralization in science, steps can be taken to revise the role of the Academy of Sciences of the U.S.S.R. Basic scholarship seems to belong in the universities, where teaching insures professorial security and where nobody can tell the scholar what he should be doing. The academy may serve as a forum for the general gatherings of scientists with common interests. I am under no misapprehension that it will be easy to "downsize" the academy. Many obstacles will have to be cleared first, not the least of which is the authorities' fear that students may become politically active if they are confronted by a large number of talented scholars.

Applied science can be developed either at the universities under contract with large enterprises, or by the enterprises' own research departments.

Because Soviet universities often lack modern equipment for applied science, they may wisely decide to merge with large enterprises that have powerful R and D departments. In such an eventuality, the "output" of experts will be added to the stock in trade of new conglomerates.

Now, let us discuss the system of production - a sphere in which horizontal market-type mechanisms are very important.

Before they can be introduced, however, a major cleanup of the vertical mechanisms has to take place; that is, improvements of the horizontal mechanisms in the Soviet economy have to come first of all from a prior correction of defects of the vertical mechanisms.

Under Soviet conditions, improvements in the vertical mechanisms have to proceed mainly along the lines of indicative planning. The development of realistic long-range indicative plans may in turn require a deep restructuring of the political system - a separation of powers. Charles-Louis Montesquieu in his famous book The Spirit of the Laws argued that to be successful, a country must have separation of powers: between the legislative, the judicial and the executive branches. Decision making would thus be based on mutual checks and balances. (The United States was the first country to introduce these "crazy" ideas.) It is reasonable to regard long-range indicative plans as being analogous to quasi laws, because both serve long-range interests. Thus, one of the necessary conditions for introducing long-range planning could be created if the legislative power in the U.S.S.R. becomes really separated from the executive apparatus. Another important issue in introducing such a plan is that the legislators would have a powerful apparatus subordinate directly to them whose task would be the development of long-range plan. If this apparatus is subordinate to the executives it cannot fulfill its function, because the executives are involved in current affairs and lack the time to seriously consider long-range planning.

Even the mid-range indicative optimal plans may at first be sufficient to create the preconditions for a further expansion of the market 's role and for its eventual transformation into a leading economic mechanism. Indeed, to come to the market prices gradually, (I mean the market prices in the broadest sense, including prices of labor, natural resources, capital assets, stocks, bonds, and so forth) we could start in principle with any set of prices, including the current ones. But the many iterations a market will have to go through before equilibrium prices obtain, may be quite long and costly. The trouble is, that current Soviet prices leave out a number of production factors, and are unusable because they have been erroneously calculated according to average social labor costs. To facilitate a transition to a market economy with a properly functioning price mechanism, an indicative plan with a matching set of initial prices could be derived from the optimization criteria based on consumer preferences and government constraints. Such an indicative plan could be offered to the enterprises as a recommendation

The concept of invariants discussed earlier can serve as a theoretical underpinning during the transitional period. The notion makes explicit both the similarities in the nature of equilibrium prices used in the optimal plan and in the market, and a set of idealized conditions for their numerical identity. Interesting research on an integration of planned and market structures is presently being done in Moscow by a group from CEMI headed by Victor M. Polterovich. The mathematical models that they use show how the said structures operate in an idealized environment. The economists would do well to notice that engineers, in their calculations, rely on idealized models proposed by physicists, and to similarly try and benefit from the idealized economic models.

A transition to a capitalist economy calls not only for good initial prices, commodity and stock markets, a sound banking system, and antitrust legislation. The severest challenge, in my view, is the socioeconomic one that touches, among others, on the issues of inequality and decentralized property, about which I want to say a few words.

A market economy is inconceivable without some income inequality that reflects principally different abilities and work effort of individual participants. This turned out to be one of the key issues of perestroika. When the reforms were first announced, there were many urgent calls to introduce equilibrium prices for consumer goods. The urgency was dictated mainly by the need to terminate multibillion ruble subsidies to producers of certain foodstuffs, especially of meat and milk. But that was not the only reason.

The Soviet wage schedule sets a fairly low income ceiling for employees, allegedly because incomes have to be matched with the output of goods and services. Clearly, this kind of income policy discourages productivity increases on the part of active workers. To reverse this situation, the decision was made to lift the upper limit on wages, and let each worker earn as much as he can.

But it is of course not sufficient to let each active worker earn just as much as he can - the output of consumer goods has to increase appropriately to balance out the growth of the wage bill.

Since the production of goods and services could not be expanded overnight, one option was to buy goods and services from the West. Gorbachev, however, declared himself resolutely against this option, arguing that it is a waste to spend hard currency on consumer goods; it would be much better, in his opinion, to spend it on the requisite equipment and to produce these goods in the Soviet Union. It is reasonable to suppose that the sad experience of Poland and Hungary, countries which have to pay back the loans (and interest) spent on consumer goods, is significant in influencing his thinking.

This was a controversial position, and in the ensuing debates some economists, including Nikolaj Shmelev, spoke out for massive purchases of consumer goods from the West.

I don't want to judge the wisdom of Gorbachev's stance on this issue because I don't know in detail how well it ties in with the rest of his political interests. But if we look at this issue abstractly, irrespective of the leader's interests, we may conclude that it probably makes sense in a crisis to opt for massive purchases abroad under certain conditions. One precondition is parallel improvement of the economic mechanism through the introduction of strong wage disparity. The money thus spent to obtain consumer goods from the West can be viewed not as outlays for current consumption, but as an investment in the perfection of the economic mechanism - often a much more sensible investment than the acquisition of machinery.

But let us assume that for one reason or another it is impossible now for the Soviet leadership to markedly boost the stock of consumer goods by means of imports. From a narrowly economic point of view it would then appear natural to increase the prices to the point of equilibrium. In reality, however, we are talking not merely of economic equilibrium, but of social equilibrium; from this perspective it soon became evident that a dramatic price hike would set off a wave of popular indignation, especially on the part of low-income groups, who make up at least one third of the Soviet population. True, even at today's low prices it is difficult to buy meat and milk in the stores. But the low prices help perpetuate the illusion in the consumer that if he rises early in the morning, or just gets plain lucky, he can buy what he is looking for. It is this illusion that the leadership does not want to take away from the people.

The leaders' growing awareness of this fact, coupled with their reluctance to import, made them delay indefinitely the projected lifting of wage ceilings and the introduction of market prices. Officially, however, the latter item of the reform package is to be postponed only for a few years.

At the back of my suggestions for improving the Soviet economy stands the institution of private property and the concept of the responsibility of economic actors that it implies.

I would like to mention here that criticism of the institution of private property (later I will substitute for this a more general definition) usually fails to consider the role it plays in creating pluralist sources of financing innovations. This criticism predominantly focuses its attention, and often quite justifiably so, on how the masses are aroused by income and wealth inequality, on the harmfulness of allowing private property owners to single-handedly decide questions that affect everyone, on the weak coordination in economic activity between individual property owners, on the squandering of resources, and so forth. To remove these flaws of private property, they propose introducing collective people's property represented by a people's state. With this type of property, the activity of managers will purportedly be better coordinated via an obligatory plan; resources will purportedly be more efficiently concentrated in the proper directions, and so will not be wasted; economic decisions taken at the top will purportedly be under better control so as to avoid the caprices of enterprise managers; glaring inequalities in income and wealth among workers will supposedly be eradicated.

The introduction of such proposals for concentrating property in the hands of the state, even if it partially eliminates the aforementioned flaws, leads to still more serious difficulties than those attributed to the institution of private property. The concentration of property in the state's hands leads to a stifling of pluralism not only in politics, but in the other spheres of socioeconomic life as well. In general though, one can say that private property is not a sufficient condition for maintaining a free society. It is possible to cite examples of countries where private property predominated but that were autocratic (Spain under Franco). However, as Milton Friedman noted, examples of free societies without private property are unknown.

The examples cited were brought within the framework of a broadly known comparison between private and state (collective) property. By the same token, from the standpoint of our examination of the conditions for developing a pluralist structure, it's sufficient to have decentralized property, as opposed to centralized property. The concept of decentralized property is broader than that of private property. Decentralized property can include a variety of forms, cooperative, communal, trade union, private (in the sense of belonging to one person or family) and equity (in particular, with the dispersal of shares among a variety of stockholders). Centralized property is the property of the state. It can be concentrated and centralized to a greater or lesser extent, that is, it can belong either to a feudal government or to regions with various levels of authority - the degree of concentration - or to individual private groups (in the extreme to one individual alone)- the degree of centralization.

Thus, criticism of private property can be conducted from various points of view. It would seem ideal to have property centralized and concentrated in the hands of a state that, in turn, truly represents the interests of the people. At the same time, however, such a concentration and centralization of property suffocates pluralism and leads to all the ensuing consequences thereof. Decentralization and deconcentration of property is needed as conditions for pluralism (which, of course, does not exclude a certain role for state property, but it is clearly a subordinate role) . The choice between concrete forms of decentralized and deconcentrated property and their desired proportions is a problem resolved in each country according to conditions there. From this standpoint, Israel's experience is interesting: a variety of forms of property have been developed: kibbutz, private, trade union, and others.[112]

Of special moment to me is the institute of decentralized individual property, which undergirds the private support of new ideas in the arts and sciences. In judging the new, each individual donor makes a necessarily subjective evaluation of the person of the innovator and not of his innovation, which is extremely difficult to assess objectively. This kind of decentralized property presupposes a fairly high degree of income inequality, which, socially, is always troublesome, and becomes exceedingly so in those cultures that, like the Russian culture, have a very strong bias against rich people. Still, even in the Soviet Union the situation is not hopeless.

Income inequality in the U.S.S.R. surfaces in many different ways. I want to focus on the group of people whose legal income is based primarily on high monetary earnings rather than on income in kind and perquisites. This group includes academicians, chief designers of weapons, leading writers, and so on. Among this Soviet nobility one can find people who are willing to spend their own money to support art and science. For example, Academician Sergej A. Lebedev, the designer of one of the first Soviet computers, provided room and board for about two years to a young nonconformist artist. Moreover, Lebedev helped to sell this artist's pictures to other academicians in spite of the semi-legality of such transactions. Oleg K. Antonov, a well-known Soviet aircraft designer, was also instrumental in promoting new art: in the early 1970s, I saw nonconformist paintings in his Moscow apartment. I have heard of a case where an Academician spent his own money to promote a scholarly piece of work, because the standard route would have taken an excessive amount of time; he was also involved in semi-legal activities linked with payments for materials and labor. There was another well-known case in which a Soviet family with a high income supported a political dissident. I am talking about Mstislav Rostropovich, who supported Aleksandr Solzhenitsyn. When Solzhenitsyn was thrown out of the Union of Soviet writers, he could have easily been accused of parasitism: he did not have an official job. Under the protection of the Soviet law that allows one man to hire another as a servant, Rostropovich hired Solzhenitsyn as a gardener (or janitor!) for his country house.

Of course, the number of wealthy people who are willing to spend part of their income to support new ideas is very small. Nevertheless, the fact that such a mechanism exists even in the totalitarian Soviet society is important.

Notes and References

Inflation in the Soviet Union

Inflation is usually synonymous with an increase in prices. However if wages and others paid-out sums of money (after deductions) exceed the increase in prices, it leads to an oppressed inflation. The increased quantity of money depreciates and this depreciation has a feedback on the economy which may be tantamount to the destruction of the money mechanism.

For a long time, Soviet officials denied the existence of inflation in their country: there were no inflationary processes in the U.S.S.R. whatsoever. The term inflation could be used only in reference to capitalism. At a time when the Western nations are gripped by inflation, such an opinion may give birth to the illusion that a socialist economy, in general, can prevent inflation. However, there are inflationary processes in the U.S.S.R.

Only after the advent of glasnost was it broadly admitted that the U.S.S.R. has been experiencing inflationary processes, and some hard data concerning the magnitude of these processes have even appeared the media. In 1970, for example, in the state and cooperative retail trade a kilogram of beef cost 1 ruble 97 kopecks; in 1987, the price was 2 rubles 49 kopecks. For sausages the prices were 2 rubles 44 kopecks and 3 rubles 56 kopecks respectively, etc.[113]

In this chapter I want to show that inflation is a general economic institution, that is, that inflation may exist in any economic system that uses money. In my analysis I assume that disequilibria are a prerequisite and a deliberate goal of economic development; equilibrium states play only a subordinate and balancing role in this process. There are situations, little noted in the professional literature, in which a rapid income growth is necessary to generate even a small increase in productivity; but because of ensuing disparities between productivity increases and monetary growth, recourse must be had to inflation as a way of balancing the system. The view that income growth is a means of encouraging workers to increase labor productivity and to change their occupation or place of work inevitably relies on certain assumptions concerning employee psychology.

Inflation, of course, is a dangerous thing not to be resorted to lightly or turned over to dilettantes, for fear of profoundly negative socioeconomic consequences.

After stating my theoretical propositions, I will apply them to the analysis of the Soviet economy from 1945 to the present.

The Setting of the Problem

Workers can be stimulated by increases in either monetary or real wages. Generally, it is more effective to raise monetary wages, since this relates earnings directly to work (of course, on the condition that prices are more-or-less stable). When real wages rise through a fall in prices there is no direct stimulus for increasing productivity, since the worker cannot understand how his own activity will influence a price decrease in the future. Needless to say, monetary wage increases may well be differentiated by the different effects on different workers. Yet a fall in prices affects everyone. Of course, one could regulate the reduction of prices for various products in order to secure a greater increase in real wages for certain worker or income groups that have relatively high demand for articles whose relative prices fall. But all of these measures stimulate an increase in labor productivity only indirectly.

Although an increase in monetary wages has certain advantages, it can create substantial difficulties. Therefore a great deal of care is required when this economic instrument is used. For example, an increase in monetary wages can even lead to a loss of output for workers, when we consider the effect of substituting leisure for consumer goods. This is particularly important to keep in mind when considering workers who are employed in the production of goods in more than one place. In this situation, the effect of substitution can reveal itself in a rather more complicated way. In an organization where the worker receives a large income, he can increase his output. But at the same time, he can reduce his output at another of his jobs, preferring leisure to additional labor. This kind of effect apparently took place in Soviet agriculture between the late 1960s and early 1970s. The increase in incomes at collective farms (kolkhozes) stimulated an increase in agricultural output. But at the same time, the output of kolkhoz workers on their private plots fell, since they did not want to work more intensively even there. As a result, it seems that the total production of certain crops fell. This had been unexpected, for it was always believed that an increase in income would stimulate an increase in output. We shall consider in greater detail below a more typical situation, in which the growth of monetary wages promotes an increase in labor productivity.

The ideal situation would be a rate of increase in monetary wages that effectively stimulates labor, but that at the same time is equal to or below the rate of increase of output. In this situation, one may combine all the advantages of the increase in monetary wages with the increase (or maintenance) of real wages. However, the increase in monetary wages can be more rapidly than the increase in the output of consumer goods. In order to reach equilibrium here between the aggregate of incomes and the available quantity of consumer goods, it is necessary to overcome certain difficulties. New problems arise here, related to the introduction of taxes, the stimulation of savings, and the increase in prices. We shall consider in slightly greater detail one of the causes of an income growth rate higher than the output growth rate. We shall also examine the conditions under which such an excess growth rate of income can be successfully realized.

It is well known that in order to use material means to stimulate a person into increasing the volume of his activity, it is necessary to offer him some minimum amount; a worker will not react to a smaller amount. At the same time, however, owing to physiological restrictions, a person can increase the volume of his activity only by a limited amount. Under these conditions, the increase in incomes will not always precisely correspond to the increase in output: the increase of output might be smaller. As has been noted, higher taxes, a stimulation of savings, and an increase in prices can, in principle, make up for the gap between the rate of increase in income and the rate of increase in output. Thus, here we encounter a process in which it becomes necessary, because of the restrictions of human psychology, to use simultaneously both accelerators (an increase in incomes) and braking devices (increased taxes, savings, and prices).

Here one might suggest an analogy with the complex chemical processes in which it is necessary to use simultaneously both a catalyst and an inhibitor. The reason for this simultaneous use of both inhibitors and catalysts frequently lies in the very nature of the chemical process. Catalysts can proceed too rapidly, and so inhibitors are needed in order to slow the process to the desired speed. Iosif L. Lakhman graphically compared the case in economics and chemistry with the lash and reins the horseman uses.

When monetary wages rise, prices are the most important means of reaching equilibrium. This is due to the fact that the tax system is fairly conservative and the growth of savings is limited because of restrictions on the interest rate. Inflationary processes arise in this situation. If the boost in wages outstrips the growth of prices, the worker has time to receive more consumer goods for his higher wages. To put it more simply, as long as the worker maintains his faith in money, wage increases act as a catalyst, and inflation performs the role of the inhibitor. In this case the process of developing production will, in general, be more effective. In other words, mild inflation becomes a factor that contributes to the growth of the economy.

Perhaps this explanation of the role of mild inflation in stimulating economic growth contributes a new element to the many explanations presented in economic literature in describing the influence of mild inflation.

When a policy of increasing production by raising wages is conducted, it is necessary to be clear about the resulting social difficulties and not to be limited to half-measures. Fearing the social consequences of a policy of using inhibitors, politicians have at times attempted to disguise these difficulties; these were efforts to create an illusion of social equilibrium. These activities have only a local effect, yet they can ultimately lead to even sharper social conflicts. In practice, if inhibitors are not deployed to the necessary degree when wages are rising, an accumulation of free money will ensue. After reaching a certain volume, the free money can become an unstable mass. Out of this emerges the danger of galloping inflation. Mild inflation turns into galloping inflation, with all its accompanying social consequences, if the increase of prices is inadequate.

Thus, an attempt to use economic methods in achieving an increase in production requires a special and well-thought-out socioeconomic policy. Economists can describe in precise detail only a few aspects of the processes that occur here and have only a few recommendations to offer to politicians. Social scientists, on the other hand, can also offer few insights to government officials. But on the whole, the decision-making process requires that political leaders be very skillful. If there are no experienced politicians armed with the most up-to-date knowledge of economics and the social sciences, the use of economic methods in managing the economy can lead to sharp social conflicts. In order to deal with these conflicts leaders sometimes turn from economic to administrative methods to manage the economy.

We shall examine all the above from the experience of the development of the Soviet Union in the postwar period. Toward the goal of supplying the requisite labor force to enterprises, various policies were undertaken during this period, including even the corv'ee and labor-camp systems, that is, the methods used by the government were not identical in various sectors of the Soviet economy. We shall examine those sectors where economic stimuli played a significant role (above all, in industry). Yet even in these sectors, equilibrium between incomes and the available quantity of consumer goods was established in various ways, with a greater or lesser use of economic means.

The year 1953 represents a watershed. After Stalin's death more attention began to be devoted to the production of consumer goods. By virtue of this, the proportion between economic methods (wages, prices, taxes) and administrative methods (commands) changed. The great need for the overwhelming predominance of administrative methods of management lost its former importance; the role of economic methods of management gained in strength.

It is important to note that even though the role of economic methods of management increased after 1953, at the same time it became apparent that the Soviet system was inadequately prepared for a consistent and effective use of these methods.

The Period from 1947 to 1953

In those sectors of the national economy where economic methods were used during the period under review, the accent nevertheless fell on administrative methods, organically supplemented by demagoguery. In concrete terms, this took place in the following manner. Wage rates and salary scales within enterprises were fixed. It seems that in 1948 the Council of Ministers even promulgated a special decree that prohibited an increase in salary scales or wage rates.

If a pieceworker (sdelshchik) increased his productivity, his earnings would rise for a period, but would gradually return to their former levels. (As matter of fact, by 1959 around three-quarters of all workers in industry and around 90 percent of all construction workers were pieceworkers).[114]

Such a revision of norms for piece-rate workers, who formed the majority of those employed in industry and construction, was carried out in the first quarter of every year. Since the prevalent norms were so-called experimental-statistical norms (norms based on past performance, as contrasted to norms determined scientifically on the basis of machine capacity, time-motion studies, and so forth), were the prevalent form, a mild revision of piece rates was guaranteed. During this period, the gap between basic wage rates and earnings was very high in several branches of the economy. The gap was supported artificially by the important percentage by which norms were overfilled.[115]

Although the hourly worker (povremenshchik) received a fixed basic tariff rate, his total earnings were not fixed, because this category of workers received bonuses, depending on the outcome of their activity. It was rather simple to regulate their wages. Since so many conditions had to be met before one could receive a bonus, it was always possible to find a pretext to reduce bonuses by claiming that a certain condition had not been satisfied or had not been met completely. In 1950 and 1951 there were months when the size of bonuses in general was reduced by 25 percent, in accordance with a decree of the Council of Ministers.[116] Thus, the bonus fund was regulated in such a manner as to prevent increases in earnings of hourly-workers. Their activity gained in intensity, yet their wages remained the same. This occurred with the help of annual increases in planned output through the process known as the "ratchet principle" ("planning from the achieved level").

Constraints on the level of workers' monetary wages could not adequately serve to maintain equilibrium between workers' incomes and the available quantity of consumer goods. The explanation here lies in the fact that the fund of wages rose throughout the country as a result of significant increases in the size of the work force. The number of workers increased faster than the output of consumer goods and services.

Under these conditions, the government resorted to taxes, in order to preserve equilibrium between the level of income and the available quantity ofconsumer goods. For demagogic purposes, however, the government officially announced this as a system of bonds, for which laborers would "voluntarily" sign up each year. At the same time, and also for demagogic reasons, under conditions of widespread shortages of consumer goods, prices for these goods were marked down annually.[117]

The policy conducted during this period had its own foundations. In order to expand military power, it was necessary to involve more workers in the industry. The output of consumer goods had to be held at a low level. In this situation, it was dangerous to raise monetary wages in order to stimulate productivity increases. If prices and taxes were not raised simultaneously it would lead to an accumulation of free money, with all its accompanying negative consequences. Furthermore, systematic and significant increases in prices and taxes reflect very negatively on a country's ideology, especially for a socialist country.[118] This is why, in the postwar period to 1953, it was easier to coordinate a harsh militarization policy with these economic and administrative methods.

The Period after 1953

As we have noted above, after 1953, monetary incentives were strengthened in the Soviet Union. This was expressed in the noticeably high rates of increase in wages, which is illustrated in table 11.1 by citing materials showing the increase in the average monetary wage throughout the economy.

The increase in monetary wages had three main causes, all three of which tremendously influenced the increase in monetary income; I cannot single out the role of each individual item.

1. The practice of simultaneously revising norms and piece rates on a mass basis was discontinued. In 1957, in accordance with the decree of the Councils of Ministers entitled "On the Change in the Procedure for Revising Output Norms," a different practice was introduced to revise output norms. Norms were to be revised according to the degree to which technological and organizational measures, related to the reduction of labor intensity, had been put into practice.

Naturally, one should not take this decree literally. At the same time, up to the present, workers' monetary wages increase, on the average, according to the plan. Wages have often been viewed mainly as a means for establishing standarts of living. Norms are revised in order to bring de facto wages closer to planned wages (vyvodilovka). Since the norms continue to be predominantly experimental-statistical norms

, it is rather easy to implement this kind of wage manipulation.

2. The minimum wage was increased systematically. In the last thirty six years, the minimum wage has risen very significantly. In 1947 the minimum wage was set at twenty to towenty-two rubles a month (in current money units). One of the first measures of the government after 1953 was an increase in wages for the poorly paid categories of workers. Yet even in 1957 the minimum wage was set at twenty seven rubles[119]. The minimum wage was raised by steps. Presently in the Soviet Union, measures setting the minimum wage at seventy rubles a month are being carried out, in accordance with the current five-year plan.

3. Wage and salary rates were increased for workers in the leading branches of the economy and in the remote regions of the country. In the period since 1953, salary scales and wage rates for workers in the coal industry, construction, public health, and the like have been raised repeatedly, in agreement with the corresponding decrees of the Central Committee of the Communist Party and of the Council of Ministers. At the same time, the income of kolkhoz workers has risen significantly. Pensions and scholarships also increased sharply.

There is no doubt that these measures had the effect of increasing the workers' material incentives and that they played a role in raising the effectiveness of production. However, the introduction of economic methods for stimulating the workers and the increase of monetary incomes require that a flexible policy be carried out in the sphere of prices, taxes, savings. At the same time, the economic policy being implemented is perhaps inadequately flexible. Though monetary incomes increased during the post-1953 period, taxes on wages were curtailed[120]. The annual "voluntary" bonds, which served as a disguised tax, were abolished. Yet all this only further increased the already-expanded amount of cash paid out to labor.

We shall examine in more detail what happened with prices. Within this period, official price changes, whether increase or decreases, were small[121]. The official price increases, however, essentially failed to keep pace with the growing disparity between the increase in cash incomes and the volume of consumer goods.

At the same time, de facto prices rose. Prices for separate kinds of food, clothes, furniture, automobiles, and so forth increased under the guise of an improvement in the quality of these goods. Slight changes in the style of the articles caused a noticeable increase in the price[122].

The increase in prices, which consumers usually interpret with a great deal of alarm, was made less apparent to the consumer as a result of the currency conversion carried out in 1960. In this currency reform, one new ruble was made worth ten old rubles, and all prices and wages were reduced at the same rate. With this overall reduction of commodity prices, prices could be raised rather imperceptibly. Consumers out of habit continue to think in terms of the old rates[123].

Another way in which prices increased was related to the so-called "washing out" of inexpensive goods (the disappearance of these items from the stores). Official statistics provide no figures on these goods. But on the basis of some articles, which recently appeard in the Soviet press, it is possible to assert with adequate confidence that the process of washing out inexpensive goods took place throughout these years. This is particularly evident even in the unusual case of television sets, where prices dropped for certain types of television units[124]. At the same time, however, inexpensive, small-screen television sets, which earlier had prevailed, gradually disappeared from the market. In their place, relatively more expensive television sets with larger screens went on sale (although the prices for these, I repeat, were reduced!) The process of washing out cheap goods also affected meats, macaroni products, and other such items.

However, the price increase that was taking place (with an inadequate output of consumer goods) was unable to make up for the increase in the population's cash income. All this led to an artificial increase in the aggregate of free money. Whereas between 1950 and 1960 the sum of savings deposits increased annually (on the average) by 905 million rubles, it rose by 3,569 million rubles annually from 1960 to 1970, and by 15,600 million rubles annually from 1970 to 1980. In 1987, savings banks held 226,900 million rubles. One may suppose that another 25 percent or so lies in the population's hands, stuffed under the mattress (v chulkakh; v kubyshkakh ).

The surplus of free money is to some extent explained by the fact that the population does not want to pay for poor-quality consumer goods, especially clothing and footwear[125]. The basic reason for the accumulation of free money, however, lies in the scarcity of goods, not in any precautionary or speculative desires for liquidity. In this we should note that the ratio of the total inventories to the sum of deposits in savings banks (not counting money in the hands of the population) has been steadily decreasing.

Table 11.2 shows clearly that, whereas the ratio of inventories to the sum of deposits in savings banks stood at 530 percent in 1950, that percentage fell to 98.1 percent by 1970, and 37% by 1987. Thus, the aggregate expansion of money in savings banks, not counting the money stuffed under the mattress, has already noticeably exceeded the aggregate of commodity reserves.

It goes without saying that, speaking in general, this movement cannot be regarded as negative. To criticize it, one would have to determine a norm for the national ratio between inventories and savings. It is not possible for us to calculate this norm. In any case, however, it is possible to say that, insofar as this ratio has shown a sharp tendency to decrease and lately forms an amount smaller than 100 percent, we should regard this relation with a great deal of caution. It threatens the existence of the monetary mechanism for distributing consumer goods and can lead to the introduction of rationing. Indeed, in times of panic, the people can spent their free money and begin to hoard commodities. This can lead to a shortage of commodities in the stores, the emergence of a black market, galloping price increases, and so on. There is a possibility of a panic in the Soviet Union, since consumers fall easy prey to all kinds of rumors. They have no real information on measures that are being drawn up to change prices or the money system. In this regard, several times when the threat of panic appeared, the Soviet press printed refutations to the rumors that claimed that bank notes were about to be changed.

Of course, the picture we have drawn is only a possibility, since the state holds the levers for preventing a disruption of the monetary mechanism. The basic lever is to pump money gradually out of the population by increasing the price of consumer goods faster than incomes rise. However, the increase in total deposits held in savings banks indicates that the accumulation of free money continues.

The state can find a solution to this situation either by freezing savings bank accounts, as was done in the time of the Second World War, or reducing the value of savings, as was done during the financial reform of 1947.

Thus, the fact that the movement of incomes in the Soviet Union, both immediately before and after the war, proceeded in basic agreement with the movement of prices (in the sense that reserves of free money were not created) gave birth to the opinion that in a planned economy there can be no galloping inflation in peacetime, and that galloping inflation can threaten only a capitalist economy.

However, the material examined in this chapter indicates that the Soviet Union today is undergoing a suppressed inflationary process, which can, in principle, give birth to galloping inflation in peacetime.

Of course, the Soviet state, since it concentrates in its own hands incomparably more power over the separate spheres of society than do the Western states, is better able to prevent this inflation, or to suppress it more rapidly. But at the same time, we should note that the threat of galloping inflation could also become the object of a sharp political struggle within the present Soviet leadership and could make for the triumph of the conservation forces. Indeed, insofar as the threat of galloping inflation is hard to overcome without detriment to the population's savings, since this requires the creation of a flexible socioeconomic mechanism capable of securing the increase in the output of consumer goods, administrative methods for solving this problem may appear very tempting. And in the struggle, this gives an advantage to those in the party who are still vividly conscious of Stalin's time and who do not cease to recall that, under Stalin, prices were falling and the power of the country was growing and the people were satisfied and the world trembled before the Soviet Union. And if it was necessary to remove free money from circulation (as was done during the financial reform of 1947, or during the period when there were subscription loans), the people met this with enthusiasm.

Notes and References

Corruption in the Soviet Union

Some Preliminary Notes

Corruption in Russia has had a long history, dating back to the "glorious" tsarist times. Shortly after coming to power the Bolsheviks had to resort to their own anticorruption campaigns, aimed at the new class of rulers. The scale of corruption in the Soviet period has naturally varied over time, reaching its peak under Brezhnev. (For more on this point see the section "The Organizational Structure of the Society and Corruption" in this chapter.)

Andropov's road to power was rather murky, but there is firm evidence to indicate that it had a great deal to do with unmasking the corruption of Brezhnev's minions, including the chief culprit, the leader's daughter Galina. Going against the corrupt party bosses did not prevent Andropov from becoming the general secretary. One possible reason for his success was that in the late 1970s, the Soviet Union entered a period of economic crisis, and the ruling hierarchy needed a strong man to handle the situation. Another reason might have been the belief of the party bosses that the anticorruption theme was merely a tactical maneuver on Andropov's part, and that, once secure in his new position, he, a realist, would put an end to the prosecutions. In fact, Andropov did not cease fighting corruption after becoming general secretary, and even had a former minister of internal affairs, Shchelokov, charged with gross malfeasance and placed under house arrest. Shortly after that, Shchelokov committed suicide.

To what extent, if any, Andropov's puritanism was responsible for shortening his sojourn on earth is in doubt; it may be that future historians will find out whether the leader's closest associates helped speed his departure. In any case, after Andropov's brief rule, and with the economic situation continuing to deteriorate, one of Brezhnev's true lieutenants, Konstantin Chernenko, was elected general secretary. Chernenko applied the brakes to the anticorruption drive, but he could not stop it completely.

Chernenko's rule, too, was brief. The group, headed by Gorbachev, that followed him to power resumed an active fight against corruption. The villain of the piece in that campaign was Churbanov, Brezhnev's son-in-law and a former deputy minister of internal affairs. At an open trial he was accused of taking enormous bribes. Besides Churbanov, other of Brezhenev's cronies, and among them the second secretary of the Moldavian Central Committee, Smirnov, were arrested and charged with the same crime. The second wave of Gorbachev's anticorruption campaign, which was linked with the first, swept through the top party echelons of the Central Asian republics. A special investigative unit set up at the U.S.S.R. Procurator's Office, together with the KGB, spent several years digging up the details of massive corruption in those republics, which amounted to many billions of rubles. Moreover, the investigators who headed that special unit went on record as saying that the threads of the crimes in Central Asia led to Moscow, particularly to certain members of the Politburo, and specifically to Mikhail Solomentsev and Egor Ligachev, who were covering up for the guilty comrades.

And then suddenly, in the summer of 1989, the anticorruption drive hit some kind of a snag. In chapter 3, in the section "Liberalization of Russia," above I set down some possible reasons for this reversal of policy.

Be that as it may, corruption, in my view, is endemic to the Soviet bureaucratic apparatus. Because corruption has such deep roots in the system, it is a formidable challenge to try and extirpate it.

Much attention has been paid to the problem of corruption in the U.S.S.R. lately, but serious studies are still lacking. It will take some time before they appear. Indeed corruption like inflation, suicide, military expenditures, and so forth, was among the subjects that have been for a long time banned from discussion as Soviet problems in the official Soviet literature. That is why there are no preliminary generalizations of the phenomenon of corruption based on an investigation of the real situation in the U.S.S.R.

Our knowledge of corruption in the Soviet Union is limited mainly to abrupt dates and anecdotal stories[126]. This situation makes analyses of corruption in the U.S.S.R. by Western scholars very difficult. To my knowledge, there are only a few papers that have been presented in the West that are completely devoted to the analysis of corruption in the U.S.S.R.[127]

This chapter is an attempt to do some theoretical analysis, which may promote a better understanding of the phenomenon of Soviet corruption. I want to emphasize the two essential aspects of the problem that are less developed in the literature. First of all, I want to put forward a classification of different methods of payment that can be, generally speaking, treated as legal. The evolution of these payments into corrupt practices is expressed in terms of rules, which are used in different countries for different reasons. Second, I want to show the diverse range of corruption in the interactions between three leading societal institutions: individuals, enterprises, and government agencies. Finally, I want to propose certain laws pertaining to the phenomenon of corruption.

The Vertical and Horizontal Components of Rewards

Corruption, as a negative phenomenon, can be contrasted with a phenomenon of incentives in a normally functioning socioeconomic system. The operation of a socioeconomic system can be regarded as a process of exchange activities by the participants in the system. Since exchange involves people, with their diverse individual interests, there arises a problem of harmonizing the interests of individual participants with those of the system as a whole. This harmony can be implemented either through vertical mechanisms or through horizontal mechanisms.

A participant receives rewards in the form of goods, services, or money in exchange for the results of his activities. The rewards can be assigned either positive or negative signs. In vertical mechanisms, a positive sign would mean that a higher-level participant rewards a lower level participant; a negative sign would mean that a lower-level participant rewards his superior. In horizontal mechanisms, a positive sign would mean that the recipient of a product (service) rewards the producer; a negative sign would mean that the producer rewards the recipient.

One can imagine certain situations in which the participant simultaneously receives both positive rewards for one kind of activity and negative rewards (for example, fines) for another. Thus, if one considers a variety of activities performed by the participants, one has to regard an individual's rewards (both along the vertical and horizontal dimensions) as an algebraic sum. This sum can have either a negative or a positive sign. One can build a matrix that expresses the connections between the types of mechanism that operate in the system and the sign of the reward. On the basis of this matrix, in a general case, that is, when the participants simultaneously take part in vertical and horizontal mechanisms, one can build four logically distinct combinations, four types of relations that characterize the participants' reward structure (see table 12.1).

These methods of earning income are based on different rules, which can be powerful to various extents--eventually they might become laws. In its turn, society elaborates rules to maintain these rules, for example, by setting fines for people who disobey the rules.

It is not our task to consider the expediency of the societal rules (including the rules to maintain these rules) and the methods by which they are changed. I take these rules as given. (Of course, I understand that changing these rules can be one of the most decisive methods of reducing corruption.) In the present analysis it is above all important to emphasize the situations where these rules can be avoided by providing additional rewards to people who might otherwise follow them. Corruption is this kind of additional reward. In general, corruption can be considered as an obstacle to development, as a social illness, because it is linked with actions that erode the mind of the individual. As with any kind of illness, corruption can be analyzed within the framework of a larger system, where it is sometimes considered a lesser evil, that is, as a means to treat more dangerous illnesses (like the attempt in the beginning of the twentieth century to cure syphilis by malaria). Corruption in this case seems to be an illegal process by the system itself to overcome self-imposed constraints . Meanwhile, using the illegal methods in the process of development could incur painful side effects. Eventually these effects can cause society to deteriorate enormously. But it is possible that the society in this situation cannot or does not desire to avoid corruption. In this case one could speak about a societal pathology.Thus, every society has its own rules for paying its people, which may vary among societies. That is why a method of payment considered normal in one country would be called corrupt in another country, and vice versa. Let me illustrate the last point by using the four combinations of rewards in the example of a restaurant. The vertical mechanism here involves the interactions between waiters and managers; the horizontal mechanism, those between waiters and customers. The payment system for waiters, in accordance with the said four combinations, can be constructed in the following manner:

1. On the one hand, a waiter receives a wage from the manager that exceeds the amount withheld by the manager for the damages that the waiter causes; on the other hand, the waiter receives tips from customers that exceed the inconveniences he causes them (if customers are unsatisfied with his service, for example, they wait a long time for their meal, or suffer material damages because of his negligence, such as having their suits stained).

2. The waiter receives a wage from the manager that exceeds the amount withheld by the manager for the damages that the waiter causes; on the other hand, the waiter not only does not receive any tips from customers but actually reimburses them for damages sustained.

3. The waiter pays the manager a certain sum (or a certain percentage of his wage) for the privilege of having the job and/or for the damages he causes; customers reward the waiter with tips that exceed the amount he pays them for damages.

4. The waiter pays the manager for damages in excess of his wages; and reimburses customers for bad service to an amount exceeding his tips.

The last of these combinations could only be sustained for a short while; it is impossible for any duration since the waiter must regularly receive positive rewards either from his manager or from his customers. All four types of payments that have been shown in the matrix can be prolonged to the point where they are treated as corruption and bring more negative than positive consequences.

Positive Vertical Payments

In this case, the manager can provide the waiter at least with a minimum reward. This minimum is given to the waiter since there can be breakdowns in the operation of the restaurant for which he is not responsible. Meanwhile, the manager can corrupt the waiter by paying him additional money for serving the clients low-quality food and regulating the conflicts that could emerge in this situation.

Negative Vertical Payments

This type of payment rarely occurs, since it presupposes rather large tips. It existed, for example, in pre-Revolutionary Russia in some very good restaurants. The owner would not only not pay his waiters, but he would in fact require them to pay him a certain sum out of the tips that they received from their customers. Such a method of payment greatly increased the responsibility of the waiter for high-quality service, as well as the responsibility of the manager for the good service of the waiters. This method of payment still exists in the U.S.S.R., but it is considered illegal. According to the established law, a manager must pay wages to a waiter in the regular way, and a waiter need only compensate the manager for damage he does directly. However, the waiters in very good restaurants receiving high tips (which many, many times exceed their wages) regularly have to pay managers a fixed amount of money (or a part of their tips). The requirement of such illegal payments is part of an informal contract, which is made when the manager hires the waiter.

Positive Horizontal Payments

These payments are made in the form of tips, which customers pay the waiter depending upon their evaluation of the quality of his service. The positive aspect of this type of a reward is due to the fact that it creates strong incentives for the waiter to improve his service. Moreover, the manager doesn't have to spend any time on systematic supervision of the quality of service provided by his waiter. Since it is also true that in this case many people, that is, the customers, evaluate the waiter's services, the probability of making an erroneous estimate of his activities is less than in, in comparison with the system in which the manager himself rewards his waiter for good work.

Let us now consider some negative aspects of this type of reward. One negative aspect is that this type of relationship can create situations in which those customers who have a reputation among waiters for being generous will get better service, to the detriment of other customers[128]. A second negative aspect is that, when the customer rewards the waiter, problems can arise in accounting for the waiter's income. This creates the possibility for the waiter to keep his income without having it taxed. Thus, the waiter faces a strong temptation, with all the negative consequences it involves. For these reasons (and possibly some others), in a number of countries or regions and during some periods of time, service is included in or constitutes a fixed surcharge to the price of the meal.

Negative Horizontal Payments

The positive aspect of this type of payment is the reinforced responsibility of the waiter for damage to the customer. On the other hand, the waiter can corrupt the customer by paying him additional money if the customer promises to keep silent about the accidents that happened in the restaurant.

In summary, all methods of payment under certain conditions can be used to corrupt the participants involved in exchange relations. The reasons that determine corruption and the methods to stop it are a subject for special investigations.

The Organizational Structure of the Society and Corruption

The restaurant example touched upon the interactions between individuals and organizations. This kind of interaction frequently occurs in other instances where services are provided, for example, taxi-cabs, barber shops, shops, and so forth. In passing, it may be noted that one encounters a variety of rewards primarily in those areas of the service sector in which, not only is the actual merchandise that is passed on to the consumer important, but the quality of the service rendered is also important. It may be for this reason that one rarely encounters legal horizontal rewards in stores, that is, direct rewards given by the customer to the salesperson.

These combinations of mechanisms and rewards can be used for more than analyzing the interactions between individuals and organizations. A society has a complicated structure, linking the participants who, in certain situations, play the role either of producers or consumers of commodities and services. This structure determines the various forms of corruption.

Let us consider this variety in relation to three major institutions that represent the social structure of the Soviet Union. These three institutions are: private people (individuals), enterprises, and government agencies.

The distinction between enterprises and agencies is rather blurred in the U.S.S.R.; at the same time it is important for the following reasons. First, relationships between individuals and organizations and among organizations themselves are mainly based on horizontal relations. Relationships between individuals and enterprises, on the one hand, and government agencies, on the other, are mainly based on vertical relations. Second, the extent of corruption often depends on the extent of the influence of corruption on the activities of an institution. It is no accident that in the Soviet Union (as in Western countries) corruption within industrial enterprises is developed to a lesser extent. The manager of an enterprise is first of all interested in a system of hiring people and paying them that allows him to fulfill the plan; if the manager does not fulfill the plan, his career is finished. A different situation is found in governmental agencies. The results of their activities are very difficult to check. In addition, they are subject to less control because they control others. Finally, the government agencies maintain the higher levels on the managerial hierarchy; they control many organizations and so they have more options in allocating resources and disguising the failures resulting from corruption.

As one can see from the table 12.2, there are nine possible types of relations between the three groups of producers (individuals, enterprises, and government agencies) and the three groups of consumers (individuals, enterprises, and government agencies).

The following subsections give examples of corruption in their interactions.

Semi-legal services such as repairing apartments, renting apartments, or renting a summer country house have been developed in the U.S.S.R. I include these in the grey market.[129] The payments for private services can be interpreted as corruption. For example, the repairman gets much more money from individuals than he receives from his basic job, making such workers less productive on their jobs. Besides, these workers often use building materials stolen from their job sites because it is difficult for private people to find these materials in stores. The extra money that these workers earn from private individuals is used largely to purchase alcohol.

Individual-enterprise. An individual often bribes the members of the admissions committee when he wants his child to be admitted to a good university. It is no accident that almost every year, the main newspapers publish leaflets that unmask bribe takers from the universities on the eve of the examination period in the universities. Individuals pay bribes to the doctors and administrators of good clinics. Hospitals in the Soviet Union usually serve the people who live nearby. If somebody wants the services of a specialist who works in another hospital, he has to bribe the doctor and the administrators of that hospital. If a hospital is part of a research institute (these hospitals are usually very good), it can serve people without taking into account where they live. In this case, the doctors and administrators are bribed to avoid a long wait in the queue for services; it is often necessary to spend years waiting to be admitted to such hospitals in the regular way.

Small bribes in the form of money for drinks are often given by the workers to a foreman who provides them with more advantageous jobs.

Individual-government agency. The large network of bureaucratic rules established by the Soviet government form the very environment in which bribery flourishes. Bribes are often given to the police for the right to move into the large cities. A Soviet citizen who wants to move from one city to another often falls into a vicious circle: he cannot get a job in another city until he has permission from the police to stay in the city (at least provisionally); he cannot get permission from the police to stay in the city until he has a job. A bribe to the police often can help him to break out of this circle. Bribes are given to government agencies by individuals to avoid punishment for such illegal activities as producing home-distilled alcohol, disguising income from illegal private activities (for example, private dentistry), and so on. Bribing police inspectors to issue driver's licenses without an exam, or to overlook traffic violations is quite common.

Enterprise as Consumer.

Enterprise-individual. This kind of corruption is primarily linked to the illegal activities of the leader of an organization (or its department) in which ordinary employees are involved. To get the employees to participate in the illegal activities while keeping silent, the manager has to pay them at least a double salary.

But there are also frequent cases where the managers corrupt the workers in order to complete legal kinds of activities. The manager of a shop in an enterprise often has to ask the employees to work overtime or to work on the weekends. Because the manager cannot pay any additional money for these extra activities, the workers could decline his request. The solution is usually a brib of pure alcohol (spirit), the most favorite drink of many Russian workers. Pure alcohol is not sold in stores, with the possible exception of stores inthe northern region of the U.S.S.R. Many factories keep stocks of pure alcohol for industrial purposes. A number of glasses of pure alcohol (a "glass" is a unit of measurement) given to the workers in a semi-legal manner serves as a kind of payment for their work.

Enterprise-enterprise. Strictly speaking, the interactions between these participants can be twofold, depending upon the interplay of supply and demand. Let us look at a common situation in the U.S.S.R. where the demand always exceeds the supply. It is known that planning in the U.S.S.R. is set up in such a way that demand and supply for capital goods are never balanced: the former invariably exceeds the latter. This is a consequence of the falsity of the plan itself (for example, intentionally unfulfillable planned deadlines for introducing new capacities or unrealistically high percentages of planned cost reductions.) or of the absence of back-up reserves that might alleviate fluctuations that occur while the plan is being implementied.

Though in many cases the gap between supply and demand is not all that great (say, 2-3 percent) it is still large enough to prevent individual consumers from fulfilling their plans, with all the attendant negative consequences. Therefore, industrial consumers have to send emissaries ("expediters") to their suppliers. Naturally, each expediter tries to get the top priority assigned to the dispatch of the goods he needs. To accomplish this, he must corrupt the vendor's employees, beginning with small offerings to secretaries and proceeding to considerably larger rewards for the sales department personnel and, in some cases, even top management. Still, the activities of expediters are considered semi-legal, since they are thought of as a lesser evil than having the factories demonstrate that they are incapable of fulfilling the plan due to insufficient goods received. Corruption of one enterprise by another also exists in the West. The interactions between those who buy goods for stores and those who sell of these goods will serve as an example. Here the seller, wanting to increase his sales, will try to ingratiate himself with the buyer in all sorts of ways. The rewards received by the buyer from the seller are generally considered undesirable. The usual rationale for this is that the buyer might conclude the transaction to the detriment of his employer. In the previous examples using the service sector as an illustation (in the case of restaurants), it was assumed that the seller (waiter), by improving the quality of his service, could not cause significant damages to be incurred by his employer. In spite of a certain mirrorlike structure of corruption that occurs when the demand exceeds the supply (the Soviet case) and vice versa (the Western case), the consequences of these imbalances are not at all similar. In the case of excessive demand, corruption reinforces the already existing situation, which is characterized by sharply increased delays in deliveries, a decrease in the quality of goods, and so on.[130] Under the existing conditions the consumer enterprise in the U.S.S.R. is reluctant to penalize a supplier who has broken its contract on delivery days and/or quality specifications. A monetary penalty does not save the consumer enterprise from punishment, because the major criterion by which the government judges the activities of the enterprise is the fulfillment of the plan in terms of outputs.Thus, the system of planning in the U.S.S.R., which performs under the conditions of excess demand causes a lot of problems, and corruption is one among them. The West, with an excessive supply, presents quite another situation. In spite of the fact that the buyer can hurt his employer, one can still try, in principle, to normalize the rewards that the buyer receives from the seller. On the other hand, this requires two things: trust toward the buyer, and a strong penalty imposed on the buyer in the event he betrays this trust. One can also imagine a kind of interaction between the buyer and his employer that will result in the third type of reward; that is, the buyer will pay his employer some part of what he receives from the seller. In principle, this variety of rewards can be used to describe interactions between individuals and private organizations on the one hand, and the government on the other.

Enterprise-government agency. It seems to me that corruption in the U.S.S.R. chiefly occurs in the relations between enterprises and governmental agencies. Bribery within these organizations includes semi-legal and illegal activities. Bribery for semi-legal activities involves the ministerial and party apparatus: the enterprise bribes them to get an easier plan, demanding less output from more input. Considerable literature has been devoted to this phenomenon. A "semi-mirrorlike" structure of this phenomenon can be seen in the West: corporations corrupt government employees (in their own country and abroad) to get better contracts, demanding more output and more input.

Government organizations are primarily involved in the production of public goods. In the process of producing these goods, however, they often have to purchase private goods. For example, government organizations carry out orders for the design and production of military hardware. These designs, as well as the weaponry itself, are private goods. Their manufacture is entrusted to a variety of organizations that compete among themselves. The representative of the government organization that controls the allocation of military contracts has an opportunity to receive rewards from the firm that gets the contract. This situation is analogous to that of the buyer and seller in the previous example, with all the positive and negative consequences that attend the utilization of each type of reward. Thus, in Western countries additional payments to government employees by the firms can be interpreted as a horizontal part of their income, as a tip, for example. Of course, this statement is only correct if these employees do not misuse their obligations.

This cannot be said of the Soviet Union, where the additional payments to government employees always have to be treated as bribes because they are always have the effect of reducing the effectiveness of the economy.

The major portion of bribes that enterprises pay to the government are for hiding their illegal activities. Stealing is most widespread in the Soviet Union in retail trade. (I will say that, practically speaking, all people working in the Soviet retail trade system are involved in one or another kind of theft.) These people especially need protection. The managers of the stores regularly (every month) give bribes to the party apparatus, to top levels of the bureaucracy involved with retail trade, to the people involved in the judicial system, and so on. The ministerial employees often receive bribes for setting higher norms for inputs in material, equipment, labor, or energy. In fact, by using less of these resources the managers have an opportunity to produce a surplus, which can be sold illegaly; this is particularly true of enterprises that produce consumer goods.

Government agency as Consumers

Governmental agency-individual. The government can corrupt individuals by varios means. One of them is knowingly setting prices that are lower than the required equilibrium prices on consumer goods. Therefore, the demand for these commodities is greater than their supply, and they become scarce. (We may note that other commodities, which have equilibrium prices, are in short supply in the sense that demand would rise with lower prices or higher incomes. Scarce commodities include meat, sugar, soup, various types of women's clothing, carpets, imported furniture, refrigerators, cars, or building materials. It would seem that the state could increase the prices of nonagricultural commodities without fear of an upsurge of public indignation, since most of the commodities in question are not necessities.

It is nevertheless possible that the reason for this scarcity lies in the government's fear that raising prices will cause public dissatisfaction. I once happened to hear the following explanation, in a private conversation, from a rather prominent official engaged in price determination. He felt that reduced prices resulted from the following political considerations. Reduced prices made it possible to create the illusion of accessibility, the illusion that, in principle, even a person with a small income could afford these commodities; all he had to do was to stand in the queue. There is a feeling among the public at large that the impossibility of purchasing without queuing is due merely to temporary difficulties, and that, as production of scarce commodities increases, the queues will shorten.

We shall also consider the negative aspects of creating a scarcity from the point of view of the problem that is of interest to us, and we shall describe the payment that society has to make for the illusions created by the government.

The existence of scarce commodities generates an illegal system for selling goods within the state network. The mechanics of this process is decribed in chapter 13.

Government agency-enterprise. It seems to me that corruption of enterprises by government agencies is not widespread; corruption of government agencies by enterprises is more developed. However, there are cases of Soviet government agencies corrupting enterprises. For example, a ministerial employee can offer a subordinate research institute considerable additional money from the ministry's funds to reward the employees of the institute. But in exchange, the managers of the institute must return part of this money to these ministerial employees. Technically the managers of the institute can do this by adding fictitious names to the payroll (primarily by simulating the hiring process in the experimental laboratories), or by working out an informal agreement with reliable people to return part of their bonuses to the managers.

Government agency-government agency. Corruption between Soviet government agencies is quite extensively developed. There are instances of the corruption of lower-level agencies by the top level, and vice versa.

The corruption of the top-level by lower-level agencies is typified by bribery for better positions in the state and party apparatus. For example, a party official who is living on the periphery can bribe the party official at the top level to get an opportunity to move to the capital of the province or Union Republic. The people in the judicial system bribe their bosses, the party apparatus, for permission to stop the investigation of certain cases.

Let us further consider corruption of the people involved in lower-level government agencies by top-level government officials. In this case, corruption takes the form of higher payments to the lower-level government employees than should be allowed by the declared principles of equality in a socialist country. Following Marx's behests, which were based on the experience of the Paris Commune, and Lenin's principles, postulated in his State and Revolution, it was felt in the U.S.S.R. that the average wage of leading officials should not significantly exceed the wage of skilled workers. Even shortly after the Revolution the new class of leading officials were not satisfied with this situation. In order to preserve outward conformity, however, to Marx's and Lenin's principles, these officials were given additional income in kind and perquisites. This situation has persisted to this very day in the U.S.S.R. and is widely known in the West[131].

The deviation of reality from declared principles can be better described if one classifies income as legal and illegal, official and unofficial. (By official income I mean income that is officially declared; that is, it is known to all). We can apply all four combinations of these two dimensions in the analysis of income. For our purposes, one of these combinations is most interesting: the income for the leading government officials is legaly set, but it is not officially announced. Disguising the income of leading government officials from the people corrupts these employees. This situation was well described by the famous Soviet dissident, Academician Andrey Sakharov:

"I want to emphasize that I am not opposed to the socialist principle of payment based on the amount and quality of labor. Relatively higher wages for better administrators, for highly skilled workers, teachers, and physicians, for workers in dangerous or harmful occupations, for workers in science, culture, and the arts, all of whom account for a relatively small part of the total wage bill, do not threaten society if they are not accompanied by concealed privileges; moreover, higher wages benefit society if they are deserved.

The point is that every wasted minute of a leading administrator represents a major material loss for the economy, and every wasted minute of a leading figure in the arts means a loss in the emotional, philosophical and artistic wealth of society. But when something is done in secret, the suspicion inevitably arises that things are not clean, that loyal servants of the existing system are being bribed.

It seems to me that the rational way of solving this touchy problem would be not the setting of income ceilings for Party members or some such measure, but simply the prohibition of all privileges and the establishment of unified wage rates based on the social value of labor and an economic market approach to the wage problem."[132]

Moreover, corruption of lower-level government employees by the leaders involves not only the unofficial character of the payment, but also the structure of the income. While a machine-tool operator's income from an enterprise consists almost entirely of money, money commmprises only about one-third of the income of a CPSU Central Committee secretary (who is not an alternate member or member of the Politburo); two-thirds of his income consists of payments in kind and perquisites, which he receives in accordance with the position he occupies. Naturally, the high income level of leaders makes it easier for the leaders to maintain their positions and, at the same time, this income is a powerful incentive to obtain such positions. The opportunity to obtain commodities that cannot be purchased in shops is an equally powerful incentive. Moreover, the considerable payments in kind, especially the perquisites, they receive also promote the authorities' more-skillful manipulation of cadres. The existence of payments in kind and perquisites does not officially allow executives to accumulate significant monetary resources and so become more independent, but it does mean a sharp drop in their standard of living if they lose their high position.

The Soviet elite is not satisfied with such income instability. Thus, some of the elite share the view that the U.S.S.R. should restore something like a service-nobility stratum, whose privileges would be preserved for life whatever positions they held. Generally speaking, only upper-level members in the academies of various sciences and academicians, who receive a considerable lifetime sum for their titles, enjoy such privileges in the U.S.S.R.

Finally, I want to note that corruption of the top-level provincial party leaders also comes about through the policy of distributing investments. A top official, protecting a certain secretary of a provincial committee of the Communist party, decides to award a large construction project to his protege. With this project, the secretary has much to gain (a new country house, a good road to his house, and so on) over and above what his people can gain. The secretary can obtain building materials that are in short supply; of course, he can also utilize the labor force without any payments. It is possible to assume that one of the essential reasons for long construction timetables in the U.S.S.R. is the unwillingness of provincial party leaders to finish large construction projects quickly, because in so doing they lose an important source of their wealth.

In connection with the last observation I would like to make a paradoxical statement. If a government is involved in the distribution of investments, an authoritarian regime is preferable to a democracy. The leaders of a democratic society are dependent on a greater number of forces than are the leaders of an authoritarian regime. That is why the former have to allocate more resources to ensure their political stability than do the leaders of an authoritarian regime. Thus, in the process of allocating investments, the Soviet leaders have to corrupt the ministers and secretaries of leading provincial or Union Republics committees of the Communist party. And the leaders of Western societies, for example, the United States, in addition to secretaries, corrupt senators, congressmen, governors, and so on.

Three Laws of Soviet Corruption

The higher the level of the person in the society, the greater the percentage of bribes in his total income.

An employee's ability to influence the distribution of resources rises in geometric progression with his promotion through the successively higher levels of the organization. At the same time, however, his income rises only in arithmetic progression. Since the extent of corruption stands in direct ratio to the amount of resources controlled by the given employee, the higher his level in the organization or agency), the greater the amount of bribes that will be paid out to him for appropriate services. I can confirm this in respect to the Soviet Union only by sporadic information from people who have shared their knowledge of the Soviet reality with me. Professor Gregory Grossman and Professor Vladimir Treml, prominent Western specialists in Sovietology, organized an investigation concerning the Soviet second economy, based on information supplied by recent Soviet emigrants. I hope that this investigation will also allow us to verify this statement.

The less tyrannical authoritarian leadership is, the more it uses corruption of lower-level employees as a method to increase its own power.

The leaders of authoritarian states are not elected. They try by various methods to protect their power from takeover attempts by people in the lower layers of the hierarchy. These methods include the corruption of the employees through higher income (involving income in kind and perquisites). This is corruption from above. An employee once corrupted is not necessarily frightened. To make the employee more loyal, the threat of imprisonment is used. If the authoritarian regime becomes a tyranny, it is usual to exterminate a disloyal person without any real violation of the law. In nontyrannical authoritarian systems there has to be a genuine violation of the law before an employee is prosecuted. In this situation, corruption of the employers by their subordinates, that is, from below, becomes a powerful weapon in the hands of the authorities to increase their own stability.[133] If the employee shows disloyalty he can be accused immediately as a criminal involved in corrupt illegal activities and arrested. Several trials in the Soviet Union (for example, in Lugansk in the 1970s) involving local party officials, were organized, I believe, by 'big shots' against disloyal subordinates. It is interesting to note that if the authoritarian regime becomes a tyranny it might become less corrupt, because the leader can increase his power by arbitrarily exterminating of disloyal people. It seems to me that there was less corruption of the officials in Stalin's time than after, when the extermination of disloyal people enormously decreased.

3. The lower the ratio of the population's legal income to its semi-legal and illegal income, the higher the amount of corruption.

Corruption is not equally pervasive in all the regions of the U.S.S.R. The Baltic republics are the least susceptible to corruption; Central Asia, the Caucasus, and Moldavia are among the most susceptible. The regions of Central Russia (Great Russia proper) fall somewhere in the middle (veering in the direction of less corrupt). The amount of corruption in a region appears to be correlated with the ratio of the population's legal income to its semi-legal and illegal income.The U.S.S.R., which is the last large empire in the world, has a unique way of setting regional income policies. The Russians have the lowest legal income; this includes not only those who live in the metropolis but also those in the national republics. In the Baltic area legal income is higher. Apparently, this is because prior to becoming part of the U.S.S.R. in 1940, these regions had a higher standard of living than did the U.S.S.R., and the Soviet government, for political reasons, has been afraid to reduce it drastically. Moreover, the peasants in this area are more skilled than those in Russia. In the republics in Central Asia, the Caucasus, and Moldavia, the legal income is comparable to that of Central Russia. At the same time, the people in these republics have considerable opportunities to increase their income illegally and semi-legally by producing large quantities of fruit and early vegetables in their own orchards and vegetable gardens. The sale of these products outside of the republic is restricted, and in some cases--before the collective farm delivers its shipments to the state--even prohibited. However, there is a large demand for their products and they command high prices all over the Soviet Union. For this reason, most of the rural population have large incomes. In addition, there are insufficient facilities, including hotels, in resort areas. This creates an opportunity for the local population, in Soviet Georgia in particular, to rent rooms semi-legally to tourists. The fact that a part of the population receives semi-legal or illegal income leads to the corruption of the controlling agencies that cover up such activities. Furthermore, if a part of the population that receives a high semi-legal or illegal income wants to obtain services from low-income parts of the population, then the latter try to exact additional payments for services. They justify doing so by claiming that it produces an equitable redistribution of income.

Conclusion

I want to make three general concluding notes concerning corruption.

Vertical and Horizontal Rewards and Corruption.

Employees and employers in a developed society, being primarily involved in horizontal and vertical mechanisms, are widely subjected to the simultaneous influence of both types of reward. The complexity of the problem consists in determining the proportions of these types of reward. This in turn, has to do with working out certain norms and with the legalization of various kinds of reward. Indeed, corruption takes place when horizontal and vertical components of the reward go against the established norms. With respect to the restaurant example, one can see that vertical and horizontal components of rewards are not always a norm in all countries. When the rules of the restaurant prohibit tipping but the waiter still expects the reward, he will be penalized for violating the norm when he is found out. In this case, it may be assumed that the process of corruption has affected the waiter. Indeed, as we have already noted, if the ban on tipping is intented to protect the interests of customers, tipping the waiter is nothing else but an attempt on the part of the tipper and the willing recipient to improve the service given to this customer, to the detriment of other customers. This becomes even more obvious in interactions between individuals and organizations, when the participant's personal interest in getting a horizontal reward can hurt the organization he represents.

A great variety of reasons determine the elaboration of norms that regulate the proportions of the vertical to the horizontal types of rewards. It seems to me, that one of the most decisive reasons has to do with the responsibility of the employee in discharging his obligations. The more responsible the person, the less the need (ceteris paribus) to give him horizontal rewards; vertical rewards are of decisive importance. An extreme case characterizing this kind of situation would be that of a robot, which does not need any horizontal rewards; it only needs vertical rewards, that is, a supply of energy and maintenance on the part of the owner. If the dominant culture in the society does not demand great personal responsibility, then it may perhaps be necessary to augment the horizontal component of rewards.

Two Kinds of Corruption and Their Spectrum.

I would like to distinguish between actions whose harmful effect on society are questionable and actions that harm the society unambiguously. The cases of corruption discussed so far all involved actions whose harm on society is indeed questionable. Let us call it the first kind of corruption. Apparently, the first kind of corruption involves the process of redesigning the system, legalizing the appropriate actions of people in it. At the same time, however, there are many actions that can cause a great deal of harm to the society. Rewards for these illegal activities can be regarded as the second kind of corruption. Fighting this kind of corruption poses special difficulties and reduces itself largely to the general problem of combating crime. Needless to say, the introduction of only two kinds of corruption, as with any other binary classification of a complex phenomenon, constitutes a certain oversimplification. The more bureaucratic the country (that is, the higher the degree of regimentation), the more difficult it is to change this regimentation to take new conditions into account, and the more developed is the spectrum of illegality in it. The freer the country (the less the degree of regimentation in it and the easier it is to change), the more rigorously the established norms are observed, and the narrower the spectrum that characterizes the extent of semi-legality and illegality. If, for example, we compare the United States and the U.S.S.R., we see that in the U.S.S.R., where bureaucracy has permeated all aspects of life, there is a wide spectrum that characterizes the extent of illegality. There, one encounters a wide variety of semi-legal activities because on the one hand the government does not want to legalize them (since they contradict the predominant ideological principles of the system), but on the other hand it finds itself compelled to take account of its own best interests.

Direction and scale of corruption in a developed society.

There are varieties of corruption. I will assume that a payment can be recognized as corruption both when it is an invariant (that is, accepted in all countries), and when it is a singular point (that is, accepted by one country or a group of countries). The differences between countries, under this assumption, are determined by the sign (direction) and the scale of corruption. Some types of corruption go in the same direction in different countries. For example, this includes attempts to corrupt the authorities by criminals who commit murder. There are also types of corruption that go in different directions in different countries. For example, in the U.S.S.R. the consumer enterprise corrupts the producer enterprise to receive scarce resources; in the Western countries the producer enterprise corrupts the consumer enterprise to sell its products. In the Soviet Union enterprises corrupt the government agencies to get a plan with a reduced output, in the Western countries corporations corrupt the government agencies to get larger contracts.

Thus, the type of corruption in different countries is distinguished by its sign. The sign can be determined by different factors: the role of the participants (who is the corruptor and who is the corruptee; who is the consumer and who is the producer), or the intentions of the participants (whether to increase the output or to decrease it.)

Further differences between countries are related to the scale of corruption. The scale of corruption is determined first of all by the number of constraints on the activities of individuals, enterprises, and government agencies. Of course, the number of the constraints only potentially determines the scale of corruption. Other conditions, including the culture of people and the severity of punishment for corruption, will eventually determine the real scale of corruption in a given country.

Notes and References

Multicolored Markets in the Soviet Economy

General comments

The performance of developed economic systems requires very complex monetary mechanisms. In a planned system, which still predominates in the Soviet Union and in which the role of formalized control processes is sharply increased, great difficulties arise in utilizing these mechanisms.

But the main problems in a planned system stem from the fact that human beings do not wish to act like robots but must nevertheless take part in this machinery. Their humanity is expressed in the fact that people have different desires and values, they make mistakes, and so on. To a varying degree, people have natural vices; that is, they try to get life's pleasures by illegitimate means.

The Marxist ideology adopted for planned socialist systems is based on arousing people's interest in improving their well-being and obtaining life's pleasures. It thereby fosters in people corresponding stereotypes of well-being, which differ from those in introverted cultures. At the same time, Marxism denies people's natural vices and writes them off as a result of a social order based on private ownership.

However, as shown by the experience of the Soviet Union, where private ownership was abolished in the early 1930s and socialism was proclaimed in 1936, human psychology has not changed. For a long time an attempt was made to explain human vices in the U.S.S.R. as vestiges of capitalism in people's minds. In "creatively" developing Marxist theory, which considered economic changes to be the basic, decisive factor in all social change, Soviet ideologists declared that people's minds have inertia and a memory of the past. Such an explanation could have been accepted by the generation born and reared under the capitalist conditions of tsarist Russia, or at worst during the NEP period. But how can one explain human vice in generations that were born and reared after the proclamation of socialism? It may be that there are "vestiges of socialism in people's minds" that are no different from the "vestiges of capitalism." Still, there remains hope that people's psychology will change only under communism. But communism has already been promised three times to the recent generations of Soviet people- by Lenin, Stalin, and Khrushchev - and it still has not come to pass.

Finally, let us note that the structure and culture of the majority of the population in Russia, where the construction of socialism began, also have their own peculiar features which have not caused the many problems that have arisen in the planned system but which have to a considerable degree exacerbated them. The Russian population consists primarily of people of peasant origins who for various reasons were not reared in the spirit of respect for the law. While in the past people's morality was not very stable, religion nonetheless significantly restricted their behavior.

The relativistic morality introduced by Marxism and the denial of absolute moral principles, accompanied by the persecution of religion, largely deprived the people of fundamental moral principles. For the sake of the triumph of communism, any immoral act was permissible; such acts were consecrated by official propaganda. Only with the advent of Gorbachev's policy of glasnost have some Soviet officials, including the Politburo member, Alexander Yakovlev, begun to acknowledge the existence of absolute human values and the imperative of complying with them.

But people who have become accustomed to using illegitimate means for the sake of bright ideals also begin using them for the sake of their own interests. And if the law punishes them for these illegitimate means, people believe that the law is bad and not that they are guilty before the court of their conscience or social absolutes.[134]

All this helps in a more detailed examination of the reasons for the formation, in the planned system, of markets that both implement and supplement the centralized mechanism of planned management. These markets provide all kinds of goods, services, and labor resources, but we shall only examine some markets involved in the sale of goods and services.

The planned system generates a spectrum of markets (see table 13.1). We will designate the various markets by different colors, which, perhaps, will help us understand how these markets are perceived by the authorities.

We will differentiate types (colors) of markets according to how the authorities assess the markets from the standpoint of advancing their objective functions under given constraints. This assessment can be expressed by the degree of the markets' legality the commodities sold at these markets, from the standpoint of the sources from which the goods are obtained, and from the standpoint of the ways they are sold. The degree of legality is measured by the scale of reward or punishment for an increase in the sale of commodities.

We shall examine legal, semi-legal, and illegal markets.[135] Each has its own subdivisions that also reflect the degree of that market's desirability to the authorities.

Thus within the legal market we distinguish the violet market where state sale of consumer goods and services takes place, but it is not open to all groups in the society, or it offers only a limited basket of available goods. Let us call the next type of market in this group the red market. It differs from the violet market in offering an unlimited choice of available goods and allowing access to any customer. We next note the pink market, which is also actively supported by the state even though it is controlled to a lesser degree. Finally, we examine the white market, which although legal and supported by the state, holds less significance for it. This market causes difficulties in economic management because it forces the state to coordinate its stricter centralized planning with a market mechanism that in principle functions spontaneously. Participants in the white market are taxed.

In the semi-legal gray markets the public rents means belonging to private individuals, services are rendered, or resources are redistributed between economic units. These markets actually give the authorities a chance to boost their target functions because, with given resources, the mechanism of operation created by the rulers themselves is not adequate, and the negative consequences engendered for the authorities by these markets are not so great. Participants in the semi-legal markets are subject to mild administrative punishment, are fined, or receive party reprimands.

We differentiate two types of illegal markets. The first is the brown market. It is the result of the existing mechanism of functioning, under which a scarcity of commodities is created artificially, and managers use illegal methods to find resources for fulfilling the plan. As a result of the considerable negative consequences of this market for the authorities, its participants are more severely persecuted. However, the persecution is confined solely to administrative punishments, including dismissal from work, a ban on foreign travel, and the imposition of severe party reprimands. In contrast, the existence of the black market, whatever its origins, impinges deeply on the target functions of the powers that be. The authorities resolutely combat the participants in this market - profiteers, plunderers of socialist property, prostitutes, and currency speculators - and prosecute them.

Legal Markets

People living in a society with a planned economy still have different systems of values, and even with the same income, they prefer to consume different market baskets. The more differentiated the incomes, the greater the diversity of consumer goods produced, the more flexible must be the system for the distribution of consumer goods.

Take a situation with the extremely low level of consumption that is especially characteristic of Soviet labor camps. In such a situation there is little variety in consumer goods, and people need essentially all of them. In the camps inmates receive their foodstuffs cooked and ready for consumption.

A similar situation, but with a relatively higher degree of choice, occurred several times in the Soviet history, particularly during the extremely lean years of World War II. Under these conditions goods were being distributed mainly through a system of rationing. Of course, even under these conditions the system of direct allocation is theoretically feasible. But the actual variety of human values will make itself known even here: a parallel system will emerge to redistribute products obtained with ration cards. This has happened several times in the history of the U.S.S.R. when a rationing systems for consumer goods was introduced. The very fact that tobacco products were rationed, although some people do not smoke while for others tobacco is of the greatest value, led to the emergence of "redistributive relations." Girls sometimes exchanged bread for stockings, and so on.

In principle the formation of such a parallel market had positive features for the state because it became possible to raise the level of satisfaction of the state's wards. Yet this market also had its negative features. In centralized systems the authorities generally have a negative attitude toward any mechanism they do not directly control. This negative attitude toward uncontrolled mechanisms is actually justified to the extent that such mechanisms can potentially have a direct, negative impact on the authorities' target functions.

Indeed, the market for the redistribution of rationed commodities soon produces middlemen. In themselves middlemen are, generally speaking, a positive phenomenon, since they promote more effective exchange. But since this exchange is not controlled by the state, the amount of income middlemen receive is not restricted. Hence the incomes of the middlemen may be dozens of times the incomes of producers, which may induce active people, whom the state needs for its immediate goals, to become middlemen. For this reason middlemen are proclaimed profiteers, and a relentless struggle is waged against them.[136]

Even when there is an acute shortage of consumer goods it is hard to distribute them by rationing, but it becomes particularly difficult to do so when there is a greater saturation of commodities. Hence the acute need to introduce a flexible mechanism that in principle permits each participant to obtain the market basket he needs within the limits of the money he has (a versatile constraint).[137]

Practical people in the Soviet managerial system realized, based on their intuition and experience, that under certain conditions it is possible to use the monetary mechanism for the flexible distribution of consumer goods. Thus, a market was created to sell consumer goods, and the direct, rationed distribution of the capital goods was preserved. Strictly speaking, this mechanism for the distribution of consumer goods should be considered a quasimarket, since the state establishes both prices on the commodities as well as incomes. At the same time, it has essential market features: the existence of an option in people's decisions, the chance to select both various types of activity and different market baskets of consumer goods, and the reciprocal influence of this selection on the behavior of state agencies.

It is commonly assumed in theory that with progress toward a communist society, the role of the red market should diminish and the role of the free distribution of services must increase. In my view however, as the well-being of the Soviet working people improves, the role of the market should grow. It will also become useful to gradually draw into this market commodities now distributed gratis. We can assume that the free distribution of such goods is largely due to the low standard of living (I have in mind mainly medical care and education).

Generally speaking, it is hard to imagine a society in which products can be distributed according to needs. No matter how high the productivity, there will always be constraints. They are dictated simply by the fact that the survival of mankind will always be menaced by external natural forces. Even if a high degree of stability is attained within the confines of the earth's atmosphere, there will still be a threat from outer space. The assessment of this threat to people will grow as the probability of survival on earth increases. At the same time, the acceleration of the rate of technological renewal of consumer goods requires considerable resources for their production.

From what I have said we can assume that the balance of resources that must be allocated to satisfy the population will, evidently, always be strained. Hence every person will in principle be able to obtain only a limited amount of resources. From the standpoint of the peculiarities of each individual's consumption, it is likely that the distribution of resources by means of money and prices is the most flexible. This is one side of the problem.

The other side of the problem is that the existence of a money economy permits effective monitoring of the economic units' activity, of the volume and quality of the work they do, and of their production costs. Evidently, money is in principle an effective means for the functioning of any complex system, especially under uncertainty. The existence of money serves both as the general expression of the values received by the system and as the general constraint on its possible activity given the existence of degrees of freedom. The comparison of costs and benefits is the general criterion of the effectiveness of a system's activity. Yet the sum total of all the benefits may also play the role of a feedback mechanism, by coordinating the activity of one system with other systems that assess ingredients obtained through the first system.

Even a legal market for consumer goods can be diversely constrained by the authorities, with limitations applying to access, the range of purchasable goods, or prices. Let us look more closely at the variety of legal markets in the Soviet Union, starting with those that are most controlled by the government.

The Violet Market.

This is a market that includes state stores, restaurants, and similar businesses. It is characterized by constraints on access, strict price controls, and a limited variety of purchasable goods.

This kind of market had its heyday in the U.S.S.R. during World War II. Employees continued to receive their salary. There was a rationing system based on aggregate categories of foodstuffs - consumers, depending on their station in life, were entitled to varying quantities of meat, fish, bread, sugar, sweets, and so on. In theory, rationing does not preclude a method of direct allocation; but because diverse human preferences persist even under these conditions, some freedom of choice was preserved. Simply put, the consumer could turn in his food voucher at a store and purchase, at the set price, the amount of each category of produce specified by the coupon. Moreover, each consumer was allowed to shop only at some particular store. Since individual consumption norms were revised only infrequently, and because of pervasive shortages, this scheme allowed a preferential treatment of more privileged employees.

For decades, there has been another kind of violet market in the U.S.S.R. - a system of special canteens for high-level managers and important party personnel. The high and mighty receive many of their goods and services in kind (for example, chauffeured limousines, summer cottages). But as far as food is concerned, the key personnel of the central apparatus in Moscow obtains it through the so-called Kremlevka. Each functionary gets, in addition to his salary, approximately seventy rubles a month gratis, which he can spend only on food. He is entitled to double this sum out of his own income, and to use this money at the special canteens to purchase C-rations, or even hot dishes at the regular state prices. Though the prices are regular, the food is not: the quality is much better, and the variety much wider (for example, expensive fish, caviar, and so on, which are not available at ordinary stores).

A steadily worsening economic situation and the shortages of consumer goods have again engendered the violet market in the Soviet Union. There are many shades of violet today: some products (for instance, sugar, soap, and tea) are rationed (unevenly) among cities and then sold at regular state stores; there are in-house food outlets that operate at factories and offices - only the enterprise's own employees can shop there; stores have certain hours of the day set aside for servicing just the employees of some particular organization.

The violet market admittedly makes sense during times of acute shortages, such as when the country is at war. But what's the point of having them in peacetime, when there is no famine? Why won't the state set such prices for consumer goods as to make it possible to buy them routinely at regular stores? I shall elaborate on this question in chapter ten.

It would also seem to make sense to abolish the violet markets for high-ranking officials in favor of just one kind of store operating under equilibrium prices and accessible to all. The high consumption levels of these officials could be preserved under the new scheme by increasing their salaries.

The privileges for the high and mighty, however, are not just a device to ease their daily chores in an economy full of violet markets. In an authoritarian regime, it is also a means for the bosses to ensure the loyalty of their subordinates. If an official can find anything he wants in any store, and receives a salary over and above his current consumption needs, he can start saving and thus acquire a certain measure of personal independence. If, however, he is assigned to a special canteen inaccessible to ordinary people, the fear of losing this privilege makes him more loyal to the regime.

The call to abolish privileges, which began in earnest with glasnost and perestroika, virtually amounted to a demand that these special violet markets be closed. At first, this issue received plenty of public attention, but so far the actual results have not been impressive. The anti-privileges plank was central to Boris Eltsin's platform in his electoral campaign for a seat in the Congress of People's Deputies. It is far from clear, however, how Eltsin plans to abolish privileges in a situation of pervasive shortages. It hardly seems wise to make high-ranking officials scrounge around for hard-to-find items. On the other hand, making the bosses personally experience the daily travails of ordinary citizens might move them to try and improve the situation more vigorously.

It is not too difficult to predict the future of the violet markets if the Soviet Union continues to democratize and if the stock of consumer goods ever reaches the point where the supply and demand are in balance. If, however, these conditions do not come to pass, the violet markets will grow, both in size and in scope.

The Red Market.

The red markets are characterized by rigidly fixed state prices, but no limits as to the choice of purchasable goods or access.

This type of market still dominates in the Soviet Union. It is invariably difficult to find goods there, even when they are theoretically available. The main problem is the long lines, which the people humorously refer to as " the socialist approach to the counter."

Today, when the supply of goods has worsened because of diminished domestic output and lower imports, but the amount of money in the hands of the population has increased, the red markets have largely been transformed into violet markets.

The long-term future of the red markets is uncertain. If a genuine market is ever introduced in the Soviet Union, the red markets will naturally evolve into the white ones, that is, regular capitalist markets with no or very minor price controls. Otherwise, if the shortages persist, the red markets, as noted above, will metamorphose into violet markets, and may even ultimately be abolished altogether in favor of direct allocation.

The Pink Market.

People living in the U.S.S.R., like homo sapiens in general, are prone to err. In particular they may make mistakes in the purchase of various items. It often happens that an unfortunate purchase becomes apparent only after the item has been used several times. Since it is frequently impossible to return purchased items to the store, the customer can correct his error only by selling the mistakenly purchased commodity to people who need it.

Soviet man, like man in general, may change his mind over time. In some cases it becomes important for him to acquire a new commodity. But he may not have the necessary money at his disposal. In such a case, in order to obtain money he will be ready to sell some of the commodities he has previously acquired and that have less value for him than the new commodity in the new situation.

Fearing the development of a spontaneous market where people could resell commodities and fearing the possibility that such market might become a black market, replete with profiteers, the state has created a special network of government commission stores to sell clothing, furniture and books. Their only purpose is to adjust the consumer's behavior, since consumers themselves use the overwhelming majority of the goods they purchase.

Since the number of commission stores is comparatively small (there are several dozen of them in Moscow, for example), they have not required significant capital investments. The operating costs of the stores are borne entirely by the people who bring their goods to these stores. They pay roughly 7 percent of a commodity's sale price for the store's services.

Commission stores are fully guaranteed against losses that might result from the unsalability of a commodity, since the original seller is paid for an item only several days after its resale. The state quite carefully monitors the activity of commission stores. In order to prevent them from being used to sell stolen goods or privately produced commodities, a person bringing an item to a commission store is registered with his identity card. The state monitors prices at these stores and does not permit the sale of commodities at prices higher than the state price.

At the same time, unlike in the conventional network of state stores, prices at commission stores are fixed by the staff of the store itself. These prices are very flexible. They may be lowered as needed if an item taken on commission does not find a market. Naturally, the store lowers the price only with the consent of the person selling the item.

Finally, we should note the buy-up variant of the commission store, whose raison d'étre is to provide the seller with instant cash. Some people need to get money immediately for the items they sell, but at the conventional commission stores one has to wait until an item is sold. The state network of buy-up stores has been created specifically for cases in which a person has to sell an item immediately. Since the store assumes the risk for the sale, the person selling the item receives a substantially smaller sum than the sale price. The difference between the price for which an item is sold by a buy-up store and the sum received by the person selling an item fluctuates according to the demand for the item.

Thus U.S.S.R. has created a network of state stores that perform the middleman functions needed to adjust consumers' behavior. Since these stores are the property of the state and the people employed in them are state employees, the situation is analogous to the red market. A number of other government constraints on the activity of store personnel in accepting commodities on commission and setting ceiling prices at the level of state prices also makes them resemble the trade enterprises in the red market.

Yet there are also significant differences between these stores and state stores. As we have already noted, the basic difference is that by store personnel may set prices, especially in buy-up stores. This creates considerably greater opportunities for the staff to illegally increase their income. It is the basic reason that commission stores are not red but pink.

What are the prospects for the development of the pink market in the U.S.S.R.? The pink market will be retained even in the distant future, since it is born of factors that are part of human nature. As the well-being of society and the quantity of commodities consumed increase, the role of this market will grow. Naturally, structural changes will also occur in the nature of the commodities sold on the pink market: given the relatively low prices of clothing, used clothing may be sharply devalued. But at the same time there may be an increase in the share of passenger automobiles sold through commission stores.

One can also suggest that, in terms of the method of its operation, the pink market may prove competitive with the red market. It is conceivable that Soviet trade methods may be improved by organizing the work of the state retail trade network on a true commission basis, with enterprises producing consumer goods. Of course, such a reorganization of trade requires appropriate socioeconomic measures to define the responsibility of the participating parties. The so-called cooperative trade in the U.S.S.R., headed by Tsentrosoiuz, is essentially a state system. It operates on the same principles as the state retail trade, but it differs from the latter chiefly in that it primarily serves the inhabitants of rural areas. This system should not be confused with the cooperative sector, brought up by perestroika, which in effect amounts to the private sector.

The White Market.

The white market also belongs among the legal markets. A peculiarity of the white market, in contrast to the pink market, is that in the white market the owners of the commodities are usually also the direct sellers. The white market, even though it is controlled by the government, is managed by the state to a lesser degree than the pink market.

Two types of white market can be discerned. One of them is primarily a market in soft goods, while the other is primarily a market in foodstuffs. The reasons for their emergence are quite different.

Soft goods. Since the pink market is not very powerful, in many cities state agencies officially authorize the sale of old items at special markets the people call "flea markets" (barakholka). The state imposes taxes on these markets and checks to see that new items are not sold there (new items can be returned to the state store where they were bought or to a commission store). Here, the state places no restrictions on prices. Owners themselves sell their goods at these markets.

So poorly controlled a market can quite easily become a nesting place for profiteers. For this reason, the state does not encourage these markets and closes them down if they become major centers of illegal trade. This happened in the 1950s when the large Moscow Perovskaia flea market was shut. A similar market in Kiev, bearing the name "Storm Cloud" (tucha) was closed in 1975.

We shall characterize in somewhat greater detail another type of white market that plays a large role in the U.S.S.R.

Foodstuffs. The specific conditions underlying the development of the planned socialist system in Russia, a country with a small-scale peasantry, supplemented by Stalin's foreign and domestic policies, led to the emergence of a collective farm market in the country.

Stalin's policy of industrialization at the expense of the peasantry was accompanied by the introduction of the corv'ee system in the form of collective farms. The state shed its responsibility for the welfare of the peasants and left them to fend for themselves.

For their labor on the collective farms the peasants received some pay, usually in the form of a small percentage of the grain or vegetable harvest. The peasants' basic source of income was their private plots. Thus, peasants received income in kind from private plots and from the collective farms.

Since the structure of products available to the peasants could not satisfy their needs, while on the other hand the city dwellers' demand for a number of foodstuffs was also not entirely satisfied by state trade, a means had to be found to organize the exchange between town and country. It would have been possible in principle to organize this exchange through the appropriate state trade system. But this would have required diverting substantial labor resources to the delivery of commodities and their sale. Moreover, the peasants have a considerable amount of free time that is of little value to them. They are willing to spend this time delivering and selling goods in the city and purchasing the goods they need. They even have an interest in doing so, since with their low income level they are reluctant to pay for middleman services.

All this led to the organization of the collective farm market in the U.S.S.R.,[138] which we will provisionally call white. The white market is less desirable to the state than the red market because it is less controllable. However, as an official market it is restricted by the state; the state controlls the hours of operation and the state also defines the upper limits of prices. These prices may not exceed the prices of similar products in state stores, evidently, by more than threefold.

The state does not usually intervene directly in prices in the collective farm market. But when crop failures occurred in the late 1960s, the state set ceiling prices. This quickly led to augmentation of the white market by another, illegal market. At the same collective farm market, the same sellers were now selling the required commodities under the counter for higher prices. Products of poorer quality stayed on the shelf. The inevitable risk to the sellers increased the prices still further: they were one and a half to two times higher than the official price limits.

Although the volume of trade on the collective farm markets is increasing, its total value share in the Soviet agricultural trade (using state retail prices) is fairly small : during the last two decades, it has fluctuated within the range of 4-5 percent.[139]

This does not negate the enormous role that the collective farm market plays even today in supplying cities with certain high-quality products, especially potatoes, meat, fruits, and so on. But here I intend only to note the role of this market.

Now let us try and evaluate briefly the prospects of the so-called collective farm markets.

The usual theoretical assumption in the Soviet Union is that with progress toward communism, the role in the economy of state property must grow constantly. This means that state farms should play a larger part in agriculture, private plots should be eliminated, and, hence, the collective farm market should disappear.

The facts, however, are otherwise: not only collective farms, but the whole collectivist idea in agriculture that included state farms, has turned out to be a disaster. The peculiar features of agriculture, and chiefly among them the presence of exogenous (weather) factors, make the system of individual (family) farming and personal responsibility the most efficient form of organization in this sector; naturally, this holds true for workers who are willing to accept the responsibility for their actions. Perestroika has provoked serious debates about a possible shift from large-scale agriculture to family farming, the leasing of land to individual farmers, and so on. The conservative resistance to these reforms, however, is so strong that the plan has not yet moved beyond the discussion stage.

Semi-legal Markets

The Gray Market.

Consumer goods and services. The commodities on the gray market are items of personal consumption (and services) allowed by the state that are brought to the market and sold by their legal owners. The illegality of these operations lies only in the fact that the transactions are not officially recorded and the resulting incomes are not taxed. Among the commodities on this market are services such as home repairs, rented urban apartments and summer dachas, or lessons by private instructors, and products such as flowers or individually tailored clothing.

During perestroika, it has become possible to officially register these activities as cooperative initiatives. But because official registration entails a huge financial burden, the activities continue to be performed almost everywhere in a largely semi-legal manner.

Let us first examine in somewhat greater detail the reasons for the formation of the gray market for individual services.

In the U.S.S.R., houses in cities are built chiefly by the state, which formally distributes them among city dwellers through district soviets of workers' deputies. Most urban dwellers receive their housing from the enterprises where they work. The importance of a given enterprise and its need for personnel determine the amount of housing allotted to it by the state.

The system for housing distribution in the U.S.S.R. is shaped by the use of housing as an additional incentive to attract people to a given job. Additional wages could not play the part performed by housing in this situation. This allocation of housing also makes it possible for a person to lose his housing if he quits his job at some enterprise, which does happen when it is necessary.[140]

Only a person who does not live in a city may get accommodations in hotels. He confirms his nonresidence to the hotel management by his identity card, on which his place of permanent domicile is listed by the police. By himself he cannot rent temporary housing.

Yet for various reasons, city dwellers need housing that the state cannot supply. For example, students who move to the city to study cannot always find space in a dormitory. A young married (or unmarried) couple that wants to live apart from their parents may also seek housing - they would rather rent than live with their parents.

The demand for additional space creates a supply. Some families find themselves in dire need due to the death of the head of the family, or they need money for good medical treatment (see below), and so on. Such families or single people rent one of their rooms or part of a room.

People looking for a place to live quite often find it through their friends or acquaintances or through advertisements. But for some time, the major cities have had certain places (usually the exchange office) where people renting and people looking have unofficially congregated.

Unlike state set rents, which are independent of location, the availability of an elevator, or other conveniences, the rents on the gray market, like all other market prices, also take into account the qualitative parameters of the places rented.

Thus in Moscow a separate one-room apartment with all amenities (gas, electricity, running water, bathroom) located near a subway station will cost approximately 1,500 rubles a year (remember that the average annual wage in the U.S.S.R. is approximately 2,400rubles). A one room in an occupied apartment with all the amenities, near a subway station, will cost approximately 600 rubles a year, and so on.

Apartment repair is a very common form of service on the gray market. Almost all housing in the cities belongs to the state. The apartment rent in the U.S.S.R. is set by the government. This rent is indeed very low and is far from sufficient to offset routine maintenance costs. Low apartment rent, however, engenders a multitude of negative consequences, including poor maintenance: there are insufficient funds to repair the buildings. The state refuses to change the rent primarily for ideological reasons. Low apartment rent is also used to propagandize the Soviet way of life in the West, where the cost of housing constitutes a considerably greater percentage of the family budget.

Thus, the tenants must pay out of their own pocket for routine repairs to their buildings. Since there are few state apartment repair shops, lines are long and prices are high. Moreover, since it is difficult and at times impossible to buy building materials from the state stores in case the tenant wants to repair the apartment himself, tenants prefer to hire a private repairman. These repairmen are usually construction workers who earn extra money in their spare time and who use building materials stolen from their construction firms. It should be noted that the quality of service by the private repairmen is generally quite low. Common corruption at their main job - low-quality of work and a lack of responsibility for meeting targets, especially owing to hard drinking - also crops up directly in work performed on a private basis. Rarely does a privately hired worker do his work neatly and on time. He usually tries under various pretexts to get an advance (and many fall victim to such requests) and then disappears for a long time to drink up the money he has received.

Summer recreational housing is another commodity on the gray market. In the summer the cities are quite hot, the air is saturated with gasoline fumes, and the houses are not air conditioned. Intelligentsia, which generally speaking, pays more attention to the health and recreation of themselves and their children, tries to spend the entire summer outside the city or visit an area suitable for recreation.

It is impossible to make such arrangements "on an organized basis," since the state does not have houses for rent in resort areas. During Khrushchev's times, as reported in the press, the state was planning the construction of many thousands of suburban houses for the recreation of Muscovites. But like many other of Khrushchev's "projects" aimed at improving the well-being of the working people, this effort did not get off the drawing board. Accomodations in state sanatoria, rest homes, young-pioneer camps, and similar institutions can be acquired only for a limited time - usually for a month. Only a small segment of the intelligentsia has private or state-owned summer cottages. It is possible to build a private cottage legally if an enterprise allocates the land, or it is even possible to buy a finished cottage. But this entails major expenditures and maintenance efforts (it is difficult to acquire materials for repairing cottages, and so on).

Here the private owner (chastnik) comes into play and offers part of his suburban home to a city dweller for the summer. Let us note at this point that living conditions in the country are very difficult. There are few food stores or other service institutions; there are few privately owned motor vehicles; after work one has to get partway to the cottage on a crowded suburban train and then walk the rest of the way. Moreover, one has to bring a large part of one's groceries from town (especially meat and vegetables). Thus, the payment for the cottage becomes payment for such limited resources as fresh air, a place to swim, and so on.

Leasing part of a suburban home may be an important source of income for the lessor. A summer cottage near Moscow (depending on such features as the area or the number of rooms) costs around five hundred rubles for the season; that is, its rent equals two months' salary for an average engineer or four months' income for suburbanites, many of whom work on collective farms or at small suburban enterprises.

The government has occasionally tried to put a stop to the renting of summer cottages, particularly because the additional sources of income for suburbanites made them less interested in their basic work. But the state quickly found that a large number of families could not arrange their vacation without the summer rentals. The central authorities were showered with complaints and appeals to lift the ban on renting dachas. I do not know why the authorities reacted to letters from working people, but the ban on dacha rentals was shortly lifted. This was officially reported in the local press (particularly, in the newspaper Evening Moscow [Vecherniaia Moskva]), which stated that, generally speaking, it was forbidden to rent houses for the summer, but that one could invite relatives. And since the degree of kinship was not indicated, the practice of renting dachas was reinstituted.

Other commodities on the gray market are educational and health services that supplement the system of free education and medical care.

Given the Soviet system of secondary school education, it is usually difficult to obtain sound knowledge of a foreign language. In the overwhelming majority of schools the study of a foreign language begins only in the fifth grade. There are thirty-five to forty pupils in a class, and the classes are usually held twice a week.

First-generation members of the intelligentsia generally do not know foreign languages and have not heard foreign languages at home. Yet they try to provide their children some knowledge of foreign languages and hire private tutors to help. First-generation intelligentsia themselves also begin studying foreign languages as adults. This is because in the post-Stalin era contacts with scholars from Western countries have increased, in some fields people have access to Western literature, and so on. Usually this knowledge is also acquired through private instructors. Even though it is not expensive to attend evening foreign-language courses, it is difficult because classes are large and the program is quite intensive. Free foreign language classes for individuals (or for small groups) are primarily a privilege of the elite.

For a lesson (one academic hour) private instructors receive approximately two-and-a- half times what a foreign-language instructor gets in a school.

Another reason for hiring private tutors relates to admissions to higher educational institutes, for which entrance exams must be passed. Intelligentsia strives to give their children college education. Practically all children of the intelligentsia try to get into colleges, and naturally, into the best ones. But roughly since 1968 it has become more difficult for the children of the intelligentsia to get into colleges. Significant advantages have been accorded the children of workers and peasants, many of whom are admitted to higher educational institutes without going through the general system of examinations. Such admission of worker and peasant youth to colleges evidently results from the authorities' desire to paralyze the activism of the student body.[141] Children from Jewish families, which traditionally try to provide their children with an education, experienced special difficulties owing to the policy of state anti-Semitism (at least, till 1989).

The limited number of places generates intense competition among the children of the intelligentsia for admission to the best colleges. Of course, "competition among parents" and corruption, inevitably crop up here. But in any case, the extent of a pupil's preparation also plays some part. Hence, parents try to improve their children's knowledge of the subjects in which they are examined. This applies to mathematics in particular, which many colleges require as part of their entrance exams and which is traditionally quite difficult for many high school pupils.

In order to improve the children's training, private instructors are called in, especially during the summer months just before entrance examinations to colleges. Depending on his qualifications, such an instructor receives up to ten rubles per hour per pupil. College and high school instructors as well, as college students, perform such private tutoring, which is a very appreciable source of income for all of them.

There is also a gray market in health care, even though medical care in the U.S.S.R. is free. Yet good physicians are frequently concentrated in hospitals attached to colleges or research institutes and not attached to the compulsory system of health care available to the residents of any district. Even if a hospital is obligated to serve the inhabitants of some area, the patient does not have the right to choose his physician. The number of good physicians is limited, and they may more or less choose their patients. Naturally, the patients want to get the best physicians. The demand for good physicians exceeds their supply. A balance is struck because patients pay considerable sums to the best physicians: up to three hundred rubles for an operation in some clinics, or fifty rubles for a house call. This payment is not gratitude for good treatment, but is rather, to secure the doctor's agreement in selecting the patient.

It is also a common practice in hospitals to pay nurses' assistants ten rubles a night to sit at a patient's bedside. The nurse's assistant on duty usually does not take good care of patients - there is no incentive to do so.

Initially, at the outset of perestroika, there was an attempt to legalize that part of private medical services that did not include hospitalization. But many of the medical cooperatives that appeared on the scene were soon ordered closed, because the cooperatives could not afford to buy the equipment for various medical tests and had to rent them from state hospitals and clinics. Since these organizations also suffered an acute equipment shortage, it is easy to imagine the consequences of this effort to combine state and private forms of medical care.

We know that the sphere of paid services to the population is underdeveloped in the U.S.S.R.: it was assumed that the so-called productive sphere, which is primarily connected with military goals, had to be developed first. At one time, Soviet propaganda even considered it an advantage of socialism that a considerably larger percentage of the gainfully employed population in the U.S.S.R. worked in the so-called production sector than did so in the West, especially in the United States.

Consumer products are also available on the gray market.

Cobblers, tailors, and the like quite often perform private work. There are private tailors, for example, thanks to the low quality of clothing in state stores and the low quality and slow schedule of individual tailoring in the state shops. A good private tailor charges approximately two or three times what a state shop charges. The recent drop in the number of private tailors is basically due to the appearance of attractive imported clothing both in state stores and on the black market.

Finally, flowers are a commodity on the gray market. The point here is that flowers are only sold flowers at official collective farm markets during limited hours - the markets close at six p.m. - and in limited areas - there are very few markets and they are far from the busiest parts of town. The number of state flower stands is also small and their assortment is limited. But since the need for flowers is very great in the evening - they are a pleasant and relatively inexpensive present - and the commodity itself is entirely legal, the officials have authorized the private sale of flowers. The place of sale is basically a secondary question. Even though there may be misunderstandings here in the sense that the police may oust flower vendors, the authorities are usually indifferent to this type of trade in busy places and are reconciled to the illegal methods of sale: the vendors do not pay taxes on the goods they sell.

Flowers reach the gray market from two different sources: they are brought in by the inhabitants of southern regions, or they are grown by suburbanites who have plots of land near their homes.

The sale of flowers from the southern regions has become quite a big business. There are even people who devote all their time to this business, as well as wholesale flower dealers. In large cities wholesalers sell to local inhabitants who organize the retail trade. This business is partly run by inhabitants of the southern regions who move to the major cities for a considerable period of time. The retail trade in flowers is primarily in the hands of married women who cannot be accused of parasitism.

The growing of flowers near large cities has become an important source of income for suburbanites, some of whom even build hothouses.

Thus, since there are consumer goods and services in the Soviet economy for which the state cannot entirely satisfy the demand, there appear people who can provide these commodities from their own resources or produce them with their own labor. Since the satisfaction of the demand for these commodities does not generally contradict the interests of the leadership, and since their source is entirely legal, the state primarily prefers not to impede this spontaneous process. Thus, the gray market is a market for the sale of legal commodities from legal sources in illegal form.

With the growth of the intelligentsia in a society that prizes health, recreation, education, and so on, the demand for this type of benefit will increase. We can assume that the U.S.S.R. is going through a phase in its development when the size of intelligentsia will increase at a more rapid rate than any change in the conditions that promote the gray market.

The role of the gray market could decline in the future if the government could allow private initiative in the rendering of goods and services not recognized as semi-legal, that is the gray markets for these commodities could convert to white market. Perestroika aims precisely at promoting private initiative in the service sector. But in a mixed economy with a huge state sector, widespread envy toward the well-to-do, with people adept at circumventing the law, and a shortage of resources, work space, equipment, and materials, this task faces monumental challenges.

Capital goods. The planning system in the U.S.S.R. is based largely on the "power play" principle. Starting with Gosplan and ending with the workplace there is a struggle between the rulers and the ruled to set the plan. The ruled try to obtain the smallest possible plan for output and to include in the plan as many expenditures as possible. If large planned expenditures are "coaxed" from the higher-echelon organization, surpluses will turn up at the lower echelon. Since claims for various resources are unevenly "chopped" by higher-echelon agencies, the size of these surpluses is usually not uniform.

At the same time, an economic unit may lack the resources needed to produce certain items. This shortage either stems from shortfalls in deliveries, since there was an imbalance built into the plan itself (enterprises slated to start up are, as a rule, not put into operation on schedule and so the products they were to deliver fail to arrive), or it is due to defective production. Such imbalances between supply and demand for various types of resources are evident at all levels of the hierarchy in the Soviet economy, all the way down to the workplace. The art of participants in the Soviet economic system, then, lies in exchanging their surpluses for the items they lack. Only the very skilled know who has what and can organize an exchange through unofficial communication channels.

All kinds of capital goods - primarily various types of materials, equipment, and spare parts, etc., that are directly used in the production of commodities belonging to the state - appear on the gray market. Exchange on this market is is conducted in physical terms.

Government officials understand the need for such redistribution of resources. They also realize that, in this case, people here are essentially operating within the framework of the planning mechanism they have themselves created, from which favorable plans should emerge. Hence higher-echelon organizations close their eyes to the sources of surplus resources. They authorize an exchange between participants that is carried out quite legally at all levels of the hierarchy. For example, at the enterprise level it takes place when participants exchange appropriate official letters and appropriate entries are made in their accounts at the bank. Moreover, if the commodities are not part of the fixed capital and are not funded, such an exchange of letters is adequate for the exchange, but if the commodities are funded and belong to fixed capital, then in all cases authorization from a higher-echelon organization is required before the exchange can take place. It is usually no trouble to obtain this authorization, which is a purely formal act. But under state ownership of capital goods, such monitoring is inevitably required.

Thus the gray market in capital goods operates legally but derives from semi-legal acts committed in the course of economic mechanism's operation.

We should also note that the existence of the gray market in capital goods has a corrupting influence on the people who take part in it. It legalizes illegitimate means - lying and corruption - insofar as it permits the realization of what was attained by these means in the course of compiling the plan. And where a first step, born of the very system of planning, has been made toward corruption there will also be other steps that lead, as we shall see below, to a black market.

We can assume in principle that even improving the planning mechanism of performance in the Soviet economy will make it possible to reduce this market's role. It goes without saying that if a regular market - projected by perestroika but not yet introduced - ever takes hold in the Soviet Union, various gray markets would simply disappear without a trace.

Illegal Markets

The Brown Market.

The basic impetus to this market is the so-called scarcity of goods. Scarce commodities exist in both capital and consumer goods. The reasons for the scarcity of these commodities greatly vary: nonfulfillment of the plan, errors in planning, the absence of flexible direct ties between suppliers and customers, and so on. We will examine only the scarce-goods market characterized by the fact that the very existence of scarce commodities is consciously built into the plan itself.

We will examine the formation of scarce consumer goods and capital goods markets separately.

Consumer goods. scarce goods on the red market . In the U.S.S.R., the prices of a number of consumer goods are lower than the equilibrium prices. For this reason, the demand for these commodities exceeds their supply, and they become scarce. Note that there are a number of other commodities for which the need is also not entirely satisfied, but equilibrium prices have been established, and supply and demand for these commodities have been equalized. (This applies at least to the consumption of bread, potatoes, dairy products, and other foodstuffs in many cities: if their prices were lowered or if incomes increased, the consumption of these commodities would grow.

Scarce commodities include many types of women's clothing, rugs, imported furniture, refrigerators, passenger cars, building materials, and so on. Note that scarcity does not apply to such vital necessities as bread, sugar, potatoes, or ordinary clothing. It would seem, therefore, that the state could raise the prices of some scarce commodities without fear of popular protest, since this rise would not affect particularly vital items.

Nonetheless, it is likely that scarce commodities exist because the state fears to raise prices in the face of possible public discontent. In private conversation, I heard the following explanation of scarce commodities from Dr. Lev Majzenberg, a quite prominent official involved in price determination. He believed that the unduly low prices existed because politically they made it possible to delude the public into believieng that such items are available, that in principle even a person with a small income could buy them if he is willing to stand in line. That is, it is presently impossible to buy some things without standing in line supposedly only because of temporary difficulties, a temporary shortage of commodities. As the production of scarce commodities increases, the lines will grow shorter.

In my view, some other indirect conclusions also follow from this position. Since in the U.S.S.R. there is no mechanism for fighting to have one's wages increased and since there are, generally speaking, unlimited opportunities to raise prices, such artificial restraint of prices is a sort of evidence that constraints do exist for the authorities: they are afraid to stir up the public. Let us now examine the negative aspects of scarce commodities and determine the price society pays for the illusions created here by the state.

The existence of scarce commodities generates an illegal system for selling goods within the state network. The mechanics of this process varies. For example, a store clerk tells her friends when a scarce commodity will be delivered. The customer comes, stands in line, and buys an item, or else the clerks "put it aside" (they write "sold" on hard-to-get furniture, stash away hard-to-get clothing, and so on). While additional payments in such cases are lower than that charged by the profiteers, it is more difficult to find clerks who are willing to run this risk for strangers. Clerks often deal with a "reliable contingent" of customers and profiteers.

It can safely be said that the overwhelming majority of the clerks in stores selling soft and durable goods make this kind of sale of scarce goods -after all, there are scarce commodities in practically all stores. Even if a young clerk is honest, he/she is forced to do these things by the department head, to whom he/she must give a part of his/her income. The latter, in turn, must give a part of his/her income to the store manager, who must pay a part of his/her income to the trading depot that supplied him/her with the scarce commodities (since, after all, they could have given these commodities to someone else), and so on to the very top of the trade hierarchy.

What I have said about the sale of scarce commodities by trade network personnel refers both to the red and the pink markets. It is not possible to officially fix higher prices on the pink market, and so the same artificially created scarcity exists on the pink market as in the red market.

What then compels trade personnel to resort to illegal selling methods? On the one hand, they are compelled by their low standards of living and low wages. A store clerk earns approximately sixteen hundred rubles a year. On the other hand, they have the opportunity to make money illegally. (An engineer might also be willing to trade under the counter with scarce resources, but he does not have any). At the same time, these methods of selling scarce commodities are relatively safe, since it is hard to prove that a clerk telephoned someone or put a commodity aside. Moreover, the police whose job it is to combat such trade methods themselves are poorly paid and are easily corrupted.

The creation of opportunities to amass considerable sums of money in the trade system leads to widespread corruption among the people employed in that system. Given the low cultural level of trade personnel, they spend the bulk of their easily acquired money on alcohol. This is especially noticeable in furniture stores, where the clerks have very high incomes owing to the scarcity of furniture (as much as several hundred rubles a day). Usually these clerks "are not dry" but are always "slightly tight." Drunkenness among women working in trade is also sharply on the rise.

Let us note yet another type of scarce commodity that is found on the brown market - illegal service by passenger vehicles not privately owned. Major cities in the U.S.S.R. have for the most part organized urban transit, especially and chiefly subways.[142] However, the taxi fleet in many large cities is inadequate to meet demand because the rates are unduly low, there is insufficient incentive for drivers to make long runs, and so on. Again, the individual comes to our aid here. The price of his services is approximately the same as for taxis.

The passenger cars illegally offered for rent usually belong to offices and enterprises. In the U.S.S.R. the heads of enterprises and offices have passenger cars at their disposal. Whatever their age and status, the executives themselves do not drive the cars: there are staff drivers to do so.[143] The wages of these drivers are usually low - lower than the average wages of drivers in the U.S.S.R. In order to keep good drivers (and executives are very interested in keeping them) executives try somehow to increase their drivers' incomes. One way of doing so is to allow the driver of a passenger automobile to use the car to transport private persons whenever it is not convenient for the executive to whom the driver is assigned. The driver's additional income in such a case amounts to approximately half his salary.

Perestroika has allowed private individuals to convert their cars into taxi cabs. The permission, however, has been accompanied by so much bureaucratic and financial red tape, that in many cities this type of service has not taken root. It continues though to be performed semilegally.

Privately owned imported commodities. By no means does the Soviet Union produce all the types of commodities needed by its people. Many high-quality commodities, especially footwear, clothing, and furniture, are officially imported and sold in state stores. Nonetheless, the quantity of imported goods is inadequate and the assortment is limited. At the same time, the importation of goods into the U.S.S.R., especially electronics and goods made of synthetic materials, is very profitable. The relationship between the prices of these goods in the West and in the U.S.S.R. is such that, for many of them, the purchasing power of the dollar is as much as ten to fifteen times that of the ruble.

In the U.S.S.R. there are entirely legal private sources for obtaining imported commodities from the West. Such goods find their way into the U.S.S.R. in the parcels sent by recent Soviet emigres; alternatively, they are brought in either by Soviet tourists returning from foreign trips, or by Westerners visiting the Soviet Union. This two-way tourism has mushroomed during Gorbachev's policy of glasnost. Foreign tourists are another important source of imported goods. This is especially true of Finnish tourists for whom it is very easy to spend a weekend in Leningrad. A trip to the U.S.S.R. helps Finns overcome restrictions on alcohol consumption that exist in Finland. These tourists often bring all sorts of cheap nylon clothing from Finland to sell in the U.S.S.R., where nylon clothing is very expensive. The expansion of cultural exchanges, with large numbers of Soviet actors performing in the West, athletes competing in Western countries, and scholarly visits, has also greatly boosted the inflow of foreign goods. These people spend quite a long time abroad and can legally accumulate sufficient money to purchase Western goods that are very fashionable in the U.S.S.R.. (For more details on expanding exchanges between the U.S.S.R. and the West, see chapter 4).

Goods imported privately into the U.S.S.R. can be sold officially through the state network of commission stores. Although one can sell goods for quite high prices, using this network entails certain inconveniences. In order to sell an item on commission, one must display one's identity card. The very fact that this transaction is recorded is in itself very unpleasant for the seller and, assuming fairly frequent sales, is also quite dangerous for him, especially if new Western goods are involved. Moreover, the commission stores must be paid for their services.

All this fosters the brown market in imported goods, which, as we shall see below, becomes a black market when both owners and profiteers participate in the sale of these goods.

For the state the existence of a brown market in consumer goods is in principle undesirable, since it creates an artificial redistribution of incomes among the population and is a source of easy money. Nonetheless, the state does not severely persecute participants in the brown market and confines itself to firing them or to similar administrative measures. Perhaps the state sees this market as a way to attract personnel into activities important to the state but for which it is thus possible to pay a comparatively low wage.

As we characterize the black market and its profiteers we shall examine some of the consequences of a scarcity in commodities, and the prospects for developing the market it stimulates.

Capital goods. A scarcity of capital goods is also built into the plan. We shall examine only one group of scarce commodities directly associated with our topic.

The U.S.S.R. is short of spare parts, especially for machines that are in wide use: tractors, automobiles, farm implements. (See chapter 5).

Agriculture suffers most from the shortage of spare parts and the system for their rationed distribution. Although it is a major consumer of these parts, agriculture is considered less important than heavy industry, transportation, or construction, and so it is usually the first to be denied funded spare parts. Yet the managers of agricultural enterprises bear very great responsibility for the harvest. They try to obtain parts by all sorts of legal methods, and they are joined in this effort by the provincial and district party committees that are held particularly responsible for the deliveries of agricultural products. The committees compel enterprises under their party custody to produce spare parts for agricultural machines.

Still, legal methods are not always sufficient. Since collective farms have more opportunity than do state enterprises to use the money they have on deposit in the bank, their managers stimulate the organization of the brown market in spare parts. Its dark shade stems from the fact that the collective farms purchase stolen spare parts. These parts are manufactured for the collective farms on the basis of personal agreements with plant workers, who then illicitly ship the parts to the collective farms. The managers of collective farms sometimes enter into such illegal relations with managers of state enterprises. The manager of the enterprise gets quite a significant sum of money for spare parts received from the plant.

In terms of the methods used in this market it should be classified as black. However, there are extenuating circumstances here. The managers of collective farms who urge plant personnel to steal are not pursuing their own personal gain or enrichment; they are pursuing the stability assured by fulfilling the plan for the delivery of the requisite agricultural products to the state.

These extenuating circumstances permit us to believe that here we are dealing with the brown market and the corresponding administrative, rather than criminal, system of punishment for its participants. In the future the brown market for the means of production may be seriously curtailed. This depends, in particular, on the leadership's policy concerning demilitarization.

The Black Market.

We will call the market whose participants are prosecuted by the state and convicted as criminals the black market. We will examine the structure of the black market from the standpoint of the legality of the goods circulating in it. These properties of the commodities have also given rise to special terms for their owners, who participate in the activity of this market.

The greater share of the Soviet black market is comprised of legal goods produced or sold illegally. Therefore, my discussion will focus on the black market for legal goods.

Legal goods with limited production or import, legally produced and illegally sold. The existence of a myriad of domestically produced and imported scarce consumer goods also results in the transformation of the brown market into a black market. This market is characterized by the emergence of a special group of people who buy up commodities for resale: profiteers. The crux of the matter here is that the state-store personnel who operate on the brown market are frequently afraid to deal with the many random customers for scarce commodities. Despite a certain degree of danger, they prefer a regular, specialized, wholesale buyer, that is a profiteer.

It is also often disadvantageous for the owners of imported commodities to sell them in commission stores. As a result, the commodities brought in from abroad are sold by their owners through profiteers, that is on the black market.

This black market feeds on the body of other markets, especially the white market. In a number of cities, especially port cities (Odessa, Tallinn, and others), imported goods are usually sold under the counter at "flea markets," since it is forbidden to sell new commodities there. In cities where there are no "flea markets," such as Moscow, for example, imported commodities form a special market - the commodities are purchased in profiteers' homes.

As we have already noted above, the state does not tolerate profiteers, even though they essentially perform for it the function of balancing supply and demand. Since profiteers run the risk of being caught and convicted, they set higher prices.

It is rather hard to say how much higher profiteers' prices are than those in state stores. Price markups vary depending not only on the commodity's scarcity but also on the number of hands through which it has passed (that is, whether a profiteer has purchased a commodity in a store or bought it from someone else), and on whether the profiteer is trading in fast-moving items in large quantities (which generate profits from turnover) or dealing in small quantities of luxury items. Roughly speaking, we can assume that a markup within the range of 40 to 100 percent of the state price of a commodity is normal. Sometimes profiteers sell their place in line; that is, they stand in line for a scarce commodity and then sell their place in line to a person who needs the item. It is somewhat cheaper to buy a place in line than to buy the commodity from the profiteer.

It is difficult for me to assess the number of profiteers in the U.S.S.R., since even a person who wants to buy goods from a profiteer has trouble finding one, but I would venture to say that the number of profiteers approaches several hundred thousand. For the most part, they are married women entitled not to work. There are also profiteers who combine profiteering with their basic job, particularly janitors in large cities who work primarily at night and in the early morning. During that time they take their place in lines for stores expected to receive scarce commodities.

The presence of profiteers has a corrupting influence on society and generates a substantial stratum of people prepared to risk criminal punishment to make large sums of money. Even though the threat of punishment offsets the large income, the fact that the state generates the source of these incomes is a diabolical temptation for people.

Petty and major profiteers are not the only ones who flourish in the realm of scarce commodities. There are also swindlers, who cunningly exploit the shortage of goods. Some of them are true masters at their work and are worthy of Ostap Bender in terms of their inventiveness.[144]

It may be assumed that the role of the black market (as well as of the brown) in providing consumer goods will grow in the next few years if the production and importation of the commodities needed by the public do not increase significantly. The reason is the sharply increased amount of the population's cash on hand, which is in large measure available to buy commodities. If in the more distant future the population's standard of living grows, it may be assumed that the state will stop exploiting the illusion that everyone has an opportunity to buy commodities, together with all its attendant negative consequences.

Stolen goods. The black market examined above springs from commodities that could be legally obtained in the trade network, legally produced, and illegally sold.

To some degree the Soviet black market also originates from illegally produced commodities. These are ultimately consumer goods, since only for them can cash be obtained; given the current border controls, smuggling is virtually impossible in the U.S.S.R.. Plunderers of socialist property are participants in the black market who obtain legal commodities by illegal means. On this black market there may be scarce and non-scarce commodities; the important thing is that all of them are produced from stolen materials at state or cooperative enterprises or are stolen in the trade network. When examining the sources of the gray market in capital goods, I noted that the system of "power planning" that exists in the U.S.S.R. generates reserve resources for enterprises. Enterprise managers normally use these reserves to fulfill and overfulfill their plans. Since the managers are not personally enriched in such cases, but only preserve their position and receive comparatively low bonuses for the fulfillment and overfulfillment of the plan, I was inclined to believe that this constitutes only a gray market.

But in a number of cases such reserves are used to produce goods that ultimately go to consumers, while the money (very substantial sums) is pocketed by the wheeler-dealers. The reserves thus generated, generally speaking, also create opportunities to use them for personal enrichment. Illegal methods of generating reserves also facilitate their use for selfish ends, for personal gain. If reserves can be used for illegal production, personnel in the higher-echelon agencies get large bribes to establish higher norms for the expenditure of supplies, equipment, etc. Major trials conducted from time to time in the U.S.S.R. show that in the planning system itself, there is potential for illegally producing commodities by artificially jacking up the norms governing the expenditure of resources.

The chains of illegal production of consumer goods can be quite long. For example, cooperatives that did not have the high-quality materials to produce high-quality elastic braid purchased stolen supplies from aviation enterprises, to which high-quality materials for manufacturing parachutes had been allocated. The production of consumer goods from stolen materials was set up by the manufacturing enterprise itself.

We note that artels for producing consumer goods that existed in the U.S.S.R. before the end of the 1950s actually produced goods illegally quite often - the artels' status stimulated them to steal. On the one hand, the artels were supposed to operate on the basis of scrap materials, and they did not receive funded raw materials from the state. On the other hand, high-quality production was demanded of them. Their small production scale created a private situation in which it was easy to produce commodities illegally.

In the central regions of the U.S.S.R., Khrushchev's amalgamation of the artels and their conversion into state factories, coupled with the introduction of severe punishment for illegal production (up to execution by firing squad), caused a sharp reduction in illegal production. However, in a number of republics, and especially in Georgia, where the authorities were very corrupt, mass illegal production has existed until recently.

Illegally produced goods, since they resemble legal ones, are usually sold through the state trade network, particularly through small state stores or stalls at collective farm markets. The unmonitored sale of commodities is significantly easier in these stores and stalls, which frequently do not have stock records and cash registers.

Commodities stolen from wholesale trading depots or from stores themselves are another source of commodities for the black market generated by plunderers of state property. Here the methods of theft are myriad, including writing off supposedly spoiled goods, short-weighing the customers, and so on. The commodities obtained are usually sold through the state retail system, whose constraints on the sale of illegally obtained commodities are circumvented. For example, a state trade enterprise that has cash registers, stock records, and so on, sets up open-air counters of illegally obtained commodities in its district (this is quite typical in the summer). The clerk behind the counter takes in money directly; stolen goods can also be delivered to him directly, bypassing the warehouse, and so on. The store manager justifies setting up open- air counters by saying that the stores do not have enough space to fulfill their plan.

Finally, we should note that some commodities are stolen from state enterprises and are sold directly to the public - principally building materials, many of which are in short supply. Materials that are not scarce are sold at a low price on the black market - lower than in the state stores, since the buyer of stolen goods also risks punishment.

Legal goods with restricted sale and illegal goods. All the scarce commodities examined so far are commodities that the state would try to sell more of if it had the resources to do so. But some scarce commodities in the Soviet economy originate from the state's attempts to reduce their consumption. Wines and spirits stand out among these items.

It is well known that excessive consumption of alcohol is a Russian tradition. In the U.S.S.R. these "glorious traditions" have multiplied. One of the reasons is that, given the prices existing in the U.S.S.R. for food, clothing, automobiles, and similar products, the greatest quantity of positive emotions per ruble of expenditure can be derived from alcohol.

The state's attitude toward alcohol is ambivalent: on the one hand, it is negative: alcohol is the scourge of production, a cause of crime, and so on. On the other hand, it is positive: alcohol is a tremendous source of budget revenues (on the order of 10 percent), and most important, it is a means of psychological relaxation for the masses. When the negative aspects become especially alarming to the authorities, they issue yet another decree aimed at curbing alcoholism.

Among the measures incorporated in one such decree in the last decade was to permit the sale of vodka to limited hours. The reasoning was that the workers would at least not drink before work or at the beginning of work. However, a decree cannot abolish the demand for vodka both in the morning and in the evening. And it is unrealistic to buy reserves of vodka because if there is vodka, it will be drunk up.

Thus, vodka became a scarce commodity in the morning and in the evening. And as it always happens in such cases, a black market sprang up. It began right in the state trade network. Clerks in stores trading in wines and spirits assumed the role of profiteers, sold vodka under the counter in the morning and evening, taking extra money for their services.

The black market in alcohol since spreads to people who combine their basic jobs with the illegal, profiteering sale of alcohol. Cab drivers, who can easily be found at cab stands, usually carry on this trade. Finally, there are also professional bootleggers. For the most part they are middle-aged women, though there have also been cases in which teenagers have become involved in scouting for customers.

The possibility of producing spirits inexpensively at home, when the official liquor sales are limited (for example, during an unsuccessful anti-drinking campaign launched by Gorbachev) has led go a market in a semi-legal commodity like homemade liquor (samogon).[145] Most homemade liquor is, evidently consumed by its producers. But some of it is sold on the black market. Unfortunately, it is not yet possible to provide a more precise quantitative picture of the role of homemade liquor on the black market.

We can assume that a major reason for the comparatively low level of sale of homemade liquor is the quite severe penalty for selling it: the sale of homemade liquor carries a prison term of one to three years with possible confiscation of property. The penalty for producing homemade liquor for one's own consumption is much less severe.

Semi-legal goods not imported or produced for the public. Semi-legal commodities basically include some consumer goods not officially imported by state institutions, mainly for ideological considerations. For instance, certain types of clothing are not normal for Soviet citizens and are associated with the Western way of life. Modern music is incomprehensible and apolitical; that is, it does not fit the confines of socialist realism. We can say that in autocratic systems like the U.S.S.R., the leaders prefer the conventional for the sake of stability. Any deviation from conventionality usually disrupts people's stereotypes. And if something new comes from "overseas," it also inspires people's respect for other countries, in which new types of clothing exists, and so on. Hence, the authorities attempt to suppress an increase in diversity in the system by limiting the assortment of imported goods.

However, in the U.S.S.R., a country with an extraverted culture, there are quite a few industrious people who want to stand out from their fellows, which they can do with unconventional clothing. Therefore there is a demand for such undesirable, "semi-legal" goods. Meeting this demand can be very profitable for private citizens traveling from the U.S.S.R. to Western countries, or for foreigners coming to the U.S.S.R..

Semi-legal goods in the U.S.S.R. were available in comparatively small quantities. Petty profiteers who sell these goods (and also such illegal goods as, for example, foreign currency) are called fartsovshchiki. The state also relentlessly combats these profiteers because they deal with foreigners.

The availability of these goods has changed significantly during the period of glasnost. Many gooods, such as genes, rock music recordings are produced both by cooperatives and state enterprises. Nonetheless, the quality of Soviet-made goods is inferior, so people still crave Western goods.

Illegal goods. Some commodities in the U.S.S.R. may not be bought and sold by private citizens and are illegal. This refers primarily to foreign currency, gold (in bars), narcotics, etc. But even these goods are bought and sold in the U.S.S.R.. It is mainly people who are involved in the black market and who have sizable incomes that need foreign currency and gold. For general reasons, they feel it is wise to keep their wealth in various forms, particularly in the form of foreign currency and gold. Soviet citizens traveling abroad also sometimes buy foreign currency because they are given a limited amount of currency for buying commodities they can sell at home.

On the black market, gold circulates primarily in the form of the gold coins from tsarist Russia, but it is also possible to acquire bar gold and gold dust. The sources of this gold may be quite fantastic, including gold stolen from gold fields.[146]

The price of currency on the black market fluctuates wildly. A dollar costs from ten to twelve rubles. People who operate in this black market are usually professional currency speculators. In recent years, new ways to exchange rubles for hard currency have appeared: on the one hand, there is a large number of emigres in the West who want to help their Soviet relatives; on the other, there are people in the U.S.S.R. with plenty of rubles, which they would like to launder abroad in the form of hard currency.

The system of penalties for the sale of currency in the U.S.S.R. is very severe: they range up to execution by firing squad. Until the early 1960s the punishment for participating in currency operations was relatively mild: two or three years in prison. Some people felt such mild punishment made it wise to get involved in currency machinations, which promised a large income. It was possible to earn tens of thousands of rubles in this way. Even if one was jailed, the money could be used to make prison life easier. Later on, one could live quite well even without trading in currency. However, when Khrushchev decided to halt currency operations, a new law was introduced; in violation of the principles of Roman law, currency speculators were tried and convicted retroactively under the new law for earlier offenses. A number of "currency speculators" were sentenced to death. A wave of protests from the world community against Khrushchev's lawlessness, including a statement on this score from Bertrand Russell, could not stay Khrushchev's punitive hand. A number currency speculators were shot.

Narcotics are also sold on the black market. The demand for narcotics is generated by the same factor as in the West: primarily, by young people's desire for intense sensations.

Morphine is the basic narcotic. It comes from hospitals where it is used as an anesthetic in chronic cases. Morphine is stolen from hospitals and sold on the black market at a reasonable price; on the order ofone ruble per ampule - one injection. Hashish and opium are also sold on the black market. They are supplied illegally from the regions of Central Asia and Azerbaijan where the plants are grown, and they are also stolen from pharmaceutical-industry enterprises that use them in making drugs. It is practically impossible to buy narcotics used in the West on the Soviet black market; it is difficult to bring them into the U.S.S.R., and the risk of punishment for seller and buyer is too great.

Finally, we should mention another illegal commodity: sex. Unlike the capitalist West where prostitution is also illegal but where it is a part of the gray market (the police close their eyes to prostitution), in the U.S.S.R., as in other socialist countries, sex is a commodity on the black market.[147]

For many years it was officially proclaimed that there are no prostitutes in the U.S.S.R., and that the phenomenon of prostitution has been eradicated. Only under glasnost, has the Soviet media, particularly the magazine Ogonyek publicly admitted the existence of prostitution in the country.

In the U.S.S.R. as in the West, there is a demand for prostitutes, especially in the large cities where there are many travelers, military personnel, and so forth. Demand generates supply. Most prostitutes in the U.S.S.R. are women who have a job elsewhere. Professional prostitution is difficult since, according to Soviet law, a young unmarried woman must work, otherwise, she will be declared a parasite.

One reason that prostitutes give for their actions is their low earnings from their main jobs plus the desire to be well dressed. If one recalls that a pair of fashionable women's boots even in a state store costs slightly less than the monthly wage of these women, the arguments made by the prostitutes become understandable.[148] In the U.S.S.R. the state actively combats prostitution. In addition to the reasons that all countries have in common for combating prostitution, the active fight against prostitution in the U.S.S.R. also stems from possible links between prostitutes and foreigners, each of whom is viewed in the U.S.S.R. as a potential spy. This does not prevent the KGB from using alliances between prostitutes and foreigners for its own purposes.

The future of the black market in the U.S.S.R. is dark, as it is, strictly speaking, in many other countries as well. In principle, the following structural changes are conceivable. The number of profiteers of legal goods obtained by legal means may decline for the same reason that the role of the brown market will diminish. However, given state ownership and taking human nature into account - the existence of people predisposed to get their income by illicit means - we can assume that the volume of legal goods obtained by illegal means will grow throughout the nation. The structure of illegal goods could undergo change. The introduction of convertible currency in the U.S.S.R. may prompt a reduction in the number of currency speculators. As for prostitution, with the growth of large cities or narcotics, it may also grow.

We can draw the following conclusions from all that we have said.

The planned socialist economic system in the U.S.S.R. has generated a multitude of markets with different degrees of legality. To assess the long-term trends in these markets, we can provisionally outline three groups of factors that shape the three corresponding groups of markets in the planned socialist system.

The first group consists of markets that are immanent in developed societies as such; we will provisionally call them immanent markets. They are the offspring of large economic systems comprised of people endowed with various human passions. These markets include the red and pink markets, and the part of the black market involved in the sale of commodities banned in any civilized society.

The second group consists of markets generated by the planned system and state ownership. They are the gray market in capital goods and the partl of the black market involved in the theft of socialist property. We will provisionally call these markets socialist markets proper.

The third group consists of markets that have emerged in the U.S.S.R. chiefly as a result of specific historical conditions in the development of a peasant country with a population having a low standard of living and a low cultural level. We will call them rudimentary markets. They include the gray market in consumer goods, the brown market, and so on.

In keeping with our classification of markets, it is possible to forecast the future for these markets in the U.S.S.R.. Multiform immanent markets will remain in both the immediate and distant future in the U.S.S.R., and they will expand.

Socialist markets proper will also remain in the distant future, even though major improvements in the socio-economic mechanism may substantially diminish their role.

As for rudimentary markets, we can suppose that they might even expand in the immediate future; but under appropriate conditions in the distant future, they may be eliminated in practice.

Notes ans References

The Anatomy and Physiology of Soviet Economics

The Status of Soviet Economics in the Stalinist and Post-Stalinist Eras

As a discipline, Soviet economics can be viewed in two ways. First, it can be considered a part of the Marxist ideological conception and, at the same time, as an instrument for economic development. In this context, the role of economic science in Soviet society is seemingly greater than it is in the West. This is due to the fact that economics is given decisive weight in ideology. Soviet economics is not only strictly bound to ideology, but also has in its arsenal the most highly developed part of Marxist doctrine: economic theory, as reflected in Das Capital.

Second, the introduction of a planning system in the U.S.S.R. as a definitive mode of operation required a developed economic science. Then, too, the necessity of substituting centralized decision making for many automatically acting market mechanisms required an elaborate conception of management structure.

Such a dual role of economics in Soviet society is responsible for changing attitudes toward it in different periods of Soviet history.

The development of economics was essentially called to a halt in the Stalinist era. A single monolithic view on the operation of the Soviet economy existed. This situation in economics can be explained to a significant degree by the following factors.

First, there were no economic mechanisms that would permit the creation of great military power within a short time. This goal could be attained chiefly through the extra-economic resources of coercion, that is through a system of compulsory labor. To what extent the goal set was justified, is, of course, another matter. One can certainly conjecture, as the experience of World War II has shown, that victory could have been achieved with even less power than was in fact developed.

Second, the rate of economic growth proposed by several economists, based on the smooth growth curves of Western countries, did not suit the Stalinist political leadership, which was striving to accelerate the growth of military power.

Third, in this period economics was unable to make sufficiently serious and constructive proposals for improving the economic mechanism, proposals commensurate with the goals set down by the dictator. This was true even where the economic mechanism was permitted to act (for example, in the evaluation of business activity, selection of new technology).

Since the economic theories elaborated at that time were based primarily on varying interpretations of the Marxist theory of price formation, the mechanism for setting down a plan in physical terms was utterly divorced from the price mechanism. Compliance with the demands of the price mechanism almost always would have necessitated making decisions unrelated to the objectives.

One must also consider that many proposals submitted by economists not only failed to help the dictator solve the problems he had posed, but also could have led to a criticism of the dictator's policies.

Under the prevailing circumstances, even if proposals did arise that were reasonable, and even if they were reasonable from the dictator's point of view, they were smothered by the general atmosphere.

Thus, during the Stalinist era, the basic task of theoretical economists was to consecrate the latest decisions of the party and its great leader as the height of wisdom. Economics became an integral part of the ideology, and workers involved with it were required to fulfill, in essence, a priestly function. It is no coincidence that teachers of ideological disciplines in the U.S.S.R. were called "priests" (popy).

The organization of economics corresponded to the function it fulfilled. The separate spheres of social existence were organized in a manner similar to the hierarchical system for governing Soviet society, which was headed by the tyrant. Small dictator-leaders likewise headed their own spheres, and were responsible for the development of the sphere entrusted to them. The power of such a dictator-leader was further determined by the extent to which he combined theoretical and practical work. Trofim D. Lysenko was powerful because he developed theory in the necessary ideological direction and, at the same time, gave practical advice that promised a rapid and decisive improvement in agriculture, often without any significant capital investments.

Economics was fortunate in this regard. Its greatest leader, the number one economist, was Stalin himself. This is not meant entirely in jest. Actually, after Stalin's death, no leader remained capable of directing its development: economics was orphaned.

Because Stalin himself had been the leader of economics,[149] it had had only a "fuhrer-curator." In the 1940s, Konstantin V. Ostrovitianov became the curator of economics. All he did was provide commentaries on Stalin's work; he had no opinions of his own, and made no practical recommendations. For this reason, Ostrovitianov could not acquire the power that Lysenko had.

As has already been noted, during the Stalinist era there was no diversity of opinion in economics; a unified position reigned on all fundamental questions. One and only one point of view was possible in a given field. And that point of view was the Marxist view; all other views were anti-Marxist.

This situation gave rise to a harsh struggle for survival and, consequently, to a certain type of creative economist. It is natural that some fields in economics remained untouched, fields to which Stalin had not yet turned his hand, and about which no final opinion had yet been pronounced. Whoever first seized such a field, managed to shout that his position was the Marxist position, and confirmed this in print was riding high. His opponents would not only be disgraced but as a consequence might even be sent to "not too distant places." Thus, the "genuine" economist was expected to pin down an opponent by any means possible.

This is why so many economists of the older generation were so aggressive even after Stalin's death. They had grown accustomed to conditions of harsh and deadly competition. They did not realize that there is no longer a deadly threat to dissidence, as long as one is law-abiding. Moral limitations of any type is incomprehensible to these people, since they have grown accustomed to thinking in situations where any means of survival was permissible. Further, if one takes into account that they are incapable of mastering new ideas, or more accurately, of actively working in new directions or of occupying as exalted a position there as they hold in their own field, their aggressiveness becomes yet more understandable.

Of course, the dismal picture I have described of the Stalinist reign over economics is somewhat simplified. There were people who tried to develop economics; these were economists whose integrity remained very high, in spite of the prevailing moral corruption. But such people were few, and they had a hard time of it. However, their presence is very important, since they play the role of "mutations" that assure development when conditions change.

For example, this structurally diversified variety of mutations in the trend toward mathematical economics has turned out to be quite successful. Among the surviving representatives of this trend, Vasily S. Nemchinov, was able to head the trend in an organized fashion under the new conditions, and Leonid V. Kantorovich gave this trend a new scientific foundation. In the next section I will deal at length with Kantorovich's ideas. For now, it is sufficient to note that even today the majority of Soviet economists lack Kantorovich's understanding of the role of prices as tools in the elaboration and realization of an economic plan.

Of course, from the standpoint of the current level of development in economics, the strengths and limitations of Kantorovich's work are apparent. But one must remember that it was a thirty-year old professor of mathematics, completely cut off from Western economic thought, who made these scientific generalizations in a manuscript written in 1942.

And there were also Victor V. Novozhilov, who tried to dress up the new ideas in the garb of the Marxist labor theory of value, and Alexander L. Lurye, who was able to explain the scientific ideas of this trend with sufficient precision and clarity.

There was also a fairly large group of economists, who, though lacking pioneering ideas or even a good understanding of the new, were nonetheless attracted by the logic of novel ideas, which they could not refute. They retained a respect for new ideas and a hostility toward conservatism. The presence of such people is very important for progress, since they act as a kind of springboard between the innovators and the conservative environment.

These people promoted the development of new trends in science, in that they were the first in publishing houses to review the works of scholars representing new trends and they were the first readers of the candidate and doctoral dissertations of these scholars (for new trends cannot develop if the scholars lack degrees. Among such men, one might name Mikhail V. Breev, Konstantin I. Klimenko, Lukomsky, and others. (See the next chapter, on the history of Soviet mathematical economics).

Economics was, in essence, the first of the social sciences and humanities allowed to develop a diversity of opinions in the post-Stalin era. The demythologization of Stalin, who was, of course, the premier Soviet "economist," was of cardinal importance.

It is well known that to this day in the U.S.S.R. the diversity of trends in the fields of sociology, political science, law, history, and philosophy is not as well developed as in economics.

The revival of economics in the U.S.S.R. in the mid-1950s was made possible by general changes in the political course of the country after Stalin's death. The rate at which the Japanese and West German economies grew in the 1950s and 1960s and the success of the U.S. in creating new technologies, especially technologies with military significance, forced the Soviet leaders to seek new avenues of economic development.[150]

Under the new conditions, an even greater improvement in the economic mechanism was required in order to attain the new objectives for the growth of the standard of living along with the increase of the military strength.

In this regard, it is important to note that the postwar achievements in the steady development of the Western economic system could not help but impress certain Soviet leaders as to the necessity of reinforcing market mechanisms in the Soviet economy. However Soviet propaganda may praise the socialist system, and however vehemently it may curse the capitalistic system, Soviet leaders see the indisputable achievements of the latter, all the same.

One must also note that in the late 40s and early 50s, new means of economic analysis appeared in the West that were perfectly suitable for the Soviet type of planned economy, and in particular for military goals. I am speaking of input-output analysis and operations research involving extensive use of mathematical methods and computers.

Thus, in the post-Stalinist era there was a practical need for the development of new trends in economics, and there were new possibilities for satisfying this need.

In this regard, I would like to make a few general comments about Soviet pragmatism, which will aid in explaining why economics has been granted the right to express diversified opinions.[151]

In any system, the introduction of novelty is linked with obvious difficulties. First, there is the risk of failure. Second, the new depreciates the old: not only existing technology, but people's knowledge as well. This threatens the interests of those people who have adapted to the old ways and who, moreover, are no longer able to master the new ways, if only because of their age.

However, in Western countries the structure of society as a whole promotes the introduction of novelty and the overcoming, although with great difficulties, of ensuing conflicts. If an idea has a chance for practical realization, in Western countries forces can generally be found to begin its development.

Soviet pragmatism works differently. Taking advantage of the existing ideological monopoly, people who are accustomed to the old ways hasten to destroy a new idea and, if possible, those favoring it. But when an idea has already received practical realization in the West, when it has been applied to military objectives, then in the Soviet Union these conservatives gradually begin to beat a retreat. There is, as one of my acquaintances in the U.S.S.R. put it, a "Western complex" at work; that is, the feeling that, "since the capitalists do not spend their money for nothing, this must be a viable operation." In fear of lagging behind the West, particularly in military might, Soviet leaders then feverishly begin to make up for their negligence. This pattern has manifested itself with atomic energy, biology, mathematics, economics, and so on.

Still, however a new trend in economics does not promise a practical application and threatens the interests of the ruling groups, it is ostracized. This is also the situation with contemporary theories of biological evolution, sociology, history, and so forth. Let me illustrate this with the following example. In the 1950s, new methods of economic research developed in the West. The new methods analyzed the economic system as a whole using input-output tables, and as separate units using the concepts of operations research. The methodology of input-output tables brought with it new concepts of planning for the highest levels of the national economy, where the leadership most clearly recognized the necessity of using theoretical constructs. This is why the acceptance of this methodology, which was a practical necessity for the leadership, was accompanied by the acceptance of the theoretical concepts associated with it. In general, if economic categories that have a theoretical character are accompanied by an operations research formulation, then it will be easier to accept these categories, declaring them to be mathematical manipulations.

The possible use of mathematical models and input-output tables at the national economic level guaranteed a relatively easy acceptance of optimization models for the national economy. But the acceptance of these models in its turn demanded a conception of prices as the dual parameters of the plan. This understanding of prices came into conflict with the Marxist theory of value. When certain economists, using operations research, analyzed particular production problems by interpreting prices as the dual parameters of the plan, the majority of economists working at that time told them that these dual parameters were only technical coefficients, which were necessary to mathematicians in order to solve problems. Thus, the permission to apply mathematical methods at the macrolevel acted as protection for the development of new directions in economic theory.

This will become clearer if we compare the positions of economics and sociology in the U.S.S.R.[152]. The field of sociology in the West has great success as a general theoretical science, dealing with the functioning of society as a whole, and as an applied science, covering society's separate parts. In the U.S.S.R., using Western achievements in sociology is allowed only to the extent that they can be used at the lower levels of the hierarchy, for example, for the improvement of the work of factories (that is, in the composition of plans for socioeconomic development). As far as the higher level of the hierarchy is concerned, because of the different nature of socialist society, Western methods of social direction are not acceptable. Therefore, no terrain has appeared in the Soviet Union for the development of theoretical sociology. The attempts to develop this theoretical science at the Institute of Concrete Social Research were deplorable. The institute was reorganized, and the director of the institute, Academician Aleksej M. Rumiantsev, was forced to resign.

Soviet sociologists can only work on concrete studies. Marxist theoreticians reserve theoretical science for themselves. They develop it solely under the aegis of the Marxist theory of historical materialism.

The superstructure of Marxist dogma received its first knocks only after the advent of glasnost.

Thus, the Khrushchevian period greatly bolstered the thinking of economists and the progress of economics. Khrushchev's growing realization of the fact that the Stalinist economic system was incompatible with any further development of the Soviet Union pushed him toward ever more radical reforms. By the end of Khrushchev's rule, the diversity of opinions in economics had reached a fairly high level: next to the old school jealously guarding Stalinist orthodoxy, now stood the new ideas on how to improve planning and, more generally, the economic system itself.

Due to inertia, the Brezhnev leadership did not immediately give up on Khrushchev's enthusiasm. In 1965, soon after the new team arrived, it proposed a package of economic reforms that sparked a most lively debate between opposing groups of scholars (which I will describe below in some detail). But as early as late 1960s or early 1970s, it became abundantly clear that the impulse for reform had been exhausted, since they threatened to push the party out of economic management.

The impending economic stagnation was thus postponed for a decade: domestic problems were to be solved through the expedient of detente and imports of new technology and consumer goods, mainly grain, from the West. The scholarly controversy in economics was consequently also toned down. Different schools of thought were not abolished; they simply stopped evolving.

As Brezhnev's personal power grew, so did the expansionism of Soviet foreign policy, which reached its peak with the occupation of Afghanistan. But Brezhnev's rule was also marked by an increasing disparity between the policy of expansionism and Soviet economic capabilities. It was not only that the overall growth was slowing down growth rates in heavy industry, a patron saint of the military, had virtually reached zero toward the end of Brezhnev's tenure in office. The Soviet gerontocracy, besides being mired in corruption, had also loosened the reins on the economic managers, and therefore could not satisfy the prodigious appetite of the military brass.

To repeat, opposing schools in economics were not abolished either under Brezhnev or under his successors, Andropov and Chernenko. They merely stagnated, although in certain areas, especially in mathematical economics, there was even some evidence of minor progress.

During the time now dubbed in the Soviet Union as the "period of stagnation," economic science was operationally totally irrelevant the inactive system fed the same inactivism back to the scholars. The occasional government decrees urging improvements in planning had nothing whatever to do with serious research.

Moreover, the evolution of economics that started under Khrushchev had not yet reached a point of maturity where it could generate well-thought-out alternative economic strategies. The environment was inhospitable to an open debate on economic strategies to say nothing of debate on the various political strategies that were closely interrelated with them. I am not sure, though, whether, even in a different environment, the theoretical sophistication of Soviet economists would have allowed them to offer anything of real value. On many occasions, Alexander Yanov and I posed the challenge of developing such programs to various academic and government Sovietologists in the United States. We understood that the Soviet Union was crisis-bound, and that before long there might be a need for serious alternative scenarios. We also understood that Soviet scholars, for the reasons indicated, could not do it themselves, especially in a crisis situation demanding quick fixes. I believe that a joint effort of American scholars and emigres from the Soviet Union and Eastern Europe could have accomplished the task. The American Sovietological establishment, however, chose to ignore our entreaties.

To sum up, though the diversity of opinions in Soviet economic science that emerged under Khrushchev was certainly very important, it is not sufficient to meet the requirements of Gorbachev's market-oriented perestroika.

The status of economics and the economists under Gorbachev has risen enormously: the closest economic advisers of the general secretary are veritable celebrities in the Soviet Union today. For the most part, they are middle-aged people who came of age during Khrushchev's time and who managed to preserve their intellectual integrity in the following period. Politically and socially, they are quite progressive, and some of them may even reject Marxism. But professionally, Marxism maintains an iron grip on their thinking, and it is this circumstance, rather than the factors of political and social courage, that may seal the fate of perestroika.

The emergence of the Cambridge school in economics at the turn of the century was possible because the West nourished a wide variety of scholarly opinions and created an environment conducive to their development. At the time, the classical free market doctrine held an undisputed sway in the academia. The classical free market theorists were opposed by corporate socialists and communists who wanted the government to have a powerful role in running the economy, a role that practically would endow the government with total political power.

The Cambridge school did not want to bury the market, only to rein it in, but without destroying those of its features that prevent the spread of political totalitarianism. For a long time, the ideas of the Cambridge school were rejected by most economists and political leaders. But these ideas (authored largely by John Maynard Keynes) saved the day when the West was hit by the Great Depression of 1929-1933: the Keynesian notions served as a base for the countercyclical policies adopted by the leading Western states.

I believe that in the Soviet Union only the group of economists, at the CSEMI, given an appropriate environment, is capable of working out a theoretical synthesis of an advanced economic system and a more liberal political regime. But this will definitely take time, and probably more of it than Gorbachev's unstable politics can allow. It seems to me that in a race between a stagnating economy without any sound formula for the transitional period and a dynamic but highly inconsistent politics, a conservative economy will emerge the winner. I am simply afraid that there isn't enough time for the Soviet economy to improve to a point where it can reinforce the liberal political dynamics.

These remarks constitute just an overview of the status of Soviet economic science. To better understand the subject, we have to look at the structure of the Soviet economic establishment and its relations with the powers that be.

The Structure of Soviet Economic Establishment

The economists of the U.S.S.R., like the politicians, may be tentatively divided into three major groups, depending on their relationship to the existing economic system: reactionaries, conservatives (protectionists), and liberals (modernists). (See the section "The Liberalization of Russia" in chapter 3.) Among the reactionaries are those economists who fight for a return to the old, rigid Stalinist system of government, in which administrative methods were predominant. It must be noted that these economists reflect the views of a large number of cadres, who also dream of a return to the "blessed" Stalinist era, when there was strict discipline throughout the land.

The protectionists are those economists who are prepared to defend the existing economic system by any means possible. Such economists represent the overwhelming majority.

The modernists are those economists who wish to improve the existing economic system.

In order to better understand the theses of the economists from the various groups, one must also provide some classification of Soviet economics itself.

Using Soviet terminology, economics in the U.S.S.R. may be tentatively divided into two major groups: political economy and concrete economics. Concrete economics includes function problems (credit and finances, labor, and so forth) and sector/territorial planning, along with the planning of the national economy. Here we will examine chiefly political economy. It may be tentatively divided into three groups: engineering, social, and philosophical. The engineering aspect of political economy deals with a range of problems that can be answered exactly, using mathematical models and experiments. Among such problems are functioning mechanisms for hierarchical systems, where all sorts of economic parameters are used, for example, prices and money.

The social aspects of political economy include such problems as choosing types of mechanisms for the functioning of the system (market and centralized mechanisms), forming financial resources for industry (credit, the industries' own resources, grants, etc.), and choosing the governing bodies (for example, appointment, elections or self-appointment).

The philosophical aspect of political economy deals with defining such questions as: What is socialism or communism?

To a greater or lesser degree, each of these aspects of political economy touches directly upon ideology. Every economist or economic institution holds its own views on all aspects of political economy. If these views are not being expressed, either directly or indirectly, then these people and institutions must be considered protectionist, since the official view is being supported through their silence.

All modernists are united in that they oppose the established order, hence threatening those who defend this order, the protectionists. However, there are modernists and modernists. The modernists must also be divided into different groups. The criterion for classifying modernists will be the impact of their economic proposals on the limitations of political power. The emphasis is placed on this criterion because those in power are in no way prepared to forego any political power. For the sake of increasing political power, they are prepared to give up, to a significant degree, such achievements as their Marxist ideology. It is extremely important to keep this circumstance in mind in order to understand the nature of the various modernist groups. The stability of certain modernist groups which revise Marxist ideology was for a long time largely due to their strengthening of the political power of the highly conservative group in the Politburo. Conversely, very leftist modernists, who want to sharply weaken the political might of those in power, often wish to remain Marxists. These modernists were less protected, but the Gorbachev leadership has already displayed more tolerance towards them.

Thus, employing this criterion, modernists may be divided into three groups. The first of these, the most radical, we may call the dissidents, who wish to go to the limit in organizing an economy within the framework of a democratic system. This is characteristic of the type of demands promoted by Soviet dissidents fighting for the democratization of Russia. This was most clearly reflected in a market-oriented program for building "socialism with a human face" which Czechoslovakian economists developed in the mid-1960s. Soviet economists who espouse the philosophy of the Prague Spring include, among others, Leonid I. Abilkin, Gavriil Popov, Nikolaj Shmelev, and Tatiana Zaslavsky.

The second modernist group may be termed oppositionists. They attempt to introduce plans for improving the functional mechanism of the Soviet economy. These plans, although not directed toward a liquidation of the existing political system, do call for limitations on political power. Two subgroups may be distinguished within this modernist group. The first attempts to modernize the economy from below, relying upon experiments they have conducted. These experiments showed that new forms of production organization are possible that promise a considerable economic effect. Since the workers' collectives would become independent in many respects under these new forms of production organization, significantly fewer functions would be left for the party apparatus, with all the consequences deriving from this.[153]

Let us remark that this group of oppositionists has not touched upon existing economic theory. This is explained in the first place by the fact that the experiments they conducted were limited to relatively small collectives where production organization did not yet require economic theory. In addition, these reformers have not yet turned their attention to the level of possible changes in the regulation of the national economy as a whole. For this, one must already have a well-developed economic theory.

The second subgroups of opposionists attempted to bring about the reforms from above, but within the framework of the planned economy. Specifically, they want to remove the party from economic management, thus freeing it of the burden of dual subordination, and enhance the role of material incentives, especially that of profit. These economists were most active during the initial stages of the abortive 1965 reform boomlet.

We may note that the ideas of this reform was also poorly conceived from an economic point of view, insofar as they relied on prevailing economic theory. As we have remarked above, this theory was unable to secure the introduction of a well-developed economic control mechanism in the 1930s. For the same reasons, it would also have been unable at the present time to provide for the functioning of the Soviet economy based on well-developed economic principles.

The third modernist group could be tentatively termed the reformists. This group attempted to bring about change in the existing economic mechanism while keeping political power intact as a whole.

In a sense, one may consider that, at one time, the most radical of the reformists was a group represented by Academician, Nikita N. Moiseev, a professional mathematician. At the end of the 1960s in one of his articles in the newspaper Izvestia, he wrote frankly of the need to create a scientifically grounded mechanism for decision making, and of the need to include scientists in it.

A second subgroup of reformists wished to change the technology of planning rather radically. It proposed ideas of optimal economic functioning. Advocates of this trend left all the power in the hands of those holding it, giving them, in addition, new instruments for planning. These reformists include a group of Soviet economists represented for a long time by such administrators as Academician Nikolaj P. Fedorenko. It would appear that this group of reformers exerts the greatest impact on the development of Soviet economics, and in particular on the engineering aspect of political economy.

A third subgroup of reformists deals predominantly with the problems of improving the existing economic mechanism. Roughly speaking, one may distinguish two types of economists within this subgroup: one type attempts to perfect this mechanism on the basis of a "manual" planning and management technology; the other, by using mathematical methods such as input-output tables and the computer technology required for this approach.

A great number of reformists in the third subgroup belong to the first type. Occasionally, it is difficult to distinguish them from the protectionists, since it is hard to find a "pure" protectionist as such. (Every protectionist must admit the existence of some shortcomings.) However, all the representatives of this type of reformist are somewhat more radical than the protectionists. They suggest more substantive proposals for the improvement of the planning and management system.

In this third subgroup of reformists, a rather outstanding group of economists belongs to the second type. Its administrative representative was the Chief of the Computing Center of Gosplan for the U.S.S.R., Victor V. Kossov. He was trying to establish the concepts of input-output analysis.

Let us remark here that an extreme spokesman of this type of reformist was one of the leaders of the mathematical economic trend, Academician Victor M. Glushkov. Vice-president of the Ukranian Academy of Sciences and director of the Kiev Institute of Cybernetics, Glushkov also played a prominent role in the all-union efforts to introduce computers into the national economy. Glushkov did not know economics and did not care to. Like any "repudiator," he did not realize he was using the most primitive economic notions, derived from his "common sense." Glushkov was striving to create a vigorously centralized system and to turn everything over to the computers, to the point where he wanted to combat theft by using computers to pay out salaries and purchase goods.

Interactions between Scholars and Practioners in Party and Planning Apparatuses

To the anatomical map of Soviet economic science sketched out in the previous section, we can now append a number of physiological details. The space in which Soviet economics moves has both a vertical dimension - interactions with the dual party and ministerial hierarchy - and a horizontal dimension - endogenous interactions among opposing schools of economic thought.

Economic science in the U.S.S.R. is developed in three types of institutes: colleges and universities (VUZy), the research institutes of the Academy of Sciences and of the ministries.

The leading role in Soviet economic science belongs to the academic institutes, brought under a single administrative roof of the academy's Economics Branch. During perestroika, the number of such institutes has grown, and because the status of socialist economics has risen immeasurably, the Economics Branch had to let go of the institutes dealing with international economic issues.

Academic institutes of economics are faced with a dilemma. One the one hand, as offshoots of the ideological sections of the Central Committee apparatus, they are required to deal with the ideological consolidation of Soviet power. On the other hand, both the Central Committee apparatus and the top economic management responsible for overseeing the economy want to obtain recommendations from economic institutes for improving the direction of the Soviet economy. Later, I will examine this conflict of interest in greater detail.

Work on economics in VUZy is directed primarily towards strengthening the ideology. This situation is the result of the nature and role of higher education in economics in the Soviet Union. Since Soviet leaders are extremely concerned about their political base, they try above all to prevent any political activity by the student body, and therefore attempt to keep talented scholars, many of whom are politically aware, away from the students.

Therefore, the political leaders require the professional staff of VUZy to direct their efforts to strengthening the ideology. Under such conditions, scholars prefer to work not at the VUZy, but at the research institutes, where the political problems are relatively less pressing.

Definitely, the conservatism prevalent in Soviet VUZy is not absolute. There are occasional oases. Several of the advocates of the economic reform of 1965, for example, Evsej G. Liberman and Alexander M. Birman, were professors at VUZy. In the late 1950s a group of professors of the Moscow Institute of the National Economy, including Mikhail V. Breev, Semen D. Field, Ivan Popov, and Boris Smekhov, played a major creative role in forming a new direction for Soviet economics: a mathematical modeling. In the early 1960s a new discipline was organized at the economics faculty of Moscow University. This discipline economic cybernetics was successfully organized because a progressive leader, Ivan G. Petrovsky,[154] had been head of the University for a fairly long time, and a progressive economist, Vasily S. Nemchinov, aspired to organize the economics education in a new way. As a result, two different programs for the preparation of students exist in the same faculty. One program takes into account current achievements of economics under the aegis of economic cybernetics, while the other ignores these achievements. But the mere fact of the existence of these two programs stimulates the work of the traditional professors of the department. Among these professors, also there are supporters of new directions in economics.

Despite the scholars' preference to work in research institutes, they find it necessary to compromise and work part-time at the VUZy in order to broaden their knowledge and to supplement their incomes. Further, Soviet leaders understand the need to teach students new methods of planning and management in order to improve the economic mechanism. The VUZy provide the forum for this teaching.

Conversely, the state also tries to have teachers of economics at the VUZy to do scientific research, so that support of ideology is not their only task. This aim is enhanced by the fact that a significant number of VUZy economists offer courses of an applied character. In connection with the research objective, so-called accounting laboratories (khozraschetnye laboratorii), which are not financed by the state, have been created in many economics departments of VUZy. Their personnel work under contracts with enterprises. It seems to me that the research conducted in these laboratories is not effective, because the professional competence of the staff is low.

Many researchers in economics are occupied with applied economics both at the national level and at the level of individual branches and regions. These economists work either in specialized economic research institutes, or in economic sections of technological institutes and design bureauxs All of these institutes and bureaus belong to appropriate governmental departments and ministries.[155] Of course, it is necessary for all economists who work in these institutes to adhere to the ideological mandates of the party. However, this requirement is relatively weak. It is important to note that economists who are occupied in these research institutes are viewed by ministry officials first of all as an extension of the ministry's apparatus. This means that the personnel of these research institutions are quite often utilized to perform the functions of the ministry staff.

Establishing communication between practioners and scientists is extremely difficult in all countries. The number of scientists in all countries is very small. Moreover, there is an incompatibility between the practioners and the scientists because of differences in their functions. Practioners are responsible primarily for current problems. Therefore, they are interested in proposals for solving problems that take into account the constraints imposed by the current operating system. By contrast, scientists are primarily occupied with eliminating these constraints. But time is needed for this; as a result, the scientists are oriented towards the future, often on a long-term basis.

The less well-educated the political leaders are, the tenser the relationships between the scientists and the practioners. The analogy of a chain can characterize the relationship between the two groups. Thus, if scientists work in highly abstract areas of science (which is to promise a profound understanding of the mechanism for a perfectly operating system) and if the socio-economic education of the country's leaders is low, then the length of the comprehension chain between the scientists and the leaders will be the longest. This means that more intermediary links are needed to translate the scientists' ideas into language comprehensible to the leadership. In Stalin's U.S.S.R. this chain was relatively short, because scientists were not permitted to develop new ideas. Moreover, there were gaps in this chain because the leaders, being primarily professional revolutionaries, were by definition incapable of absorbing new scientific ideas.

After Stalin's death, the situation changed somewhat. Theoretical economists were permitted to study more basic questions, but only within very strict limits, for example, a discussion of the possible introduction of large-scale private ownership was prohibited. In addition, the composition of the staff serving the Soviet leaders had changed. They were now primarily engineers. This was even true for the Soviet Gosplan, where leading personnel among professional economists were replaced by engineers.

As these changes occurred, the chain between scientists and practitioners became longer. At the same time, the leaders became more receptive to new proposals. Naturally, this receptivity could be exploited if the issues were presented to the leaders in a comprehensible form. But numerous links are needed to accomplish this.[156] Although there are still gaps in the communications chain, new intermediary links between Soviet leaders and scientists have nevertheless been forged.

A new staff position, that of a consultant, added to the apparatus of the Central Committee in the late 1950s can be considered one of the most important connecting links.[157] The advantage of using consultants was essentially based on the idea that they, unlike the instructors, are not tied down to operational work. Hence, consultants are supposed to prepare proposals for the solution of specific problems. To carry out such work, scientists from research institutions were invited as consultants. There is evidence that competent consultants are mainly presented in the departments of the Central Committee responsible for international relations. To the best of my knowledge, the consultant acquired by the departments responsible for current economic affairs were not first-rate.

Perestroka has brought about major changes in the relations between the political leaders and the economists.

But first let us note that the theoretical innovations of the Stalinist period rarely bore the names of their real authors.

Khrushchev's autocracy altered little in this regard. As before, scientists were unsure of their future, since their views were, generally, merely criticized or ignored by state leaders. All the economists' positive proposals were made public in the name of the leadership. In 1958, before the reorganization of the Machine Tractor Stations (MTSs) and the sale of equipment to the collective farms, Khrushchev decided to consult with the specialists. He held a conference for agrarian economists, workers in the Ministry of Agriculture, collective farm managers, and others. Among those present was a well-known Soviet economist, Doctor of Economics Vladimir Venzher. In his The Economic Problems of Socialism in the U.S.S.R., Stalin had sharply criticized Venzher and his wife Sanina for their proposals to reorganize the MTSs and sell equipment to the collective farms. Khrushchev had known Venzher for a long time, almost since the 1920s. Venzher was in Moscow as a Red Guard from the Khamovniki district during the Revolution. After that, he participated in party work and met Khrushchev. Thus, Khrushchev almost addressed Venzher by his nickname Volodia.

Before the conference Khrushchev said approximately this to Venzher: "Don't think that this is your proposal; your proposal was different and incorrect." This attitude to economists' proposals was caused on the one hand by the fact that the state leader, because of his functional role as head of the government, was trying to show the people he was the creator of new ideas, and on the other hand by the relatively minor character of the proposals themselves, the fruit of individual activity by different economists.

It may be that the sole exception to this attitude toward economists' opinions during the Khrushchev era was the case of Doctor of Economics Evsej G. Liberman. His proposals for improving the economic mechanism, revolving around increasing the role of profits, were publicized; they were published in the Central Party Press. However, when economic reform was begun after the removal of Khrushchev, Liberman was forgotten.

Thus, although different views were allowed in economics, economists remained faceless when it came to government decisions.

In Gorbachev's period, the names of the leading economists are no longer being hushed up, and their proposals receive a fairly wide publicity. For example, the suggestion made by Shmelev and Chernichenko to pay collective farmers in hard currency for any amount of produce over and above the planned target was spotlighted by the national press, and officially approved for a speedy implementation by the end of this year.[158]

Besides, the length of the chain between the leading economists and the powers that be has shortened considerably nowadays, the economists virtually have direct access to the leaders. On one hand, the leaders now badly need scholarly advice, on the other, the recommendations they usually receive do not go beyond common sense, and hence they easily comprehend them. There is a time bomb ticking beneath the cordial alliance of scholarly and political minds: the proposals of the economists are still rather crude, and their implementation may be socially explosive. Thus, a whole set of ideas about a rapid transition to a market economy, with concomitant price hikes, unemployment, and the like, have at least been shoved to the back burner. Only time can tell who the successors will be to the present-day advisers and whether they will be able to offer operationally sound prescriptions for overcoming the crisis.

To sum up, for the most part economic research institutes are regarded by the authorities as an appendix of the central managerial apparatus.

The party apparatus was the major user of the economists' work. As is well known, the arty apparatus fulfills a dual role in Soviet society. On the one hand, it formulates and implements ideological policies. On the other hand, it intrudes directly into the process of changing the economic mechanisms and participates actively in the process of shaping and fulfilling economic plans. This dual role of the party apparatus is the basis for the complex relationships it has with both economists and managerial personnel.

One can note in particular, that the dual role of the party has a negative influence on the activities of scientific research institutions. This is apparent, for example, from the fact that the party has, in the past, diverted staff members of these institutes from their program work. The party uses these researchers to conduct ideological work, which it considers of primary importance. This might include lecturing on economic topics in support of the most important aspects of communist ideology (recall that the party possesses a wide-ranging apparatus responsible for lecturing activities). Further, the party uses researchers in order to justify many activities of different branches of the economy.

The fact that the economic institutes are located in large cities ensures that the staff is subjected to exploitation by at least three levels of hierarchy: the Central Committee, the Urban Committees, and the Regional Committees.

For example, when I worked at the Institute of Economics of the Academy of Science of the U.S.S.R. in Moscow, I was often diverted from my regular program work to complete assignments not only for the Central Committee (for example, preparing material for the regular plenary sessions, answering letters of Soviet citizens addressed to the Central Committee concerning proposals for improving the performance of the Soviet economy), but also for the Regional Party Committee, which consisted of checking the activities of factories located in the region. Leading scientists participated, and it was customary for the director of the institute, or his deputy, depending on the importance of the assignment, to choose staff economists also to participate. By fawning on the party apparatus in this way, the director or his deputies would demonstrate how seriously they took the party assignments. Depending on the complexity of the task, participants might spend several months exclusively on such political work at the expense of their regular work, doing so because the political assignment was usually considered incomparably more important than any other.

If the economists had taken their political assignments seriously, they would have had no time for their own professional work. Fortunately, it was known that the party gave these assignments simply in order to formally discharge its own responsibilities towards fulfilling its current work plan.

After quickly comprehending the intent of these assignments, I personally spent only one or two days on them rather than the several weeks that might otherwise have been required. Sometimes I even contrived to be thanked for doing a good job by the leaders of the institute. I believe that my experience is not unique. In spite of the shrewdness shown by scientists in carrying out the party assignments only perfunctorily, they spend considerable time on these tasks, especially on giving lectures. Moreover, the political tasks degrade the professional pride of the scientists, because they are inspired to carry out these assignments only in a slipshod fashion.

Management personnel is interested mainly in the results of the economists' work from the standpoint of possibly improving methods of planning and management. Of course, if the improvements proposed by economists conflict with the interests of managers, then these improvements will not be implemented in any case. The threat that the novelties might curtail the authority of the Soviet management apparatus, the inability to implement new methods of planning, and so forth, has led many Soviet managers to oppose the introduction of new economic methods.

I should comment on some personal motives of the management and party leaders that define their relations with the scientific-economic community. An autocratic system engenders some pointed questions concerning the legal guarantees[159] for management staff and the safeguarding of its status regardless of its position at a given time. The type of reward depends on the nature of products put out by the staff. If the staff produces market commodities it will want these rewards in the form of higher monetary income in exchange for the value that the members add individually. It seems, however, that the leaders do not want to (or cannot) give the producers of these goods any significant guaranteed incomes at levels proportional to any profits that may result from their performance. If the staff produces goods then the staff will want rewards above all in the form of special privileges. One such privilege in the U.S.S.R. is the receipt of scholarly titles and degrees. These titles and degrees ensure the corresponding privileges which are usually connected with specific jobs, but sometimes these privileges can be independent of a given job.

The possession of academic titles is the greatest privilege since it guarantees the bearer a sum of money irrespective of whether or not he is working. This sum is quite significant: an Academician receives six thousand rubles per annum and a Corresponding Member of the Academy of Sciences receives three thousand rubles per annum.

The possession of doctoral and candidate degrees is also extremely rewarding. Degrees ensure the bearers of receiving appropriate positions in research institutions and also of giving them direct monetary increments. The scholarly degrees also make it easier for the bearer to receive the rank of associate or full professor in the VUZy, with corresponding increases in salary.

Based on this situation, both party and management leaders have a definite interest in receiving scholarly degrees and titles. But they are unwilling (or unable) to spend time taking the exams and writing the dissertations necessary to receive higher degrees. They look for any means to avoid fulfilling the requirements, such as using subordinates to write dissertations.[160] All of this inevitably leads to close, informal contacts among party and management leaders and the staffs of the VUZy and research institutes in which the defense of dissertations takes place.[161]

Interactions between Opposing Economic Schools in the Post-Stalinist Period

Vertical or horizontal, the interactions between different groups of Soviet economists are characterized by both conflict and cooperation.

It is in the nature of things that struggles are bound to arise between the various trends in economics, and they do. The reactionaries, conservatives, and modernists fight with each other. One can make the following generalization given existing conditions.

The older generation of Soviet economists - quite a reactionary bunch on all matters of political economy - is sinking into oblivion, either dying or just fading away from the academic and political scene. The baton has now been passed to the middle-aged. The majority of leading middle-aged Soviet economists are progressive in their work in the social and philosophical aspects of political economy and conservative in its engineering aspect. Some leading middle-aged Soviet economists are conservative in their work in the social and philosophical aspects of political economy, and progressive in its engineering aspect. As for the possible retention of these diversified views in economics, one can say the following, based on the interrelations between economists: the sharpest critics of pluralism in economics were the economists of the older generation, who had inherited the Stalinist style of scientific life.

The majority of middle-aged economists, trained basically in the post-Stalinist era, belong to the various groups of conservatives in all aspects of political economy. The thugs among them are already quite rare-environmental influence tells. But if the environment were to change, then one must assume that a sufficient number of thugs would be found even among this generation of economists, if only because the majority of them to this day are not properly acquainted with the new trends in Western economics.

Structurally and professionally, the young cohort of Soviet economists differs only marginally from their middle-aged colleagues. True, they came of age during the period of stagnation, but perestroika itself has not yet wrought any major changes in their professional education. Quite likely, the authorities are still afraid of the students' potential political activism. It is ironic, then, that the young economists vigorously participate in the activities of various unofficial groups called to life by glasnost, and that, in terms of their political awareness, they are far ahead of their middle-aged counterparts, to say nothing of the older ones.

It is not only the large blocks, such as the reactionaries, conservatives, and modernists, who do battle with each other. There is also plenty of infighting within the blocks.

Let us first look at the group of modernists. There, dissidents struggle with the oppositionists and the reformists. It is difficult to achieve unity among these groups, since they possess contradictory methods of influencing the political system. The dissidents want a radical change in political structure, while the oppositionists and reformists want either its limitation or its preservation, respectively. If the dissidents tend to unite those in power, the oppositionists and reformists attempt to split the power up, to obtain the support of those in power, in order to introduce new ideas.

Among the radical economists of the dissident and oppositionist persuasions in the U.S.S.R., there are really no specialists versed in contemporary methods of economic analysis.

Although I have deep respect for the courage of the radicals who, in a bitter struggle, are attempting to achieve socioeconomic reforms, I would also like to note that many of them, while very progressive regarding the social aspect of political economy, preserve protectionist and even reactionary notions regarding its engineering aspect. They defend Marx's labor theory of value, and attempt, within this framework, to make recommendations on improving the functional mechanisms of the socialist economy. Thus, one of the radicals gives lectures of this type: "K. Marx's Labor Theory of Value and Improving the Mechanism of the Social Economy."

The paradox is that in the U.S.S.R. one's attitude toward the law of value often acts as a litmus test, identifying one as a partisan of decentralization and of strengthening market relations. This is so because the law of value is a personification of the market, a synonym for it. In addition, the Marxist theory of value is the gospel truth for the majority of economists. They feel that this theory correctly explains the market mechanism. This is why the economists who deny the validity of the law of value side with the centralizers, regardless of whether or not they oppose the conservative Marxist point of view that the law of value will not function under socialism, that all will be strictly planned, or whether or not they oppose Western value theories and the ideas connected with them on constructing flexible techniques for the functioning of the economy. Here we confront the essentially negative side of the radicals' actions.

There is a struggle going on between the oppositionists and the reformists, although one would think the great proximity of their political positions would unite them. The general cause for the incompatibility between these groups is that each aspires to guarantee the triumph of its own position. The oppositionists feel, not without foundation, that acceptance of the reformists' views would create the impression among the rulers that the path to Russia's salvation had been found, and their own views would be rejected.

Even within the reformist camp there is quite a fierce struggle going on. Its causes are the same as those in the relations between the oppositionists and the reformists. The various groups of reformists seek, in fact, only to exchange one monopoly in the economic domain with another, to exchange one technology for economic regulation with another, although more perfected technology.[162]

Such are some of the aspects in the interrelations between the various groups of Soviet economists.

It is very typical of the present state of affairs in Soviet economics that it is often impossible to tell whether a given economist or economic institution is, on the whole, progressive, conservative, or reactionary. The fact is, only a few economists are conservative or progressive or reactionary in all aspects of political economy. As a rule, if an economist is progressive on one issue, he is conservative or even reactionary in another. The terms progressive, conservative, and reactionary can be used only in regard to a specific set of circumstances.

The only possible unconditional evaluation of the trends themselves is that all trends are necessary. The only exceptions are those trends which, after study, yield to the influence of the "law of the excluded middle" (this relates primarily to the engineering aspect of political economy).

Let us now look at the relationship, in the post-Stalin era, between those in power, that is, the Politburo, and the various trends in economics.

During the Khrushchev era, the power of conservatives and reactionaries notwithstanding, a spirit of reformism prevailed. It is possible that Khrushchev was also prepared to support the oppositionists: for various reasons, he was inclined occasionally toward limiting the party's power. Khrushchev, however, was dead-set against the dissidents. The left wing is always the most dangerous for authoritarian systems, since it calls for the creation of a democratic society and an economic mechanism proper to this society. The right, conservative wing is also unacceptable for many of those in power, but they treat it with somewhat more tolerance, since it does not object in principle to the foundations of the existing political mechanism and its socioeconomic system, but only demands they be severely tightened up.

For a long time, until the late 1960s, Brezhnev's role possibly consisted in balancing different trends in economics, each of which had one or several supporters in the Politburo.

The oppositionists in the Politburo, who in 1965 came up with a reform package, could not achieve victory so long as the Politburo members who defended the stability of party possessed sufficiently great power. Despite a series of maneuvers,[163] the oppositionists were nonetheless obliged, in effect, to curtail the economic reform and even in some respects to take a step backwards. The role of physical indicators in the plan for enterprises was strengthened anew. Oppositionist economists who proposed improving the economy from above were subjected to criticism.

The Politburo members supporting the oppositionist economists who proposed improving the economy from below were also obliged, apparently, to have these economists stop their activity. The existence of this support may be deduced from such events as the speech by a former Politburo member, Gennady I. Voronov, in defense of autonomous teams in agriculture, which represent the new forms of production organization already mentioned. A number of Politburo members, among them Poliansky, were against these teams. It is known that the successful, ongoing experiment with autonomous teams at the State farm Akchi in Kazakhstan was disbanded in 1971 with the direct connivance of several Politburo members. The experiment organizer, Ivan Khudenko, was thrown in jail on absurd charges and died there in November of 1974.

The oppositionists evidently angered not only the conservatives, but also the reactionaries. Yet the program of such extremist forces, the program for Russian National Socialism, is reflected in the book In the Name of the Father and of the Son by Ivan Shevtsov.[164]

The impossibility of victory for either group apparently led to Brezhnev's more active role. He proposed a protectionist policy, according to which the solution to the country's most pressing problems of development was set up to be implemented by external forces-the Western world. However, it is difficult to effect a lasting improvement in relations between the U.S.S.R. and the West because of the incompatibility between democratic and authoritarian systems and because the Soviet Union cannot guarantee the fulfillment of long-term agreements. Hence, the West advances credit and similar forms of aid with great caution. Thus, a protectionist policy, like a centrist one, has led to stagnation.[165]

The different schools in Soviet economics came through the period of stagnation relatively unscathed, with memories of a peculiar pattern of enmity and cooperation. Below I will deal with a strange alliance of unorthodox reactionaries and reformists, but what I have to say about them applies equally well to the goings-on between the conservatives and the oppositionists.

One can suppose that among the reactionaries dreaming of a return to Stalinist times there are some who are prepared, in one way or another, for a modernization of Stalinism. Some Stalinists want to return to the "good old days," although with a certain amount of modernization. Clearly, this type of reactionaries goes along with the reformist branch of modernists, since the latter have no intention of limiting political power. There are also serious problems of compatibility in this alliance, but all the same they are more easily resolved.

Why should this group of reactionaries seek a rapprochement with the reformists? The reason for this rapprochement is not only the reactionaries' need to present a more refined program to their opponents: demanding a mere return to the past is not convincing enough. Reactionaries also require growth in military power, and thus are ready to use new methods if these methods do not conflict with their political power. Thus the reactionaries are not opposed to the introduction of new methods if they permit a strengthening of the regime. However, the introduction of such new methods often requires compromising, to a certain degree, with ideological principles, or more exactly, with their prevailing interpretation as defended by tens of thousands of "popy." Experience shows that these reactionary forces are ready to pay with ideological concessions for the possibility of strengthening the regime.

The next chapter discusses further the attitude of the unorthodox reactionaries to the reformists.

With Gorbachev's glasnost and perestroika, the fighting among the protagonists of different economic policies has intensified immensely. The patterns of scholarly influence on those in power have also been drastically altered. As of today, the dissidents have pushed the reformists and even the oppositionists to the sidelines, and have moved into the driver's seat. Center stage, politically, belongs now to the supporters of the market and the democratic institutions. Enough has been said already about the weaknesses of this group.

The orthodox reactionaries, the bitter enemies of anything new in either politics or economics, have also picked up steam. They are quick to offer their program: a return to the past. A so-called "letter" signed by one Nina Andreeva, which was published by newspaper Sovetskaya Rossiya on 13 March 1988, was in fact a manifesto of the reactionaries' circles. The unorthodox reactionaries, too, are fairly active in voicing various combinations of liberalizing and tightening economic schemes. Their idol is Peter A. Stolypin.

No one hears much about the conservatives any more, since they are incapable of offering anything constructive. The Brezhnev system that they advocate is clearly responsible for plunging the Soviet Union into its present crisis. Bureaucratically, however, the conservatives are still quite strong, and infinitely inventive in thinking up all sorts of ruses designed to nullify the dissenters' efforts.

To predict a possible outcome of the struggle in economics is no easier than to predict the future generally. Some things, however, are not too difficult to foresee. The conservatives are likely to continue to lose ground due their intellectual impotency. Should the reactionaries triumph, it is probably the unorthodox among them who will be victorious. Zealots, they will pursue their objectives much more vigorously than the present, cynical leaders. That's why some dissident economists may switch over to their side.

If the liberalizing trend continues, it is the reformists who are likely to be its greatest beneficiaries. Together with the dissidents and the oppositionists, they are going to move gradually to construct a more perfect economic system, one that will be more in tune with a gradual process of Russia's democratization.

Notes and References

The Development of Mathematical Economics in the Soviet UInion in the Post-Stalinist Era

Thirty years ago, in 1959, the Soviet publishing house Nauka (Science) published a book by Leonid V. Kantorovich entitled The Best Use of Economic Resources. The English version of this book appeared in 1965, published by Harvard University Press. Although this book was written in 1942, its publication was delayed for seventeen years. Kantorovich's book is a great achievement of economic science, a fact acknowledged by the Nobel Prize he received for it. It had an enormous influence on the development of economic science in the U.S.S.R. and became a gospel of the leading school of Soviet mathematical economics.

But the influence of Kantorovich's book was many-sided and contradictory in nature. I discuss its significance and the history of its appearance in part 6; in this chapter, I would like to express some thoughts on the book's direct and indirect influence on the development of Soviet economic science.

Illusion and Reality Concerning the Usefulness of Mathematical Methods in Soviet Economic Science

The influence that Kantorovich's idea of optimal planning had on the development of Soviet economic science can be best understood within the general context of the development of mathematical methods, including input-output tables and econometric models, in the analysis of economic processes.

Mathematical methods of analyzing economic processes, supported by computers, created an illusion that with their help it would become possible to improve the efficiency of the Soviet economy considerably. If we suppose that the subjects of economics can be reduced to the production of goods with a given technology, that its participants are interested in the growth of production, and that the main source of difficulty is the lack of coordination of the effort directed at fulfilling the positive intentions of the country's leaders, then up-to-date mathematical methods and computers can, in principle, help improve the situation. The fact of the matter is that the decisive conditions for economic success are (1) the opportunity to limit leaders' intentions, which may not always be good; (2) the creation not just of goods and services, but of new ideas and (3) personal interest on the part of the people in improving the efficiency of production, and not just in fulfilling the plan. These conditions belong to an area which, so far, defies automatization and formalization. Here, initiative on the part of a free individual, as functions within the framework of a democratic society, is of foremost importance.

As paradoxical as it sounds, the new mathematical methods of analysis turned out to be quite suitable for many Soviet political leaders, who were far from understanding the essence of these methods but who wanted some changes in the economic system. These were conservatives whose foremost concern was to save the existing political structure, which is characterized by a commanding style of leadership with a system of appointments. Mathematical methods of analysis, backed up by computers, create the illusion, that in practice, they would radically improve the economic situation, while allowing the existing political system to continue. In contrast, all suggestions for improving the socioeconomic mechanisms by introducing the market and its accompanying institutions are typically characterized by verbal methods of analysis. Although the leaders' common sense more easily grasped these verbal methods, their implementation threatens to weaken the leaders' stability and, most important, robs those in power of certain privileges. If, for example, a group of people is made responsible for the results of its work, then it must be granted the right to choose its own leaders. In this case, those in power lose one source of illegal income: the appointment system.

Thus, the political aspect of these new mathematical methods for the analysis of economic processes suited the conservatism of political leaders, who were ready to make certain changes as long as they did not undermine the stability of their power. Meanwhile, these methods provoked negative reactions both from the reactionary political leaders, who did not want any changes in the managerial system, or more precisely, who wanted to preserve the blessed regime of Stalin, and from those in liberal political circles, who were prepared to create a more flexible market mechanism.

Ideology was not, in my opinion, a serious obstacle for the development of new methods of economic analysis. Although these methods threatened to undermine Marxist economic dogmas, the existing political mechanism safely protected the accepted ideology. Marxist ideology is quite flexible and, if necessary, it is easy to call black, "white," and white, "black." Soviet leaders are quite cynical and are indifferent to changes in ideology when offered something that can broaden and strengthen their power and, at the same time, create the outward impression of adherence to the accepted ideology. These leaders did not permit an open criticism of Marx or Lenin, because these figures had been elevated to the rank of the saints where every word was holy. But, each of these venerated figures wrote diverse materials at different times on different subjects; one can find statements in their writings that will justify almost any point of view. By picking such a general statement, a scholar could develop his own point of view.

The experience of the development of mathematical methods in economics confirms this to a large extent.

During these years, the state made large investments in the development of mathematical methods in economics and computers. Several research institutes, including CEMI, the Central Mathematical Economics Institute of the Academy of Sciences of the U.S.S.R. were created to be responsible for the development of mathematical methods for economic analysis. Subsequently, several new institutes have been organized on the basis of CEMI, including the Institute of Economics and Progress Projections in R and D, the Laboratory of SocioEconomic Measurement, and the Institute of Socioeconomic Demographic Problems. Many research institutes, both those dealing with the national economy as a whole and those dealing with branches of the economy, opened Departments to explore mathematical methods in economics. During these years, a large network of design bureaus specializing in the field of automatized control systems, were organized in different ministries. Naturally, they required economic and mathematical foundations. A network of computer centers was formed specializing in processing economic data; foremost among them was the computer center of the State Planning Committee.

The relationships between the said mathematical economic institutes and bureaus, on one hand, and their official supervisors, on the other, are anything but simple.

The mathematical-economic trend was reformist. However, it has a certain unpleasant aftertaste for those in power since it involves a direct streamlining of their work. If an engineer makes use of mathematics, then "Good luck to him," as the saying goes. But if a planner uses mathematics, the new methods are going to cause certain annoyances for those in power, since they are directly involved in the planning mechanism. This was manifested most sharply in connection with the reformist subgroup that argued for the improvement of the system's economic mechanism on the basis of decision-making theory and for the inclusion of scholars in this mechanism.

It must be noted that the direct involvement of scientists in the decision-making mechanism is by no means obligatory, nor is it a new phenomenon, generally speaking. Experience shows that the involvement of major scientists in governing a country has yielded varied results. Such major economists as Turgot and Schumpeter were unable to achieve results as ministers. However, Bohm-Bawerk, Wieser, and Keynes, when drawn into affairs of state, had a great positive influence on the economic development of their countries. I know of no cases where enlisting major mathematicians in governing a country yielded good results. In any case, the idea of enlisting scholars into the higher governing bodies of a country seems to be totally alien to all the present rulers, who fear the presence of a foreign element in their milieu. For example, Nikita N. Moiseev received no support from the rulers. Among other things, in the early 1970s he was not even invited to the All-Union Conference on the Use of Mathematical Methods and Computers in the National Economy, a very representative conference that was attended by several Politburo members.

The group that supports improving the economic mechanism through automation of the existing planning technology is substantially closer to those in power. However, it is possible that even reactionaries in the Politburo are rather afraid of the leader of this trend, Academician Victor Glushkov, since he wishes to automate everything. With such an all-encompassing approach to automation and an enormous hunger for power, Glushkov is rather dangerous, but he is necessary for business. Judging by the way Khrushchev swept away Marshal Georgy K. Zhukov, one supposes that autocrats know how to remove a presumptuous technocrat if necessary.

The reformists who seem to have been the closest to the reactionary forces in the Politburo are those favoring the trend toward optimal planning of the national economy, since it promises growth in production efficiency without enlisting scholars into the country's top political circle.

The following example provides evidence for such an assumption. Three articles written by the Doctor of Economics Adolf I. Kats apeared in three issues of the journal Planovoe Khoziajstvo (Planned economy) for 1972, under the general, quite pretentious heading "Belated Confessions and Sterile Borrowings." These articles unmasked the bourgeois essence of economic research in the West, and were directed against Soviet scholars who used production functions conduct mathematical-economic and econometric research on Soviet economy. The very fact that three articles by a single author appeared in one journal in the same year is unusual for Soviet publications. Usually an author has one, or very rarely two articles published. The size of each article was also unusual for this journal. The first article (in no. 7) took up eighteen pages, the second (in no. 9) ran to twenty-one pages, and the third (in no. 10) was nineteen pages long. Usually, an article devoted to an important theoretical problem takes up no more than fourteen pages in the journal. Furthermore, most of the text of Kats's articles were set in brevier type, so that the articles were even longer than the numbers of their pages indicate. If one considers also the pretentious style of the articles, it becomes obvious that permission for the publication of these articles could only come from the highest levels (as high as the secretary of the Central Committee of the CPSU or a Politburo member).

Then, in 1973, an article by Iury Belik, entitled "Scientific Prediction in Long-Term Planning," appeared in issue no. 5 of Planned Economy. The article was directed against mathematical methods in economic forecasting. The same issue also contained an article by Iakov A. Kronrod, entitled "Theoretical Problems of Optimal Growth for the National Economy," which was directed against the concepts of optimality that were being developed at the CEMI. Kats, Belik, and Kronrod all inveighed against the new trends in economics from the exalted vantage point of Marxism-Leninism and Communist party decisions.

In early June of 1973, a note signed by an unknown economist, Solov'ev, appeared unexpectedly in Pravda and criticized the aforementioned authors' articles were. The article charged these authors went with against the decisions of the Twenty-Fourth Party Congress, which called for the development of the mathematical-economic trend. This criticism was also couched in the best style of party publications. When my friends and I discussed this note in Pravda, we were very upset by the tone of the critique: the most reactionary methods had been chosen to defend progress.

There was also a humorous side to the situation. The last names of the two authors, Kats and Kronrod, were Jewish, and that of the third, Belik, seemed Jewish. (Actually, Belik is an ethnic Russian; he works in the Central Committee of the CPSU, which already precludes his being Jewish.) In those days, many of my friends who had nothing to do with economics called me up to ask: "Has an anti-Semitic campaign started again?" The tone of the articles and the authors' Jewish names suggested the possibility that progressive Jews were being scolded for criticizing party resolutions.

Naturally, only a Politburo member could have sanctioned the publication of an article such as Solov'ev's in Pravda.

In late June of 1973, the Planned Economy, according to standard practice, organized a discussion of the Pravda article, or more accurately, it organized a condemnation of the article. In a rather lengthy account of this meeting, published in Planned Economy (1973 [10], pp. 152-57), there was, of course, no mention of the Pravda article, and the discussion was described merely as an editorial board meeting of the journal, with the participation of scholars, planning practioners, and members of the press. It was further described as having been organized to "continue the discussion of problems of theory and practice in the planning of the national economy."

About two hundred workers from various scientific and nonscientific institutions in Moscow, including the Academy of Social Sciences of the Central Committee of the CPSU, attended this very-well-represented gathering. Forty people spoke. Thirty-eight of them condemned the Pravda article, including the authors of the articles in Planned Economy. One must not forget that Belik works in the Central Committee apparatus (he is a consultant, which is somewhat higher than an instructor) and that he had come out against Pravda, the central organ of the Central Committee of the CPSU. Some of the speakers mockingly demanded that the author of the Pravda article join the debate, knowing that the economist Solov'ev did not exist. Only two men, Evgeny I. Kapustin, director of the Institute of Economics of the Academy of Sciences, and Victor V. Kossov, deputy-chief of Gosplan's Plan-Coordinating Department, gave mild support to the Pravda article.

The board of Gosplan for the U.S.S.R. also discussed the Pravda article. Although a resolution on the "anti-Marxist nature of many branches of the mathematical-economic trend" had been prepared beforehand, and the speakers spoke out against CEMI, the first meeting ended unsuccessfully for its organizers. Academician Nikolaj N. Nekrasov, chairman of the Council for the Study of Productive Resources, an organization subordinate to Gosplan, spoke at the board meeting and voiced his disagreements with the criticism of CEMI. He all but added the following words to his declaration: "Science can manage without Gosplan, but Gosplan can't manage without science." A few other people supported Nekrasov. Nikolaj K. Baibakov, chairman of Gosplan for the U.S.S.R., was presiding over the board meetings. Seeing how the situation was developing, he interrupted the meeting and said that this question would have to be reconsidered. In September of 1973 the board actually did return to an examination of this question, and adopted the resolution mentioned above.

In October of 1973 a meeting of economists took place organized by the Department of Science of the Central Committee of the CPSU. (Earlier, an analogous meeting of philosophers had been held. The Department of Science had heard about the state of affairs in the ideological disciplines.) During this conference, all the major reports were made by reformist scholars who were developing the new trends. Among those speaking at the discussion, the majority were people either dealing with these new trends or supporting them.

In 1976 an authoritative commission staged an investigation into the activities of CEMI, the leading mathematical-economic center. As a result of that investigation, extensive changes have taken place in both the structure and the personnel of CEMI. Among other things, two vice directors, known for their progressive views, have lost their jobs.

One can surmise that the Planned Economy articles, the Pravda articles, the reports in the Central Committeeof the CPSU, and the investigative commission were all sanctioned by appropriate Politburo members.

For a broader look at the relationship between the old and new trends in economics, it is interesting to examine the role of two leading economic institutes: the Institute of Economics and the Central Economic-Mathematical Institute (CEMI). Both institutes play a significant role in Soviet society. As ideological centers, both exert direct influence on the practical decisions of the central bodies of the party.[166] I would like to touch briefly upon the relationship between the party and the economic apparatus management as it concerns these two leading academic institutes.

The Institute of Economics has for many years dealt primarily with ideology. However, in the mid-1960s members of the institute took an active part in formulating proposals for economic reform. It would not be an exaggeration to say that this institute was the chief headquarters for the advocates of reform. However, although many of the theoretical principles employed as the basis of reform corresponded to traditional Marxist precepts, on the whole the proposed reform required decentralization and a diminution of the party's role in the national economy. Consequently, many members of the institute, even some of those supporting reform, were opposed to the new directions in economics, which were designed to promote mathematical economics. In the early 1970s, when reform attempts were all but abandoned, the Institute of Economics was subjected to sharp criticism in a resolution of the Central Committee. The institute was reoriented toward studying ideology in the context of traditional Marxist ideas. But in the mid-1980's, under the impact of perestroika, the institute once again found itself on the cutting edge of the reform movement.

The Central Economic-Mathematical Institute, created in 1963, studies primarily optimal planning. Further theoretical advances in this area stimulated a somewhat greater awareness of the equilibrium or market models; still, the major preoccupation of optimal planning is with the vertical mechanisms. The concept of optimal planning is based on new theoretical ideas that clearly require reexamination of many obsolete Marxist concepts. While preserving centralized management of the economy, optimal planning is linked primarily to deconcentrating information.

The CEMI is and has been subjected to criticism by Gosplan for its anti-Marxist views and similar sins. Conflict between the CEMI and Gosplan was precipitated by the fact that Gosplan opposes new methods of planning (which can be expected of any organization striving to preserve its status).[167]

Some leaders of the party apparatus for a long time supported CEMI.[168] These leaders were extremely sympathetic towards the preservation of a centralized economic system, even if it is necessary somewhat to modernize and deideologize the Soviet system. The party leaders who react against the CEMI may either be very conservative people who want to maintain the status quo or very liberal people who want to introduce a market mechanism.

The relationships are anything but simple between these mathematical-economic institutes and bureaus on the one hand, and their official supervisors on the other. There are numerous reasons for the reciprocal dissatisfaction. For example, the practitioners criticize the scholars for not considering an array of important constraints in their models of optimal planning. They also claim that the proposed models are too simple because they do not reflect the stochastics of the economics process. These criticisms are reasonable, but one must note that the methods currently used also suffer from many of the same inadequacies. More than that, the diffuseness of planning has additional importance to the practitioners, because it allows them to solve some of the problems connected with consolidating their power.

Of course, the relationship between a ministry and the directors of its enterprises depends on the size of the plan assigned to the enterprise. Then, too, the choice of sites for new factories, as specified in the plan, determines to a large extent the relations between ministry personnel and the party apparatus, especially members of the local party organizations. In any case, since it is not acceptable to reject new methods of planning, the more discriminating ministry leaders try to use new methods of planning, with the accompanying mathematics and computers, to substantiate decisions they have already made.[169]

Next, I want to make several general observations on the introduction of new ideas in branch institute groups dealing with optimal planning.

To effect a substantial change in a production technology, that is, in the process of producing machines, it is necessary to stop current production in operating plans in order to replace outdated equipment with new. Only comparatively minor technological changes can be made in the production process without halting production. But stopping current production can have substantial negative consequences. In view of this, major new technological processes, which would interfere substantially with existing production, are introduced in many cases alongside ongoing production. Only after the new technology is installed and working in the new enterprises are the old production lines shut down.

There is an analogous situation in the management of the Soviet economy, which also has its own technology. For example, one can view the methods of optimal planning as a substantially new technological process of management. It is impossible to stop Gosplan's current operations while introducing optimal planning because this would paralyze management of the planned Soviet system.

In the spite of this difficulty, it is possible to introduce optimal planning into Gosplan even as it carries on its work. In practice this means that, for the use of Gosplan and the ministries, parallel organizations can be formed (at lower levels, if necessary) to develop optimal plans. In essence, the groups involved in optimal planning in branch research institutes could be viewed as sources of support to the ministries. Similarly, the Main Computer Center of Gosplan can be regarded as the embryo of such a support organization at Gosplan. The CEMI can be viewed as the organization for developing new technology.

Naturally, it is extremely difficult to coordinate the activities of all the groups noted and all the organizations they support. In many respects they function independently. Moreover, they function in a strongly competitive setting, as already pointed out. But, in spite of all these difficulties, the idea of establishing a parallel system of planning is gradually forcing its way into reality. It seems to me that this dynamic process can be regulated after establishing a special institution to coordinate the activities of all personnel involved in creating a new system of planning.

In the last thirty years, a lot was done to train economists and mathematicians who specialized in the field of mathematical economics. A number of specialized departments were formed in certain universities (including Moscow, Leningrad, and Novosibirsk) and colleges. The teaching of up-to-date mathematical methods, especially linear programming, was strengthened for all students of economics.

One of the indications of the increasing role of mathematical economics is the growth in the number of "generals" and "officers" in it. In the U.S.S.R., the titles "academician" or a "corresponding member of the Academy of Sciences" are analogous to the rank of general. These titles are given first of all for administrative activity, but they in turn help in the acquisition of administrative authority. Needless to say, the prestige incurred by such titles allows their holders to exert a lot of influence of the development of certain scientific trends. (Recall that the first organization specializing in mathematical economics - the Laboratory of Mathematical Methods in Economics - was formed in the late 1950s by academician Vasily S. Nemchinov, exercising his privileges as an academician to form an independent laboratory.

Among the total number of Soviet economists (about forty) who have the titles of academicians or corresponding members of the Academy of Sciences of U.S.S.R., a substantial majority is not familiar, and because of its age is unable to be familiar, with the methods of mathematical economics. This does not mean that they all feel the same way about them; quite the contrary, attitudes range from the openly hostile to the extremely positive. Among the Soviet economists, after Nemchinov's death in 1965, four academicians, Abell G. Aganbegian, Alexander I. Anchishkin, Nikolaj P. Fedorenko and Stanislav S. Shatalin came to represent mathematical economics. In past years, certain shifts took place in the composition of corresponding members of the Academy of Sciences of the U.S.S.R. and such well-known economists as Valery L. Makarov and Nikolaj Ia. Petrakov, who are directly involved in mathematical economics, became corresponding members.

Unfortunately, I am not familiar with the proper statistics. But I can say with assurance that recently there has been a sharp increase in the number of "upper and middle officers" in the field of mathematical economics. I estimate that about a hundred doctors of economics (or mathematics) and about a thousand candidates of economics (or mathematics) specialize in this field. This constitutes a small percent of the total number of doctors and candidates in economics. There are about ten specialized councils in the U.S.S.R. in the field of mathematical economics that are granted the right to award doctorates and candidates degrees.

The organizational undertaking mentioned above attracted a noticeable number of capable individuals into mathematical economics. First of all, I want to mention a group of talented mathematicians who dealt with pure mathematics. It seems to me that the presence of such a group of scholars creates a potential for the appearance of new great ideas because pure mathematics allows us to see the depth and to rethink the economic problems. The most important concepts in economics in the last four decades have been elaborated by mathematicians with an interest in combining pure mathematical ideas with their applications. I have in mind the theory of games and the theory of optimal planning elaborated, respectively by the two outstanding mathematicians Johb Von Neumann and Kantorovich. Kantorovich told me in one of our conversations that the knowledge of functional analysis allowed him in the late 1930s to understand the essence of nonclassical optimal problems, which are used for the representation of an economic system.

The appearance in the 1970s and in the 1980s in the U.S.S.R. of several books in mathematical economics written by pure mathematicians[170] confirms that these scholars can make an essential contribution to economics. These books did not present revolutionary ideas, but they are essential in the creation of a bridge between pure mathematics and economics.

The picture of pure mathematicians appearance in the field of mathematical economics will not be complete if I do not mention the reasons that stimulated some talented pure mathematicians to join this field. These reasons are mainly linked not to the normal prolcess of scientific development but to the ugliness of the Soviet political system. Among this group of pure mathematicians a great percentage are Jews (or half-Jews) who, as a result of anti-Semitism, cannot find a job with their qualifications in a specialized mathematical organization. A fast developing new field, as mathematical economics was in the 1960s and early 1970s requires capable people, and mathematical economics absorbed many of these good mathematicians.

Nevertheless, these mathematicians felt like stepchildren who were forced to take a job in mathematical economics while their Russian colleagues had the opportunity to develop their ideas in specialized mathematical institutions. That is why many of these mathematicians took advantage of the opportunity to emigrate from the U.S.S.R. when it was open to them in the 1970s.

In spite of all the effort exerted on developing mathematical economics, it has not had a significant effect upon the development of the Soviet economy. The implementation of this method was unable to prevent the growth rate of the Soviet economy from falling. I share the view of Professor Vladimir E. Shlapentokh from Michigan State University that the political leaders who supported the mathematical-economic methods have become disillusioned. Moreover, the champions of perestroika totally ignore mathematical economics in their enthusiasm for the market ( while implicitly assuming that the market will accomplish everything all by itself).

The following facts may serve to confirm indirectly how the illusions surrounding mathematical economics have been gradually abandoned. It is known, for example, that the State Planning Committee was always quite hostile to mathematical economics. But still, under the pressure from above, it was forced to flirt with and outwardly acknowledge the effectiveness of these methods. In the early 1960s, a special department was founded in the State Planning Committee applying mathematical methods to economics. But in the beginning of the 1970s it was liquidated, or more exactly, it was made into a subdepartment and merged with the Department of Integrated Planning.

In the late 1960s, a special rubric devoted to the application of mathematical methods to economics was introduced in the journal Planovoe Khoziaistvo. In 1972, ten articles were published under this heading; eight were published in 1977. The year 1979 was the last for this topic, and only two articles were published under this heading in 1979. In the 1980s, although the journal mentions such tools of mathematical economics as production functions and input-output tables, articles with mathematical formalism have totally disappeared, as has the general rubric related to the application of mathematical economics.

Even in the 1960s, the progressive critics of mathematical economics warned that sociopolitical reforms are the decisive tools for solving economic problems. They rightly supposed that one cannot expect significant positive shifts in the economy unless the market mechanism is introduced with its accompanying sociopolitical institutions such as decentralized ownership, and unless the party is removed from the economy.

If we agree with this criticism of mathematical-economic methods and take it to the limit, then all that was done in the U.S.S.R. in developing these methods must be considered useless. It seems to me that things are not so simple in this case. In principle, I agree with the statement that without the appropriate sociopolitical reforms (in particular, the creation of a pluralistic political mechanism and a market economy) it is impossible to achieve an effective economic development. But at the same time, without the developed science of economics, which includes mathematical methods, it is also impossible to achieve steadily high results. A characteristic view of many liberal Soviet scholars is that the market does everything automatically. They often confuse the market with an oriental bazaar. The market is a very sophisticated mechanism that may include certain very complex institutions, even indicative planning. It demands knowledgeable participants, especially as managers of large enterprises and workers at the government agencies which regulate the economy. One cannot seriously think of participating in the workings of a market mechanism in a developed industrial society without knowledge of up-to-date mathematical methods in economics.

It still be possible, to manage the economy on the basis of experience and common sense within the framework of the command-style Soviet planning mechanism, although at the cost of incredible losses, but one can hardly hope to construct or to successfully exploit a developed economic mechanism without the knowledge of modern economic theory. This theory must combine sophisticated horizontal mechanisms (and, first of all, the market) with the vertical mechanisms (government interference). Therefore, methods of mathematical economics are a necessary condition for building a developed socioeconomic system. The mistake in understanding the role of these methods was tied either to their overestimation (that is, taking them to be a sufficient condition for improving the mechanism of planning) or to their underestimation (that is, ignoring the significant role they play in the foundation and performance of a modern economic system).

These considerations prompted me to make the following statement:

"It seems to me that the evaluation of the role of mathematical-economic methods in the development of Soviet economic science, and its practical realization, should be based on creating the potential for future socioeconomic progress in the country. These methods will become especially important when socioeconomic reforms, which allow for rapid growth of economic efficiency, take place. Under these conditions, the necessity of having people educated in economics will become particularly great because the complexity of the economic mechanism will increase considerably. I do not want to deny the practical usefulness of all measures which took place that were meant to improve the Soviet economy using mathematical methods. I only wish to note that their role within the framework of the existing system may not be as important as it would be in the formation and functioning of a more developed system."[171]

The practical demands of Gorbachev's perestrojka are much too large for the Soviet economic theory to handle. The lack of theoretical ideas relevant to the ailing Soviet economy is painfully obvious.

.Application of Methods of Mathematical Economics during the Past Thirty Years

In this section I want to analyze the successes and the difficulties in developing methods of mathematical economics during the last thirty years, and to examine the potential for the effective application of a more developed economic mechanism. In analyzing their successes, I want to discuss in great detail the development of economic theory as it was influenced by mathematical methods, together with the difficulties and the problems faced by a wide range of economists in understanding these methods.

The leading concept in the development of economic theory in the U.S.S.R. in the past thirty years has been the concept of optimal planning.[172] It included other methods of mathematical economics, the most important being input-output tables, which display cases where the number of technologies equals the number of goods and there are no nonreplaceable resources/natural resources. As far as econometric research was conceived, it seemed at first that it could be used chiefly in a statistical analysis of economic data. At the same time, econometric methods brought forth some ticklish theoretical questions.

The methods of econometrics rely upon extrapolation from past trends or, more precisely, they accentuate the analysis of uncontrolled variables. Therefore, these methods can be used only for forecasting, and their applications requires a rejection of goals, that is of the intentions of the current leaders. It became obvious as early as the 1930s that a plan was not a forecast, not a wish, but a directive, a law compulsory for all branches of the economy, and that Soviet planning was not to rely upon extrapolation of past trends in industrial development, but had to express the interests of the current leaders (at that time, Stalin) aimed at creating a militarily powerful Russia; econometrics, dependent on extrapolation, was harshly criticized. Therefore, when, at the end of the 1960s, econometric methods of analysis reemerged to forecast the Soviet economy thanks to Boris N. Mikhalevsky and Alexander I. Anchishkin,[173] a number of conservative Soviet planners perceived it is a threat to directive, goal-oriented planning. In connection with this, I can mention one particular article published in 1973 by Iury Belik, an adviser to the Planning and Finance Organs Department of Central Committee of the CPSU, in which he announced his opposition to the mathematical methods in economic forecasting.[174] Nevertheless, these methods of forecasting were used for the analysis of the Soviet economy and even played a practical role in long-range planning - an even more significant role than optimal planning.

In the 1970s econometric research carried out in relation to a long-range plan for 1971-1990, indicated that an extensive growth of Soviet economy, that is, growth mainly from involving new labor force and capital, could not continue further. Growth was precluded by the depletion of natural resources at discovered sites, obsolete machinery, and demographic shifts leading to a decrease in the labor force. The conclusion of the forecast stated that there is a need to switch to intensive methods of economic development based on technological progress and workers' personal interest in growth. This in turn requires major reforms in the sociopolitical mechanism. But in any case, the forecast showed that the level of production in the Soviet Union by the 1990s will not exceed that of the United States and other developed capitalist countries on a per capita basis.

But let us return to the concept of optimal planning. The aforementioned book by Leonid V. Kantorovich and the accompanying work by Victor V. Novozhilov[175] present the national economy as a model of optimal planning. Thanks to the model by Alexander L. Lurye,[176] economists for the first time were given a method of thinking that organically treated target selection and examination of the structure and amount of the final products (as unknown variables), in relation to available technologies and the initial endowment of different kinds of resources (as known variables). Secondly, it was shown explicitly by the founders of the optimal planning concept that the prices of goods and resources, including labor, natural resources, and capital goods, arise in the process of working out a plan and are tools in not only plan formulation but also plan realization. Even now, this type of thinking is unusual for an overwhelming number of Soviet economists.

Of course, these findings from the theory of optimal planning, especially in the works of Kantorovich and Novozhilov, assumed a "Marxoidian" appearance, which muddied their purity and clarity. I cite as an example a model of optimal planning proposed by Novozhilov, in which the criterion of optimality is given by a function for minimizing total labor input and in which the quantities of the final goods have been set as additional restrictions on available resources. These kinds of models create an impression of the Marxist character of prices in an optimal plan, since they are measured in abstract labor. But this sort of illusion is costly. First of all, this imposes an erroneous commeasuring of different kinds of labor, different in its complexity, reducing them all to simple labor; in no other way is it possible to construct the criterion of optimality noted above.

The disregard for the price-of-labor category in Marxism becomes entrenched in these types of models. An examination of this category makes it clear that high wages for highly qualified workers are necessary for the correct computation of the production costs for various goods and for the optimal allocation of labor. If it is necessary, for the purpose of social justice, to redistribute income, this might be done through a tax system.[177]

In Novozhilov's model, the quantities of final goods are taken as given. Thus, one dispenses with the whole process of searching for the scale of production of the final goods in the process of an optimal plan and of searching for the intensity of use of a given technology for the production of a specific product. In Novozhilov's model, only the optimal intensity of a given technology is sought.

During the past thirty years, large numbers of Soviet economists who assimilated the ideas of optimal planning continued to develop Novozhilov's model and attempted to construct similar "Marxoidian" schemes.[178] Meanwhile, models of optimal planning and pricing based explicitly on the assumptions of the commeasurability of the utility of final goods became more widespread, and lead to the appearance of a noticeable number of publications concerning the theoretical analyses of the category of social utility.[179]

In the mid-1960s, in place of the general model that represented the national economy as a problem of optimization, came a model of the Soviet economy as a problem of the optimization of a large-scale system requiring decomposition for its solution, and hierarchical representations of the management structure of the Soviet economy. The development of this trend is connected to names like Lev M. Dydkin, Efim Iu. Faerman, Valery L. Makarov, Iury V. Ovsienko, Vsevolod F. Pugachev, Victor A. Volkonsky, and the author of this book.[180]

The major theoretical contribution of this trend to economic science is a clear vision of the way that a local criterion of optimality for the unit of a certain level is linked with the criterion of a unit of a higher level, and eventually with the global criterion of optimality for the whole system. In particular, it has been shown that such a linkage can be done by using prices. Prices, elaborated at a given level of hierarchy, are used in forming a local criterion of optimality for economic units subordinated to its level of hierarchy; this local criterion is termed profit. Meanwhile, the global criterion of optimality for the whole system can be expressed as maximization of the level of people's satisfaction.

These findings let one clearly understand the reasons for the emergence of a developed price mechanism in a planned economy: it is caused by the need for deconcentrated decision-making, and for granting the choice of the most expedient structure of input-output to the economic units who take into account their own options. This view completely erases the existing theories of the need for forming a price mechanism for the Soviet economy, based on the supposition of its provisional character because of factors such as the presence of two modes of ownership (government and cooperative), different qualities of labor, and so on.

The understanding of the price mechanism, which follows from the concept of optimal planning, prevents one from treating it simply as a synonym for the market. Even today, an overwhelming majority of Soviet economists are convinced that the price mechanism is an outcome of the market, and thus represents an atavism in the Soviet planning system. So, categories such as prices and profits are treated as bourgeois categories within the framework of planned economies. I want to note, on the side, that some Western scholars who deal with Soviet economy also make the mistake of attributing to Soviet supporters of optimal planning an agreement with the ideas of the market based only on the fact that they are guided by the prices and profit in making local decisions. Prices and profit are economic invariants, inherent to any developed economic system. In this respect, planned systems differ from the market systems in the mechanisms for forming these parameters, that is, in whether they are centralized or decentralized.

This understanding of prices and profit helps one see the danger of strengthening the role of prices and profit without restructuring the price mechanisms within the framework of an acting planning system. Using Marxist schemes to let the government set prices on the basis of the labor theory of value, and using them in turn to make profit the leading criterion for evaluating the work of economic units, can lead to an economic disorder.

In the 1970s and 1980s, economists continued to be seek new techniques within the framework of the theory of optimal planning. Theoretical work in nonequilibrium economic situations comes closest in this direction.[181] This work is an attempt to understand how, in a state of disequilibrium, the absence of optimal (equilibrium) prices can still lead the economy to an equilibrium state. This was an important theoretical advance, in that it demonstrated operationally how to integrate the horizontal and vertical economic institutions. Considering the reality that perestroika has little time in which to produce tangible results in U.S.S.R. and the difficulties in applying market institutions, with its corresponding prices, this kind of research can help in achieving a compromise decision that will the economy toward an effective path. This work is especially important for today's Russia, since the market economy cannot be achieved overnight, and its implementation calls for some pretty sophisticated "transitional" tools.

The 1970s brought new ideas in the development of the concepts of optimal planning. People realized the limitations of the concept resulting from an underestimation of the role that an individual with his own desires and interests plays in the performance of the economic system.[182] For example, the supporters of the concept of optimal planning implicitly assumed that a given economic unit is interested in providing higher units with complete and accurate information about its productive capacities and will try to overfulfill the plan given to it from above. But such a statement cannot be an assumption: it has to be an inference, if one takes into account the real interests of workers. A group of researchers from the Institute of Problems of Control led by Alexander Ia. Lerner, tried to construct a non-contradictory system to stimulate workers to disclose maximally true information regarding their internal capabilities to the planning organs above.[183] After Lerner expressed his desire to emigrate to Israel, he was dismissed from his job and this trend did not receive any significant further development. In their work on the optimal planning for the Soviet economy carried out in the late 1960s and early 1970s, Eduard F. Baranov, Victor I. Danilov-Danilian, and Mikhail G. Zavelsky, a group working in CEMI, made a major attempt to strengthen the role of one factor in the model: specifically, to explicitly introduce the interests of people living in a certain region, the migrational flow of labor force, and so on.[184] Unfortunately, the group fell apart by the mid-1970s evidently due to difficulties in allocating prestige among themselves. I do not know of any serious further work in this field.

Interesting research began to develop linking sociology and optimal planning.[185]

Finally, in the 1970s, there was a deeper realization of the limitations of the optimal planning approach as a whole. Due to the practical demand to develop specific programs (such as programs for developing the chemical industry) a question arose as to whether an optimal plan might not be sufficient by itslef for solving economic problems. It seemed that having an optimal plan would solve all the problems of economic development both in time and in space. Why, then, is there a need for separate programs? A group of mathematically oriented economists, headed by Efrem Z. Maiminas, tried to answer this question.[186] Although the methodology of this research leaves something to be desired, its value lies in an attempt to find more general means of efficient planning, rather than simply optimal planning. It seems to me, that sort of attempt is a step toward more realistic planning patterns, which take into account the indeterministic character of economic processes. Optimal planning, even if it took the stochastics of economic processes into account, remained within the bounds of a deterministic system. Unfortunately, not enough attention is being paid in Western Sovietological literature to the Soviet research on the field of "effective" planning and this seemed to me to be a disappointing gap.

The 1980s brought some new developments to Soviet economic theory that use mathematical methods. Of special moment is the joint research by Gennady M. Khenkin and Victor M. Polterovich on a new class of Schumpeterian innovator and imitator interaction models.[187] In contrast to the well-known models of Western scholars, Khenkin and Polterovich were interested in an equilibrium distribution of production among economic units with different efficiency levels, subject to minimum interaction constraints between innovators and imitators. The mathematical formalism that they used bears on a rare and complex class of differential equations, and again demonstrates how fruitful a synthesis of abstract and applied mathematics can be. Interesting results have also been obtained by a group headed by Vadim I. Arkin on the application of probability theory to the economic models with an endogenous technological progress. Within the latter problematique, I have been most impressed with the research on the assessment of new technologies.[188]

The Soviet invasion of Afghanistan put an end to détente. There is an ideological recruitment taking place in the Soviet Union and a rebirth of emphasis on the U.S., with its ambitions of world domination, as the main enemy of the Soviet Union. This is compounded by a reluctance and an inability to carry out any reforms demanded by the stagnating economy. Under these circumstances, an ideological shot fired at the Central Mathematical Economics Institute by Konstantin U. Chernenko in mid-1983 in his speech at the plenum on ideology constituted an omen that in the future the creative development of economic science in the U.S.S.R. would be restricted. Fortunately, this bombshell did not obliterate the bridges between mathematics and economics. Due largely to the efforts of leading Soviet mathematicians, the institute received an overall positive mark from an ad hoc investigative commission appointed by the Academy Presidium. Academician Nikolaj P. Fedorenko, the director of CEMI, whose powerful enemies in the academy unleashed a campaign of persecution against the Institute, also managed to survive. Though alive, CEMI fell on hard times: whole departments were carved out of the institute and transformed into separate research organizations. Fedorenko's enemies finally got to him, and he was relieved of his position.[189]

The Concept of Optimal Planning as Applied in the U.S.S.R.

It is usual to oppose a theoretical construction of optimal economic performance with practical results when these constructions are not built in to some model that can be fed statistical data, to derive numbers that will direct economic activities. It seems to me this kind of dichotomy is not justified, since there is a whole spectrum of relations between the two extreme states mentioned above. An important area within this spectrum is the one in which theoretical constructions enrich the intuition of a planner, allowing him to make rough decisions in a reasonable direction rather than exact decisions in a wrong direction.

Mathematical methods play an important role in this phase. The role of mathematical methods in the development of economic theory is widely known. I just want to briefly mention certain aspects of their application which, in my opinion, are particularly important in determining the views of Soviet planners. First of all, mathematical models permit the modeling of the process, that is, translating some problem within a given system into another language without saturating these models with concrete numerical data. Considering the compactness of mathematical language, this linguistic translation lets one see the problem in its entirety, to see the relationships of all its parameters. It is difficult to grasp the problem in its entirety given a verbal account, because a verbal account is cumbersome and incapable of encompassing the total vision. Moreover, mathematical models guarantee the opportunity to analyze the total picture, that is, all the dependent and independent variables in their relationships in the model. It is quite easy to lose sight of this totality given a verbal account.

These models discipline the mind since they allow a clear vision of the assumptions that underlie the conclusions. It is typical for Soviet economists to make inferences without clearly stating the assumptions under which they are correct. Of course, Soviet economists are not the only ones to have the "privilege" of thinking this way: it is a trait common to all mankind. But it is a question of degree: compared to physicists or even to biologists, economists are less accustomed to the correct relationship between assumptions and conclusions.

What I have said about modeling processes on mathematical language can be further realized in elegant deductive constructions, which, having a small number of assumptions can lead to a variety of different conclusions. Together with Solomon M. Movshovich and Iury V. Ovsienko, I have tried to construct a dynamic optimization model of the economy based on a relatively small number of assumptions, and to extract from it as inferences a variety of different economic categories (rent, depreciation, prices of durable and non-durable goods, price of labor, and so forth).[190] At the same time, this model allows us to show how all these categories are interrelated in the financial currents that accompany the transformations of resources and products in physical term.

Finally, I would like to turn my attention to an important aspect of using mathematics in economics: the possibility of constructing mechanisms of economic performance based on translating various algorithms for solving economic problems from the mathematical to an economic language. The success reached in writing algorithms for solving large-scale problems, based on the principle of decomposition, to a large extent permits one to imitate the hierarchical management system so characteristic of the Soviet planning system. The availability of a variety of algorithms allows us to assume a corresponding variety of patterns of planning and plan implementation.

Because of what I have said about the role of mathematical methods in enriching the intuition of the planner, I do not want to downplay the role of these models in practical applications (in the sense of feeding them with data and preparing them for computer analysis). Various parts of the spectrum of theoretical constructions can be combined in the management system. A certain part of a spectrum can be used within a corresponding part of the management system, and then they can be combined together. This is how a designer of large system operates. His genius, enriched by theoretical knowledge, allows him to develop a concept of the given construction of, for example, a bridge. Its separate parts, if they are developed enough, can be described by a model and calculated. The synthesis of the whole system belongs to the designer.

Thus, the practical applications of the theory of optimal planning could, first of all, affect the leading planners by enriching their intuition. In particular, the aforementioned work serves this purpose, since it gives a general picture of the flow of goods in an optimizing economy both in financial and in physical terms, and allows planners to see how their intuitive decisions can be coordinated among themselves.[191] For example, if we introduce rent on natural resources at this point, intuitively setting its value, then we can see how this would affect the prices of goods and how the revenue portion of the budget would change. Thus, the role of taxation might have to be reduced in order to simultaneously maintain the guiding role of price and to guarantee coordination between the financial flows and the "motion" of resources and products.

Meanwhile, the practical application of the theory of optimal planning was understood primarily as a formalization of economic processes, of plugging numbers into the models and running them on computers. The existing economic mechanism resist the implementation of these models; even in those cases where people succeeded in building such practical models; the system rejected them as if they were a foreign body. Much has been written about this in the literature, and I am not going to bother with any examples.

Unfortunately, very little was done as far as enriching the intuition of the heads of ministries and State Planning Committee with constructions stemming from the theory of optimal planning. This was so even in the Academy of National Economy - the institute for teaching Soviet top-level managers, in which vice ministers, leading workers in the Central Committee of the CPSU, and so on study full-time for several months. Even here, the ideas of optimal planning were reduced mainly to explaining the methods of formulating and solving specific optimization problems.

One could say that, in general, in spite of great efforts to implement the application of mathematical methods to Soviet economic research, an overwhelming majority of Soviet economists suffer from math phobia. So far, Soviet economists are divided as to whether they do or do not use formulas in their work.

In the beginning of 1984, the Soviet journal Economics and Mathematical Methods published an article by the administrative head of the field of mathematical economics, Nikolaj P. Fedorenko,[192] which summarizes certain results of the development in this field. The fact that he needed to justify the expediency of these methods and to elucidate their basics shows how little these methods have disseminated.

The new economic ideas accompanying mathematical methods of economic analysis have had little effect on the average economist or even on the leading economists in their most active middle years. The evidence for this, in particular, is the round-table discussion on ways of perfecting Soviet economic mechanism organized by the journal, Economy and Industrial Organization in 1983.[193] Leading Soviet economists took part in this discussion side-by-side with practitioners. Reading the reports of this discussion, one feels once again that the categories used in conceptualizing the problems remain old-fashioned both in form and in content. This is in spite of the fact that the organizer and the leader of this discussion was head academician Abell G. Aganbegian, who is familiar with mathematical methods of economic analysis.

What were the reasons that the institution of Soviet economists absorbed the theoretical constructions of optimal planning so poorly? One could name, as one of the reasons, the practicality of both scholars and workers and a limited vision in the field of optimal planning, a vision that narrowed the borders of practicality to numerical models. Also important is the opposition to new ideas put up by the great majority of traditional economists, who are unable to master them. This opposition is quite strong, since the teaching of economic theory is done everywhere through textbooks on economics that are completely based on the obsolete Marxist dogmas. So far, there is no new textbook in economics written on the basis of the concept of optimal planning.

All these reasons are familiar. But I would like to discuss in greater detail inherent cognitive difficulties in dealing with new economic ideas. It seems to me that the difficulty is in the complexity of assimilating these methods by common sense. First of all, common sense typically analyzes a problem at a high level of excessive information, redundancy given by its verbal description in economic language. Meanwhile, mathematical language is very concise and requires great concentration of effort for precise formulation. Formalism provides a language for such a precise expression of thoughts. Taking into account the fact that, for a long time, the study of economic disciplines in the Soviet Union was to a large extent cut off from the formal descriptions of economic processes, it becomes obvious how difficult it must be for the Soviet economists to deal with sufficiently developed mathematical models. This condition is greatly aggravated by the fact that it is easier for common sense to perceive disjointed pairs of individual assumptions and corresponding conclusions than to perceive the total vision of the aggregate of assumptions, and the appropriate conclusion based on their conceptualization. This last circumstance is especially important for understanding the concept of optimal planning. In this concept, the distribution of resources and price setting interweave organically, that is, the price is a tool for the composition of a plan and its implementation. But, for common sense, it is easier to treat a plan as a process of resource allocation and to treat prices separately as an expression of the cost of production.

Thirty years have passed since the publishing of Leonid V. Kantorovich's book, The Best Use of Economic Resources, a book that marked a revolution in the development of economic science in the Soviet Union. With all its limitations, the concept of optimal planning was a major step forward in the development of Soviet economic theory. Although, as I have already mentioned, this theory cannot claim to have greatly affected changes in Soviet economy, it can further the development of economic theory and might play a significant role in a future, improved socio-economic mechanism. Meanwhile, by the mere fact of its existence, the theory could have greatly stimulated the development of economically educated specialists. But this did not happen.

Not so long before the publishing of Kantorovich's book, I had a conversation with him. We discussed questions of possible reforms to Soviet economic science and management practices. Kantorovich thought that the existence of the ideas of optimal planning, and the "citizenship" rights that they would receive, would be enough to greatly change the state of Soviet economic science within five to seven years, to capture the hearts of most economists and planners, and to convert them to the new faith. The basis for such a statement is a notion that the ideas of optimal planning are obvious and logical, and that it does not require any special mathematical knowledge in order to understand the procedure of composing an optimal plan and implementing it by means of prices. And even Kantorovich's book itself (except for the mathematical appendix) is written in such a way as to allow any unprejudiced reader, who knew the four arithmetic operations and was inclined to logical thinking, to be persuaded that Kantorovich's construction was correct, and that is was the most adequate construction for the nature of planned socialist economies.

I expressed my skepticism concerning the time needed for economists to accept Kantorovich's ideas, and mentioned a period of two generations. Slightly more than one generation has passed, and it seems that I was an optimist. There is a joke going around in the Soviet Union that "a pessimist is a well-informed optimist." It looks like I was not sufficiently informed to predict a more realistic period for radical changes in Soviet economic science under the influence of the ideas of optimality, not to mention the broader and deeper concept of an indeterministic approach.

Notes and References

I have relied mostly on my personal experience in giving an account of this material, because for the first fifteen years, I myself played an active role in establishing and developing methods described. See also A. I. Katsenelinboigen, Soviet Economic Thought and Political Power in the U.S.S.R. (New York: Pergamon Press, 1980). In the last fifteen years I have received most of the information concerning the development of mathematical methods in economics from published Soviet sources, particularly Economics and Mathematical Methods, a journal which I follow systematically, as well as from numerous conversations with Soviet economists on professional trips to the U.S.

Jews in Soviet Economics

This chapter does not claim to be a systematic exposition of the contribution Jews have made to Soviet economic science. I am not familiar with the national composition of scholars in this field in the 1920s and early 1930s, during which time a number of genuinely pioneering ideas were developed. I would like to concentrate on the post-World War II period, while making some remarks about the late 1930s and early 1940s, during which, in a sense, Soviet economic science as it is today took shape. The post-war period is most familiar to me, since at that time to a great extent (until I emigrated in 1973), I was myself actively involved in Soviet economics. Nevertheless, the present effort should be seen as a number of observations based primarily on my own experience.

Jews in Economics in the Stalinist Period

Economics in the U.S.S.R. performs an ideological as well as a practical function. It is natural that under the circumstances that came to prevail in the country, the leading role was given to the so-called political economists, that is, those economists whose primary duty was to furnish ideological justification for the emerging rigidly centralized economic system. It must be said that Jewish economists made their contribution on this front. Though Stalin himself was naturally the number-one ideologue, his minions in the late 1930s included such Jews as Lev A. Leontiev, Boris L. Markus, Lev M. Gatovsky, Evgenij S. Varga, Genrikh A. Kozlov, Maria N. Smith, and others. I. A. Lapidus and Konstantin V. Ostrovityanov collaborated on a textbook on political economy at that time, but it was known that the Jew Lapidus played a much greater role in the undertaking. In 1940 Stalin invited six leading Soviet economists to a discussion. I know the names of only four of them, of whom two - Leontiev and Markus - were Jewish.

The Jewish ideologues followed different paths. Since they lived in the period after the Great Purges, when the apparatus of management and propaganda had become largely stabilized, they died natural deaths. Most of them, though losing their high positions under Stalin, were still able to lead fairly comfortable lives.In the mid- and late-1930s Leontiev was Stalin's principal spokesman in the field of political economy. As a scholar he was an inconsequential figure, but he had good political sense and a flare for journalism. His closeness to Stalin at that time can be seen from the fact that the Soviet leader often invited him to his Kremlin flat. During the war, Leontiev was removed from his leading position and replaced by Ostrovityanov who, incidentally, like Stalin had received a religious education at a seminary. For many years Leontiev was editor-in-chief of the journal Vojna i Rabochy Klass (The War and the Working Class), later called New Time. He spent his last years as a pensioner. But even then he played a significant role and supported certain new trends in economic science that aimed at economic liberalization. But all this was against the background of Leontiev's constant sorrow, until the very last days of his life, over Stalin's death. Leontiev died in Moscow in 1974. Markus's life (his sister was Sergey, M. Kirov's wife) followed a somewhat different path. An outwardly brilliant man, Markus was a mediocre scholar. His magnum opus, Labor in the Socialist Society, published in 1939 by Gospolitizdat, is a masterpiece of ideological apologia. In the mid-1930s he headed the economics section of Pravda. Lev Mekhlis was at that time the paper's editor-in-chief. Reminiscing on his years at Pravda, Markus would discuss with me, among other things, Stalin's modesty. Once, when Markus was in Mekhlis' office, the latter received a call from Stalin, asking him to reduce the level of praise that he, Stalin, was receiving. The call pleased Markus immensely. But, in all likelihood, it was simply one of Stalin's tricks: the purpose was either to check on Mekhlis's loyalty or to find someone to blame for the grotesque accolades Stalin was receiving in the press.

Markus's success at Pravda soon brought him the position of director of the leading economic institute, the Institute of Economics of the U.S.S.R. Academy of Sciences. Simultaneously, he was made editor-in-chief of the journal Problemy Ekonomiki (Problems of Economics).

Despite his political conformism, Markus committed a serious blunder in the late 1930s. In 1940 Problems of Economics published an article by a member of the Institute of Economics, M.I. Kubanin (a Jew by nationality). Following Stalin's speech at the eighteenth CPSU Congress, Kubanin sought to show that the U.S.S.R. was still lagging behind the U.S. in labor productivity in agriculture. Stalin had indicated in his speech that the U.S.S.R.'s major economic goal was to overtake the leading capitalist countries in the per capita output of pig-iron, steel, and other capital goods; but he did not say that the U.S.S.R. was behind in the per capita production of agricultural goods. Rumor has it that Nikolaj A. Voznesensky (then chairman of Gosplan) passed Kubanin's article to Stalin, commenting that it was a slanderous lie against the Stalinist system of collective farms. Kubanin was liquidated (he was either shot or perished in the gulag) and his family was expelled from Moscow. Not until after 1956, when he was granted posthumous rehabilitation, was his family allowed to return to Moscow. His daughter, Marina Kubanin, was employed by the Institute of Economics in memory of her father. Solomon Khejnman, a member of the Central Statistical Directorate (TsSU), who provided Kubanin with statistical data, was also arrested and exiled. In the mid-1950s he was rehabilitated, returned to Moscow, and given a post at the Institute of Economics.

Accused of being a turncoat, Markus was fired from his job as Director of the Institute and apparently expelled from the party (or subjected to the strictest party reprimand). When the Second World War broke out, he volunteered for the front. When I first met him in 1946, he was already fully reinstated in the party and had been appointed as the chairman of the Department of Labor Economics at the newly reorganized Moscow State Institute of Economics. He was quick to realize that, given the prevailing economic and political situation in the country (coercive labor conditions, low level of income of the population, and so on), it was extremely dangerous to study labor problems. Therefore, while retaining his Chairmanship, he switched to other lines of inquiry. He became involved in editing a multi-volume publication on the history of Moscow, which in 1947 celebrated its eight-hundredth anniversary. He died of cancer in 1949.

Generally speaking, the incident as well as the liquidation of many other prominent Jewish economists in the mid-1930s can be regarded primarily as political actions characteristic of Stalinist rule in that period. But they can also be interpreted in terms of the already emerging anti-Semitism.

I would like to say a few words about the lives of several ideologues who predicted confidently, in accord with Marxist doctrine, capitalism's imminent collapse. Adolf I. Kats, who as a communist came to the U.S.S.R. from Romania in the late 1930s, "proved" in the mid-1940s that capitalism was already so weak as to need only a slight push to be toppled over. The work was greatly admired by Stalin, who ordered it to be published in the journal Bolshevik (now Kommunist). Kats's opponents, however, were able to prevent its publication; according to Ostrovitianov, Georgy M. Malenkov was instrumental in stopping the publication. Kats himself continues to actively defend Marxist doctrine.

The most important ideological figure to defend the Marxist dogma of decaying capitalism was Academician Evgenij S. Varga. Varga, a Jewish communist who had played a prominent role in the Hungarian Revolution, came to the U.S.S.R. in the early 1920s after the defeat of the revolution. Until 1948 he headed the Institute of World Economy, the ideological center for propagating the Marxist interpretation of the capitalist economy. The institute employed a large number of Jews, many of whom held important positions. Among them were corresponding members of the Academy of Sciences, Mariya Natanovna Smit (nicknamed Madame Smit) and R. Levina, and such prominent scholars as Modest I. Rubinshtejn, S.A. Dalin, Sh.B. Lif and V.E. Motylev. In 1948, the institute was closed down as an early victim of the struggle against so called Cosmopolitanism. A book, Technical and Economic Changes in US Industry during the Second World War, written in 1947 by M.L. Bokshitsky, a Jewish member of the Institute, was severely criticized. As the work was written at a time when the U.S.S.R. and the U.S. were allies, it did not condemn capitalism to the extent that was necessary by 1948. But the very fact of the liquidation of the institute indicated that it was not just a case of mistakes committed here and there, but rather the deliberate elimination of the "hornets nest of cosmopolitanism." One of the leading members of the institute, R. Levina, was arrested; she was rehabilitated soon after Stalin's death, and died in Moscow in 1964. Among others arrested was Varga's assistant, a Jew, who was aiding Varga with the preparation of his manuscripts for publication and, probably, translating them from German to Russian. (Varga never learned how to speak Russian well, and certainly could not write it.) After Stalin's death, the assistant was released from prison and given a post at the Institute of Economics.

With the closure of the Institute of World Economy in 1948, a majority of its personnel found employment at the Institute of Economics of the Academy of Sciences. The Institute itself was re-created in 1956 as the Institute of World Economy and International Relations (IMEMO) but its "new version" employed hardly any Jews.

Now I would like to concentrate on the role of Jewish economists in forming the other side of the Soviet economic science - that which served the practical needs of the newly-created planning mechanism. Indeed, there existed in practice no insurmountable barrier between the ideological and practical sides of Soviet economics. On the one hand, the ideology provided the points of departure for the creation of the economic mechanism; on the other hand, the experience gained in developing new methods of economic management was generalized in overtly ideological terms. To give a concrete illustration of the interrelationship between ideology and practice, let us look at the mechanism of price formation. The initial assumptions for this mechanism are given in ideological terms. The choice between initial assumptions poses a dilemma as to which concept of value formation should be chosen for initiating a price mechanism in a planned economy: Marx's labor theory of value or the non-Marxist theory of marginal utility developed by the Austrian school. Until the late 1930s, the U.S.S.R. refused to acknowledge the applicability of either of these concepts to the socialist planned economy; it was thought that prices existed for the purpose of accounting production costs and distributing consumer goods. Stalin, however, was intent from the 1930s onwards on seeking objective justification for the existing economic mechanisms, in particular, the mechanism of price formation: in accordance with the requirements of a "psychological balance," that incorrigible voluntarist ardently sought objective economic laws that were eventually independent of his own will. Lev A. Leontiev helped to make Stalin's wish come true with this flexible formula: "The labor law of value [literal translation from Russian] also operates in the Soviet economy, but in a rather modified form." This is almost as meaningful or meaningless as the statement that "The Law of gravity also operates in the Soviet Union, but in a rather modified form.."

Ideological formulas like this helped reinforce the practice of price formation, which ignored such factors as the rent on land, the interest on investment, and similar concepts unconnected with labor costs. Even today the Soviet practice of price formation cannot rid itself of these theoretical constructs.

Jewish economists occupied a very prominent place among scholars who served the practical needs of the Soviet economic system. By the end of the 1930s and in the 1940s, they were, in essence, dominant in all areas of applied economics. Thus, Shamaj Ya. Turetsky and G. Maysenberg were the leading figures in the field of price formation; Lev I. Itin in industrial economics; Solomon E. Kamenitser in the theory of organizations; Moisej M. Lifits in Soviet trade; Alexander M. Birman in finance, and so on.

With respect to "Jewish strongholds" in other areas of applied economics, although the Jews did not always occupy the leading positions, they were formally entrenched in secondary roles and highly regarded in economic circles, not only as professors but also as academic authors. Names such as Alexander I. Zalkind (Vikentev), Boris I. Braginsky, Boris Smekhov and Semen D. Feld were well known in the field of national economic planning, Efim L.Manevich and Mihhail Ia. Sonin in labor economics, while L.A. Bronshtejn, G. I. Chernomordik, and others were prominent in the field of transport economics.

Many of these scholars were for a long time heads and professors in the respective departments at the Moscow State Economic Institute (MSEI). In 1948, during the struggle against cosmopolitanism, many Jewish professors lost their jobs at MSEI. Some were reappointed after Stalin's death. Finally, I would like to remark briefly on the attitude of the authorities toward the formation of new cadres of economic scholars. A drop in the number of of Jewish students admitted, especially graduate students, to the best institutions of higher learning (primarily Moscow State University) was responsible for greatly reducing the opportunities for Jews to become leading scholars in the future. At the same time, there was a significant reduction in the number of Jews accepted in the economic research institutes (that is, those connected with the U.S.S.R. Academy of Sciences) and given professional positions; some Jewish professors even lost their jobs. But even Jews who retained their jobs found themselves in an extremely difficult situation. All Soviet economists experienced great handicaps in their work under the Stalinist regime but the Jews were especially vulnerable: it was much easier to dismiss them and much more difficult to employ them. Let us, for example, look at the case of the very talented Jewish economist, Alexander L. Lurye. In 1948 Lurye, in company with several non-Jews, was severely criticized for attempting to smuggle into Soviet economics the "bourgeois" concept of "interest rate on capital" (under Soviet conditions, this concept is known as the "period of recoupment"). Although others in this group were able to maintain their positions, Lurye was fired and for several years had to settle with second-rate jobs.

Jews in Economics in the Post-Stalin Period

After Stalin's death, Soviet economic science continued to play a leading role in Soviet ideology. Although Jewish economists were increasingly excluded from the ideological arena, they were nevertheless among the most outstanding ideologists. I would mention first of all Yakov A. Kronrod. For many years Kronrod headed the Political economy section at the Institute of Economics of the U.S.S.R. Academy of Sciences. At the beginning of the 1970s he was dismissed and did not have a secure position for several months. He lost his position because he deviated from orthodoxy in his article, "On the Problem of the Socialist Mode of Production and the Stages of Its Development".[194] He attempted in this article to reconcile two facts that must appear contradictory to a genuine Marxist: that the Soviet Union is a socialist country and that Soviet labor productivity is lower than that of the developed capitalist countries. He achieved this reconciliation by assuming that socialism in the Soviet Union had not yet reached maturity. The "big shots" responsible for ideology were furious with him: if the Soviet Union was not a mature socialist society how could it serve as an example for the building of socialism in Eastern Europe or China? Indeed, in Soviet economic and other literature the Soviet economy was always described as a mature, developed socialist economy.

Jewish economists continue to play a role as teachers of economics. But they are mainly old people, and as they pass away or retire (sometimes involuntarily) they are replaced by non-Jewish colleagues.

However, after Stalin's death, very serious changes were made with respect to economic science. Economists were now called upon to show how production might be improved by substituting economic methods of control for administrative ones. It can be confidently claimed that those Jews who survived the Stalinist period and retained their creative powers soon became the pioneers of new trends in economic science.

Proposals to improve the performance of the existing economic mechanism proceeded in two directions. One was concerned with improving the technique of centralized planning, that is, directives for introducing more rational methods of resource allocation; the other with socio-economic measures, including the introduction of market-type economic relations.

The outstanding Soviet scholar and Nobel-Prize winner Leonid V. Kantorovich can rightfully be considered the most important spokesman of the first of the aforementioned trends, which involved introducing mathematical methods and computers into Soviet planning (see chapter 17).

The development of mathematical economics in the U.S.S.R. attracted many older scholars, too. The leading scholars who worked in this school include both mathematicians and economists of both the older and the newer generations. A majority of them were Jews. Among the older generation were Lev Ia. Berry, Michail R. Edelman, Lev E. Mints (who, together with others, received a state award for advances in the input-output table), Iakov P.Gerchuk, Alexander L. Lurye, Albert L.Weinstein, Semen I. Zukhovitsky. The newer generations of Jews economists and mathematicians includes Igor Ya. Birman, Victor D. Belkin, Evgenij B. Dynkin, Revold M. Entov, Efim Iu. Faerman, Evgenij G. Golshteyn, David B. Iudin, Felix N. Klotsvog, Iosif L. Lakhman, Veniamin N. Lifshits, Boris S. Mityagin, Solomon M. Movshovich, Victor M. Polterovich, Gennadij Sh. Rubinshtejn, Vladimir E. Shlapentokh, Mikhail G. Zavelsky, and others.

Although the influx of young Jewish scholars into economics had drastically declined on account of the draconian admission rules, many young Jews entered mathematical economics from related disciplines, that is, from mathematics and control theory.

The contribution of Jews to the new field of mathematical economics is beyond doubt; what is in doubt is the overall evaluation of the rather controversial role played by mathematical economics in the U.S.S.R.

The new mathematical methods, combined with the use of computers, create a powerful illusion that it is possible within the framework of the existing political system, by perfecting the planning technique, to attain significant practical results.

Another trend in Soviet economics is commonly associated with the Jewish economist Evsej G. Liberman. Many Soviet economists were surprised by the appearance in the Soviet media of articles by this little-known professor from Kharkov emphasizing the importance of increasing the role of profits and the like. As far as I know, the well-known political figure, Academician Aleksej M. Rumiantsev, who had known Liberman from his party work in the Kharkov oblast, was instrumental in calling the attention of the top party bosses to these articles.

Liberman's position, which is often seen in the context of economic liberalization, was highly ambiguous. His insistence on a greater role for profits was by no means tantamount to calls for decentralization and the introduction of a market economy. But Liberman, by insisting on increasing the role of profits while the central organ holds responsibility for price formation, was essentially demanding deconcentration within the framework of the centralized planning hierarchy. Moreover, the implementation of Liberman's ideas as he himself had formulated them could have led to serious economic difficulties. In the field of economic theory Liberman shared the traditional Marxist approach; that is, the government must set prices on the basis of average labor costs. But prices established in this manner would be unable to act as a "force" to channel the activities of economic units in the direction desired by the government itself.

While I have a high opinion of Liberman's role in the field of steering the economic mechanism, I think it necessary to point out the serious limitations of his proposals.

One development of Liberman's ideas was connected with certain socio-economic proposals: for example, increasing the powers of the managers at enterprises, which implied increased responsibility on their part for decision-making; the generation of some unemployment; and, as a necessary condition for the success of all these measures, a reduction of the party's role in the economy.

The leading figure among Jewish scientists in this field was undoubtedly Lev M. Gatovsky. Gatovsky belongs to the older generation who lived through the Stalinist period. He managed to occupy high positions both in the Stalinist and post-Stalinist periods. His resourcefulness is truly remarkable. In the mid-1960s, in the period of economic reform, he was placed in charge of the Institute of Economics. In the late 1960s, when the reformist period had come to an end, he was dismissed.

Among Jewish economists who became involved in developing Liberman's ideas, we should further mention Alexander M. Birman. Birman began his professional career in the 1930s; in the 1940s to 1950s he occupied a prominent position on the Soviet economic Olympia. Birman for a long time lectured, and then held the position of the chairman of the Department of Finance at the Moscow Plekhanov Institute of National Economy. He was also dean of the institute's School of Finance, and was even provost for a couple of years. He was not known for his scholarly erudition: his approach to general economic problems was rather that of a publicist. But it was precisely this quality of his that was so valuable. The problems he raised in the press concerning the necessity of upgrading the enterprises' responsibility for their own economic activities required, at the outset, less a subtle knowledge of economics than an unusual amount of civic courage and the ability to "wield the quill."

Birman's proposals were severely criticized in the press. A general reorientation of policy in the late 1960s away from economic reform also put an end to his preoccupation with this line of inquiry. Moreover, the Plekhanov Institute at that time got a new head: Boris M. Mochalov, an inveterate anti-Semite (see below). Birman was one of his victims and was forced to leave the institute. A little later, he went to work for one of the research institutes that dealt with problems of the supply of capital goods.

The Jewish economist Efim L. Manevich also devoted considerable attention to socio-economic problems. Manevich belongs to the same generation of economists as Birman. In the post-war years he established himself as a leading expert in the field of labor and wages. Even before Stalin's death he successfully defended his doctoral dissertation and took up the position of a senior research fellow, and later even that of a sector chief at the U.S.S.R. Academy of Sciences' Institute of Economics. Manevich's work in the mid-1960s implicitly stressed the need to recognize the existence of unemployment in the U.S.S.R. and to establish an appropriate relief system.

Similar ideas were also being worked on by another Jewish economist, Mikhail Sonin.

In the next generation of economists who, in the 1960s, tried to call attention to market mechanisms, there was a young Jewish scholar named Grigorij Khanin. During the 1960s, he tried on many occasions to obtain the degree of Candidate of Economic Sciences by defending a dissertation on the role of market mechanisms in a planned economy. His views were stoutly resisted by the conservative economists on the Higher Certifying Commission (VAK). He received his degree only in the 1970s, when he changed the theme of his dissertation to the more neutral "Stock markets in the West." Khanin's persistent advocacy of his opinions caused him much difficulty with his bosses, and he was compelled to change his job several times.

Thus, the Jewish role in the formation of new trends in Soviet economic science is somewhat paradoxical. Genuine scholars, like Kantorovich, tend to play a conservative political role, whereas liberal scholars, like Birman and Liberman, are often unfamiliar with the world's latest achievements in economics.

Jewish Economists in the Period of Perestroika

The discrimination against Jewish applicants to the institutions of higher learning, which began in the immediate post-war period, had finally "borne fruit" by the mid 1980s. By that time, the older generation of Jewish economists had either retired or died out. The next generation produced too few talented scholars, none of whom proved capable of making much headway in the academic establishment.

Therefore, there are no Jewish economists among the prominent backers of perestroika - if they are involved at all, it is only as supporting cast. Among such people I would mention Victor Belkin, Josif Lakhman, and Grigorij Khanin.

Among mathematical economists, there are a number of talented Jewish scholars, for example, Victor Polterovich and Solomon Movshovich, who are quite sympathetic to reform ideas. They very well understand how to integrate planning with the market, and effect a gradual transition to a mixed economy. These scholars, however, are still quite far, both professionally and politically, from those economists who are on the cutting edge of perestroika.

Jewish economists' Interactions with Their Colleagues and the Authorities

It is necessary to make a distinction between the attitude of colleagues and the authorities to the opinions of Jewish economists, and their attitude to Jews' desire to receive high positions, titles, and the best education in the field of economics. I have witnessed on many occasions sharp confrontations between those economists who supported traditional points of view and those who advocated new ideas despite the possible consequence of losing their position or prestige. There has been unity among conservative economists, whether Jewish or not, against both Jews and non-Jews who favoured new ideas. This alignment of forces took place, for example, when the Jewish economist Grigorij I. Levin defended his dissertation for the degree of Doctor of Economic Sciences.

Among Soviet economic scholars there are a small number of both militant Judeophobes and Judeophiles. I imagine this is the case in many countries. Apparently, the key difference between various countries in this respect lies in the attitude towards Jews of those who fall between these two extremes. The danger of anti-Semitism in Russia stems precisely from the fact that, should the extreme anti-Semitic elements launch an attack, they could count on the active support, or at least the sympathy, of the overwhelming majority of the population.

This was already apparent in the 1940s, during the campaign against cosmopolitanism, and again, in the 1960s, when there were no cosmopolitans left to fight.

A good case in point is the scandal that broke out in the Plekhanov Institute of National Economy in Moscow, where many of the most important professors were Jews. In the late 1960s Boris M. Mochalov, a middle-aged economist with no great reputation, became the head of the institute. He had previously been a secretary of the party organization at the University of Moscow but had lost this position as a result of some complex bureaucratic infighting. Mochalov's political views were those of the most conservative elements of the Soviet party apparatus. Immediately after his appointment, he embarked on a massive purge of cadres. Taking advantage of the existing situation in the institute (which the previous president had tried to keep unobtrusive), he launched an anti-Semitic campaign. The majority of those who were fired or who "left on their own initiative" were Jews. Some of the leading Jewish professors had died, thus facilitating the realization of Mochalov's goals. Along with the economists, some professors of related disciplines were fired. Thus, the Department of Philosophy, which was one of the best in the country (and which employed a relatively large number of Jews), was virtually decimated. Its head, Genrikh I. Ezrin, a man of high moral standards who strongly supported new trends in science, and who had been with the institute for over twenty years, was dismissed. Several others, including Professors Boguslavsky and Anatolij I. Rakitov, were compelled to leave the department along with Ezrin.

Mochalov's actions gave rise to much indignation on the part of liberal-minded people inside and outside the institute. An article against Mochalov appeared in the Literaturnaia Gazeta; it did not, of course, refer to the expulsion of the Jews. Mochalov's cronies did not let him down: he kept his job as president. A party meeting at the institute, called to discuss the article failed to produce anyone courageous enough to support it. The paper subsequently punished the member of its editorial board who had prepared the article for publication. As compensation for the "moral" damage he had sustained, Mochalov was granted access to Literaturnaia Gazeta's columns. He wrote that there was a definite need to make the policies that governed admissions into into colleges and universities correspond to the social, geographical and national composition of the population. As far as I know, the national press, which spent much time studying cultural problems connected with the composition of Soviet students, never openly raised the question of the need to regulate the national composition of students. Mochalov's article was a direct appeal for an anti-Jewish quota.

Mochalov lost his presidency some time in the 1970s. The new head of the institute had no Jews to purge. But nothing was done to bring the Jews back onto the faculty or into the graduate department.

The extreme anti-Semitism expressed by Mochalov is not characteristic of heads of the leading economic colleges and research institutes; only Olimpiada V. Kozlova, the former head of the Ordzhonikidze Institute of Engineering Economics in Moscow, was regarded as Mochalov's equal in this respect.

At times, heads of economic institutes show their displeasure with the low quota of Jews they are allowed to take: quite often they need people capable of doing the work the institutes are called upon to perform, and they take in Jewish scholars. On the whole, however, bosses sympathize with the official anti-Semitic policies, which protect them from additional competition. Another reason for their support of the official anti-Semitism is that it helps them to exploit the Jews. When such a person hires a Jew and helps him out, he expects him to produce scholarly works that the patron then publishes under his own name.

Under Gorbachev, the highest echelons of Soviet power are not heavily involved in promoting anti-Semitism. But Jewish economists still experience discrimination. This is primarily evident in the small number of capable young Jews admitted to the best universities and colleges, where one stands a somewhat better chance of receiving an up-to-date training in economics. Jewish youngsters, though, are being admitted to second-rate economic institutes; after graduation, they could obtain a post in the planning department of the less-important factories and research institutes, primarily in light industry, construction, and so on. Jews are almost totally prevented from entering full-time graduate schools. Therefore, Jews must be able to exert tremendous efforts to write the dissertation on their own and to pass the necessary exams.

For a long time, the authorities have kept a very close watch on the percentage of Jewish professors and scientific researchers. Should the director of some research institute permit an increase in the percentage of Jews employed in his institute, he would be called before the higher party organs and his "mistake" would be duly pointed out to him. Today, apparently this quota has been lifted, at least as far as the local party authorities are concerned. But heads of the institutes still have lingering fears, and their hunger for exploitation has not abated much.

The authorities also maintain strict control over high-level appointments in the economic institutes. Among the heads of a dozen leading economic colleges and research institutes there is one Jew: Mikhail R. Ejdelman, the director of the research institute of the State Statistical Committee.

The next level of the hierarchy in the best economic colleges and research institutes, that is, the deputy directors, contains no Jews. The only exceptions are Boris Z. Milner (Institute of Economics of the Academy of Sciences of the U.S.S.R.) and David M. Kazakevich (Institute of Economics and Organization of Industrial Production of the Siberian Branch of the U.S.S.R. Academy of Sciences).

The existence of anti-Semitism in the U.S.S.R. and the opportunity to emigrate to Israel and the West have motivated many economists to leave the country. Those who have left are mainly young and middle-aged people. As far as I know, no leading economist of the older generation has so far emigrated. One reason is, that they understand that, given their level of professionalism, they have practically no chance of finding a job in the West that will correspond to their interests. The number of middle-aged economists of some renown in the U.S.S.R. who have emigrated is also very small: I can name only Igor Ia. Birman and myself. These economists are reluctant to leave for the same reason as their older colleagues. The fact that Birman has been unable to find a permanent job in his field only strengthens the apprehension of those Jewish economists who are still living in the U.S.S.R. Moreover, not one leading Soviet social scientist who emigrated to the U.S. has been able to find a permanent job in Soviet studies.

More widespread is the emigration from the U.S.S.R. of the leading specialists in the field of mathematical economics whose training was primarily in mathematics. Their abilities are well recognized in the West, and they have been able to receive positions as mathematicians in the best American universities: for example, Evgenij B. Dynkin, at Cornell University; Anatol B. Katok, at the California Institute of Technology; Boris S. Mityagin and Boris G. Pittel, at the Ohio State University.

Emigration attracts predominantly those Soviet economists (and mathematical economists) who are young or middle-aged and who held relatively modest positions in the U.S.S.R. These economists, especially the younger ones, have, on the whole, done well in the West.

How, then, is the emigration of Jewish economists likely to affect economic science in the U.S.S.R.? Since the inflow of Jewish youth into economics is greatly reduced, this fact alone has a serious negative impact on the development of Soviet economics. But since some young Jews still manage in one way or another to find their way into economics, their emigration may noticeably affect the future of Soviet economic science. Primarily, the emigration might make itself felt in the development of new ideas in this discipline that are relevant not only for the U.S.S.R. but also for the wider world. In addition, the rate of scientific progress might be adversely affected. It seems to me, however, that as long as the Soviet leaders desire to maintain contacts with the West, and remain interested in developing economic science, there will be a sufficient number of non-Jewish economists who, in principle, will be capable of contributing to this science.

References

Nobel and Lenin Price Laureate L. V. Kantorovich: The Political Dilemma in Scientific Creativity

The Ballad Of L.V. Kantorovich

By Joseph Lakhman (translated from Russian by G.K.)

Read At The Gathering Marking Kantorovich's 60-th Birthday

The Almighty, having created Adam,

Supplied him with a heavenly mandate:

"Live with Eve, enjoy yourselves,

Give in to your every wish,

Your resources are unlimited,

Only remember to behave yourself."

Nothing doing - our progenitors

Picked up a fruit from the forbidden branch.

And Jehovah lashed out at them in anger, and punished

Adam and Eve.

"No more heavenly garden for you!

You''ll have to work, both you and your children!"

And then an question of utmost urgency arose -

What do be done first and what last.

The disgraced Adam got to thinking, " How shall I

choose optimally? To what shall I apply my brain

and my brawn?"

There was neither art nor science he could consult.

Failing to solve the puzzle,

He left it to his progeny.

Human kind multiplied,

And so did its needs,

New questions intruded.

"Oh, God," cried out the people,

"Who will bring us together

and sit in judgement among us?

There are so many ways to go!

Which shall we choose?

How, in accordance with strict rules,

Can we add to what You left us with?"

But the good Lord kept a glum silence -

He probably did not know the answer Himself.

Then came a big scholar with a solution,

Alas, too clever a solution.

'Objectively determined valuations' -

That's the panacea for each and every doubt!

Truth be told, the scholar first got his knuckles

Slightly rapped

For such an unusual advice

That threatened to overturn the existing order.

After some thought, however, the conclusion was reached

That the valuations had been undervalued,

And that they indeed open the way

To the desired objective.

This scholar now sits among us.

The poet takes off his hat and greets him!

The Persona

I first met Leonid V. Kantorovich in 1957. At that time he was one of the best-known mathematicians in the U.S.S.R. and one of the least-known economists.

In early 1957 Kantorovich visited the Institute of Economics of the Academy of Sciences, the citadel of Marxist-Leninist economic theory. He arrived from Leningrad accompanied by several other mathematicians to present a paper on planning to an audience of five or six people. Afterward Shanin, a Leningrad mathematician in the escort, delivered a fiery speech extolling the usefulness of Kantorovich's ideas for the working class. Although the paper was received with indifference, later response was sympathetic. One listener, Konstantin I. Klimenko, was already a warm supporter of Kantorovich. Another, Leonid P. Postyshev, tried only to reconcile Kantorovich's conceptions with Marxism. I myself, attempted to apply Kantorovich's ideas to more complex situations. Others in that first audience stayed with more conventional (Marxian) economic concepts.

In the face of so cool a reception, what made Kantorovich's lecture so remarkable? How did he manage to develop a new concept in economics and survive in the Stalinist era? What price did Kantorovich pay for the recognition of his scholarly achievements? What kind of man is he?

Kantorovich was born into a doctor's family on 19 January, 1912, in St. Petersburg. In tsarist times, for a Jewish boy to be born into an affluent family living in the capital was particularly significant, for it meant early exposure to European culture. Even though his adolescent years were spent in the post-revolutionary period, Kantorovich shared the legacy of earlier times with his educated parents. His talent, especially in mathematics, surfaced early.[195]

Kantorovich finished high school at the age of fourteen and went on to Leningrad University. He graduated at eighteen, received his professorship at twenty two, and a year later was granted a doctorate without having to defend his dissertation[196].

During his years at the university, Kantorovich wrote on functional analysis and the theory of sets; his work was published abroad, for at that time there were too few domestic journals. At eighteen he presented two brilliant papers at the First All-Soviet Mathematical Congress.

In 1932, in collaboration with V. G. Smirnov and V. I. Krylov, Kantorovich published his first book, The Calculus of Variations. Over the next ten years, Kantorovich frequently returned to this problem of "fastest descent," which dates back to Newton; his results are deservedly hyphenated as Newton-Kantorovich.

At that time, many mathematicians believed that functional analysis, as a branch of pure mathematics, was a dead end. At the age of twenty Kantorovich became absorbed with functional analysis. The theory was first developed in the West at the turn of this century and caused a great stir because of its predominantly abstract nature. There was only a vague notion as to the ground rules for this field, which promised to be a productive one for mathematics.

A German specialist in functional analysis who immigrated to the U.S.S.R. in the late 1920s managed to interest Soviet mathematicians - young Kantorovich among them - in this idea.[197] Not only has functional analysis made a tremendous impact on mathematics, but its investigation had a profound influence in shaping Kantorovich's creativity, particularly in work on the theory of semi-ordered spaces.

One of Kantorovich's significant achievements has been to bridge the gap between functional analysis and applied mathematics. His accomplishments were so great that in the notorious year of 1949, at the peak of the bitter assault on cosmopolitanism (in fact, an attack on Jews), Kantorovich received the Stalin Prize.

Kantorovich's creative style transcends the limits of narrow professional specialization. As an inventor, he has been granted several patents for original calculating devices. He was a poet, a witty man, a master of practical jokes. Once when Valery Makarov, one of Kantorovich's colleagues from Novosibirsk, had been visiting with me, I was awakened by the telephone; the caller asked in English if he could speak with Makarov, identifying himself as a member of the American Academy from Boston. I tried to reply in English, but the "American" repeated his request in broken Russian. I answered that my guest had already left, and that he should try to contact Makarov through Kantorovich in Moscow. The response: "This is Kantorovich speaking." Kantorovich then recited one of his wonderful fables about the scientist who, much like a real cook, concocts an obscure dish.

Kantorovich was moderately absentminded, in keeping with the stereotype of a great scientist. In the early spring of 1960, I went to Gorki to familiarize myself with some research in mathematical economics being carried out at the University of Gorki. When he learned of my trip, Kantorovich expressed a desire to join me there. He wanted to visit the Gorki auto factory to consider the possibilities for the practical implementations of his ideas in optimal planning. He told me that he would fly directly from Leningrad and wired me his arrival time. I went to the airport to meet him, but alas, Kantorovich was not on the plane. When I questioned the pilot, he replied that some correspondent (at that time, Kantorovich was a corresponding member of the Academy of Sciences) had been left behind in Moscow, and that his coat, hat, and other belongings were on the plane. I was given custody of these items. Since no more planes were scheduled to arrive that night, I returned home. Well after midnight Kantorovich wired to say that he would arrive by train (number unspecified) the next day. I waited through the two morning trains before Kantorovich arrived. I greeted him with his hat and coat. Kantorovich took it all quite matter-of-factly, and began describing in animated tones what a lovely evening he had spent in Moscow. During the stopover at the Bykovo airport, he had gone to a restaurant for dinner and afterward had decided to call Leningrad. Considering Soviet service - and at a second-rate airport, at that - one can easily imagine how long it took Kantorovich to get through his dinner and place a long-distance call. When the plane departed without him, Kantorovich took a cab to visit the family of mathematician Nikolaj Efimov before boarding a night train to Gorki.

Kantorovich was a kind and generous man. He liked to help people; he was able to forgive the attacks of his enemies.

But there was also a certain streak of vanity in him, and super-cautiousness when it came to things political. When a friend of mine, in 1975, congratulated Kantorovich for receiving a Nobel Prize, he took it all quite matter-of-factly, and went on to complain that he was not a Hero of Socialist Labor, though already a proud winner of two other highest Soviet awards, that of the Lenin and State Prize. Kantorovich claimed, and not without justification, that a pin of the Hero of Socialist Labor was a prerequisite for obtaining certain hard-to-come-by services in the Soviet Union, such as theatre tickets and the like. Other regalia, including even a Nobel Prize, were often not sufficient.

Once Kantorovich hosted a group of Western mathematical economists who came to the USSR with an official visit. After the discussion, Kantorovich, a generous soul that he was, decided to invite his guests and several Soviet scholars to a restaurant for dinner. The offer was made on the spur of the moment, and the party had no reservation at a near by fairly decent establishment. As it turned out, all the tables there were occupied. Kantorovich's Soviet colleagues nonetheless attempted to pursuade the manager that it was a very important reception, involving a much-decorated member of the Academy and prominent foreign guests. They tried in vain: the manager just kept repeating that if their host were a Hero of Socialist Labor, he could have done something for him. After a long search, they finally found another decent restaurant, which also was "filled to capacity," but where the weight of a bribe proved too heavy for the management to bear.

Yet I think the real reason that Kantorovich craved the pin of a Hero of Socialist Labor had to do not so much with practical conveniences, as with his vanity leavened on fear of the high and mighty, which fear, as the reader will soon see, was pretty well grounded in reality.

Throughout all his life Kantorovich remained awe-struck by the powers that be. Let me illustrate this with the following story. In 1976, soon after emigrating from the USSR, I met Kantorovich in Philadelphia, where he came to receive a honorary doctor's degree from the University of Pennsylvania. We had a long talk at his hotel, and also at the official reception given to the newly honored Ph.D.'s. On that occasion, it should be pointed out, Kantorovich came to the United States alone, without an "escort." The next time I saw him was in 1978, in Amsterdam, at an international cybernetics conference, where he was a member of a Soviet delegation. There he kept a wide berth from me, but once we accidentally ran into each other in the doorway. He sheepishly looked around, and seeing that the coast was clear, quickly asked me if it were true that my older son, Gregory, was fighting in Angola with an expeditionary corps. Without hesitation I assured him that these were all baseless rumors, and that my son was a successful student at the University of Pennsylvania. On that note we parted.

And finally, to bring this section to an end, I would like to say that nothing human was alien to Kantorovich. Once, in the academic town of Novosibirsk, he was walking with some friends of mine in a little forest that separated the university building from the apartment complex. My friend's wife, an extremely timid woman, told Kantorovich that she was afraid to walk around alone. Kantorovich quickly replied, "Come now, Liubochka! It is more dangerous when you are not alone...." (It is common knowledge that in little academic town everyone minds everyone else's business!)

Kantorovich's Mathematical model of Optimal Resource Allocation

In the mid-1930s, as a young mathematician, Kantorovich had already climbed some rather formidable heights on the mathematical Mount Olympus, conforming to Schumpeter's law of "ideas before age thirty." In his twenties he was a professor at Leningrad University and active at the Steklov Mathematical Institute of the Academy of Sciences - the most prestigious mathematical institution in the U.S.S.R. In the infamous year 1937, some representatives from a plywood trust (fortunately, not from the NKVD) called on Kantorovich to solve a difficult practical problem blocking plywood output. The gist of it, as described to Kantorovich, was this: the trust owned eight different types of machines, each of which could produce five different types of plywood. Each individual type of machine could produce more of one kind of plywood and less of another; the output rates of different kinds of plywood were fixed on the basis of existing needs. How could the production be assigned to different types of machinery so as to achieve the maximum output of plywood in the required proportions, that is, a maximum number of complete sets of plywood?

To solve this problem by sorting out all the various combinations is practically impossible. For only five different types of plywood and eight types of machinery, one would have to sift through nearly one billion linear equations with twelve variables. But this is precisely where mathematical optimization methods enter, to provide a solution by means of a relatively small number of mathematical operations.[198]

The plywood problem that confronted Kantorovich has a history extending back to the early nineteenth century. At that time Monge, the famous French mathematician and engineer, had been concerned with problems in the construction of military fortification. For example: suppose that there were several points at which fortifications were to be constructed, and that each of the points needed certain minimal quantities of priming. The distances between the various points where priming was available in certain quantities and the points where definite quantities of this priming were needed differed, so that transportation costs varied. The problem lay in linking the suppliers of priming to its users so as to minimize the total transportation costs.

For a long time, attempts to resolve Monge's problem proved unsuccessful. The plywood trust problem was in essence a somewhat more complicated version of Monge's problem. In both cases the challenge was to find solutions to nonclassical optimization problems. Suffice it to say that not until the 1940s were mathematicians able to solve such optimization problems under inequality constraints.

Kantorovich's solution of the plywood trust problem in 1938 was a tremendous achievement. The theoretical -and practical- issues led Kantorovich to channel his energies toward meaningful economic problems involving optimal resource use.

I don't know how often Kantorovich succeeded in solving local problems; I do know a little about some of the obstacles he faced. In principle, the use of mathematical methods to solve local economic problems was permitted even during Stalinist times, and as far back as the 1920s in Moscow; in Leningrad such methods were employed to organize production within a given factory - for instance, to calculate the duration of an operational cycle of machine building. These methods were relatively simple, yet, thanks to them, economists were learning to use mathematical language and to mitigate official mathphobia. Although mathematical statistics were discredited and condemned as a bourgeois pseudoscience in the early 1930s, statistical methods were tolerated for the analysis of certain minor problems.

Most of the Leningrad economists were able to ride out the Stalinist times. In Moscow, however, a similar group of economists centered at Bauman Engineering College -one of the best Soviet schools- and at the Institute of Engineering Economics were less fortunate, because of their Jewish membership. In the 1948 assault on cosmopolitanism, a lethal blow descended on the production-flow specialists at Bauman, then headed by Stalin Prize winner Boris Ia. Katsenbogen. At the Institute of Engineering Economics, Iakov I. Lukomsky, the leading mathematical production specialist, managed to survive, which facilitated the publication of Kantorovich's book in 1959.

The major obstacles to the use of optimization theory in solving practical problems in the USSR are rooted in the hostility of the economic managerial bureaucracy. Ordinarily, current production problems are linked to reliance on "indicators." Only infrequently, it seems, are production issues relieved of the conflict with planning demands, as in the production of the plywood trust.

In the majority of cases, improvement in one set of indicators causes deterioration in another: an optimal solution may simply contradict the accepted system of incentives. If so, the mathematical imperatives never progress beyond internal disputation. Once, after the war, a group of mathematicians from Leningrad headed by Kantorovich recommended linear programming methods to rationalize the metal cutting at the Egorov railroad-car plant. Waste was drastically reduced. But afterward, Kantorovich found himself in trouble: since the Egorov plant was the largest supplier of scrap iron for steel mills, the reduction in waste decreased the supply of scrap iron, threatening a disruption of production at steel mills dependent on this scrap for their operations! Kantorovich was summoned to appear at the Leningrad Regional Party Headquarters on charges of "complicity." The matter was hushed up only because Kantorovich was deeply engaged in calculations for atomic reactors.

Another anecdote is associated with the Egorov plant. Planning U.S.S.R.-style rests on the ratchet principle: every year output plans are incremented, depending upon the previous year's results. The Egorov plant, after introducing linear programming, achieved something like 94 percent efficiency performance. But the ministry, following the ratchet princple, increased the quota for finished goods at the plant by another 7 percent. The Leningrad Steklov Mathematical Institute, where Kantorovich then worked, wrote the ministry confirming, on its high mathematical authority, the impossibility of achieving a 101 percent output.

Approximately the same thing happened in 1961 at the Moscow compact car factory, where I wanted to implement the optimal planning system in the forge shop. Kantorovich expressed an interest in participating in our work. Together with a large group of mathematicians and technicians, we made a strong effort to develop a new system of metal cutting. This promised huge savings for the factory and its managers accepted the project. We needed relatively little for the realization of our ideas.

First, three additional workers, with wages to match would have to be employed. But right then, we ran smack into a nationwide campaign to cut auxiliary labor costs. The workers we needed would have been auxiliary. The effort to increase the outlays for wages by a few hundred rubles, even if the savings in materials will be measured in tens of thousands of rubles, is doomed in the U.S.S.R. We also needed to have a small additional storage facility built for production inventories. This also turned out to be completely infeasible. To build such additional space required the permission of the U.S.S.R. Council of Ministers. We could not overcome all these hitches, and the factory continued to waste hundreds of thousands of rubles through irrational planning.

The practical application of the ideas of optimal planning might have moved more quickly -especially in the 1960s- had a more intuitive approach been taken to educate the planners about optimal planning. But to do this, textbooks on optimal planning had to be published to involve more students in the field. While Kantorovich was helpful in disseminating materials for economists as far back as the late 1950s -as in his one-year courses at Leningrad University -his labors were focused more heavily on the solution of applied optimization problems than on academic exposition of the state of the art.

Let us return to the positive aspects of Kantorovich's creative work. His analysis of the plywood trust problem as a mathematical perplexity would alone warrant the highest esteem. Kantorovich moved beyond the role of mathematician, however, to traverse adjacent fields of knowledge. Having solved the plywood trust problem, he showed the same sparkling insight on problems in machine building, agriculture, and other subjects.[199]

Thus, Kantorovich's methods surfaced in one area of the economy or another. In 1939-1941, he realized that the socialist economy as a whole could be perceived as an optimization problem. The logic of the Soviet planned economy naturally impelled Kantorovich toward this notion. The description of economic systems in terms of optimal models goes back many years -to Barone and Ramsey, in particular. Kantorovich, however, was unaware of their work. Kantorovich's idea of visualizing resource use as an optimal problem is obviously pertinent beyond the planned economies. In 1938, Abraham Bergson made notable progress in bringing this point home to us. Needless to say, the planned Soviet system aroused Kantorovich's curiosity in optimization relations. In investigating them, he was also able to penetrate deeper into the role of prices than had Soviet economists before him.

In the West, the translated writings of Enrico Barone, as well as work by Oscar Lange, Abba Lerner, and Fred Taylor, demonstrated the feasibility of using prices to organize a flexible, decentralized process of resource allocation in both a market system and a planned economy. This provided a powerful critique for many authors who failed to grasp the role of prices in centralized economies.

Prices turned out to have the same function in both market and centrally planned systems. Economists envisaged certain options in choosing their input-output relations. Prices were needed to help economic units make rational decisions in choosing the structure of input-output relations most beneficial to the society. From this viewpoint, market and centrally planned systems differed only in the kind of price-forming mechanisms they adopted. In market systems, prices were formed in a process of horizontal interaction among economic units; in planned systems, they were set by a higher planning organ -that is, in a vertical manner.

At the time of Kantorovich's work, a planning system that used prices was already functioning in the U.S.S.R., though it was built on the false Marxist premise that the price mechanism belonged solely to the market economy. In centrally planned systems, where the goal as well as the available disposable resources were assumed to be known, everything was thought to be quite simple: the allocation of resources for the production of various goods would be carried out directly, on command, bypassing any kind of price mechanism. The examples of Robinson Crusoe and the organization of production inside a factory served as intellectual prototypes.

Thus, when the Soviet system found it necessary to use prices to organize a modern planning mechanism in the 1930s, it was hopelessly confused about the proper method of determining these prices. A certain compromise was struck, which stated that prices were a temporary phenomenon, needed in the initial phase of constructing a communist society; during this transitional stage, the Marxist labor theory of value was to reign over prices.[200]

The shortcomings of the labor theory of value are well known. For instance, one product may require a certain amount of natural resources, time, and labor for its production (even if we exclude heterogeneity of labor). Yet it will have the same value as some other product whose production utilizes the same amount of labor but requires less natural resources and less time. With the resulting distortions, prices cannot serve as informative signals for the decision-making economic units that are striving to fulfill planning goals. The labor theory of value, as applied in the U.S.S.R., frequently resulted in schizophrenic situations where the planning conducted in physical terms was completely uncoordinated with the planning based on prices. Decision making by firms seeking the most efficient input-output schemes on the basis of prices often conflicted with the physical targets proposed by the higher authorities. If these conflicts were to be resolved, then either the directives of the higher authorities had to be sacrificed, or the experience derived from using prices had to be neglected. The Soviet economic system evolved for the most part along the second path: physical planning was generally favored. Rational economic analyses collided with the Stalinist drive for superindustrialization[201].

Kantorovich's Scholarly Feat

In this context, let us consider Kantorovich's role in the development of price theory.[202] In his theory of planned price formation, he demonstrated that prices signify the measure of the scarcity of all the resources present in the economy at a given time. This meant that natural resources (in the creation of which no labor was expended), means of production (as a product of labor activity), and labor itself have different values only to the extent that they are able to bring us closer to the fulfillment of established goals under existing resource availability and technological modes of production. Prices, as the measure of this scarcity, are precisely the instrument that enables us to make local economic decisions that lead toward the system optimum.

The fact that Kantorovich, independently from Western economists, discovered the economizing properties of prices in a planned system is not his great feat: Western scientists had already expounded these relations. His real success was in proposing both a concrete procedure for compiling an optimal plan and ways of overseeing its implementation in price mechanics. Such procedures were formerly unknown, since the methods of mathematical programming were not available.

Here I would like to draw attention to a quality of Kantorovich's creativity that is not always characteristic of mathematicians or economists. Kantorovich, having solved the problem of the plywood trust as a mathematician, could easily have ignored the economic implications of the so-called resolving multipliers as variables of the conjugated space (an image borrowed from functional analyses which he employed to solve the problem; later he called them "objectively determined valuations"). Kantorovich's talent lay precisely in his ability to spot the economic parameters behind a number of the mathematical quantities that he introduced. While creatively interpreting the progress toward a solution of the problem, Kantorovich realized that the resolving multipliers are the essence of prices, necessary for drawing up a plan, and for correcting it in the process of implementation by various economic units.

This deep insight into the nature of the problem was undoubtedly fostered by his vast mathematical culture and his sharp mind; he is renowned for his ability to perform unexpected associative tricks with all sorts of diverse facts.[203]

Thus, Kantorovich revealed the interrelation between physical parameters (variables of the primary space) and prices (variables of the conjugated space). It is noteworthy that in the 1930s John von Neumann was pursuing related mathematical problems, which were also engendered by his interest in economics. Kantorovich met Neumann in 1935 when the latter visited the U.S.S.R. to attend a mathematical conference. But the mathematical apparatus used by Kantorovich to analyze the given problem was different from that of Neumann; it is my impression that Kantorovich was unaware of Neumann's work in the realm of economics.[204]

After constructing a model of an economic system and contrasting it with existing practice in planning and price formation, Kantorovich came to realize the enormous shortcomings of the mechanism then in operation. By the end of the 1930s, he thus emerged as an economist, announcing a new concept for planning the Soviet economy. In 1940 he wrote a letter to Gosplan containing his recommendations.

At this point, the inevitable clash between Kantorovich and the Soviet bureaucracy finally occurred; only by some miracle did Kantorovich manage to survive it.[205] Gosplan authorities considered any suggestion to be a personal critique. Beyond bureaucratic stupor, the easiest way to stop criticism was to denounce the author as an enemy seeking to distract personnel from carrying out the mission entrusted them by the Party. What saved Kantorovich from destruction is unclear -perhaps his renown as an outstanding young Soviet mathematician, or perhaps the start of the war between the U.S.S.R. and Germany. Nevertheless, Kantorovich's efforts as a theoretical economist ran up against a wall.

This harsh reception did not discourage him, however. In 1942 he finished An Economic Analysis of Optimal Utilization of Resources, in which he projected the method of optimal planning to the level of the national economy and explained the role of prices in organizing and executing the optimal plan. Publication of the work was blocked for seventeen years. Meanwhile, his ideas were circulated among some economists directing the Soviet economic system. In 1943, for example, he gave a lecture at the Institute of Economics of the U.S.S.R. Academy of Sciences on his concept of optimal planning. Fortunately for Kantorovich, this dubious initiative was overlooked.

What was it that hindered the acceptance of Kantorovich's conception? What made Kantorovich stubbornly push for the recognition of his ideas, acting at times like a Don Quixote fencing with Soviet economists and bureaucrats?

Kantorovich was honestly convinced that his ideas could help the country improve its economic situation, particularly during the lean years of World War II. I suppose he sincerely believed that only an unfortunate lack of understanding on the part of economists and bureaucrats kept his ideas from being accepted. In an act either of innocence or of recklessness, he was simply challenging the wisdom of the cruel and rigid Stalinist political establishment. His successes in local situations, such as his solution of the plywood trust problem, served only to redouble his perseverance, since they fostered the illusion that his ideas would eventually win out. Perhaps Kantorovich's political naivete was his strongest ally in his intellectual struggle, and perhaps it helped keep him out of prison.

Here, I would like to include a few words about mathematical methods in economics during the 1930s in the U.S.S.R. There were three main mathematical-economic trends at that time: statistical study of the development of the branch structure of the economy; the formulation of macroeconomic models; and the study of consumer behavior. To my mind, these investigations were eliminated either because they were politically inexpedient or because they turned out to be superfluous. Ideology only made matters worse. Several supporters of mathematical methods were arrested; some of them died.

In the post-Stalin era, the confrontation between the mathematician Kantorovich and the more traditional Soviet economists manifested itself largely in the fact that these economists, although ready to acknowledge a certain value to mathematical procedures, were strongly opposed to the idea of interpreting the resolving multipliers as prices. Thus, conservative Soviet economists, quite reasonably, attacked Kantorovich's proposals as anti-Marxist on the grounds that he advocated a bourgeois theory of marginal utility for price formation.[206] The conservatives accused him of being in thrall to the ideas of the bourgeois economist Eugen von Bohm-Bawerk, who was a cocreator of the subjective utility theory. Poor Kantorovich! At that time he hadn't the faintest notion who Bohm-Bawerk was, and went around asking his learned friends to enlighten him on this score.

One of Kantorovich's conservative foes played a well-publicized trick on him that merits special attention for it reveals the deep difficulties Kantorovich faced in defending the ideological purity of his position. The Soviet economist Aron Ia. Boiarsky posed to Kantorovich a problem in optimal resource allocation. Besides labor, several other factors, such as land, equipment, and so on, were included. As the problem was formulated, labor was not a scarce resource, so that its shadow price had to equal zero. Result: the total collapse of the labor theory of value!

Indeed, under certain real-life situations, labor can turn out to be excessive. For example, during certain historical periods in both "Red" and "White" China, the population -lagging in modern technology and the use of resources -proved excessive and was doomed to die out. Still, other limiting resources have prices.

Kantorovich was on the horns of a dilemma in selecting the proper ideological cover for his position with respect to price formation. Of his several options, the one he chose was to stubbornly maintain that his objectively determined valuations conformed to the labor theory of value in a different sort of way.

In a manuscript I read in 1957, Kantorovich hardly mentioned the labor essence of his valuations. It seems to me that he was assisted in the development of the theory by the book's editor, Albert L. Wainshtein, who is highly esteemed for promoting Soviet economic science and facilitating the publication of Kantorovich's book. But Wainshtein's lack of sophistication, exacerbated by his well-founded fear of the ignorance of those in power, contributed to some unfortunate "Marxizing" of Kantorovich's work. Kantorovich thus became identified with a labor theory interpretation of prices. It has become very hard for me to tell when he does this for tactical reasons and when he honestly subscribes to the position. In conversation he invariably adheres to his conciliatory position.[207]

An event that occurred in 1972 shows that the labor doctrine of value has risen above the purity of Kantorovich's mathematics. The Moscow Mathematical Society invited me to present a paper on the development of mathematical methods in economics. These sessions are held at Moscow State University and usually draw an audience of several hundred.

As had been my custom on similar occasions, I paid special tribute to Kantorovich (who was present). I doubly enjoyed doing so in this case, since I wanted the attending mathematicians to hear an economist acknowledge Kantorovich's outstanding contribution in establishing the mathematical trend in economics in the U.S.S.R.

At the end of my presentation, the eminent Soviet mathematician Shilov asked me the loaded question, "What is your attitude toward labor value?" My presentation, I replied, had shown conclusively that prices were used in the planning mechanism, designed to secure the maximum output of needed goods subject to the constraints on the available resources. This mechanism is based on Dantzig-Wolfe's mathematical procedure; it followed from the given algorithm that prices may perform their function as guidelines for self-acting economic units since they represent Lagrange's multipliers. Hence, it was evident that no category such as "labor value" was required within the framework of the observed planning process. Perhaps there might be a need for it under some circumstances, but I was not familiar with any reasonable models that so stipulated.[208]

I then suggested that this attitude toward prices was not inconsistent with Marxism, since Marx himself wrote that there will be no labor value phenomena in the future planned society, and it was precisely this future society with which we were concerned. Kantorovich asked for the floor. He declared then he could not agree with me, and that he had demonstrated conclusively that shadow prices corresponded to labor value.

Many in attendance were astonished to see an eminent, mature mathematician, protected by worldwide renown, hurrying to sound orthodox, while a "semi-mature" and "unprotected" economist strayed from the ideological path.

Kantorovich's striving to preserve the Marxist foundation for prices is not altogether harmless, for Kantorovich built all his multiproduct models on the premise that the output structure is known. He simply refused to admit the price of utility; yet utility can be fit into the theory of a socialist economy -even within the framework of the existing ideology -provided major stress is laid on the social utility of goods and not on their subjective utility, which is characteristic of the Austrian school and scorned by Soviet economists.

The Economic-Mathematical Mutations

People who generate new ideas are like mutations. If the environment is favorable, the mutations rapidly multiply. If not, they die, though a few may survive to become epicenters in new environments with gradually expanding impact.

Kantorovich reminds one of a mutation. He lasted through the cruel Stalinist times. Changes in the environment in the post-Stalin era imported some credence to the "survivors" among the new "mutations" in economics. The outstanding organizational abilities of Vasily S. Nemchinov; Victor V. Novozhilov's mastery in camouflaging optimality theory as Marxism; and an admirable lucidity on the part of Alexander L. Lurye gave impetus to the new trend. Other men put their high scholarly reputations on the line by writing positive reviews of books on mathematical economics, encouraging publishers to print them, and serving as dissertation readers on the new subject matter; in a way, they helped to accelerate the enfranchisement of mathematical economics in the late 1950s.

Undoubtedly, Soviet receptivity to Kantorovich's ideas was facilitated once Wassily Leontief's input-output tables became well known on the macrolevel (that is, not on the enterprise level, but in planning the national economy as a whole).[209]

Leontief's work was admired, first of all, because many Soviet decision makers possess a "Western complex"; that is, they think capitalists do everything more rationally and do not spend money for nothing. Therefore, Leontief's ideas must have practical importance, and obviously these ideas can be applied to the planned Soviet economy.

One further circumstance aided Kantorovich: the sanction of the military. Optimal planning aroused interest among military authorities for its potential use not only in the optimal allocation of military technology, but also in the conversion of peacetime production into military production.

Kantorovich's book finally appeared in 1959.[210] Elected a corresponding member (in economics) of the newly reopened Siberian branch of the Academy of Sciences in 1960 and appointed a deputy director of the Siberian branch of the Academy's Institute of Mathematics, he was practically in charge of mathematical-economic methods. In 1964 he was elected a full member to the Academy of Sciences (in mathematics). In 1965 he shared the Lenin Prize with Nemchinov and Novozhilov. The Soviet government bestowed its favor in 1976 and allowed Kantorovich to accept the Nobel Prize in economics, shared with Tjalling Koopmans of Yale. On several occasions Kantorovich was allowed to travel abroad to accept honorary doctoral degrees.

The thirty years that have passed since the theory of optimal planning was first recognized in the USSR have disclosed its enormous practicality. The Central Mathematical-Economic Institute of the U.S.S.R. Academy of Sciences, created in 1963, has become a leading center of optimal planning. Many research and development institutes have organized optimal planning laboratories; a number of universities and colleges now have departments of mathematical economics and teach the theory as a major subject.

Kantorovich continued to participate actively in the implementation of optimal planning theory without generating new ideas. But his creativity still flourished, and not infrequently he showed some very profound insights into economic problems. Thus, in planning, Kantorovich stressed the general versus the particular plan; he held that the larger scenario should be resolved as accurately as possible using sophisticated mathematical models, while smaller problems should be attacked with simpler methods.[211]

Kantorovich was also active at several institutes of research and development and served on the Committee on Prices of the USSR Council of Ministers. His mere presence was important since it compeled others to forgo rhetoric for logic, or face the intellectual thunder of the mathematical theoretician. His role paralleled that of the late John von Neumann in the United States.

So the learning cycle for Soviet converts to optimal planning would seem to require approximately two generations. One generation has already passed. The second could be even more enthusiastic about Kantorovich's ideas. We should note, however, that the present efforts to introduce a market economy in the Soviet Union may temporarily obscure the potentially significant contribution that mathematical economics can make to the improvement of the system, especially and primarily in a transitional period.

And now we have to ponder a very complex social dimension to the practical application of an idea in the U.S.S.R. Philosophically, an idea is truly new if it expands the universe of existing ideas. A different problem arises with respect to its timing and the limitation of any negative consequences, especially if the idea endangers an awareness of the diversity of ideas itself.

Kantorovich's concept of optimal planning seems truly progressive. As an outstanding scientific contribution, it has greatly enriched the arsenal of economic ideas. Out in the open, any country can make use of it.

The part that optimal planning in solving the U.S.S.R.'s economic difficulties should not be exaggerated. Its troubles are rooted in the very nature of the autocratic political system -a system ill-equipped to work out new strategies, to change them in an emergency, or to correct mistakes within their framework. Even if we confine ourselves to the economic mechanisms, effective turnarounds are hard to accomplish without institutions such as private property, unemployment, and competition. The theory of optimal planning makes little mention of these, although it may be tied up with them.

Obviously, since optimal planning aids in the better utilization of available resources, the strongest likelihood is that the theory will help to strengthen the military might of the U.S.S.R. The great danger may come through its use by more reactionary political forces to consolidate power.

Perfecting the economic mechanism is an ongoing concern. Even within an autocratic state, two planning paths are continuously debated. The aim of one is to perfect centralized power. The second path moves toward decentralization (the introduction of a number of market elements, unemployment, competition, and the like).

The first option can clearly be exercised within the existing political system. Thus, the theory of optimal planning might prove useful to the reactionary Politburo faction, devoted mainly to entrenching the existing regime, in its struggles with the more liberal group in the Politburo. The theory of optimal planning creates an illusion of tidy perfection of the economic mechanism, on the one hand, and provides a brief for a strictly centralized political system, on the other. Ideological incompatibility with the Marxist labor theory of value can be easily overcome, thanks to Marxist casuistic exegesis. For high-level Soviet functionaries, this rationalizes a conformist facade.

Opposition to optimal planning comes mainly from planning functionaries who resist upsetting the conventional techniques; there is still an army of diehards steeped in the official Marxist theology. The liberal intelligentsia also fears ideas it does not understand. More respectable opposition will come from political factions whose vision of future Soviet economic development includes decentralization. A best guess is that sophisticated techniques of optimal planning will prevail and become the new "right" idea, to which all other theories are held hostage.

Thus a tremendous social responsibility to serve humanity and not despotism is placed on all Soviet economists involved in the theory of optimal planning. The position of the scientific creator of the theory therefore becomes critical. Virtue would command that, as long as he was alive, he had to use his reputation to block any inhumane negative political applications of his theory or to ameliorate such abuses.[212] That is a rather tall order.

I return once more to the question of Kantorovich's personality. A revolutionary nonconformist in science can at the same time be a political conformist, attempting to strike a compromise with the dominant powers that reflect the reigning ideology. Bruno, Galileo, and Copernicus walked the less-traveled roads, though not all were politically nonconformist.

All of this is intended not to rationalize Kantorovich's political conformism, but to stress the enormous obstacles that tend to keep a nonconformist scientist from maintaining a deviationist political posture.

Kantorovich died of cancer on the 7 of April, 1986. One of his students, Valery Makarov, who by then had become the director of CEMI, used all his connections to arrange a stately funeral for his great teacher. He saw to it that Pravda printed an obituary which was signed by, among others, Mikhail Gorbachev. The announcement in Pravda made it possible to secure a burial site for Kantorovich at the prestigious Novo-Devichie Cemetery in Moscow. The deceased was survived by his wife, son, daughter, and grandchildren.

Character and fate in the life of Leonid Vitalyevich Kantorovich will undoubtedly be analyzed in future disquisitions. One side of his creative genius will fade, while the other glows brighter. A backward glance at his life will beam on one radiant spot, to reveal the peak of his unparalleled leap over inhuman odds and his creation of a strong branch for the tree of economics through his ingenious adaptation of mathematics.

Notes and References

The Story of a Favorite Jew or Aron Katsenelinboigen is a Proud Name

I would like to begin these notes by recounting a curious dialogue that transpired between two Soviet scientists in the presence of one of my acquaintances. It concerned Jews, a subject not usually discussed publicly by the Soviet scientific elite. To be precise, the participants were not so much scientists as managers (both were heads of research institutes), and their light social banter about the Jews was in reality an exchange between two experienced functionaries. The conversation, according to my acquaintance, took place in the office of Nikolaj P. Fedorenko, the director of Central Institute of Mathematical Economics and my boss of many years, and was started by the director of another research institute. In contrast to the then-successful Fedorenko, whose institute was renowned for its numerous projects and favored by the influential members of the Central Committee, his counterpart could boast of nothing of the kind. "You know, no matter what we try, nothing works," he complained. "We can't fulfill plans, haven't got any creative ideas, individual departments sweat bullets to meet deadlines...". Having listened to all that, Fedorenko said with a rather condescending smile, "Why don't you hire five Jews, make them department heads, and your troubles will be over." Fedorenko's colleague started to express fears that the district party committee would not let him take on Jews, and that, in general, such practices bring nothing but grief. "Oh, come on," my director parried with the same smile, "you can't have it both ways. So, you'll get it from the district committee. But your institute will have a good reputation."

Such is the nature of Soviet life: one accidentally overheard conversation can teach you more than a year's subscription to a newspaper.

On the surface, our scientific functionaries were simply talking about the best ways to make a career. In reality, they touched on a rather curious and not-often-discussed phenomenon - the place of Jews in Soviet science. I would even put it more broadly - the place of Jews in the Soviet social hierarchy. Strange as it may seem, in our constant discussions of Soviet anti-Semitism, we often fail to understand its real place in society. If Soviet Jews are simply the objects of hatred on the part of the establishment, then why even to this day do some of them rise to high levels in the hierarchy? The agelong Russian notion of "the governor's learned Jew" suggests one possible answer. This phenomenon, which I would describe as favoritism towards the Jews, is explained, on the one hand, by the Jews' talents, business abilities and professional qualities and, on the other, and no less significantly, by their loyalty to the rulers. A Jew will not try to take his boss's place. He has no chance of getting to the top in any event; the most he can expect is to remain a favorite as long as possible.

However, a favorite's position in the Soviet hierarchy is always shaky and subject to frequent, often unexpected flip-flops. I think that almost every Jewish favorite who sacrifices all his strength, energy, and brains to the ruler, becomes, like the famous Moor "at his journey's end," the butt of the ruler's joke. There is at work the so-called GEGE system (which I will describe later), whose playful designation stands in complete contradiction to its inhuman and ominous substance. By the standards of this system, I myself climbed rather high in the Soviet scientific hierarchy; for many years I chaired a leading department in a leading economic institute. I considered myself to be a member of the most elite scientific circles, and, together with a group of colleagues, nurtured the hope of rebuilding the country's economy on the basis of mathematical analysis. Looking back, I realize that for many years I harbored illusions not only about ideas that were objectively unrealizable in the U.S.S.R., but about my own fate as well. I thought of myself as one of the captains of economic science, but, as I understood later, I was merely a temporary favorite of those who truly commanded this science. Admittedly, this revelation could have come earlier. Unfortunately, it is all too common to judge the events of the past from the vantage point of the present: to accuse some, to absolve others. The wish to rethink the past is, in itself, commendable, but trying to understand something outside the current of life, outside the flow of history, is, alas, fruitless. It makes no sense to research who did what and when while ignoring the time and place of the event. Such analysis could hardly yield anything useful besides artificial schemata and pointless speculation.

In the Role of a Young Gizot

After this somewhat prolonged introduction, I hope the reader will not think it strange that, having graduated from the Moscow College of Economics at the age of eighteen and considering myself an excellently schooled economist, I yearned to enter graduate school. The year was 1946, when the great Stalin had already extolled the great Russian people, and the country had felt the winds of change. In light of these new currents, the Admissions Committee of the Moscow College of Economics hardly burned with enthusiasm to augment the ranks of its graduate program with a candidate by the name of Katsenelinboigen. Much depended on how I completed the state examinations. They were administered by a committee, which was chaired by the then-famous professor, Boris Markus.

After being assigned a question about monopolies and competition, I realized that a simple repetition of Lenin's ideas on the subject would not be sufficient under the circumstances. I truly had to distinguish myself; to show the committee that they were dealing with a unique scientific mind. Of course, now this sounds like a joke, but at the time I, with my aspirations to serve at the altar of science, was not laughing. I began, sure enough, by stating that Lenin's assertion about the merging of industrial and bank capital was exceptionally deep and meaningful. But it seemed to me that it would be correct to broaden this assertion somewhat by including transport and mercantile capital together with industrial capital. In that light, we could observe more precisely the development of competition under conditions of monopoly. This answer was completely unprecedented for an economics college in 1946. Right after the examination, professor Markus asked me to give him a call regarding a doctoral dissertation subject. It seemed that such a mature economist as I was had no need for a Ph.D. thesis, which in the Soviet Union precedes the highest doctoral degree.

If my "original" thinking at the exam on political economy made me famous, the same originality at the examination on the history of the Soviet Communist party could have had a very different and sad ending, and not just for me. The question I was assigned had to do with the causes of Russia's defeat in the 1905 war with Japan. I had scarcely started on my answer when a tragic mishap occurred, which, though personally nonthreatening, left me with a bitter memory, for it involved the welfare of another human being, and a good human being at that. My first words were "To quote comrade Stalin, who in his work 'The Short Course of History of the party'..." A member of the examination committee, professor Lev Itin, interrupted me right away with the comment that I was being imprecise. What he meant was that the "Short Course" was officially regarded as a collective manuscript, approved by the Central Committee. He didn't know that the morning papers that day had reported on the publication of a fifteen-volume edition of Stalin's works, in which the "Short Course" was designated as volume 15; I proudly related this fact to my examiners. There followed a momentary silence, after which I proceeded with my answer. If any member of the committee had taken the pains to report this incident, Itin - a party member, a department chairman, and a Jew to boot - could have been in real trouble. Even lesser misdeeds surrounding Stalin's name were severely punished. This time the story had a happy ending: none of the committee members informed on a shiftless professor.

To pick up the main thread of my story, among the causes of Russia's defeat in the war with Japan I mentioned the stupidity of the Russian General Staff. Exhibiting a wide-ranging knowledge of the subject, I backed up my words with references to the published notes of a former tsarist general, Ignatiev. My examiner protested, saying that the charge of stupidity applied not to the Russian generals, but to the German coterie, hand-picked by the Empress. I disagreed: general Kuropatkin disgraced himself professionally not only against the Japanese, but also against the Germans during the Great War; whereas general Brusilov, besieged by the same German coterie, managed to bring off his famous breakthrough on the Eastern front in 1916. (Ample quotes from a book by Sergeev-Tsensky on Brusilov's tactics, published around that time, helped to drive my point home.)

The examiner was a pretty good-natured and able man - a rare specimen among the teachers of party history. He did not want to press his views too hard, and gave me an A.

Having received the same grade at three other exams, I was recommended into the graduate program in June of 1946. Meanwhile, the spirit of Russian chauvinism enveloped Stalinist Russia like a thick fog, getting thicker with each passing day. At the beginning of September 1946, when my application came before the Admissions Committee, the committee members took the stand to announce that they considered Katsenelinboigen's acceptance into the program inadvisable due to his youth. Later, I realized that the reasons for all the rejections I ever received were meaningless. The only difference was in how skillfully they were fabricated.

However, this time the charged atmosphere of the meeting was relieved by a witty speech by a professor in the department of economic history, Isaiah Bak.

Professor Bak was a brilliant man who belonged to a constellation of those old members of the intelligentsia who, above all, cherished the notion of scientific honor. He delivered himself as follows.

As far as I know, and I am a historian by profession, when young Fransois Gizot was honored with a gold medal by the French Academy for his work in French history, it provoked a storm of protests from the scientific establishment. Up to that time this medal was bestowed only on the grey bearded Immortals who comprised the cream of the academy. One of these "immortals" stood up and openly declared that he resented the decision to grant the gold medal to such a young scholar. Afterwards, Gizot said in his own defense, 'I do feel a profound guilt for my youth, but I solemnly swear that with time I will rid myself of this flaw.

Professor Bak sat down, and the audience started humming approvingly, and some laughed. The tension lifted, and my candidacy was approved.

The life story of Isaiah Bak was a tragic one. Bak was cast in the mold of the old school. He was nobody's favorite and had no highly placed protectors. He owed his position only to himself. When the campaign against cosmopolitanism broke out, Bak became one of its first victims. The respected scientist was accused of worshipping Western culture because he dared to assert that the invention of the steam engine belonged to James Watt, and not to the Russian Ivan Polzunov. He was fired from the college, and, hounded and persecuted, committed suicide by throwing himself down a flight of stairs.

The First Fly in the Ointment

In 1946, when I entered the graduate program, knowledge, originality, and ideas still had some meaning. By the time I was finishing my degree in 1949, chauvinism and anti-Semitism had reached an apogee and cast their shadow on all and everything. I was simply not given an opportunity to defend my dissertation at the Moscow College of Economics, although my subject, "The Creation of Permanent Cadres in the Coal Industry: The Case of Greater Moscow,"was suggested by the president of the college himself. He said that this subject would bring me closer to real-life practice. By this time, however, no one spoke of substance, Gizot, or my age.

The college's party chairman asked me to stop by. He was my classmate, and I used to know him by his familiar name, Petka Shapovalov. If he had any distinction at all, it was his exceptional mediocrity. Now, it seemed, he felt that his time had come. He did not stand on ceremony and said without much ado, "Go, look for another place. You won't defend here!" His eyes betrayed a certain hidden triumph, and he clearly wanted to add, "as if you don't yourself realize that, with your last name, you shouldn't waste time on trying to make it in science!"

What was I supposed to do in these circumstances, if I had even an iota of common sense? Forget everything, including the college, the Soviet economy, and my dissertation? Start a new life? One can speculate endlessly, superimposing life's experiences over the illusions of youth. I will not engage in this, since I am writing about the life that I have lived and that I can examine only from the perspective of that time. Any other approach, it seems to me, would be dishonest and insincere. And circumstances notwithstanding, I was definitely attracted to science. Even at that time, I considered myself to be a scientist in my way of thinking. I understood, of course, that in order to have an opportunity to devote myself to science, I would have to make sacrifices. I would have to tolerate the likes of Petka Shapovalov. To this day, I consider this readiness for self-sacrifice to be an important quality of a scientist.

In those years, economics seemed to me full of unplumbed depths. To get a better grip on economics, I decided to start at the ground floor, with the most basic unit of the economic system.

That was how I got the idea to work in a factory. First, I joined the Moscow Calibr, and later transferred to Frezer. I was drawn by theory and science, but life decided differently.

If you, the reader, have a feel for that wonderful time, the early 1950s, you will have no difficulty imagining how it was for me, with my first and last name, to carve my way into Soviet science. "Man, 'tis a proud name," says a popular Soviet saying, but Aron Katsenelinboigen, as you might imagine, was not a very proud name. I went on applying to one institute after another, and everywhere received the same resounding "No." Sometimes they thought of excuses, but more often they did not bother even with that. I wrote one draft of my dissertation, then another, but who cared? I tried to make my thesis more relevant to industry, but who needed it?

Now, many years later, I am amazed at the level of naivete and stubbornness that was needed to try and break through that wall. At one time, I took to writing grievances to the Central Committee, telling them I was burning with desire to advance the science of economics but did not even get a chance to submit my dissertation. There, I even found a "curator," a low level apparatchik by the name of Gorukhov, who kept sending me around to different institutes. He was paternally gentle, but at one of the places where he directed me, my dissertation about material incentives in industry was kept for a year and then returned with a disastrous evaluation written by a department chief, Andrej Grigoriev. After my last grievance, in 1952, Gorukhov was particularly tender, "You see, comrade Katsenelinboigen, we've considered and weighed everything here. I would like you to understand me. In other words, unfortunately, we can't do anything for you." This was all that I got out of three years of petitions.

How I Blew Up ZIS from the Inside

Before I continue, I would like to recount another event that recalls the atmosphere of that epoch. Now, it is hard to believe, but in those days I was accused of an attempt to blow up the Stalin Automobile Factory. Remembering it now, I can hardly keep from smiling. This, however, was 1952, when the basements of Lubianka and Lefortovo were once again full of prisoners. It was in such a time that I was faced with this unpleasant accusation. The reason for it again stemmed from my urge to bring my work closer to real-life practice.

I left Frezer because I did not see any hope of doing scientific work there. I could not find any other job. From approximately April 1951 until June 1953 I had less than a part-time job at the Moscow Technical College of Book Distribution, where I was teaching a course entitled "Classification of Scientific and Technological Literature." (This was after I finished my graduate work at the Moscow State Economic Institute in 1949!) At the same time, I did voluntary work as a lecturer with the Moscow Komsomol Committee. Having the time and opportunity to visit many enterprises through my work at this organization, I was able in 1952 to write a book (which was also a dissertation) on the interrelations between forms of production organization and wages in Soviet industry. I required references for my work from a number of leading enterprises, in particular the Stalin Automobile Factory (ZIS), since I had made many references to production practices at this factory. I asked Anatoly V. Tolmachev, the head of the lecturers' section at the Moscow Komsomol Committee, to call Boris Demianov, the Komsomol chairman at ZIS, to tell him about this lecturer, Aron Katsenelinboigen, who was interested in the issues of labor and wages and wanted to meet with staffers from the relevant department. Boris Demianov agreed, and soon afterwards I received an approval to go to the human resources department and talk to the chief of the employee bonuses section. We talked at length. Across the table from us sat Valery Belkin, the economist in charge of socialist competition, who played the villain's part in this entire story. "All right," the chief of employee bonuses said in conclusion, "leave me your manuscript, we will evaluate it and give you our opinion in about a week."

Three or four days passed. I showed up at the Komsomol headquarters and ran into Gorb, the head of the student affairs department, (I remember his name; he was a tall, handsome guy), who said, "What did you write there? People from the department of human resources at ZIS called us and said that it was real anti-Soviet stuff!" Frankly, these words did not fill me with joy. Controlling myself, I only asked to be given a chance to go back to the plant and straighten everything out. That request was granted.

As it turned out, the anti-Soviet character of my plan consisted of the following (I beg the reader's pardon, but I must tell about this in detail, since it is a marvellous period piece): in my study, I had written that modern forms of production demand, under certain conditions, combining the roles of operator and adjuster. This increases efficiency, but raises problems with the pay schedule. Because of these observations, I was charged with an attempt to "blow up ZIS from the inside" by leaving it without adjusters.

I had already heard somewhere that some group of "saboteurs" had tried to do just that. But Boris Peltsman, the former head of planning at the Dinamo plant, explained the real meaning of this accusation to me. Boris Peltsman had himself been arrested in 1948 on the charge of attempting to blow up Dinamo. Two outside experts had come to the conclusion that Peltsman masterminded imbalances between production and assembly shops. Later, my colleague from the Institute of Economics, Aron I. Shuster, told me about a similar affair. His wife, whose last name was Cantor, was also an economist and worked at ZIS. She was accused of awarding bonuses in such a way that the lion's share went to the Jewish shop chiefs, thus fueling ethnic tensions.

In my case, events followed a straight path. Someone from ZIS called the department of working youth at the Komsomol committee and asked point-blank, "Who is this lecturer Aron Katsenelinboigen you got there, an anti-Soviet propagandist?" I do not know how this story would have resolved itself if not for the intervention of the head of the lecturers' section, Anatoly Tolmachev, who turned out to be a highly decent man. I remember how in my presence he called someone named Chesnokov, chief of the heavy industry sector at the Moscow District Party Committee, and said that he had a lecturer (he intentionally omitted my name) who had such and such ideas. What was the chief's opinion? And the other answered ever so carefully, "Well, it seems rather reasonable, although, perhaps somewhat untimely."

The next day, Anatoly called Demianov and said,"We have a lecturer here who prepared a study. I heard you had some problems with?" The other replied, "Why, certainly! It's pure anti-Soviet propaganda!" Tolmachev continued, "I spoke about this with the comrades from the Moscow Party Committee. They said that his thoughts were interesting, but possibly poorly timed. Maybe your comrades overdid it a little? You know, a young guy comes in and makes some suggestions, and they completely reject him? You, Boris, should read the study yourself and get your own opinion. It's worth it." I don't know what happened afterwards but the incident was over.

Later, I learned the background of this story. The reader has already met Valery Belkin, the economist in charge of socialist competition, who was present at the conversation in the office of human resources. It turned out that Belkin was none other than the son of the District Attorney of the city of Moscow (certainly, he was Russian). This story can, paraphrasing Pushkin, be called "The Belkins' Story," for it features yet another Belkin, Viktor Belkin (he was Jewish), who later became a good friend of mine and told me about what happened behind the scenes.

Both Belkins were finishing a correspondence course at the College of Economics that year and had even studied together for the exams. And so one Belkin, Valery, the son of the DA, lectured the other Belkin, Viktor, about the facts of life: there are always people who need you, and people that you need. "Want a good example?" continued Valery, "There was this guy, Aron Katsenelinboigen, who came to our factory with his dissertation and wanted to get our approval. And I decided, 'Oh, no, you don't!' And right away, I called the right people, and said the right things, and just sold him down the river. But sold him to the people I needed. You think they didn't notice? They noticed, and I got the promotion..."

Valery Belkin had a faultless intuition for the principles of that life. He rapidly rose up the totem pole: he became the secretary of the Komsomol Committee of the Zhdanov district, then an aid to Kaganovich, who headed the Committee on Labor. When Kaganovich was fired, Belkin was demoted as well and placed in the Institute of Labor. From there, he made me job offers, wanting to lure me away from the Institute of Economics. But now he talked to me with the utmost respect. I was already becoming a favorite of the upper management, and he knew better than to fight with those people. In other words, I had stopped being one of those who needed him, and had become someone he needed.

The Night of 13 January, 1953

Now I would like to tell you about one night that became a turning point in my life. This story has to do with professor Konstantin Ivanovich Klimenko. It all started at the end of 1949 when I sent an article to the magazine Bulletin of Machine Building with some ideas derived from my experience at a micrometer shop in the factory Calibr. Since I was someone off the street, the chances of being published, especially with a name like Aron Katsenelinboigen, were rather slim. My article reached the chief of the economics department, a man named Theodor D. Saksagansky. He read it and said, "Very good!" And right away, without beating around the bush, he added, "But we need one more signature, preferably of the chief of the micrometer shop at Caliber. Without it we won't get anywhere." I got the signature rather easily, and after that everything went smoothly. The article appeared in September 1949 and was noticed right away. Saksagansky was even praised by some big shots, and after that he warmed up to me. Actually, he worked not only at the Bulletin, but also at the publishing house Mashgiz, where he was an economics editor. By the middle of 1952, I had a book finished, and I took it to Saksagansky at Mashgiz. He did not have the gall to say "No"; nor did he have the guts to say "Yes." So he made a Solomon-like decision, "Let's unofficially send your work to six people for a review, and see."

The year, I repeat, was 1952. But the curious thing was that the reviewers did not always march in step with the times. At least the first two, both ethnic Russians - Kabanov, chief of a department at a ball-bearing factory, and Goltsov, chief of labor resources at one of the machine-building ministries - wrote positive reviews. But Saksagansky said that that was not enough, that he needed reviews by scholars. "We sent it to the Institute of Economics, to Konstantin Klimenko, but he has not answered. Go, talk to him yourself, ask him. Maybe he'll respond."

I found Klimenko on 6 January, 1953. As will become clear, this date is significant. At first, Klimenko said that my work was not in his field. But after some explaining on my part he asked me to present it to him in person. I did, and his reaction was, "Excellent! I would be delighted to write a review. Come back in a week, on 13 January, at about ten, right to my apartment."

It so happened that on that day, 13 January, the papers ran the story about "the killer doctors." My first thought was not to visit Klimenko at all. And then I thought, "What do I have to lose?" I called him, as we agreed, around ten that evening. He lived in the center of the city, on Pokrovka. I could tell by his voice that he was looking forward to my call. "Come! Of course, come!"

He had written me an incredible review, composed entirely of superlatives. We sat down to have some tea. And suddenly he started to talk about Stalin. "Stalin is robbing the country and killing innocent people." The conversation turned to the execution of Marshal Vasily Blukher and some of Stalin's other crimes. I sat there and could not believe what I was hearing. I had never heard anything like that before. And on such a day. It was an indescribable shock.

Meanwhile, it was already late into the night. I lived in Perovo, in the suburbs of Moscow, and had no idea how I was going to get home. I had gone a long time without work, and did not have enough money for a cab. The last train was due to leave at around one in the morning. At half past twelve I got up, thanked my host, and started saying good-bye. Then suddenly Klimenko's wife came in from another room. (Her maiden name was Lakhtin, as I found out later, and she was from an old Russian aristocratic family. Her aunt, by the way, was Rasputin's lover.)

Konstantin Ivanovich introduced us. Elena Nikolaevna asked me, "Young man, what do you think about yesterday's announcement about the doctors?" I answered completely earnestly, "Each people have their bastards, but the people aren't responsible for them!" "Young man!" she replied, "What are you talking about?! How old are you? This is just another Stalinist provocation." At this point Klimenko really blew up. Everything he had said before had only been a prelude. "Was it for this," he roared, "that I fought on the barricades? Or when we blasted the 'Black Hundred' in Samara [now Kujbyshev - A.K.]? For the rebirth of this scum?"

We stayed up until half past one or two o'clock. I walked about seventeen kilometers home. How I walked and what road I took, I do not remember. I had a complete memory loss, such was my amazement.

I became great friends with Klimenko. He helped me publish my first book, which became my third dissertation, Automation of Production and Organization of Labor. What happened with the book was curious as well. Saksagansky, to give himself some insurance, asked me to find a coauthor. He himself recommended Professor Klimenko, who agreed. But, when the manuscript had passed by all the authorities, he wrote a letter to Mashgiz with the request that his name betaken off the book, since the true author was not he, but I, Aron Katsenelinboigen. So the book was published with only my name. Klimenko authored the introduction.

Much later, while drinking his favorite home-made cherry brandy, I told him, "You did so much for me: helped me publish the first book, get a job at the Institute of Economics [by then I had already become a staffer there], but nothing could compare to that night, on 13 January, 1953."

About Kantorovich and Our Reformers

That was indeed a transformation in my conscience. Or, more precisely, in my political conscience, because in spite of having penned three dissertations and being employed at the Institute of Economics of the Academy of Sciences, I was still professionally quite naive. The transformation in my conceptual thinking took place in 1957, when our institute was visited by Leonid Kantorovich. He presented his views on optimal planning, after which I realized that I could not go on working the way I had in the past.

In truth, my previous intellectual experience had somewhat sharpened my receptivity to Kantorovich's lecture. Back in my student days, I was interested in the law of value under socialism, and in the price mechanism generally, and in the way these related to Marx's economic theory. I spent entire days in the Lenin library, and gradually felt this yearning to really "touch" all the hoary economic categories. The challenge proved to be beyond me, and for a long time I let go of theory. Kantorovich's new approach to the same problems revived my dormant interest. In his talk, Kantorovich put forward the ideas for which, many years later, he was awarded the Nobel Prize. The lecture was attended by four or five people. Kantorovich's appearance and his manner of speaking seemed rather odd; perhaps he was even taken for one of the "reformers" who bombarded the Institute of Economics day and night with their harebrained projects.

At a risk of digression, I would like to take the liberty to talk about this phenomenon in greater detail. Too much time and energy were taken from us by these madmen.

Our institute was a citadel of Soviet economic science, not only because it did work for the Central Committee itself. In those days, I proposed a method of scientifically measuring an institute's importance by the number of letters and projects it received from crazies. The Institute of Economics received more such letters than any other. Their authors were in the business of tackling only major problems, and offering permanent solutions.

One such reformer from Vol'sk sent in a three-page-long universal mathematical formula. Supposedly, if one were to build the country's economy according to this formula, one would immediately achieve communism; this was the one recipe for the solution of absolutely all problems.

How could one react to such suggestions? Ignore them? Return them with apologies? But then the authors would send their nonsense to the Central Committee, and it was bound to return to us again. Fortunately, our brilliant minds came up with several solutions. The best solution, and I have no doubt that a lot of thinking went into it, belonged to my friend, Konstantin Baev. One crazed reformer was literally driving him mad. Hardly had Konstantin managed to reply to one set of suggestions, when he received new ones. He finally drew the line, and upon receiving another letter, he asked his secretary to bring him the encyclopedia Brokhaus and Efron, placed it on his desk and started writing a reply: "Dear Comrade, . . . In your last letter you touched on a number of important questions regarding the development of the Soviet economy. However..." And here Konstantin opened the encyclopedia at random and copied something about field mice, Latin terminology and all. This put an end to the correspondence. (Although on the outside, Konstantin Baev seemed a remarkably happy person, in reality, he was a tragic figure. He understood what was what both in our institute and in our world. In addition, he was a hunchback. He had trouble in his personal life, and ended it all with suicide.)

A second method of dealing with madmen was invented by German Prudensky. He was a Doctor of Economics, and a past master at all sorts of bureaucratic tricks: his work experience included the positions of secretary of The Sverdlov Regional Party Committee and deputy chairman of the Committee on Labor and Wages. He preferred to get rid of reformers by sending them the following text in response: "Dear Comrade! Your suggestion is exceptionally interesting. Currently, we are working on a draft of a government edict regarding further improvement of the economic mechanism, and your ideas will certainly be taken into account in the preparation of this draft."

I had my own reformers, and suffered considerably at their hands for failing to heed the advice of Baev and Prudensky. Someone named Kozlov, from the city of Murom, wanted to speed up the construction of communism in the following manner: Every day, the growth of the national income would be announced on the radio. The workers, seeing how vigorously it grew, would work even better, and in a short time we would build communism.

I erred, in an attempt to spare Kozlov's feelings, by replying that he probably had not taken into account all the difficult aspects of the problem. This provoked more letters. My indiscretion cost me many months of bureaucratic infighting.

Oh, we were a citadel, but this was a typically Soviet citadel, where more time was spent on "applied" rather than on "pure" science. Someone wasted about half a day in the smoking room discussing world politics. Someone spent days in the management offices trying to procure an apartment. Different strokes for different folks: some of us battled to get articles and dissertations published, searching for reviewers, or attending banquets, which generally followed the defense of a dissertation.

I would even go further. This was an institute staffed principally with monsters, ever ready to acknowledge that their main task was to justify the decisions of the Central Committee and the edicts of the government. I remember the a general meeting of the institute in the year 1957. The main item on the agenda was the Central Committee's decision to create regional economic bodies. The idea was to eliminate the central ministries and to send many of their employees to the boondocks. This created such an administrative nightmare that if we had received this project from one of the numerous reformers, I think we would have been forced to resort to the encyclopedia Brokhaus and Efron. But this project came from above, and my colleagues got up one after another, and expatiated on the brilliance of Nikita Khruchshev, who had decided to introduce territorial managerial principles.

In this atmosphere, who could be interested in this strange character, Kantorovich, with his mad project called optimal planning? Kantorovich was a horrible speaker. He talked like this: in the beginning he would raise his voice... higher, higher, then suddenly his voice would drop, and he would appear lost in thought, sometimes for a long time. It was said that once he fell asleep at a presentation. And the only people who believed in his ideas, besides himself, were a group of mathematicians involved in his project. He used to say, "If the government supports me, then in five to seven years all economists will start thinking like I do. This will be the beginning of a new era in economics." I was not so optimistic and thought that his ideas would take two generations to be accepted. Our initial conversation occurred in 1957. A generation-and-a-half later, 99 percent of Soviet economists do not yet understand Kantorovich's theory.

Years later, when I became a professor in the department of mathematical economics at the Moscow State University, I got to teach an unusual course. The Central Committee sent a directive to the university requiring its instructors in political economy to have some knowledge of mathematical methods. If they were to criticize these methods, then they should at least know what they were criticizing. The department of economics designated the instructors, and for a whole semester I diligently delivered my lectures to them. When I had finished, I was forced to admit regretfully that they still did not understand this mathematical "abracadabra."

It would seem that nothing could have been easier. We start with the premise that the economic system has a purpose that points toward a desired goal. However, just because we want something, does not mean that we can achieve it. There are constraints: resources and technology. The problem is to distribute our limited resources in such a a way that we achieve the desired goal in an optimal way. It is therefore necessary to mentally combine a certain number of parameters, with the help of an unconventional logical apparatus.

This is where the difficulties began. When Kantorovich said that prices inhered in the plan, that they were tools for drafting the plan, that prices were dual parameters, he lost those people armed only with common sense. It would have been altogether different if we had said that price was an expression of cost or of necessary labor expenditure. That would have been clear to everyone. But when we started talking about utility criteria (which, in essence, are the foundation of mathematical analysis), then we ended up with gibberish. What utility ? What criteria? How could they get a feel for that?

Perhaps this is the reason that, for more than two hundred years, from the time of Marx's predecessors Smith and Ricardo, the labor theory of value has been so attractive: it was accessible to simple logic and common sense. The reason for the backwardness of Soviet economics lies in its attempt to get by on common sense alone. It is difficult, though, to teach people to think in categories outside of common sense. It might take as long as it took them to accept the thought that the earth was round. Imagine that we undertook to explain to the less-civilized natives of Africa that the earth is round: they would ask why people on the other side do not walk upside down. So it is with mathematical methods. A different type of logic is at work, an integrating logic, built on the understanding of the ideas of duality. One needs a comprehensive view of the earth to tie it to man's local position on its surface. Common sense, however, views everything locally; it separates, fractionalizes, but it never takes in the whole.

I remember one amusing incident in 1962., on the day that my younger son, Sasha, was born. He was born in the morning, and I left the hospital to go straight to a management meeting. The agenda included our report on the mathematical methods in economic analysis. I tried to talk as simply as possible. More specifically, I tried to say that at the heart of these methods lies the possibility of comparing goods from the perspective of their utility. From this perspective, one can evaluate the most diverse goods, like shoes and butter, for instance.

After my presentation, the director said: "Now you understand what nonsense this is? How can one compare shoes and butter? Comparisons through labor costs are another matter. What are they telling us? Who can understand this?" The audience was deadly silent. And then suddenly the deputy director for physical plant, Nina P. Kotlova, who was also a member of the directorship, piped up: "No, comrades, I personally did not understand a thing!" The audience broke out in hysterical laughter. Matters were made worse by the remark of the chairwoman of the Institute Trade Union committee, Vera I. Chernyshova, "Sit down, Nina! This is over your head." This saved the day, and the director suggested we move on to the next item on the agenda.

By the way, I would like to say a word about the brilliant career of the director of the Institute of Economics, Kiril Plotnikov. He was an assistant to the finance minister Zverev, and rumor had it that the minister made Plotnikov his deputy for his unique talent in shorthand. The knowledge of shorthand helped him very little, and he was reappointed to head the Institute of Economics. You can imagine how this intellectual appreciated the idea of duality.

How did we manage then, if so few could understand us? How could Kantorovich manage, nay prosper? The truth is that our approach was supported by the armed forces. Just because of that it could not be called anti-Marxist. And we were no novices at walking the Marxist tightrope. When needed, we all could wear a Marxist hat, and everyone did it in his own style. I, for example, once wasted a ton of time, but found a necessary quotation in Marx's "The Poverty of Philosophy." In 1847, he wrote that in a future society goods would be measured by their utility. Strictly speaking, these words contradicted his whole theory, by that did not matter: many were thankful that citation. That's what's so great about the Marxist canon: one can find in it a positive answer to any question.

The "GEGE" System

I came to the conclusion that the Soviet Union had developed a schizophrenic economy, one with inconsistent and even conflicting priorities. This conflict could not be resolved within the framework of the existing planning system. Together with two other employees of the Institute of Economics, I got an opportunity to develop new optimal models for the Soviet economy. The view of the economy as a large system was essential to this approach.

When he learned about these ideas from one of his deputies, the institute's director, Nikolaj Fedorenko, became extraordinarily interested in them. It so happened that at the time the director was preparing a presentation for a conference of the Academy of Sciences. Fedorenko asked us to prepare the text to be presented on behalf of the institute. The implication was that he would just read the report, and nothing more.

I believed that this was the way it was going to be. The report that we wrote was so unusual that when Fedorenko read parts of it (for example, the part on prices under socialism) the audience buzzed for several minutes. After the presentation, everyone congratulated him, saying that the institute was making great inroads in science. I became the director's true favorite. Before I had been an ordinary staffer, but now I was appointed chief of the Laboratory of Optimal Planning and was then promoted to the position of the head of a leading Department of Complex Systems. As to the conference report, Fedorenko published it in the magazine Communist, but under his own name. My name and the names of my colleagues who took part in writing the report were not even mentioned.

By the way, I tried everything to ward off being made head of the department. "Listen," I said to the director, "I don't know and don't want to know anything about administrative work." But he insisted, "Aron Iosifovich, would you prefer to work for someone who does not know what he is doing?"

But this was only the beginning. Fortune's wheel was now rapidly spinning in my direction or, as they used to write in old novels, "Fortune started smiling on me". Nary a day passed without the director asking me to stop by. He had a giant office, with an R and R room and a bar always stocked with cognacs and the best wines. We sometimes sat there discussing new ideas. In general, I must say that he was a gifted person in many respects. While he was not a scientist, he had a genuine respect for true science. Suffice it to say, that during the ten years that we worked together, he never reproached me on substance, and was, in general, more good than evil, an intelligent politician with an excellent knowledge of the Soviet system. He was capable of masterfully turning any situation to his advantage.

The interesting thing was that his career in some ways reminded me of Stalin's career. Recall how Stalin came to power after Lenin's death. Initially, Zinoviev and Kamenev were in charge. The former presided over the international workers' movement, and the latter headed the Council of People's Commissars. What about Stalin? He was put in charge of the routine, the everyday events, some secondary things, some internal party affairs. It was said that in Lenin's days, when the Politburo discussed strategic questions, Stalin could leave the room to smoke his pipe: no one took him seriously. But then, half a year later, in May 1924, Kamenev was forced to share his responsibilities in the Sovnarkom with Rykov. Zinoviev also lost power. At the fourteenth Party Congress, they sensed that Stalin was getting closer to the top, but it was already too late.

And consider how Khrushchev came to power. Who, after Stalin's death, took Khrushchev seriously? Malenkov was the leading figure, and Khrushchev was relegated to solving organizational questions - the same operational routine that enabled him to gain power.

This was the law of the hierarchy: he who takes care of the routine and controls the apparatus, becomes the ruler. This is not a novel thought, but I want to stress that the same hierarchical law applies not only to the party, but also, as we shall see in Fedorenko's case, to the management of science.

How did Fedorenko make his career? In the beginning, he too was an ordinary head of an economics department at some college of chemical technology, although even then he had achieved a certain recognition as a conscientious man of action, and, I believe, even became provost. In 1956, Anushavan Arzumanian, who was secretary of the Economics and Law Branch of the U.S.S.R. Academy of Sciences, urgently needed a deputy. Arzumanian, who played a big role in politics, enjoyed a close relationship with Anastas Mikoyan, and was besides the director of the Institute of World Economics, wanted nothing less than to bother with office routine. He needed a good administrator, and Fedorenko was recommended to him, but what bait could he offer Fedorenko? Using his connections, Arzumanian made an obscure department head from a chemical technologies college a correspondent member of the Academy of Sciences.

In 1963, Academician Vasily Nemchinov created CEMI, the Central Institute of Mathematical Economics. A member of the presidium of the Academy of Sciences, Nemchinov was also looking for a person who can take on this administrative routine, and he found such a person in Fedorenko, whom he knew from the Economics and Law Branch. Nemchinov wanted to deal only with ideology and theory, to be constantly "at the top," so he made Fedorenko the director to take care of everyday business. What did he use for bait? Nemchinov used his connections and had Fedorenko promoted to full member of the academy.

I myself was the witness to subsequent events. The year is 1963. The first meeting between the management and the leading staffers of the CEMI. We are sitting in a conference room at large tables arranged in a U-shape. Everyone is seated, including Fedorenko. Only Nemchinov, as a true ruler, is up pacing around the room, with his hands behind his back, and talking about the institute's goals. Formally, he is simply the head of the laboratory, but in fact he is the boss, and he addresses Fedorenko in a condescending manner, "What do you think, Nikolaj Prokofievich, when are they going to finish the repairs on that building we received?" (The institute had received the building that used to be Catherine the Great's stables.) But three or four months later, six months at the outside, the famous academician Nemchinov with all his distinctions is reduced to an ordinary lab chief, and Fedorenko becomes the real owner, the man on whom everything in CEMI depends.

Like a true feudal lord, he conferred honors or took them away. He determined positions, careers, and compensation. In this regard, I would like to stress that Stalinism cannot be equated only with persecutions, prisons, and illegalities. It was, above all else, a certain system of ethics, and, at the same time, a certain model of coming to power, and of the norms of the ruler's behavior. I do not think it correct to call Fedorenko a typical Stalinist: there was no trace in him of Stalin's criminal personality. On the contrary, I would rather count him as a liberal ruler. It is all the more interesting, then, that even in his behavior (I have already talked his path to the top), he exhibited some Stalinist characteristics. True, in his speeches at banquets he often struck a liberal pose, especially when proclaiming, "Forget about me! I have already achieved everything, now we need to think about you, the young people, about your future!" (Stalin also liked to come across as a kindly democrat). We know that Stalin had an unsurpassed ability to keep his subordinates in fear: no one was ever sure that he would die a natural death. The liberal Fedorenko possessed the same mastery. He left the ordinary folk alone, but his deputies were never certain whether they would be fired or kept where they were.

Fedorenko, like Stalin, also had a special attitude towards his favorites. His favor meant everything. In those days, we lived in a Moscow suburb called Perovo (in contrast with the West, Soviet suburbs are much worse than inner-city areas) in horrible conditions: my wife, my two sons, and I all in one tiny pass-through room. We had to traverse my wife's parents' room, and through their and our rooms passed my sister-in-law and her husband. In a word, a typical Soviet apartment. After I came to CEMI, my wife said, "Why don't you write to the academician and ask for an apartment? You are such a gifted scientist!" I demurred, "Why should he give me an an apartment? You of all people should understand what optimality is. He has a goal, which is his career, and he has limited resources, the most important of which is apartments. Who is he going to give them to? To those who assist his promotion the most! Everything else is pure sentimentalism. Gifted - not gifted! What difference does it make!?"

This was the situation when I started my new job, but now everything changed. One day, the director came into my department and said, "Listen, Aron Iosifovich, this makes no sense, that our professor lives in such conditions. We need to improve them at once." (Stalin once showed the same solicitude to the aircraft designer Alexander Yakovlev). And without any requests on my part, I received a three room apartment in Moscow on Lenin Avenue.

Then came the trips abroad. Before, there was no way I could even mention it. No way! The district party committee would never allow it! Now the committee concerned me very little. Everything was decided for me and without me. I got the nod to go with the first Soviet delegation of economists to Yugoslavia. The delegation consisted of three people: the vice president of the Academy of Sciences, Konstantin Ostrovitianov; the deputy to the director of the Institute of Economics, Deronik Alakhverdian; and me. I was tasked to make a presentation on the concept of optimal planning. We all felt free both in word and deed. The only thing we did not have the right to do was to disagree among ourselves publicly; this was exactly the rule Ostrovitianov violated. It seemed that he, having imbibed Marxist political economy with his mother's milk, had a hard time listening to my non-Marxist heresies. So, when I was making my presentation at Belgrade University, he could not contain himself and cried, "Wait a minute! What do you do about labor value? Where is the labor value?" Having no desire to get into polemics, I answered, "You see, Konstantin Vasilievich, I am talking about other things concerning the socialist mode of production; your question is outside my scope." That put an end to it.

We received a first-class welcome. Every day, we had a banquet and sometimes two banquets. It was during dinner at The Hunter restaurant in Belgrade that I decided to reply to Ostrovitianov's comment. I need to add that while he was no scholar, he was a gifted politician and a brilliant raconteur, famous in the academic circles for his wit. In the restaurant, I made a toast, "I would like to toast Academician Ostrovitianov, but not only for his contributions to Soviet economic science, and not only for his help with the development of mathematical economics [this was already quite ambiguous], but also for his promotion of mathematical sociology." Academician Ostrovitianov had offered a formula for determining the age of the wife of a full member of the academy: subtract the academician's age from a hundred. Ostrovitianov was the first to laugh.

In my glory years, I was even nominated for a correspondent membership of the Academy of Sciences, and my name appeared in newspaper Izvestia. I was not admitted to the Academy. The meaning of my candidacy was only that I was candidly slated to be canned. I could not have cared less, if not for the endless congratulations from my family. They thought that if Izvestia printed my name, then I must already be a full member; as with the Supreme Soviet of old: to be nominated for a deputy was equivalent to being elected. Both my uncles called constantly, "Listen, Aron," said Uncle Joseph, "can I congratulate you? Don't be bashful, tell me, we know how talented you are!" "Well, of course you can congratulate him," seconded Uncle Abraham. Then both my aunts joined in, Aunt Tsilia, and Aunt Genia, "He could even as a child read the entire collection of Zola in one sitting!" "What does Zola have to do with it?" I countered, finally losing my temper somewhat, and trying to explain that it was one thing to be nominated, and another to be confirmed. It was impossible to convince them. "We know how modest you are!" was their categorical conclusion; and then at every corner of Perovo they talked about how their nephew, Aron, was elected a member of the academy.

Be that as it may, in several years I had made a dazzling career. And then, one day, everything began to change. Of course, the changes were slow and gradual, but only an outsider could view them as unexpected.

At one of the meetings of the Scientific Council, the laboratory chief Iury Cherniak made a speech. This was odd, because he was a man only remotely related to science, and he had nothing to do with what we were about and what was considered the mainstream of the institute's work. After his presentation, Fedorenko got up and said, "The ideas put forward by Cherniak have important general implications for CEMI." In other words, he indirectly reduced us to something secondary. I did not understand, then, that this was the beginning of the end, and the thought only came to me later that my fate as "the Governor's learned Jew," a Jewish favorite, (call it what you may) also obeyed the same laws of the hierarchy.

I talked earlier about how the leaders, people like Stalin and Fedorenko, came to power. Now I would like to talk about the favorites, who are regulated by the so-called GEGE system. What is GEGE? It stands for: gifts, equalization, guilt, and ejection. I have already mentioned some of the gifts that I received. Actually, they were not confined to the apartment and foreign trips, but also included certain mental benefits, a pleasant state of mind that comes from the realization that one is involved in important matters as a partner in the alliance: the director takes care of external affairs, his deputies coordinate the work of the departments, and I generate ideas. My friends and colleagues accused me of selling out, and what else were they to think if I accepted gifts? For my part, I believed that I was serving true science.

As I said, our department was the brain center of the institute. Academician Fedorenko was its king. The king's role was not simple, though others did the king's thinking for him. I remember that the Economic Branch of the academy once asked me to prepare a report for an upcoming meeting of the board. The board had the following practice: before each meeting, the scientists reported about new directions in their fields. This usually took half an hour, and then the official meeting began. I was asked to make a presentation about optimal planning. Two weeks passed.; a telephone call: would I mind if the presentation was a joint one with Fedorenko? Ten days later, another call: would I mind if Fedorenko's name came first? I agreed, but the presentation never took place.

Later, talking to an acquaintance of mine from the board, I learned that some last-minute doubts had arisen after the final decision to let Fedorenko make the presentation alone. All right, they had agreed, he would read the text, but what if there were questions, which the famous physicist Pyotr Kapitsa, a member of the board, especially liked to ask? They remembered the embarrassing incident with Academician Vinogradov. In 1962, Vinogradov talked to the board and declared that the Institute of Linguistics was planning a reform of the Russian language, suggested by Khrushchev. Vinogradov said, in particular, that the Russian language had preserved this anachronism: men's foreign names were inflected, but women's names were not. Uniformity of usage was needed, so that they would not be inflected in either case. Then Academician Kapitsa got up and said: "What are we going to end up with? I have this neighbor and a friend, Academician Rebinder, and he owns two she-dogs, two bitches. So, I am walking around my development, and I see Rebinder with one of his bitches. What am I supposed to say? Here comes bitch Rebinder?" Kapitsa was interrupted by raucous laughter. In the academic circles, everyone knew that Rebinder was a big womanizer. The memory of this incident was still alive, the organizers feared that something similar would happen to Fedorenko, so they simply canceled his presentation.

I have already said that the changes in my life happened slowly. My separate meetings with Fedorenko occurred with ever-decreasing frequency. He was steadily losing interest in our department. The break happened, however, after the following conversation. One day, the director asked me to come over to his office and said, "Aron Iosifovich, what work do you think would be most interesting and rewarding for us now?" I was silent. "It could be," he answered himself, "the writing of a textbook on political economy. I would like to suggest that you and I undertake this task together." My name had lately disappeared a couple times from the reports of the institute, so I could not resist asking, "And what guarantee do I have that my name does not disappear again this time?" "What guarantee would you like?" asked Fedorenko, coldly looking me over. "Well, that is for you to think of," I answered.

I left. After that, the director never asked to see me again. Some time later, we had a Scientific Council meeting at which Fedorenko openly lashed at our department. It turned out that we did not have any practical ideas. We did not offer anything new and practical, and for a long time we had been simply spinning our wheels. Then I realized that our relations had entered a new stage, that of guilt, and that our association was about to end. The director had squeezed everything he could out of us, and he simply did not need us any longer. That was the Moor's "journey's end," when he became the butt of the prince's joke. Another group of favorites emerged. They offered the same framework as we did, but with some new essential ideas.

According to the GEGE system, I, like all other Jewish favorites in my position, could now expect the finale: ejection. It was not long in coming, and it was precipitated by the application of a staffer in our department, Boris Moishezon, for an exit visa to Israel. The director ordered a departmental meeting at which I was to give a report. I enquired whether any nonscientific matters were going to be discussed, and received a negative answer. In the middle of the meeting, after my report, Fedorenko got up and said, "And now let's talk about the situation that resulted from the fact the that colleague applied for an exit visa." I refused, because I had assured the people in my department that we would not discuss Moishezon. For many of them this was important, because they knew their own shortness of temper and either they would not have turned up at the meeting at all, or they would have come well-prepared. The meeting was closed. No angry words were exchanged or horrible threats made. This was, after all, still an academic institution, and everything was done on an "academic level." There simply followed the director's order that the department would be terminated.

My story, as the reader can see, does not have anything sensational. No one was jailed, and I, to the last day, was not thrown out of work. This story is about something else: how little the person of a scientist, or more broadly, of a human being, is valued in the Soviet Union. His brains will be used while he is needed by the ruler, and then he will be disposed of, and others will take his place. The favorites change in this system, but the system itself remains. The GEGE system, as I called it earlier: gifts, equalization, guilt, and ejection.

Conclusion

What should the West do under these circumstances, that is, in a situation of advancing Soviet glasnost and perestroika?

I do not claim to have the best answer to this question. No matter what proposals are made there will be other, opposing suggestions. And it is impossible to objectively assess the advantages of one over the other since we are dealing with an indeterminate situation for which there is no program for a full, clear-cut linkage of various events.

I will present certain observations that, in my opinion, are a prerequisite to the search for political strategies with regard to U.S. Soviet relations. Perhaps these observations can in some measure promote the further development of a specific type of alternative in this area.

In the West, and particularly in the United States, a binary approach was prevalent as far as formulating a policy towards the Soviet Union is concerned. Thus, the present Soviet regime, which is considered communist (the U.S.S.R. is the communist devil), is juxtaposed to the anti-communist position: everyone who is against communism is with us. Meanwhile, if we take into consideration the fact that contemporary Soviet leaders no longer believe in the communist doctrine, that they cynically use it only as a cover, and that among them are quite possibly some relatively liberal-minded people, then the entire situation begins to change. Opposition to these liber-minded people comes, first of all, from the conservatives, that is, from the protectors of the present regime, among whom, most once again are cynics who do not believe in the communist doctrine, but who want to preserve the existing order.

With a tripartite approach, along with the liberals and the conservatives, one can also have reactionaries, mainly the Russian chauvinists, who truly believe in their cause. As this group grows and develops, the struggle not only between them and the liberals, but also between them and the conservatives, becomes more and more intense. A certain portion of the conservative circles also begins to fear the chauvinists, and as a result comes out against them.

This allows us to maintain that given the present set of circumstances it is, extremely important to reach a better understanding of just what kind of threat the "third factor," that is, russophilism, presents.

I feel that in the West (and even in the U.S.S.R., for that matter) russophilism is grossly underestimated. One of the reasons for this, in my opinion, is that not enough intelligent information is coming out of the Soviet Union about the threat posed by the nationalist circles. The liberals among the Soviet intelligentsia see, as their enemy, the present authorities, who hound them, and do everything they can to impose limits on them. The Russophiles have the same main enemy. I want to strongly emphasize that this common element takes precedence over the differences dividing the two groups. Moreover, the liberalization of the country is so important for a large portion of the pro-Western intelligentsia (who are providing the West with most of its information) that they at the same time minimize the threat posed by the reactionaries, a threat that is increasing as the process of liberalization spreads. This last circumstance requires a short explanation.

The mean age of the active members of the pro-Western intelligentsia is around fifty years old or older. For them, Gorbachev is their last chance, their last hope for a liberalization of the country. To this intelligentsia, the russophiles appear to be a small group of poorly educated, crude, and ignorant people, and at times they simply seem to be hooligans who cannot have a serious impact on events, either within the country or outside of it. The pro-Western intelligentsia rightfully believes that those in power fear the russophiles because they understand that the russophiles pose the direct threat of their removal. I have even heard the opinion that, even if the russophiles belong to the cultural intelligentsia, they cannot be of any interest to the West: their books are written in such a peculiar Russian linguistic style that they cannot be translated, and their paintings are done in such an old style that they do not appeal to Western modernistic tastes.

It seems to me that the situation is somewhat different with the politically active portion of the Soviet intelligentsia that has emigrated to the West. Each one of them must fight individually in order to attract the attention of those in power to their proposals, which are aimed at improving Soviet-American relations--herein lies their value as experts. Here, there is a variety of opinions and, in particular, there are people among them who, in the Western press, call upon the politicians in power and the intellectuals to keep a watchful eye on the rebirth of Russian nationalism and its dangers.

Let's suppose that the Western leaders were to take the threat posed by the russophiles very seriously. What then? I again want to point out that, although I do not have any ready-made prescriptions, I would like to share with the reader certain observations with respect to this question. If I get on a soapbox and become categorical, I must ask the reader to forgive me.

In the West, the danger of pursuing an isolationist policy towards the U.S.S.R. is well understood and the opinion is held in influential circles that in order to remove the Soviet threat, it is necessary to democratize the U.S.S.R.[213] The threat posed by the Soviet Union is not only because of its expansionist military policy. Since the Chernobyl incident, it has become clear that no less a threat is posed by the fact that the Soviet Union uses modern peaceful technologies in an irresponsible fashion that can have a direct effect on the development of other countries. This is the reason for the various political strategies vis-`a-vis the Soviet Union, which are aimed at its democratization.

In addition, we can assume that not all countries are able to quickly establish democratic regimes. I do not mean to infer that this can be attributed only to the genetic predispositions of the populace of a given region. But to my mind, it seems to be undeniable that a nation's culture is an extremely important factor in the establishment of the political system of that country. I think that we can all agree that changing the culture of a nation requires a significant period of time--if not centuries, then at least more than one or two generations.

So, how can a multi-faceted policy of achieving the ideal of transforming the U.S.S.R. into a peace-loving and responsible state be carried out? Toward this aim, one could first of all create the potential for subsequent development; that is, one could create possibilities that predispose the country to subsequent development. Attempts to link, beforehand, all stages of development with the ultimate goal by means of a rigid program (or even a flexible program) are apparently unrealistic in the complex and turbulent world of international relations.

One can suggest for discussion the following political strategy for dealing with the U.S.S.R. in its current stage of development, that is, for approximately the next ten years, .

This strategy is based on the assumption, as noted above, that Soviet leaders are, for the most part, cynical and firm, but not bloodthirsty. Some of them, like Gorbachev, want to employ flexible, even relatively liberal means, while others, apparently, prefer more rigid means. Additionally, there are consistent, sincere, liberal circles, one of whose more prominent representatives is Academician Andrey D. Sakharov. From all indications, the forces of these circles are not strong enough in and of themselves to achieve victory. Along with them there are also extremely reactionary, nationalistic circles. We can assume that cynical leaders are preferable to fanatical reactionaries.[214]

Under these circumstances, the destruction of the present regime in the U.S.S.R. headed by cynics could entail the assumption of power by hard-core reactionaries to whom, the communist ideology is also distasteful. That is why it is so dangerous for the West to indulge in a binary mode of thinking that manifests itself in the encouragement of the formation of anti-communist blocks against the present regime. And yet, the creation of such anti-communist blocks is a well-acknowledged concept for many Western politicians. Khomeini was supported as a force opposed both to the Iranian communists and to the communist regime in the U.S.S.R. as well; the Germans supported the Bolsheviks during World War I; neither experience has taught Western politicians how dangerous it is to support fanatical advocates of an authoritarian ideology.

It is my feeling that a more effective Western political line vis-`a-vis the Soviet Union could be worked out if the Western powers were to switch from a binary mode of thought to a tripartite one. Western policy towards the U.S.S.R., it seems to me, could be aimed foremost at promoting the development of the Soviet Union's nonthreatening policies. Toward this aim, perhaps it would be advisable, given the situation, to form an alliance with the cynical but liberal Soviet leaders, while promoting their alliance with the liberal circles and the cynically-minded conservative leaders against the true, hard-core, radical chauvinists.

It is apparent that, above all, Gorbachev cannot be allowed to stake his prospects in the struggle for power on the nationalist circles. Bearing in mind the remarks that I made in chapter 3 about Gorbachev's evolution and his flexibility, it is conceivable that if the nationalist forces should ever win the upper hand, Gorbachev, faced with losing his power, could swerve to the right and head up the movement.

I would like to point out, however, that despite the apparent divergence of interests between the russophiles and Gorbachev, at some points these interests nonetheless converge. It is quite reasonable to presume that Gorbachev has certain sympathies towards the moderate nationalist circles. The fact that he has in a very real manner provided support for the army, even in very controversial form, is certainly to their liking. And Gorbachev's domestic changes, such as the struggle against corruption, special privileges, and so on, is entirely in keeping with the interests of the russophiles. Of course, in principle, liberalization runs counter to the views of the more chauvinistic circles. However, the opportunity presented by this period of glasnost to bring about the resurrection of forgotten Russian writers and poets, to fight for the protection of the Russian environment and historical treasures, to broaden the influence of Russian Orthodoxy, and to organize groups of young activists who can put a stop to Western influences on Russian youth, is being intensely used by russophiles of every possible kind. It must be said that the consistent russophiles not only approve of criticizing the middle link of the Party apparatus, but they would carry it even further in the event of their victory: they would simply liquidate the party. The church, which they would resurrect, would take care of ideology (an ideology in which many believe) and would not interfere in economic questions. Even if they were to retain the centralized heavy industry, they would free it from today's system of control under conditions of a dual (party and economic) hierarchy-- a dream of the liberal circles that, so far, has proven to be unattainable. The ideas of Stolypin-Gorbachev about measures for the decentralization of agriculture (and the service sector and light industry as well) are very close to the hearts of many of the russophiles. At any rate, they hardly applaud government control of these branches of the economy. In this sense, the russophiles could do much more for the revival of the Soviet economy through domestic means than Gorbachev is doing at the present time. These considerations pertain primarily to the introduction of private property. This alternative has been widely debated in the Soviet press. Suppose, private property will be introduced; that is, it will be ratified as a law by the Supreme Soviet. By no means will these measures instill belief in the Soviet citizens, who have long been used to mistrust the government (and justifiably so), in the immunity and permanency of this property. Russian nationalists, on the other hand, represent a fresh force that speaks on behalf of the most profound interests of the large portion of the population; they can revive trust in the authorities making the public more acceptive of private property.

Finally, we must particularly note the relation between Gorbachev's policies and those of the russophiles with respect to means of promoting the growth of the U.S.S.R.'s technological might. Here, their interests coincide--only their means for achieving this goal differ. Gorbachev, apparently, sees liberalization as one of the fundamental ways of activating the intelligentsia and increasing its contribution to society. The russophiles believe that this same goal can be achieved through the development of Russian nationalism. If we consider the experience of Hitler and Stalin, the russophiles' views have a very serious basis.

How can an alliance between Gorbachev and the nationalists be averted? We must keep in mind that the prevention of such an alliance might have to ve achieved under extremely limited circumstances: Gorbachev will hardly want to give back the Russian empire that has been formed over the past seven hundred years, or do away with the authoritarian regime (this regime does not necessarily have to be tyrannical).

Apparently, Gorbachev will have to be put in a situation where it would be impossible to solve domestic problems by using expansionist methods. The temptations here are colossal. For example, a take-over of Iran and the establishment of control over the Persian Gulf would provide the U.S.S.R. with an enormous amount of oil and enable it to use petrodollars to revive the Soviet economy. Soviet leaders can reason cynically that, if Soviet control were to be established over Middle Eastern oil, the Western countries would rant and rave but they would have nowhere else to turn and they would have to buy this oil from the Soviet Union. In this respect, the agreement signed between the U.S.S.R. and Iran in the summer of 1987, which provides, in particular, for the building of a railroad to stretch all the way to the Persian Gulf, is a very ominous symptom indeed.

The situation that exists in the world today is most favorable one for preventing the U.S.S.R. from implementing expansionist policies. The leading industrialized powers are democracies. Despite all of their differences they are compatible and understand the necessity to preserve the free world. As matter of fact, over the past 150 years, it seems, at no time has one democratic country ever attacked another democratic country.

The only large expansionist power in the world today is the Soviet Union. (Authoritarian, industrialized China could likewise become an expansionist power, but for now China can be discounted, since it is not yet powerful enough.) For the first time in several centuries, Russia has for many years now been isolated from other developed nations and does not have any allies. Of course, the U.S.S.R. tries feverishly to drive a wedge between the Western nations. It has tried again and again to use the contradictions between the Western countries to create alliances against the United States. But so far these attempts have been largely unsuccessful.

Meanwhile, the Soviet Union need not fear nuclear blackmail because it has nuclear weapons and the delivery capabilities to ensure its security. The U.S.S.R. has an advantage in the number of soldiers and in the fact that its economy is geared towards military needs. By using these advantages and cultivating them even further, while at the same time preserving a balance in nuclear weapons (which is what many Soviet military figures are advocating), the U.S.S.R. can carry out a policy of gradual expansion. The West responds to this sort of Soviet policy primarily by creating a strong nuclear potential and developing a system of defense against a nuclear attack. But insofar as it is apparently impossible to create a totally foolproof shield since for every poison a suitable antidote can be found, the situation related to the nuclear arms race is fraught with great danger. At the same time, many Western countries are unwilling to increase production of conventional arms or to build up their conventional forces in order to demonstrate that they will not allow the Soviet Union to carry out its expansion through conventional means. I am not saying that the West should have more arms than the Soviet Union. I am only talking about a sufficient quantity of arms and soldiers to block the U.S.S.R. from developing any serious plans for further expansion. If we keep in mind that today's Soviet leaders are cynics and not fanatics, they will not risk a military confrontation if they see the real might of their opponent. Weakness and an unwillingness to defend oneself, however, can incite cynics to military action. Moreover, as Vladimir A. Lefebvre demonstrated in his highly original research, cynics are likely to interpret a proclivity towards compromise as a sign of weakness.[215]

However, for the governments of many Western nations it would seem to be significantly more difficult to spend more on expanding their armies and increasing the production of conventional arms than to run the risk of a possible nuclear catastrophe. C'est la vie!

Hitler, after seizing Austria and Czechoslovakia with impunity and arranging the Munich agreement, miscalculated England's reaction to the seizure of Poland and brought about the beginning of World War II; likewise, the Soviet Union could miscalculate the political intentions of the Western powers aimed at preventing Soviet aggression. For example, a Soviet takeover of Iran might well prove to be the last straw, and the Western states might fervently rearm themselves and then enter into armed conflict with the U.S.S.R. using conventional weapons, at least in the beginning.

However, apparently it is not a good idea in a period of stagnation to tempt the U.S.S.R. with the possibility of a victory of expansionist policies. Let us assume that the West understands this and that even the Soviet leader shows some farsightedness and decides not to incite the West to launch a decisive arms race. What hope then remains for the Soviet leader to pull his country out of the slump, if expansion is excluded as a viable option? The answer usually is the following: through the process of domestic liberalization and the removal of military tensions. However, if the domestic liberalization leads to the assumption of power by the nationalists, then we will enter into a vicious circle.

In order to escape from this vicious circle appropriate new goals and measures for the immediate future must be found that not only will be to the U.S.S.R.'s advantage, but in which, above all, the leader himself will have a very strong, direct interest.

As is well-known, the leaders of countries with authoritarian regimes acquire prestige by expanding the territory of their own country, by foisting their regime on other regions of the world, and by military victories. This is how the leaders of such countries win their place in history. Therefore, if we are to speak about the creation of a non-threatening Soviet Union, then we must ask ourselves from what other kinds of action a Soviet leader can be acknowledged by history?

In my view, if a Soviet leader were able, in a foreseeable period for a political leader, who is not a dictator, (let's say in five to seven years), to continuously and significantly raise the Soviet population's living standard at least to the standards of a Western European country such as Spain, he could become a national hero.

Of course, to accomplish this certain conditions would have to be met. It would be necessary for the Soviet Union to cut back significantly on its defense spending and to provide the West with certain guarantees that it would not pursue a policy of further expanding the empire. On the other hand, the West must be strong and decisive enough to discourage any aggression by the U.S.S.R., and at the same time the actual military might of the West should not be so strong as to evoke the suspicion that it is preparing for a preemptive war against the U.S.S.R.

At the same time, there must be some movement in the U.S.S.R. in the direction of creating a free society. I am deliberating using the term free in order to avoid the vague term democratic. A free society, which is usually called a democratic society, is a multi-dimensional entity. Among these various dimensions are pluralism, a commitment to democratic principles, the division of power, openness, and others. Even though all of these various dimensions are interrelated, each of them follows its own course of development. In formulating political strategy it is extremely important to decide which of these dimensions should be developed first, and to hold back on the development of the others so that the development of the society as a whole will not be stiffled and return to unabashed authoritarianism (it is particularlyimportant to avoid suffocating pluralism by excessive democratization; that is, to prevent the activation of the population which could lead to mob rule, as occurred, for example, in Russia, where soon after the February revolution the October Revolution came along).

How could the U.S.S.R. guarantee the West that it will not pursue threatening, expansionist policies? How can a free society be developed in the U.S.S.R.? To adequately discuss these questions is beyond the scope of this conclusion.[216] At this point, I want to focus, instead, on how a Soviet leader might improve the welfare of the Soviet people in order to give him an opportunity to develop the country in a direction that would not be threatening either to the West or, in the long run, to his own people.

For this, it is necessary for both the West and the Soviet Union to carry out a package of measures. Perhaps it would be in the interests of the West to help the Soviet leader become a significant figure and go down in Russian history as a great man. Given today's policies of militarization and the existing state of relations with the West, the Soviet leader cannot become a national hero by improving the welfare of the Soviet people. Even if the Soviet Union were to make real cuts in defense spending and to redirect the funds that would be saved toward developing the economy and improving the welfare of the people, the existing conditions (that is, of having to preserve the empire and spend significant amounts on developing new forms of weaponry) will probably not allow a demilitarization of the magnitude that is needed in order to revive the economy. Ideally, we can expect the sort of reduction in defense spending that will enable the West to make significant cuts in its defense spending.

Another possible way to improve the welfare of the Soviet people would be to increase production by overhauling the economic system.

In my opinion, the measures that are being taken at the present time to increase the flexibility of the Soviet economic mechanism are hardly sufficient to solve the problem of the stagnating Soviet economy any time in the near future. Suffice it to say, that providing each family with a separate apartment, which at one time was being promised for 1980, now is being promised only for the year 2000. Furthermore, it is not exactly clear just what constitutes a family. Does this mean a family in which along with the parents and children there are also grandparents and grandchildren?)

In my opinion, one of the thorniest problems of economic restructuring is intellectual: a large-scale industrial society such as the U.S.S.R. cannot be run on the principles of a primitive understanding of market economy, which is the lot of Gorbachev's advisers.

As it is, seeing the successes of Western countries and being unfamiliar with their economic mechanism, a significant portion of the Soviet intelligentsia, and among them a number of economists, think that it would be best to change to a system of private enterprise and free play of competitive forces, a system of which they have only a very primitive conception. They look upon this mechanism as a bazaar, that is, as a system where the producer displays his merchandise and sells it, depending on the demand for it. As a rule, there is no recognition of the fact that the market is a highly developed mechanism coordinated with a complex structure of institutions: banks, stock markets, and so on. Besides the market, the West disposes of many non-market horizontal institutions, such as universities and foundations, which play an important role in the ever growing field of R&D. Moreover, in conditions of dynamic large-scale production, horizontal mechanisms must be coordinated with vertical control mechanisms. The history of Western economics testifies to this: the development of vertical mechanisms was carried out from below (the formation of many-leveled hierarchical complexes in the course of competition), and from above (the recognition of the need to strengthen the role of the state in the economic mechanism). The entire question depends on how strong the links are between the vertical and horizontal mechanisms. In measuring the strength of these links, a large role is played in economics by the social sciences, which permit the formation of institutions. For an industrial society to move from a planned system to a market system, it needs a satisfactory transitional economic plan (with prices to match) and a gradual shedding of centralized practices. Modern mathematical methods can be of help, depending on how successful they are in gaining concession of this right from the social sciences. Radical Soviet economists are, also, not always familiar with this type of conception. Seeing the advantages of the market economy, they do not fully think through the problem of how the market is coordinated with the nonmarket horizontal mechanisms, and how all of them are coordinated with the state. It seems to them that it is all very simple and a matter of common sense.

The role of the social sciences is determined in the first place by the fact that every country has its own peculiarities, which must necessarily be taken into consideration when forming the economic mechanism. Failure to comprehend the peculiarities of a country's cultural influence upon the development of its economic mechanism leads to attempts at blind imitation, to the mechanical transposition of the experience of various Western countries to the U.S.S.R., with all the resulting negative consequences.

Under these circumstances, the question of Western aid for the Soviet Union becomes an extremely pertinent one. If the U.S.S.R. were to give the West the opportunity to carry out a significant arms reduction, then perhaps it would behoove the West to give a large portion of the money that would be saved to the Soviet Union to help the Soviet leader to quickly and sharply raise the living standard of the Soviet people. The West could provide such aid in the form of technology for the production of such consumer goods as footwear, clothing, incubator chickens, hothouse vegetables, and other goods which are manufactured industrially. It is not likely, even with demilitarization and aid from the West, that the Soviet Union could, in any short period of time, get its agricultural industry back on track. In this respect, the West will have to help by providing agriculture products.

A policy of transforming the U.S.S.R. into a non-threatening state also assumes certain actions on the part of the Soviet leader. If we presume that Gorbachev's liberalization policies can be used to a greater degree by the nationalists, a paradoxical concept arises. Perhaps in the coming few years we should be encouraging Gorbachev not to activate the masses, but to renounce policies that are threatening to the West. By no means am I advocating the preservation of the authoritarian regime in its present form. First and foremost, this regime must be limited by pluralism that still precludes mass organizations or their unabashed expression demonstrations, for instance). Openness and separation of power must continue to develop. In other words, I am speaking of a political system resembling limited democracy, especially with regard to the issues of national significance. Subsequently, after overcoming the country's stagnation, a policy of gradual activation of the population can be pursued. I am not against an activation of the Soviet population; I am merely trying to point out certain circumstances that perhaps, make it more advisable to delay this process so that it occurs, not in a critical situation brought on by stagnation, but rather in a period of greater stability in the country.

More specifically, the change in the demands placed on Gorbachev's policies relate, first of all, to the U.S.S.R.'s choice of allies.

There are four leading forces in the U.S.S.R.: the party apparatus, the KGB, the army, and the economic apparatus. It is highly unlikely that any leader advocating radical changes in the system would receive the support of all four of these groups. It is equally unlikely that any leader who should decide to oppose all of these groups at once could be successful.[217] In order to achieve the goal outlined above, the leader would probably have to align himself with the existing party, KGB, and economic apparatuses, preserving the existing structure and, especially, preventing any spontaneous actions by radical groups. In doing so the leader would be advised to direct his main efforts to restraining the aggressiveness of the military.

Meanwhile Gorbachev, in trying to solve the country's pressing problems, now appears to be engaging in just the opposite political game. He is fighting the party apparatus, especially its middle link, while at the same time limiting the power of the KGB, threatening to abolish the ministries and demanding more responsibility from the managers of the factories.

At the same time, Gorbachev is, to a great extent, cooperating with the military.[218] Like Khrushchev before him, Gorbachev wants to reduce the size of the military, and scrap the obsolete or excessive conventional and semi-conventional (missiles of the 1960s vintage) weaponry. At the same time, there is no evidence that he is cutting down on the money for state- of-the-art military technology. Certainly, there have been no momentous changes in the conjugated and indirect military expenditures that make up the greatest part of the Soviet military burden.

I realize that my views here may be unpalatable to many. For example, instead of calling for the activization of the country's internal sources of development, instead of promoting the flourishing of active entrepreneurs and the formation from them of a new middle class, instead of supporting the struggle in the Soviet Union for human rights, I am calling for an alliance with a cynical leader and recommending that he conserve, for a while, the existing structure. But it seems to me that in a case like this, "impatience of the heart" could prove to be extremely dangerous. We must first of all keep in mind that all political undertakings occur under a particular set of circumstances and at a particular speed. It is risky, therefore, to talk in unconditional terms, that is, to say generally what is better and what is worse with respect to concrete circumstances outside the timetable of their possible realization.

Ideals are of extreme importance for the development of an overall strategy. Those ideals are vulgarized when attempts are made to realize them immediately. We approach our ideals through a painful struggle in a multi-staged process of creating potential possibilities for subsequent development at each of these stages, since otherwise the use of unsophisticated means could lead, in the long run, to a movement in the opposite direction, away from the ideal.

But, of course, each time we must consider the means being used. Inappropriate means can ruin any good cause. This is why there is a significant danger connected with my suggestions for an alliance between the liberals and the cynics. This danger must always be kept in mind, and everything should be done to limit the number of victims in making compromises. As I see it, the behavior of Academician Andrey D. Sakharov fits these requirements.

I understand that the reader could argue that, if Gorbachev were to achieve his goal of improving the welfare of the Soviet population, he might then want to further increase his popularity through military action, and it would be even easier for him to do so, since he would encounter less tension and have greater support from a grateful population.

Alas, I must agree with this sort of criticism since there are no firm guarantees that this could not happen. In principle, this would be true even if the West itself were to create conditions under which it could verify Soviet promises; that is, if the West were to proceed on the assumption that it cannot merely trust, but must have the capability to verify. However, it seems to me that a serious pitfall is contained in this approach. It is very difficult to firmly establish sufficient and necessary conditions that would solve the problem of verifying compliance with commitments. If people were able to firmly establish such requirements the world would be largely free of conflict. This is why morality is established, and why numerous institutions are established for monitoring the actions of the authorities within the country; it is extremely difficult to formalize requirements for compliance with these sorts of complicated obligations. In addition, authoritarian and democratic regimes are on an unequal footing when it comes to the speed at which policies can be developed or turned around. An authoritarian regime can change its politics by 180 degrees very abruptly, but it takes a democratic regime a considerable amount of time to return to a former policy, since it must both win over public opinion and go through a complex network of legislative institutions.

Nonetheless, it seems to me that if the living standard of the Soviet people were to be raised significantly, then the need to maintain this level (while meeting, of course, a number of other conditions that we mentioned above) would still make it possible to create a non-threatening U.S.S.R., since the U.S.S.R. would have to gradually democratize in order to maintain the high living standard, assuming a strong democratic West.

Therefore, to the extent that we can allow ourselves to presume a non-threatening course of development for the U.S.S.R., particularly in the presence of carefully-thought-out guarantees from the Soviet Union, it makes sense to talk about the advisability for the West of running certain risks to implement policies aimed at promoting a sharp increase in the welfare of the Soviet people.

If we were to summarize the foregoing, it all boils down to the following: should we concentrate our attention now on the further activation of the Soviet population and the liberalization of the U.S.S.R., or should we first seek roundabout ways to halt the stagnation of the Soviet system and to raise the living standard of the Soviet people?

One could present a number of very serious arguments to support the assertions that (1) the liberal start represented by Gorbachev will triumph, and then the question of the Soviet threat to the West will become moot, and that (2) the assertion that Gorbachev's liberalization can be used to a greater degree by the nationalists than by the liberals is an extreme view. Among these arguments: many in the ruling party group fear the fanatic russophiles, since the russophiles threaten to remove them from office; it would be better to placate an empire with a growing Moslem population and strong separatist sentiment by proclaiming the equality of all nationalities and to back this claim up by appointing representatives of the various nationalities to positions of leadership in the central government; a significant portion of the population still has not given up hope for the possibility of the U.S.S.R. developing in the Western mold, and so on.

Finally, the fact that about twenty years ago Yanov already saw the threat of russophilism and the russophiles have yet to come to power, as well as the fact that almost ten years later Vladimir Solov'ev and Elena Klepikova wrote in the Western press that "the Russian party is not yet in power, but it is already knocking at the door,"[219] and, I should point out, has not yet walked through that door, indicates that there is opposition to the power of the nationalists.

Be that as it may, I believe that many readers will agree with me that if the process of stagnation in the U.S.S.R. becomes more serious. it will increase the possibility that the russophiles will come to power, and that russophilism is not just emotional sighs but a real force that has to be contended with. I share Yanov's view that the frightening thing about the russophiles is the fact that they do have a very real agenda. This does not mean that all the russophiles share one, united platform; there are varying views even among the russophiles. However, they are all united by what used to be called "Russian traits": a belief in the leader, Orthodoxy, and Russia. It seems to me that in terms of their validity the programs of the russophiles are extremely close to those of the Bolsheviks before the Revolution. It suffices to remember that at the last moment before the October uprising in 1917, the Bolsheviks stole the Peasant Program from the Social Revolutionaries, and the promise to turn the factories over to the workers was so flimsy that almost immediately after the Revolution they went back on this promise. The important thing was that, in the Bolsheviks' statements, there was an overall ideological trend that was in tune with the sentiments of the masses.

The examples cited here are sufficient to cause us to be on our guard and to listen carefully to the voices of those who remind us of the threat posed by the russophiles, even if at times they exaggerate.

Let us be optimists and belief in the forces of Good. But at the same time let us at least not forget about the forces of Evil - the nationalist movement. And how can we here avoid mentioning Zoroastrianism? According to Zoroastrianism, there are two basic forces in the world: Good-Ormuzd, and Evil-Ariman. The Good will eventually triumph over Evil. But in order to facilitate this outcome, the people of the world must help the forces of Good in their struggle against the forces of Evil. But do they have enough strength to do so? And what will they consider Good and Evil in this ever changing world?

Notes and References

INDEX

Abalkin, Leonid I.

Academy of Sciences

Ackoff, Russell

Aganbegian, Abell G.

Akhmatova, Anna

Alackvedian, Deronik A.

Alexander II

Alexandrov

Allilueva, Svetlana I.

Anchishkin, Alexander I.

Andreeva, Nina

Andropov, Iury V.

Anti-Semitism

Antonov, Oleg K.

Arbatov, Iury A.

Aristocracy

Arkin, Vadim I.

Arrow, Kenneth

Arzumanian, Anushavan

Astafef, Victor

Atomic bomb

Authoritarianism

Babaevsky Semen P.

Babel, Isaak

Baev, Konstantin

Bakhrushin, Sergei

Bakhtin, Michail M.

Bakunin, Michail

Baltic republics

Barone, Enrico

Basil II

Bedny, Dem'ian

Belik, Iury

Belkin, Victor D.

Belkin, Valentin

Bender, Ostap

Berezov

Berliner,Joseph

Berman, Michail M.

Berry, Lev J.

Birman, Alexandr M.

Birman, Igor J.

Bohm-Bawerk, Eugen von

Breev, Michail V.

Brezhnev, Galina L.

Brezhnev, Leonid I.

Brusova, V.G.

Bukharin, Nikolay

Bulgakov, Michail

Burlatsky, Fedor M.

Carlos, of Spain

Caucasus

Central Asia

Central Committee Plenum

Central Economic Mathematical Institute

Chaikovskaia, Olga

Chalidze, Valery N.

Chauvinism

Cherniak, Iury

Chernichenko

Chernobyl

Chernomordik, G.I.

Chernyshevsky, Nikolai

Chernyshova, Vera I.

Chesnokov

China

Chodak, Szymon

Chujkov, Vasily I.

Churbanov

Civil rights

Communism

Congress Peoples Deputies

Conservatives

Consumer goods

Contracts

Convertability

Corruption

Cosmopolitism

Council of National Economy (Sovnarkhoz )

Crisis

Cultural typology

Culture

Daniel, Iuly

Danilov-Danilyan, Victor I.

Dantzig, George

Demianov, Boris

Demin, V.

Democracy

Detente

Dimitros

Dinamo

Dissidents

Dostoyevski, Fedor M.

Dubinin, Nikolai P.

Dydkin, Lev M.

Dynin, Alexander S.

Dynkin, Evgeny B.

Economic crisis

Economic reform

Edelman, Natan

Edelman, Michail R.

Efimov, Nikolai

Egorov Factory

Egypt

Eisenhower, Dwight

Eltsyn, Boris N.

Emelyanov, Valery N.

Emery, Fred

Empire

Entov, Revold M.

Ershov, Alexander

Extarverted

Ezhov, Nikolai I.

Ezrin, Genrikh I.

Faerman, Efim, Iu.

Favorite

Fedorenko, Nikolai P.

Fedorov, N. F.

Fedoseev, Peter N.

Field, Semen D.

Franko, Francisco

Frezer

Friedman, Milton

Garajedaghi, Jamshid

Gatovsky, Lev M.

GEGE

Gerchuk, Iakov P.

Germany

Gierek, Edward

Glasnost

Glushkov, Victor M.

God

Goldsmith

Golshteyn, Evgeny G.

Goltsov

Gorb

Gorbachev, Michail S.

Gorbachev, Viacheslav

Gorukhov

Grekov, Boris

Grigoriev, Andrej

Grossman ,Gregory

Gumilev, Lev N.

Heisenberg, Werner

Herzen, Alexander

Horisontal Mechanisms

Iagoda

Iakovlev, A.

Iakunin, Gleb

Ideology

Ignatiev

Inflation

Inozemtzev, Nikolai N.

Institute of Economics

Institute of the National Economy

Institute of World Economy

Internationalist

Introverted

Invariants

Inventories

Israel

Itin, Lev I.

Iudin, David B.

Iukhneva, N.

Iuzovsky

Ivan IY

Ivanov, N.

Izvestia

Japan

Jews

Juvenal

Kabanov, Nikolai I.

Kaganovich, L.M.

Kalita, Ivan

Kamenev, Lev

Kantorovich, Leonid V.

Kapitsa, Pyotr N.

Kaplan, V. and husband

Kapustin, Evgeny I.

Karamzin

Katok, Anatoly B.

Kats, Adolf I.

Katsenbogen, Boris Iu.

Kazakevich, David M.

Keynes,J.M.

Khanin, Grigory

Kheinman, Solomon E.

Khenkin, Gennady M.

Khomeini

Khrushchev, Nikita S.

Khudenko, Ivan

Kirilenko, Andrey P.

Kirov, Sergey M.

Klepikova, Elena

Klimenko, Konstantin I.

Klotsvog, Felix N.

Kontorovich, Vladimir I.

Koopmans, Tjalling C.

Kopelev, Lev Z.

Kornai, Janosh

Kosarev, Alexander

Kossov, Victor V.

Kosygin, Alexey N.

Kotlova, Nina P.

Kotov, F.

Kozlov, Frol R.

Kozlov, G.A.

Kozlova, Olimpiada V.

Kronrod, Iakov A.

Krylov, Vsevolod N.

Kubanin, M.I.

Kubanin, Marina

Kuropatkin

Kuznets, Simon

Kvasha, Iakov B.

Lakhman, Iosif L.

Lakhtin, Elena N.

Lange, Oscar

Lapidus, I.A.

Lebedev, Sergey A.

Lefevre, Vladimir A.

Lenin, VladimirI.

Leningrad

Leontief, Wassily

Leontiev, Lev A.

Lerner, Abba

Lerner, Alexander Ia.

Levin, Grigory I.

Levina, R.

Lewis, Flora

Liashchenko, Pavel

Liberal

Liberman, Evsey G.

Lif, Sh.B.

Lifits, M. M.

Ligachev, Egor K.

Likhachev, Dmitry S.

Literary Issues (Literaturnaia Gazeta)

Literaturnyj Irkutsk (newspaper)

Litvinova, G.I.

Liubertsy

Lobachevsky, Nikolay I.

Lomonosov, Michail V.

Lukomsky, I.I.

Lumsden, C.

Lurye, Alexander L.

Lusternik, Lazar A.

Luttwak, Edward

Lvov

Lysenko, Trofim D.

MacArthur, Douglas

Maiminas, Efrem Z.

Makarov, Valery L.

Maksimov, Vladimir

Maksimova, Raisa M.

Malenkov, Georgy M.

Mandelstam, Osip

Manevich, Efim L.

Market

Markus, Boris L.

Martov, L.

Marx, K.

Maysenberg, G.

Mazepa

Medvedev, Roy

Medvedev, Vadim

Medvedev, Zhores

Mekhlis, L.

Mel'nikov,

Mil'man

Mendeleev, Dmitry I.

Metal-cutting machinery

Mikhailov, S.

Mikhalevsky, Boris N.

Mikoyan,Anastas I.

Milner, Boris Z.

Milyukov, Peter N.

Minerals

Mints, Lev E.

Mitrofanov

Mitskevich, Adam

Mityagin, Boris S.

Mochalov, Boris M.

Mocque, J.

Moiseev, Nikita N.

Moishezon, Boris G.

Molodaia Gvardia (magazine)

Monarchy

Money

Monge (problem)

Montesquieu, Charles-Louis

Moscow

Moscow News

Moscow State University

Moskva (magazine)

Motylev V.E.

Movshovich, Solomon M.

Nagibin, Iury

Nash Sovremennik (magazine)

Nasser, Gamal A.

Nationalism

Nauka i Zhizn (magazine)

Nedelya

Nekrasov, Nikolai N.

Nemchinov, Vasily S.

NEP

Nevsky, Alexander

Nicholas I

Nicholas II

Nobel prize

Novozhilov, Victor V.

Noyj Mir (magazine)

Oblomsky, Iakov, A.

Ochlocracy

Octiabr (magazine)

Ogarkov, Nickolaj

Ogonek (magazine)

Ogurtsov

Oleinik, B.

Opennes

Orlov, Iury

Osipov

Ostrovitianov, Konstantin V.

Pamiat

Paradise

Party apparatus

Pasternak, Boris

Pathology

Patriotism

Peltsman, Boris

Perestrojka

Peter I (the Great)

Petrakov, Nikolai Ia.

Petrovsky, IvanG.

Pitsudski, J.K.

Pittel, Boris G.

Planned Economy [Planovoe Khoziajstvo]

Planning

Planovoe Khoziajstvo (journal)

Platonov, Andrey

Plisetsky, Maya

Plotnikov, Kirill N.

Pluralism

Pokrovskij, Michail

Poland

Poliansky

Politburo

Poltava

Polterovich, Victor M.

Polzunov, Ivan

Ponomareva, T.A.

Popov, Gavriil

Popov, Ivan

Postyshev, Leonid P.

Pravda

Predisposition

Prices

Problemy Ekonomiki

Profit

Profumo

Prudensky, German A.

Pskov

Pugachev, Vsevolod F.

Pushkin, Alexander

Rakitov, Anatily I.

Ramsey

Rasputin, Valentin

Reactionaries

Reformists

Religion

Rikhter, Svatoslav

Rosenberg, Alfred

Rostropovich, Mstislav

Rubinsthtejn, Gennady Sh.

Rubinsthtejn, M.I.

Rudakov

Rudenko

Rumanzev Gardens

Rumiantsev, Alexey M.

Russell, Bertrand

Russkoe Samosoznanie (journal)

Rybakov

Rykov, Nikolai

Sagdeev, R.

Sakharov, Andrey D.

Saksagansky, Teodor D.

Savings

Schizophrenia

Schumpeter, Joseph

Semyonov, J.

Separation of Power

Sergeev-Tsensley

Shafarevich, Igor R.

Shanin

Shapovalov, Peter

Shatalin, Stanislav S.

Shatrov

Shchelokov

Shcherbakov, Alexander S.

Shemanov, Gennady

Shevarnadze, Edward

Shevtsov, Ivan

Shilov

Shlapentokh, Vladimir E.

Shmelev, Nikolai

Shuster, Aron I.

Siniavskij, Andrey E.

Skurlatov

Smekhov, Boris

Smirnov, V.G.

Smith, Maria N.

Sobriety and Culture

Socialism

Socio-economic rights

Solomentsev, M.ichail

Soloukhin, Vladimir A.

Solov'ev, Vladimir

Soloviev, I.

Solzhenitsyn, Alexander I.

Sonin, Michail I.

Sovetskaia Rossiaya (newspaper)

Sovetskaya Kul'tura

Stagnation

Stakhanov, Alexey G.

Stalin, Iosif V.

State Committee on Prices

Steel

Stolypin, Peter A.

Stromas, Alexander

Sukhovo-Kobylin

Suslov, Michail

Sychev, I.C.

Systems approach

Tarle, Victor

Taylor, Fred

Technology

Tetenev, N.I.

Theocracy

Tikhomirov, M.

Tkachenko, V.

Tolmachev, Anatoly V.

Tombovskaia Pravda (newspaper)

Tomsky,

Torah

Tradition

Trakhtenberg, Iosif A.

Treml, Vladimir

Trotsky, Lev D.

Trubachev, Oleg

Tsar

Tsiolkovsky, Konstantin E.

Tsypko, A.

Tukhachevsky, Michail N.

Turetsky, Shamai I.

Turgot, Anne-Robert-Jac'ques

Udalstov, Ivan D.

Uglanov,

Ukraine

Ulmarbekov, U.

Union Republic

Uvenal

Varga, Evgeny S.

Vasilev, Dmitry D.

Vecherniaia Moskva (newspaper)

Venzher, Vladimir

Vertical mechanisms

Vinogradov, Ivan M.

Vitte, Sergey I.

Vnutrennie Protivorechia (periodical)

Voinovich, Vladimir

Vojna i Rabochy Klass

Volkonsky, Victor A.

Voronov, Gennady I.

Voznesensky, Nikolai A.

Vremia i Miy (periodical)

Vyshinsky, Andrey Y.

Weimar Republic

Weinstein, Albert L.

Weitzaker, Richard von

Wieser

Wilson, Edward

World War II

Yagodkin

Yakovlev, Alexander

Yakubovich

Yanov, Alexander L.

Yeltsyn, Boris N.

Yeshovshchina

Zaslavsky, Tatiana

Zavelsky, Michail G.

Zhabotinskij, Zev

Zhdanov

Zhukov, Georgy K.

Zinoviev, Grigory

Znamia (magazine)

Zoshchenko, Michail

Zverev

* Number of pages are taken from the original publication

1. J. Stalin, Voprosy Leninisma (Moscow: Gospolitizdat, 1953) 618.

2. J.Stalin, O velikoj otechestvennoj vojne Sovetskogo Soiuza (Moscow: Gospolitizdat,1950) 351.

3. Professor Alexander Dynnik from the Michigan State University made a good point when he said that this film could very well have been called Little Faith, meaning little faith in the official ideology. The name Vera in Russian means "faith."

4. P. Raine, Paraguay (New Brunswick: Scarecrow Press, 1956).

5^{. Khrushchev Remembers, The Last Testament (Boston:
Little,Brown and Co,1974), 83-4.}

6. M. Bakhtin, Problems of Dostoevsky's Poetics (Minneapolis: University of Minnesota Press, 1984) 271.

7. A. Yanov in his work entitled Detente after Brezhnev: The Domestic Roots of Soviet Foreign Policy (Berkeley: Institute of International Studies, University of California, 1977) provides an extremely interesting analysis of the dilemma of the aristocracy in Soviet society.

8. Moreover, completely original programs require that an individual be such a financial source. Here, an analogy with art might be appropriate. Financial backing of various art movements is partially accomplished through private individuals. Even when sources of financial support are many, but they are all say, corporations, new directions may be choked at inception. Corporations will support shows at museums exhibiting "approved" art.

9. Our Country and the World, 33 (51) (1989):153.

10. After visiting Yugoslavia and talking to Yugoslavian sociologists in the West, I came to the conclusion that many people involved in workers' self-management in that country feel that they are intellectually unprepared to participate in business decision-making, and even resent having to do so.

11. A. Herzen, From the Other Shore (London:Weidenfeld and Nicolson, 1956)12-13.

12. I was told by an engineer at a watch factory in Moscow that after World War II, Stalin spoke with several leading people involved in the manufacture of watches. He asked them what must be done to increase the quality of Soviet watches. One of the experts replied, "Stop plans to increase the production of watches for one year." Stalin said that he agreed.

[25]. It is well know that one major factor that helped the Bolsheviks gain victory in the civil war was the large number of of former Russian generals and officers enticed into the Red Army. "Of the 130,000 commanders of the Red Army about half were former Tsarist offices and Generals.

Whatever the reasons for the officers and generals to side with the Bolsheviks, even those forced to serve [since their families were taken hostage-A.K.] ideology began to take shape which justified this cooperation even if it was mere rationalization." M. Agursky, Ideology of National-Bolshevism (YMCA Press: Paris, 1980) 55-56.

[26]. Lev Z. Kopelev speaks of the Bolshevik counter-revolution in his book State and the Nation (Ann Arbor: Ardis, 1982) 56. The March 1989 demonstration at Maiakovsky Square in Moscow commemorating the February Revolution featured the following poster "Down with the Bolshevik counterrevolution!" (Novoe Russkoe slovo, 3 June 1989). The official Soviet Press even at the time of glasnost still keeps quiet about the destruction of democracy instituted after the February Revolution.

[27]. I recall the following story: in Moscow's Lenin Library stood an ultra-curious policeman. If even two people standing in the hall started up a conversation, he would approach them and say, "No more than one person are permitted to assemble." The image of this policeman, with his concise formula, remains in my mind's eye as a symbol of an atomized system.

[28]. Narodnoe khoziajstvo SSSR 1987, 343.

[29]. The Nation 244 (23) (1987).

[30]. My hypothesis is similar to the views expressed by V. Soloviev in his article "The Flowers of Evil in the Soil of Glasnost," Vremia i my 93 (1986) 200-204.

[31]. It is quite reasonable to presume that Gorbachev has certain sympathies toward the moderate nationalist circles. His words during his meeting with the workers of the Krasnodar and Stavropol areas sound somewhat ambiguous: "Some assert that the Soviet Union threatens to conquer the entire world, strives to achieve military superiority, and intends to occupy all of Western Europe. And that the Soviet Union supposedly wants to 'lay its hands on' Africa and Asia. They have drawn this kind of picture of the Soviet Union, or as they call it 'the Russian bear','the Russian aggressor'." I look at you and I wonder: Is this really the impression that we, you and I, and all of our generations which created everything that we have in our country, is this the impression that we create? We are proud of our country. How much effort we have put into it and how many lives have been lost for it! Could it possibly be that we are thinking up all of these devious plans with respect to other nations? Raisa Maksimovna and I were once reading Dostoyevski. He wrote that perhaps the Russian hear-and today I would say the heart of the Soviet people-is the most open to fraternity and unity." Pravda, 19 September 1986.

[32]. Back in the early 1960s, I naively assumed that anyone who was a nonconformist and anyone who criticized the Soviet regime was a liberal. The following incident opened by eyes: At that time, nonconformism to official authority was expressed in the form of men in the city wearing beards. The authorities were very hostile to this innovative move: a typical conservative phenomenon. I thought that everyone I saw with a beard was a liberal. In the Department of Economic Mathematics in one of the prestigious institutes of higher learning in Moscow a young teacher with a beard appeared. Due to the nature of my work our paths crossed. You cannot imagine how surprised I was when I heard this bearded man making glaring nationalist statements which were accompanied, as is usually the case, by anti-Semitic remarks.

[33]. Lev Z. Kopelev published, in 1982, a wonderful book, The State and the People (Ann Arbor: Ardis Publications). This small and extremely compact book contains views with which I largely concur on the development of the Russian-Soviet empire. Along with this, I feel that I have succeded in touching upon several aspects of this broad topic that were not mentioned or were not as developed in the book.

[34]. It is interesting to note that these same motives for the preservation of the empire are now being used by several Russophiles, Gennady Shemanov, for example. According to the russophiles the future belongs to Orthodoxy and it will save the world. As sooner or later everyone will become Orthodox, why under these circumstances should the Muslim republics separate from the future Orthodox Russian nation when, in the near future, earlier rather than later, they may taste the greatness of Orthodoxy: the Russophiles of course strongly believe in the imminent victory of Orthodoxy in Russia and, apparently, not without reason.

[35]. The facts and citations pertaining to the Warsaw campaign are from Trotsky's book Stalin, (Benson: Chalidze Publ.,1985),118-27.

[36]. Alexander L. Yanov has turned his attention to these circumstances in his book The Russian New Right (Berkeley: University of California Press, 1977).

[37]. The main reason for the conflict between Stalin and Tito apparently lay in Tito's desire to expand his small empire. This was reflected in his attempt to become the head of the Balkan Federation. The Federation apparently intended to include countries that had already become people's democracies as well as Greece, where pro-Soviet General Marcos was at the time waging a rather successful partisan war in an attempt to establish his supremacy. However, Stalin could not stand tohave a small-time emperor like Tito around him, and relations between the two countries became so tense that Tito, for his own salvation, was forced to throw himself into the embrace of the United States.

[38]. Estimating the amount of Soviet help to Third World countries is a taxing intellectual job. When one tries to get at the volume in monetary terms, one naturally assumes that this money could equally well have been spent to meet internal Soviet needs, and forgets that the lion's share of Soviet assistance is in the form of weapons supplies. How obsolete is this weaponry, how much of it needs to be manufactured to keep the Soviet military industry working at an efficient production level - answers to these and similar questions remain unclear. That's why I believe that the problem of Soviet help to Third World countries has to be looked at from the general perspective of Moscow's military-imperial policy. If this policy is left unchanged, the effect of reducing foreign assistance on Soviet internal betterment will be small at best.

[39]. Future of the Soviet Empire, H.Rowen and C.Wolf, eds., (New York: St.Martin's Press,1987).

[40]. I. Birman, Secret Incomes of the Soviet State Budget (Boston: M.Nijhoff,1981).

[41]. N.Shmelev, "Payments and Debts," New World, 1987, no.6:144.

[42]. R. Ackoff & F. Emery, On Purposful Systems, (New York:Atherton, 1970).

[43]. The figures in table 6.2 overestimate the percentage of the native population, especially of Azerbaijanians, because they assume that all people of a given nationality native to a region live in that region.

[44]. Kazakhstan could be an exception. It was rumored at the beginning of the 1970s that the Kazakhs have the opportunity to serve in the army in their own republic. The granting of this exception was motivated by the need to strengthen the border with China, the main enemy of the Soviet Union, by manning it with solders who were well acquainted with local conditions.

[45]. Moscow is first mentioned in the Russian chronicles in 1147 (Bol'shaia Sovetskaia entsiklopediia, 1974: 7).

[46]. Tbilisi as a fortress city was mentioned for the first time in the 4th century a.d. (Bol'shaia Sovetskaia Entsiklopediia, 1976: .313).

[47]. King Argishti in 782 b.c. built the fortress Erebuni (the contemporary Erevan) (Bol'shaia Sovetskaia entsiklopediia, 1972: .89).

[48]. Samarkand was known in the 4th century b.c. as Marakanda, the capital of the state Sogd (Bol'shaia Sovetskaia entsiklopediia, 1975: 528).

[49]. A.Katsenelinboigen, "Variations in Means of Description of Economic Systems," in N.Chigier and E.Stern, eds., Collective Phenomena and the Applications of Physics to Other Fields of Science (New York: ,1975) 38-44.

[50]. A. Bergson, "A Reformulation of Certain Aspects of Welfare Economics," A. Bergson ed., in Essays in Normative Economics, Cambridge, Mass.: (1966) 3,26.

[51]. G. Debreu, Theory of Value, New York: 1959.

[52]. There is an analogous situation in physics. See L. Polak, Extremal Principle in Mechanics, Its Development and Usage in Physics, (Moscow: 1960). The variational principle of mechanics in the eighteenth century was regarded as a teleological principle that reflects the perfection of God who created the world in the best possible way. This principle was enthusiastically supported by the church. Using of a system of differential equations for the description of the motion of objects was regarded as resting upon the principle of causality, and as atheistic. The proof that each of these principles could be converted into the other made possible the release of this problem from ideological restrictions.

[53]. L. Kantorovich, The Best Use of Economic Resources (Harvard: 1965); A. Lurye, Economic Analysis of Socialist Economy Planning Models (Moscow 1973); V. V. Novozhilov, Problems of Cost-Benefit Analysis in Optimal Planning, (Moscow: 1969).

[54]. This is especially typical for V. Pugachev, Optimization of Planning, (Moscow: 1968).

[55]. See the work of A. Granberg, Methods and Models of Research on Territorial Structure, (Novosibirsk: 1977).

[56]. See the paper by V. Danilov-Danil'ian, M.Zavelskij, "Social-Economic Optimum and the Regional Problems of National Planning," Ekonomika i matematicheskie metody, 11 (1975): 547-563.

[57]. I cannot vouch for the authenticity of the following information, but it is interesting nonetheless. It is well known that in 1972 the anniversary of the establishment of the Union of Soviet Socialist Republics was celebrated. As if in connection with that, the chief of the Council of Ministers of the RSFSR Mikhail Solomentsev sent a letter to the Central Committee of the Communist Party, in which he emphasized the fact that the standards of living in the RSFSR is lower than in other union republics.

[58]. The political significance of this fact could be demonstrated by the following statement made by Brezhnev in his speeches All for the Good of the People in the Name of the Soviet Man at the meeting with the voters of the Bauman voting district in Moscow, 14 June 1974: "A great achievement of the upcoming five-year plans will be the development of the economy of the non-black earth zone of Russia, which is inhabited by approximately 60 million people. It can be said with certainty that transformations of such scope, and I have mentioned only a few of them,are as yet unknown to history. They are destined in many respects to change and enrich the appearance of our mother country." L. Brezhnev, "All for the Good of the People in the Name of the Soviet Man:" Kommunist, 1974, no.9: 1974.

[59]. I. Koropeckyj, "Economic Prerogatives," The Ukraine within the U.S.S.R,: An Economic Balance Sheet, (New York: 1977), 13-64. I agree with the author that there is an absence of investigations in the interrelations between the central organ of power and the republics, specifically of the Ukrainian SSR. It is known that investigations into the problems of management in the U.S.S.R. is basically concentrated on the relations between the central organ and its enterprises. In this manner, as Professor Koropeckyj justly infers, an important part of the problems of management in the U.S.S.R. related to territorial problems, has slipped from the field of vision of Western investigators.

I note here that the author justly stresses that the relations between the central power and the Ukraine is also strongly typical of interrelations between the center and other Union Republics.

[60]. It is known that in recent years the police in the Soviet Union have been granted greater prerogatives in dealing with minor hooliganism and drunkenness. Individuals caught by the police for such crimes are to be brought immediately before a judge and given a 15-day sentence to perform miscellaneous tasks to help clean up the city. However, the police encounter many problems when they arrest factory workers. The managers of the factories often ask party leaders to help them to release workers, because it is very important for the fulfillment of the plan that the workers be on their jobs. For that reason, the police prefer to arrest violators among the intelligentsia at times paying attention even to the most minor disturbances, because as a rule the intelligentsia, is not directly involved in the fulfillment of plans.

[61]. L. Brezhnev,"O Proekte Konstitutsii Osnovnogo Sakona Soiuza Sovetskikh Sotsialisticheskikh Respublik i Itogakh ego Vsenarodnogo Obsuzhdeniia." Doklad na sessii Verknovnogo Soveta SSSR, 4 January 1977, Kommunist, 1977, no. 15: 10-11.

1. For Yanov's article and the resulting discussion, see Literary Issues, nos. 5,7,10, and 12 (1969).

2. A.Yanov, The Russian New Right, (Berkeley: Institute of International Studies, University of California, 1978).

3. Yanov, A., The Russian Challenge and the Year 2000, New York: Basil Blackwell, 1987.

4. I would also like to note the articles published in the American press by two emigres from the Soviet Union, V. Solov'ev and E. Klepikova, in which they direct the reader's attention to the danger of strengthening Russian nationalism, which they call "the Russian party."

5. This sort of view on the possible path of development for the U.S.S.R. is very characteristic of Alexander Stromas. See, in particular, A. Stromas, Political Change and Social Development: The Case of the Soviet Union (Frankfurt: Verlag Peter Lang, 1981) and the article "The Building of a Multi-National Soviet 'Socialist Federalism':Success and Failures," Canadian Review of Studies in Nationalism, 13(1) (1986).

6. This one-dimensional classification is a bit too simplistic. What we need here is a multidimensional typology.

To begin, we may divide people into two groups, depending on whether they do or do not welcome the fact of ethnic diversity. Let us call these groups the nationals and the cosmopolitans respectively. The nationals themselves can be variously classified. One such rough classification may be represented by a two-dimensional matrix, with one dimension being the attitude toward one's own people, and the other the attitude toward all other people as a whole, without any intermediate subdivisions into races, nationalities, or communities. Let the types of attitude be just love, indifference, and hate, and assume that, whatever the sentiment, it is always stronger with respect to one's own people than to strangers. The resulting table will look like this:

7. A. Katsenelinboigen, "Will Glasnost Bring the Reactionaries to Power?"Orbis (Spring 1988): 217-30. Professor Gibian's response appeared in Orbis, (Summer 1988): 442-44.

8. Ogonyek, March 1988, no 10: 9-12.

9^{. D.Likhachov,
"Russia," Literaturnaia Gazeta, 12 October 1988.}

[71]. L. Dymerskaia, "Zamechaniia k istorii, ili istoriia, sotvorennaia po zamechaniiam," Strana i mir (11) (1985): 69.

[72]. L. Dymerskaia, "Zamechaniia k istorii, ili istoriia, sotvorennaia po zamechaniiam," Strana i mir, (12) (1985): 43-50.

[73]. Of course, illegal right-wing dissident movements did not die out. I have in mind, for example, Ogurtsov, who created an underground Christian league and the organizers of other Christian religious sects. Soviet apparatchiks learned the lessons of their Bolshevik predecessors well. They understood just how dangerous any underground organizations could be. It is, apparently, no accident that the authorities allowed Dostoevsky's novel The Possessed to be published. What better book to dissuade intellectuals from active underground activity!

A few years ago Ogurtsov was released from jail and soon afterwards* he left for the West.

[74]. Pravda, 2 January 1983.

[75]. Pravda, 23 January 231983.

[76]. The material presented in this part is based on the article by V. Treml "A Noble Experiment?" which is published in Soviet Society under Gorbachev M. Friedberg and H. Isham eds. (Armonk, NY: M.E.Sharpe, 1987).

[77]. V. Demin, "Logika nasiliia-logika degradatsii," Sobriety and Culture, 1986, 3: 52-54.

[78]. O.Trubachev, "Slaviane. Iazyk i istoriia," Pravda, 28 March 1987.

[79]. In 1828, Pushkin wrote the epic poem "Poltava" in which he condemned Mazepa as a traitor to Russia, although Mazepa was trying to win independence for the Ukraine from Russian occupation. In his poem "The Bronze Horseman," written in 1833 Pushkin praised Petersburg (a city which, by the way, was built at the cost of the lives of tens of thousands of peasant serfs) as a fulcrum for the expansion towards the West. Another poem, written by the great Polish poet, Adam Mitskevich, also dedicated to Petersburg, stands in stark contrast to Pushkin's.

Thus, Pushkin's liberalism blended perfectly with his imperial views. This phenomenon is extremely important for Russia. Subsequently, it can be seen in a very stark form at the governmental level. I am referring to the Russian tsar Alexandr II who is famous as the tsar-liberator. He abolished serfdom in Russia and implemented, in 1863, the very important liberal reform of introducing in Russia a system of due process of law and trial by jury, yet in the same year he very cruelly crushed the Polish uprising, and in the years that followed he very actively expanded the Russian empire.

In passing I would like to note that once, when I was still in the U.S.S.R., while I was having a conversation with a russophile who was tirelessly praising Stalin for his contribution to the development of Russia, I pointed out to him that by 1938 Stalin had wiped out the creme de la creme of the Russian nation. I got the following answer from him: "But in 1937 Stalin celebrated the hundredth anniversary of the death of the great Russian poet Pushkin." And that truly was the case!

[80]. A more detailed history and description of the activities of Pamiat can be found in the article entitled "Eshche raz o 'Pamiati,'" which was sent out of the country by an anonymous Moscow author and published in Novoe Russkoe Slovo on 13,14, and 15 1987.

A detailed description of Pamiat's activities is presented in English in a brochure entitled Pamiat: Hatred under Glasnost. (New York: The Anti-Defamation Leage of B'nai B'rith, 1989).

20. S. Reznik, "Kaganovich Syndrom," Word 3-4 (1988): 119-32.

[82]. It is interesting to note that in my article devoted to Gorbachev's politics in the collection "Vnytrennie protivorechiia," which I submitted for publication in May 1987, I mentioned the society Pamiat as a sort of curiosity. I based this on information that I received from the letter of a prominent Soviet humanities scholar to his friend in Israel: I was not familiar at the time with any published information on Pamiat. Little more than four months after I wrote that article, in the central Soviet and foreign press there appeared ten or more articles describing the activities of "Pamiat." Such a constant growth of information about this russophile society and the polarization of opinions around it in the official Soviet press and on television says a great deal about the growing role of russophile ideas in Soviet society.

[83]. This description of the "Liubers" is based on V. Iakovlev's "Kontora 'Liuberov,'" Ogonek, 1987, no 5: 20-21.

[84]. Iu. Kublanovskij, "Budushchee Rossii sviazano s khristianstvom," Strana i mir, 1(37), (1987): 48.

[85]. A. Velikanova, "Bogatyr' na rasput'e," Strana i mir, 1(37) (1987): 38.

[86]. Nedelya, 1989, 21.

[87].This paragraph is based primarily on a thought expressed by V. Shiapentokh in his article entitled "Good-by, to an Old Soviet Dream: Catching Up with the West," Christian Science Monitor, 8 April 1986.

The ideas I express in the text are also very similar to those of R. Kaiser, "The Soviet Pretense," Foreign Affairs, Winter 1986-1987: 236-51.

[88]. F. Lewis, "Moscow Still Believes," The New York Times, 10 April 1987.

[89]. P. Vail', A. Genis, "Fedot, da ne tot," Strana i mir, 1(37) (1987): 37.

[90]. N. I. Tetenev, the editor of the journal Russkoe samosoznanie, which is published monthly in the United States, is an example of an extreme manifestation of such tendencies. In just a few years, Tetenev ran the gamut from a dissident who participated in the struggle for human rights in the Soviet Union, to an inveterate Russian chauvinist and anti-Semite. For further details, see: Vremya i my, 1986, no 93: 216-27.

1. Y. Gilboa, The Black Years of Soviet Jewry, (New York: Little Brown and Company, 1971).

2. This correspondence, along with letters from the U.S.S.R. commenting on the correspondence, are published in Strana i mir, 1986, no.12.

3. N.lukhneva, "Aktual'nie voprosy mezhnatsional'nykh otnoshenij (ob usilenii agressivno-natsionalisticheskikh i antisemitskikh nastroenij v sovremennom russkom obshchestve," Interraduga 11 (1988):86-92.

4. I happened to know a man close to Khrushchev working in the central committee of the Communist Party of the Soviet Union. He related a conversation he had with one of Khrushchev's aids. The man I knew tried to convince the aid to hire a few smart Jews in the Central Committee apparatus, arguing that they are needed for the cause. Khrushchev's aid responded:"Are you crazy? No sooner will we take one Jew, he will bring others along, turn this place into a synagogue, and throw both you and me out."

5. Gen. 46:34.

6. Interesting in this connection is the following statement by the outstanding English Economist John Maynard Keynes:"The ideas of both economist and political philosopher, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interest is vastly exaggerated compared with the gradual encroachment of ideas. Not, indeed, immediately, but after a certain interval, for in the field of economic and political philosophy there are not many who are influenced by new theories after they are twenty-five or thirty years of age, so that the ideas which civil servants and politicians and even agitators apply to current events are not likely to be the newest. But, soon or late, it is ideas, not vested interests, which are dangerous for good and evil." The General Theory of Employment, Interests, and Money (New York: Harcourt Brace, 1936).

7. Quoted from the newspaper New Russian World, 6 January 1988.

8. Gen. 1:26.

9. In my article, "Plan, Market, and Management", Acta Slavica Iaponica 2 (1984):1-24, I gave a number of socioeconomic analogies arising from the contract between an omnipotent God and man. These analogies explore the possibility of introducing contracts between the ministries and the subordinated plants within the framework of a centralized economy such as the Soviet economy. In that article I wrote that such contracts are impossible in the Soviet Union. The God of the Old Testament concludes a contract man because He, God, is in competition with other gods and seeks to win followers with the help of the contract. In the U.S.S.R., on the other hand, the omnipotent government is above all competition.

At the present time, this point of view seems to me to be somewhat of a simplification. It seems there are two things at the foundation of this contract between God and man: on the one hand, it is God's admission of his own imperfections, and on the other it is the greatness of man and the fact that he is in principal comparable to God. This factor of competing among gods could play a role in the contract between God and man, but not a decisive one. Extending the religious analogy to economics, it would be proper to speak of the contracts between large corporations and small outsiders. It is the realization on the part of large corporation of their weaknesses when it comes to innovations that leads them even to finance some small outside firms exploring new avenues of technological development.

10^{. Gen. 32:24-32.}

11^{. Gen. 32:28.}

12^{. Gen. 32:30.}

13^{. Gen. 3:22-23.}

14^{. Num. 14:11-20.}

15^{. Deut. 17:14-20}

16^{. I am very grateful to Mikhail M. Berman for
discussing with me his methodological ideas regarding the analysis of human
behavior based on combinatorics of man's priorities. Naturally, he bears no
responsibility for conclusions made here in the application of his methodology
to the problem in question.}

17^{. C. Lumsden and E. Wilson, Genes, Mind, and
Culture (Cambridge Mass.:Harvard University Press, 1981). Relative to
genetic characteristics of the Jewish race, the reader is referred to the
rather provocative appendix "The Formation and Transmission of Jewish
'Differential' Characteristics from the Viewpoint of Contemporary Biology"
in the book by L. Poliakov, The History of Anti-Semitism. (}New York: Schoken Books, 1965).

18.This approach to the manifold is manifested in the Western pluralistic political system. Each party elaborates its own unique program for the country as a whole. Since each specific situation calls for one of these programs to be chosen, a mechanism of selection comes into play (elections, a parliament that assigns priorities to each program). In no way does this mechanism of selection lead to the dispersion of the manifold. On the contrary, preservation and expansion of diversity is fundamental to Western political systems.

19^{. I once though about a seemingly simple but
paradoxical fact that white blond people whose skin reflects the sun inhabit
more northern regions where the sunlight is in short supply, while black people
whose skin absorbs the sun's rays inhabit southern regions where there is
plenty of flaming rays. It turns out that black skin is adapted to the sun's
burning rays because it contains special pigments that protect the skin against
overexposure to ultraviolet rays. White skin lacks the these pigments. All
other conditions being equal, with an increase in the amount of ultraviolet
radiation, people with black skin (I do not know about people with red or
yellow skin) have better survival chances than people with white skin.}

20^{. Interesting in this connection is the role of
the Diaspora for Russian and Ukrainian people. Russia is a country of vast
territory and large population; its Diaspora is relatively insignificant.
Russians that have left Russia assimilate fairly quickly and absorb the culture
of the host country. Still, the presence of the first and second generation is
important.} For instance, Russian refugees in the west after the First and Second World Wars were largely responsible for preserving the great works of Russian literature. It was in the west that the Russian emigrants published more or less complete works of Akhmatova, Gumilev, and Mandelstam, as well as others. With Ukrainians the situation is very different. The Ukraine became part of the Russian empire and the danger of its russification lurks great. Here, the role of the Ukrainians Diaspora in preserving the Ukrainian culture is immeasurable. We see how much Ukrainians of the Diaspora strive to maintain their ethnic culture and, in spite of strong assimilation tendencies, they have largely succeeded.

21^{. Gen. 21:34.}

22^{. Gen. 26:13-17.}

23^{. Gen. 47:5-6.}

24^{. Exod. 1:7-10.}

25^{. Exod. 1:22.}

26^{. Gen. 15:16.}

27^{. It is not an accident that Simon Kuznets, in
his book Modern Economic Growth (New Haven: Yale University Press,
1966), excluded the Arab countries from consideration. While many of these
countries have a high GNP, their development hinges on a single product and,
therefore does not satisfy the requirements of modern economic growth.}

28^{. I want to note in passing that the State of
Israel, with its amplified dynamism, will represent an unpleasant model for its
neighbors no matter who these neighbors happen to be.}

^{29. I cannot vouch for
this rumor, but I heard that one Jewish millionaire has even set aside money
for a foundation, located in New York, to stimulate research on the possibility
of settling Jews in space.}

30^{. Narod i Zemlia, 1984, no. 1:226.}

31^{. Exod. 13:17-18.}

32^{. Num. 14:29-34.}

33^{. See Gen. 12:10-20 20:1-18.}

34^{. Here I want to note that the Soviet Union is
a totalitarian country, meaning that all capital goods, natural resources, and
people belong to the state.}

35^{. I cannot attest to the exactness of the fact,
but unofficial instruction regarding emigration from the Soviet Union states
that Soviet citizenship is revoked when a person emigrates to such countries as
Israel or the Republic of South Africa}

[91]. A. Yanov, Russian Ideas and the Year 2000 (New York: Liberty Publishers, 1988).

[92]. A. Solzhenitsyn, Letter to the Leaders of the Soviet Union (Paris: Imka Press, 1974), 49.

[93]. K. Aksakov, The Slavophiles Theory of Government (St. Petersburg:1898), 41.

[94]. Yanov, 215.

[95]. Ibid., 222; 243.

[96]. Ibid., 238; 239; 261

[97]. Ibid., 264---265

[98]. Ibid., 234.

[99]. Ibid., 233.

[100]. Ibid., 221.

[101]. Ibid., 213-14.

[102]. This approach has been deeply elaborated by J. Gharajedaghi, Toward a System Theory of Organization (Seaside: Intersystems Publ.,1984).

[103]. For example, the chief engineer of a Moscow sewing factory told me of a woman from this factory who, in Stalin's time, was sentenced to five years in a labor camp for stealing two hundred meters of thread; guards at the door found a partly used spindle of thread in her coat. Solzhenitsyn cites an analogous example in his Gulag Archipelago.

[104]. S.Ross, Introduction to Stochastic Dynamic Programming (New York:Academic Press, 1983).

[105]. From this standpoint it is interesting to look at the book Mission Alsos by Goldsmith. This book is based on observations made by the author as the head of a special group of American scholars working during World War II. The goal of the group was to investigate the scientific potential of Germany and especially its advances in the production of the atomic bomb. Goldsmith thinks that the major reasons for the failure of Germany to produce an atomic bomb was that the wrong solution to this problem had been advanced by the famous physicist W. Heisenberg. Other physicists had seen different ways to solve the problems. But Heisenberg was a "little führer" in physics, and his authority suppressed all others.

[106]. As Khrushchev wrote in his memoirs, the Politburo seriously discussed allowing the famous Soviet ballerina Majya Plisetskaya and piano player Svyatoslav Rikhter to travel abroad.

[107]. J. Kornai, Economics of Shortage (New York:North-Holland Publ.,1980).

[108]. The term deconcentration was suggested by M. Kaiser, The Soviet Quest for Economic Rationality (Rotterdam: University Press, 1971).

[109]. I want to note that ignorance of diversity also gives rise to radical views concerning the concept of development. Instead of limiting the existing mechanisms - of finding a proper role for them, what is called for is their total replacement by a unified mechanism.

[110]. N. Ogarkov, "On guard of Peacetime Efforts," Kommunist, 10 (1981): 89-90.

It is curious to note that after her return from the U.S.S.R. to the US, Svetlana Allilueva, in an interview with a correspondent from an American newspaper remarked that one of the chief problems in the U.S.S.R. is the conflict between enthusiastic and professionally educated military leaders and the inflexible bureaucratic party apparatus.

Isn't it frightening that during the creation of defense committees, party bigwigs making up the committee along with military personnel deprive the first of power, the reason for removing Marshal Ogarkov from his posts?

[111]. V.Y. Altaev, A.B. Pomansky, G.Y. Trofimov, "Sovremennie napravlenia teorii ekonomicheskogo razvitia," Ekonomika i matematicheskie metody, 1 (1989): 32-45.

[112]. Recall that Jules Mocque called attention to the variety of forms of property in Israel as the most important particular characteristic of that country's development.

1. Narodnoe khoziajstvo,1987, 435.

2. A.G. Aganbegian and V.F. Maier, Wages in the USSR (Moscow: Gosplanizdat,1959),149.

3. Efim L. Manevich's doctoral dissertation very thoroughly analyzed this situation in the organization of the wage system and the system of norms. The results were partially published in his work Wages and Its Forms in the Soviet Industry ( Zarabotnaia plata i ee form y promyshlennosti SSSR ) ( Moscow: Gosplanizdat, 1951).

4. I know this from personal experience at the Frezer factory in Moscow during those years.

5. Particular, prices fell for liquor, especially for vodka. For example, in the 1949 decrease in prices in 1949, prices for vodka fell by 28 percent, for liqueurs by 25 percent, and for grape and berry wine and for cognac by 15 percent. Pravda, 1 March 1949.

6. This is how the situation is described in "scientific terms" in a work by two well-known Soviet economists: "The Soviet State in the postwar period conducted a policy of reducing retail prices. Therefore, factors lying on the side of money and which are related to a change in the scale of prices no longer determined the movement of monetary wages. Factors lying on the side of labor which flow directly from the economic nature of socialism rose to the forefront." Aganbegian and Maier,86.

7 Aganbegian and Maier, 220-21.

8. It is well known that there were even plans to eliminate the taxes on wages entirely. We will not go into a detailed review here of the reasons for these proposals. Rather, we will note only that these plans display economic illiteracy, since taxes on wages play an important role in coordinating wages, as the price of labor, with the quantity of goods that the worker will consume. For more on this, see my work, written jointly with S.M. Movshovich and Iu. V. Ovsienko, Basic Economics and Optimality (Seaside: Intersystems Publications); the Russian version of this book was issued under the title Growth and Optimality. (Moscow: Nauka, 1972).

9. Official and unofficial prices rose for the most important "ideological" product: liquor. This increase also was directed in the struggle against "fire water" (zelenyi zmij), the influence of which rose to threatening heights. If we recall the reduction of prices for wine and liquor prior to 1953, the perniciousness of Stalin's methods of management becomes even more obvious, and we see the far-ranging negative consequences of Stalin's methods, which corrupted the people.

10. Leonid Brezhnev's remarks in the Report of the Central Committee of the CPSU to the Twenty-Fourth Congress of the Communist Party of the Soviet Union confirmed the available facts in regard to the artificial increase of prices: "The great and complex task of satisfying the market with articles of mass consumption must be resolved under a stable level of state retail prices and, to the extent to which the essential economic preconditions have been created, with reduced prices for individual goods. It follows that we should decisively suppress an excessive increase in prices, intensify control over the setting of retail prices and rates for services, and harshly call to account those directors of enterprises and of economic organs who attempt to circumvent the state-established order" (Kommunist, 1971, no. 5:72).

11. The currency reevaluation led to an artificial redistribution of income for various groups within the population. Thus, expenses rose sharply in the service sector, since many services are rendered for tips. (If you don't give a tip, you can be deprived of services.) If a tenant ordered a repairman from the housing administration for a small repair before 1960, for example, he would give the repairman a ruble. Soon after 1960, he would give the repairman the same ruble tip, even though the ruble was now worth ten times its earlier value. The same story occurred at the open (kolkhoz) market, where vegetables were sold for the same price in kopecks after 1960 as they had been before 1960.

12. This is defined to a large extent by the fact that military considerations in the radio industry dictate the increase of television production. In peacetime, however, the military capacities cannot be applied exclusively for military purposes and for the production of producer goods which are used for the output of producer goods.

13. Thus, since 15 April 1974, a clearance sale of several types of clothes, footwear, and fancy goods has been in progress, with prices lowered to roughly half their former level. The sale has reached a total sum of one billion rubles. Pravda, 17 April 1974.

1. K.Simes, U.S.S.R.: The Corrupt Society (New York: Simon and Shuster, 1982).

2. G.Grossman, "Notes on Illegal Private Economy and Corruption," U.S. Congress, Joint Economic Committee The Soviet Economy in a Time of Change (Washington: US GPO, 1979), 834-55; R. Ericson, The "Second Economy" as a Resource Allocation Mechanism under Central Planning (Cambridge, Mass: Harvard Institute of Economic Research, Harvard University, Discussion Paper 782, August 1980); J.M. Montias, and S. Rose Ackerman, Corruption in a Soviet-Type Economy: Theoretical Considerations, (Paper presented at the Conference "The Second Economy of the U.S.S.R." sponsored by Kennan Institute for Advanced Russian Studies with National Council on Soviet and East European Research, 24-25 January 1980).

3. Russel Ackoff tells the following story. Once he came to an American hotel with a wealthy person who was known by the bellboys to be a generous tipper. The moment this man stepped into the vestibule, several bellboys rushed toward him. At the same time they completely neglected the other guests in the hotel from whom they did not expect large tips.

4. A.Katsenelinboigen, Studies in Soviet Economic Planning (White Plains, New York: M. Sharp Publications, 1978).

5. J.Kornai, Anti-Equilibrium (New York: North Holland, 1972).

6. M.Matthews, "Top Incomes in the USSR," Economic Aspects of Life in the U.S.S.R. (Brussels: NATO Directorate of Economic Affairs, 1975) 131-54.

7. A.Sakharov, "Progress, Coexistence, and Intellectual Freedom", in H. Salisbury, ed., Sakharov Speaks (New York: Vintage Books, 1968) 102-3.

8. A.Shtromas, Political Change and Social Development: The Case of the Soviet Union, Europaisches Forum, band 1 (Frankfurt: Peter Lang, 1981).

1. Folk sayings like "The law is a shaft: where it's aimed it goes," reveal the general attitude of the people toward the law. The behavior of the defendant in a play by Sukhovo-Kobylin is another example. When the judge , placing his hand on a pile of books - the law code - asks the defendant: "How shall I judge you: according to conscience or according to the law?" the defendant replies: "According to conscience, sir, according to conscience."

2. Certain generalizations and facts about semilegal and illegal markets can be found in the text of the report by D. Simes, "The Soviet Parallel Market," Economic Aspects of Life in the USSR, 91-100.

3. The following is the definition of profiteering in the RSFSR Criminal Code (Moscow: Iuridicheskaia literatura Publishers, 1971): "Profiteering is the buying and reselling of commodities or other items for profit" (p. 59). The problem of creating a flexible mechanism for distributing the means of production in a planned system is considerably more complex, since for many commodities the number of consumers is not large enough to form a convex set.

4. As follows from the works by R. Auman, ("Existence of Equilibria in Markets with a Continuum of Trades," Econometrica, (34) [7] 1966, and V. Arkin, ("An Infinite-Dimensional Analog of Non-Convex Programming Problems," Cybernetics, 1967, no. 2-3), given a continual set of participants and a certain number of commodities, it is possible to find the optimal equilibrium state of a system by means of prices and incomes constraining the participants, even if the objective functions of the participants are nonconvex.

5. Other less important sources of products on the collective farm market are fruits and berries from garden plots allotted to workers and employees of especially important enterprises and institutions in large cities.

6. Narodnoe Khoziajstvo U.S.S.R. v 1987: p.411.

7. In 1956 the practice of evicting workers from apartments received from an enterprise in the event a worker quit his job was discontinued. Manpower turnover is quite high in the U.S.S.R. at the present time, and it is quite difficult to control with the available means. For this reason, a number of enterprise managers have raised the question of returning to Stalinist methods of economic management that would enable them to hold on to manpower, particularly by means of eviction from houses belonging to the enterprise. As far as I know, in the late 1960s the Volgograd Tractor Plant attempted to return to the eviction practices that existed prior to 1956. But the U.S.S.R. Procurance halted the eviction of workers who quit their jobs at the enterprise.

8. As shown by events in the 1960s in the West, as well as in Yugoslavia and Poland, students are the most dynamic force in the contemporary radical movements. Soviet leaders were frightened by the wave of the student movement that had already directly approached the Soviet frontiers. The introduction of courses (rabfaki ) for the less well-educated (worker) youth entering higher educational institutions and the privileges conferred on them were designed to make these young people obedient defenders of the regime who would paralyze the actions of their better-educated and more independent classmates. A child from an intellectual family is no longer grateful to the Party and the government for his opportunity to study: he accepts it as his right and sometimes even as an unpleasant duty, since his parents want to see him no less well educated than they are.

What I have said suggests that working youth admitted under preferential conditions to higher educational institutions are distributed among all groups. Thus in every group a nucleus is created that opposes student activism. Official propaganda attempts to explain the privileges conferred on working youth by saying that from the standpoint of social justice, the social composition of the student body should reflect the social structure of the population, that workers cannot afford to provide better knowledge for their children through private lessons, and thus naturally, bright working youth cannot compete with the less able but "coached" children of intellectuals, and so on. Even though they seem humane at first glance, all these arguments are demagogic. If the Soviet leaders were actually concerned about humane interests, they would create better educational conditions for school children, especially for bright school children from the facilities of low-income workers and collective farmers.

Note, by the way, that the average wage of intellectuals in the U.S.S.R. in recent years has been almost equal to the wage of workers and collective farmers, and that families in the various social groups now have the same number of children. Love of alcohol, indifference to the education of the children, the desire to see their children more affluent - these are the values that are dominant in workers' and peasants' families and that make it difficult to draw children from workers' families into higher educational institutions.

Finally, if the Soviet leaders were concerned with humane interests, they would create special groups at higher educational institutions for less prepared worker and peasant students where they would gradually acquire the knowledge they need. However, the penetration of these students into the general student body lowers the level of preparation. Attempts by individual professors to protest the positive assessment of these students' skills, since it poses the threat that unqualified specialists will be graduated from higher educational institutions, have ended in the expulsion of these professors from the higher schools. The president of a higher educational institution knows that, if he gives a negative certification to a student from a worker's faculty, it will be regarded as an antiparty act, since it would entail weakening the authorities' stability in the immediate future. And it is unimportant whether the quality of specialists deteriorates, since this decline will surface only in the more distant future, when the present leadership will no longer exist.

9. In my view, the operation of the subway system in the U.S.S.R. is an example of what a state with a strictly centralized economy can achieve. Yet it should be borne in mind that such irreproachable operation of the subway system (if one does not count the crowds at rush hour and the deafening noise on some sections) has been attained under unusual conditions. The subway system functions as a type of transport not connected with other types of transport, and the number of disruptive factors in it has been reduced to a minimum: there are no intersections, there is no influence from the surrounding atmosphere (temperature, precipitation, etc.). A strictly centralized control system experiences great difficulty in similar routine processes where it is necessary to coordinate different types of production processes operating in parallel and to eliminate the disturbances that arise. It goes without saying, that such systems cannot organize effective production where there are nonroutine processes and where a special, flexible system of control is required.

10. During his tenure as chief of state, Khrushchev sharply reduced the number of passenger automobiles and with them the number of drivers at the disposal of the heads of enterprises and institutions, thereby evoking the wrath of the bureaucratic elite in no small measure. One of the first acts of the leaders who replaced Khrushchev was to restore these vehicles. In recent years the Soviet leaders have attempted to decrease the size of this group of drivers by requiring that the managers themselves learn to drive the cars the state is prepared to assign to them.

11. In Stalin's day one Mel'nikov (Mil'man), toiling in the Union of Writers, expressed the view that it would be a good idea to write a book about the best people in the U.S.S.R. who are already living in the communist way. Stalin, of course, constantly exploited the idea that the victory of communism was close at hand. (Recall, for example, Babaevsky's novel The Cavalier of the Gold Star.) Therefore the proposed book was right in the vein of official propaganda. Upon securing the mandate of the Union of Writers and a black ZIM limousine, Mel'nikov set out for the bountiful southern regions (communism is evidently closer to the south). There he was wined and dined for months by the chairmen of the rich Kuban collective farms who very much wanted to see themselves portrayed as representatives of the communist tomorrow.

Among other things Mel'nikov undertook to help these chairmen get an automobile, which in those days was even harder than now. He faked telephone calls directly from the office of a collective farm chairman to a highly placed official in the Ministry of Trade in Moscow and explained to him how important it was to allocate a car for this chairman. Everything the Moscow writer did instilled trust in him, and people eagerly gave him money so that he would purchase the car upon his return to Moscow. Mel'nikov performed similar machinations with promises to deliver a car in the Donbass, where rather well-to-do groups of miners, who were to become heroes of his book, eagerly gave him their money to buy cars.

After returning to Moscow, Mel'nikov continued to pull the wool over the eyes of the trusting southerners with his promises to ship their cars. In the mid-1950s Donetsk miners meeting with Rudenko, their deputy to the U.S.S.R. Supreme Soviet and chief procurator of the USSR, told him the story about the automobiles. Following this, Mel'nikov was convicted.

12. V. Treml, "A Noble Experiment", in. M.Friedberg and H.Isham, eds., Soviet Society Under Gorbachev, 1987.

13. I was told about the exposure of a group of thieves stealing gold in the gold fields and selling it to wealthy people in Armenia. This group hired itself out to work in the gold fields, worked very intensively, overfulfilled its plan, and won the title of communist labor brigade. Under the terms of the competition for this title, the winners work without additional supervision - the administration trusts them (just as the best workers at machine-building plants are given their personal stamp). After winning the confidence of the administration in this way, the group began to systematically steal part of the gold produced.

14. As far as I know, prostitution was legal in Czechoslovakia prior to 1968, but only for foreigners from capitalist countries who were staying in Czechoslovakia for more than a month. These foreigners were issued special cards entitling them to invite girls to a certain hotel. The girls were in state service and enjoyed special privileges, including a pension at the appropriate age for their profession. The argument for providing such a service to foreigners was that they would find prostitutes anyway, and thus it was better to control the business and get foreign currency for it rather than let it take its course.

15. A member of the commission investigating prostitution in Moscow told me that in response to his comment that prostitution may make it difficult for girls to marry, one of them replied that, on the contrary, prostitution helps them be well dressed and better looking, and this could help them find a husband.

[149]. In the mid-1940s, Nikolaj A. Voznesensky, a Politburo member and the first vice-chairman of the Council of Ministers of the U.S.S.R., made a similar attempt to lay claim to the position of leader number two in economics, at the very least. But this attempt lasted only a short time. As was later made clear, he had published a "fallacious" theoretical work on the military economy of the U.S.S.R. Voznesensky had his opinions on practical questions too, and, as chairman of Gosplan, he put them into effect. Shamaj Ia. Turetsky, who worked at Gosplan for many years, told me that Voznesensky's ideal, as he confided to Turetsky in private conversation, was Catherine II. He felt that Russia should be a strictly centralized state with an enlightened monarch. Planning should embrace all sections of the national economy; everything down to the last bolt should be planned.

[150]. From time to time, prominent Soviet economists were called to the Central Committee to present their suggestions for increasing the rates of national economic growth. Yakov B. Kvasha, an economist of the older generation, once nicely captured the true significance of these meetings by saying that Soviet leaders could profit more from suggestions on how to depress growth rates in the West than on how to boost their own.

[151] .The notions expressed on the decisive role of the pragmatic side of the question for developing new trends in the science of the U.S.S.R., as well as those expressed on the ability to waive ideology to this end, can be confirmed by Mikhail T. Iovchuk's article "The Development of Socialist Ideology and Culture," published in the journal Kommunist, 15 (1971). This article is all the more interesting since it was written by the former president of the Academy of Social Sciences of the Central Committee of the CPSU, an experienced political functionary who has been through the school of hard knocks.

[152]. V. Shlapentokh, The Politics of Sociology in the Soviet Union (Boulder: Westview Press,1987).

[153]. In collective and state farms, labor wages are based on a worker's completion of a specific job. For example, a tractor driver receives wages based on the number of hectares he has plowed. As a result of this wage system, workers take no interest in increasing the net effect, for example, an increase in grain output. Thus the tractor driver, in pursuit of an increased number of plowed hectares, disregards the quality of the plowing. It is difficult to control the work of a tractor driver, but the main thing is that it is often impossible to correct the blunders he makes in his work, blunders that can spoil the results of an entire year's work by many farm workers.

The following humorous incident illustrates this. In a contest between tractor drivers, organized in the 1960s for the Exhibition of National Economic Achievements in Moscow, one of the first places went to a driver who was considered mediocre in his own collective farm. The point is that at a contest, drivers are not only supposed to plow quickly, they are also supposed to plow well. In real life, the latter requirement is often disregarded.

In a number of collective farms, there were enthusiasts who organized so-called autonomous teams. These teams consist of workers from various specialties, who work through a given agricultural process from beginning to end. Wages for their labor are based on the end result, for example, on the amount of grain sold to the state. Under certain circumstances, this type of labor organization, as the experience of reliable workers shows, has a significant effect: the harvest increases sharply, work productivity goes up, and costs are reduced, since the team members actually take an interest in the end result. In the mid-1960s, Ivan Khudenko organized the work of the entire state farm Akchi in Kazakhstan on the basis of autonomous teams, and achieved great results.

At the same time, the team system gives rise to complex sociopolitical problems. This system weakens the need for directives from higher organs. There is no need to say when to harvest. Because of this, team labor organization conflicts with the interests of the collective farm bureaucracy, which has become firmly entrenched during the past two decades. Teams also weaken the role of rural district party committees, whose basic role is also to give directives as to when to sow and when to harvest.

It is no accident that in those months when the party organizations of Kazakhstan, with the agreement and approval of party bosses from the center, liquidated the unique State farm Akchi, an article appeared in Pravda. With exaltation, its author described one day in the life of the secretary of the rural district party committee. Starting early in the morning, the secretary called up the collective farm manager and asked him whether he had sown a certain area with winter crops. The manager thanked the secretary for his call, since he actually had forgotten to sow this area. The entire day, in one way or another, the secretary of the district committee reminded, pointed out, and drew attention to the necessity of performing this or that task. He truly was the zealous manager of the district.

[154]. A great service rendered by Ivan G. Petrovsky to Moscow University was that he personally supervised the appointment of professors working in new areas of science. Petrovsky virtually delegated other academic concerns to his deputies and the University's party organization. But, respecting the appointment of "innovators," he was the sole master. Incidentally, Petrovsky was the last nonparty member to hold such an exalted position.

[155]. Sometimes these institutes are called laboratories. This oversimplifies the bureaucratic procedure involved in the formation of these research institutes. To clarify any misconception, it should be noted that directors of laboratories have fewer rights than those of institutes. But the establishment of a laboratory presumes its eventual transformation into an institute with independent rights.

[156] . In the late 1960s, a representative of the scholarly community tried to explain to a leader of Gosplan the idea of optimal planning and the possibility of a simultaneous formation of the plan and prices. Despite the fact that this representative was a "semi-scholar," he was not able to explain these ideas to the Gosplan leader. The latter informed his interlocutor that had he not formerly known him to have common sense, he would have considered him just as insane as the scholars who elaborated the theory of optimal planning. It is possible to understand the reaction of the Gosplan leader. As a man with common sense, he knew that he was responsible for compiling plans in physical terms. The formation of prices based on past expenditures is done by a special organization, the State Committee for Prices. Therefore, how can prices be supplied together with the plan under these circumstances?

[157]. As far as I know, the first consultant position was granted in the Department for Relations with the Socialist Countries of the Party Central Committee when it was headed by Yury Andropov. Fedor M. Burlatsky was the first chairman of the consulting group of this section. Iury Arbatov then took his place. Both Burlatsky and Arbatov belong to the part of the new generation with more open minds on many complicated problems and some interest in scholarly research.

[158]. I am not sure how feasible this proposal is under current Soviet conditions. The trouble is that Soviet agriculture suffers most acutely from a lack of good harvesting equipment, trucks, roads and storage. In other words, the logistical system may not be ready to handle a sudden one-time upsurge in production, even if the farmers should respond positively to the lure of hard currency. With imported grain, the situation is very different: the deliveries are spread pretty evenly over time, and end up in ports linked by a road network with the storage facilities. The proposal of Schmelev and Chernichenko also has a built-in potential for multiple abuses: one farm, for example, may pass part of its harvest to another farm so that the latter can overfulfill the plan.

[159]. Since the salaries of the USSR's leaders are quite low, it is difficult for them to accumulate money that might give them independence. Extra income consists rather of income in kind and perquisites (summer homes, cars, etc.), which, however, remain the property of the state. One can assume that the higher the position a person occupies in the hierarchy, the greater role these material payments play in his income. When a person loses his position, he loses these material benefits. (When he retires he loses only part of the benefits.) One of the reasons for the mass corruption found in the leadership seems to be linked precisely with their desire to use their position to amass goods in case they lose their positions in the future. One can assume that the higher the position occupied in the hierarchy, the greater the role of bribes to supplement income.

[160]. Sometimes matters reach a ludicrous stage when these people do not have time to defend their dissertation. One incident making the rounds in Moscow relates to how Mitrofanov had his dissertation defended. (He was one of the secretaries of the Leningrad Province Communist party.) He submitted his dissertation for the degree of doctor of economic sciences to the Moscow Engineering-Economics Institute. However, he did not show up for the defense of his dissertation; instead, he was represented by his assistant. The chairman of the scholarly council announced the candidate's absence to those who assumed and explained that at that given moment the candidate was occupied with executing an important state assignment. The dissertation was defended by the assistant and Mitrofanov received the degree.

[161]. It can be assumed that the circumstances noted in the text exert a major influence on the struggle between party organs at various hierarchical levels for the right to influence the activities of scientific institutes and the direction of their scientific work. For example, the Moscow City Committee of the party tried to dispute the right of the party's Central Committee to influence scientific institutes situated in Moscow. But judging by the fact that the organizer of this struggle, Yagodkin, the secretary of the party's Moscow City Committee, was not reelected to the membership of the Central Committee at the last (Twenty-fifth) Congress, the Central Committee scored a victory in this struggle.

[162]. An analogous situation was to be observed in Soviet biology. It is known that for a long time biology was monopolized by Trofim D. Lysenko, who was the archenemy of geneticists. After a long battle, Lysenko was overthrown. Lysenko's enemy, the well-known geneticist Academician Nikolaj P. Dubinin, triumphed. In the genetics institute he headed, Dubinin quickly began to introduce a despotic regime, suppressing new ideas. Moreover, at elections to the Academy of Sciences of the U.S.S.R., Lysenko and Dubinin often formed a block against scientists who were not in agreement with their views.

[163]. Thus, it seems that in the late 60s, Rudakov, secretary of the Central Committee of the CPSU for heavy industry, was dismissed from the Presidium of the Council of Ministers. This was a signal that the CC CPSU would not actively interfere in the drawing up of the national economic plan.

[164]. There were persistent rumors that Poliansky, a former Politburo member, supported the publication of Shevtsov's book.

[165]. In addition, one must suppose that, in the beginning, Brezhnev did not possess his own power apparatus for carrying out his policy. In the first years of his administration, Brezhnev's policy consisted of maneuvering between various factions and settling the conflicts arising among them. In the early 1970s, when Brezhnev decided to strengthen his role and to announce a more independent policy, he obviously stumbled upon the difficulties linked with his lack of a personal power apparatus: the apparatus of the Central Committee is, to a great degree, divided between two prominent figures, Andrej P. Kirilenko and Mikhail A. Suslov. Two directors of academic institutions, Academicians Nikolaj N. Inozemtsev and Iury A. Arbatov, enlisted by Brezhnev, are exceeding their role as counselors. This also testifies to the fact that Brezhnev's own power apparatus was weak.

1. I somehow managed to propose the following criterion for measuring the social significance of an institute: the number of letters that a given institute receives from the insane.

2. In this connection, it is interesting to mention the contacts that have been observed between two warring organizations such as Gosplan and CEMI of the Academy of Sciences.

In the early 1960s a series of resolutions from the Soviet government greatly promoted the development of the methods of optimal planning. According to one of these resolutions, Gosplan created a special department for the application of mathematical methods and computers in the management of the Soviet economy. Vsevolod F. Pugachev, who formerly served in CEMI, worked as the deputy of this department in 1964. Until this time, Pugachev had several general ideas for organizing the economy on the basis of optimal planning and wanted to carry them out. He was successful in obtaining Gosplan's agreement to develop elaborations of branch optimal plans. To accomplish this he also obtained a decision to create the necessary groups in the branch research institutes.

However, due to the opposition to new ideas and to "impulsive intuition" exhibited by the apparatus of Gosplan, Pugachev left Gosplan and returned to CEMI. He continued as the head of a laboratory and of the department that worked on problems of establishing a hierarchical system of optimal planning.

Victor V. Kossov, who worked at CEMI, succeeded Pugachev at Gosplan. The department that applied mathematical methods and computers to the management of the economy was not productive because of opposition in other departments of Gosplan, and opposition due to the professional inadequacies of many specialists working at Gosplan.

In the late sixties the death of the chief of this department, Iakov A. Oblomsky, gave the leadership of Gosplan the opportunity to terminate this department. However, Gosplan still found it necessary to preserve the appearance of supporting new methods of planning. Such was the spirit of the times. A sub-department in the Gosplan department on long-range planning, which was to prepare summaries, was established, with responsibility for the same functions as the disbanded department, viz. the application of mathematical methods and computers to the management of the economy. Kossov was appointed deputy chief of this long-range planning department of Gosplan. He was accountable for the work of the new subdepartment.

Kossov is known as a specialist in the field of input-output tables. For a long time he was not favorably inclined toward the idea of optimal planning, primarily because he was unfamiliar with this approach. But Kossov and Pugachev are also known for their pragmatic views and are considered by some to be unscrupulous in pursuing their careers. I think that their inclination toward using methods of optimal planning was motivated by the possibility of receiving greater personal benefit, and it may have been further strengthened by the support of optimal planning, as I already mentioned, by several extremely conservative members of the Politburo.

The evidence for the close collaboration between Kossov and Pugachev is primarily their joint article "The Multi-Stage System of Optimizing Calculations of Long-Range Economic Plans," published in the journal Planned Economy (1974, no. 10).

Further, V. Kossov and F. Kotov published in Planned Economy (1976, no. 4) a review of The System of Optimal Planning of the Economy, written by two CEMI collaborators, Victor I.Danilov-Danilyan and Mikhail G. Zavelsky. This book, as well as other similar work published by CEMI researchers, was subjected to severe criticism in this review. Only Pugachev's work was excepted because the reviewers considered that it is "utilized in Gosplan for calculating the long-range plan."

3. In the early 1970s, Mikhail Solomentsev, an alternate member of the Politburo, visited CEMI. This was an unusual visit, since as a rule leaders of the institute go to the Central Committee and not vice versa. In speaking with leaders of the institute, Solomentsev discussed specifically the possibility that the institute could construct a five-year plan for the development of the national economy parallel to the plan prepared by Gosplan. While there many have been many reasons why Solomentsev needed a parallel plan, one thing is clear: it is doubtful that Solomentsev was favorably disposed toward Gosplan.

4. Thus, for example, specialists in optimal planning were drafted to substantiate the necessity of building a factory for the production of cars such as the famous Zhiguli (Fiat). Since the decision was predetermined, specialists merely had to "substantiate" the rationality of the decision. Still, this decision was not easy. For example, there was a dilemma over whether to build one large factory in one place or to build several small factories in several towns, where labor, energy and housing funds were available.

5. B.S. Mitaygin, ed., Mathematical Economics and Functional Analysis (Moscow: Nauka, 1975); E.B. Dynkin and A.A. Iushkevich, Controlled Markovian Processes and Their Application. Moscow: Nauka, 1975; Arkin,V.A. ed., Probabilistic Problems in Management (Moscow:Nauka,1977). V.A. Arkin, ed. Mathematical Modelling of Control Processes Under Uncertainty (Moscow: CEMI of the Academy of Sciences of the USSR, 1987); V.A. Arkin, ed. Probabilities and Mathematical Economics (Moscow: CEMI, 1988); V.A. Arkin, ed. Elaborations in Stochastic Optimization and Mathematical Economics (Moscow: CEMI, 1988).

6. A. Katsenelinboigen, "Mathematical Economics in the Soviet Union: A Reflection On the 25th Anniversary of L.V. Kantorovich's book: The Best Use of Economic Resources," Acta Slavica Iaponica 4 (1986): 88-103.

7. Problems of Optimal Performance of a Socialist Economy (Moscow: Nauka, 1972); Introduction to the Theory and Methodology of Optimal Performance of a Socialist Economy (Moscow: Nauka 1983).

8. B.N. Mikhalevsky, A System of Models for Mid-term National Planning (Moscow: Nauka, 1972); A.I. Anchishkin, Forecasting the Growth of the Socialist Economy (Moscow: Economika, 1973).

9. Iu. Belik, "Scientific Forecasts in Strategic Planning," Planned Economy. 1973, no. 5, pp. 24-35.

10. V.V. Novozhilov, Problems of Cost-Benefit Analysis in Optimal Planning (White Plains: International Arts and Sciences Press, 1970).

11. A.L. Lurye, Economic Analysis of the Planning Models of a Socialist Economy (Moscow: Nauka, 1973).

12. Incidentally not only an overwhelming majority of Soviet intelligentsia, but also of Soviet economists, do not understand the reason for income tax in planned economy; they perceive this as an unnecessary bureaucratic procedure.

13. K.K. Val'tukh, "Input-Output Tables and the Labor Theory of Values," Economics and Mathematical Methods, 20, (2), (1984): 319-27.

14. A. I. Katsenelinboigen, I.L. Lakhman, Iu.V. Ovsienko, Optimization and the Price Mechanism (Moscow: Nauka, 1969).

[180]. Iu. V. Sukhotin, Economic Forms of a Planned Management (Moscow: CEMI of the Academy of Sciences of the USSR, 1975); S.S. Shatalin, Performance of the Economy Under Mature Socialism (Moscow: Moscow State University Press, 1982); V.A. Volkonsky, Principles of Optimal Planning (Moscow: Economika, 1973); L.M. Dudkin, Iterative Aggregation Theory (New York: Marcell Dekker,1987); V.L. Makarov, and A.M. Rubinov, A Mathematical Theory of Economic Dynamics and Equilibrium (Moscow: Nauka, 1973); E.Iu. Faerman, A.I. Katsenelinboigen, Iu.V. Ovsienko, Methodological Problems of Optimal Planning of a Socialist Economy (Moscow: CEMI, 1966); V.F. Pugachev, Optimizing Planning (Moscow: Ekonomika, 1968); E.Iu. Faerman, Problems of Long-range Planning (Moscow: Nauka, 1971).

16. E.M. Braverman, and M.I. Levin, Nonequilibrium Models of an Economic System (Moscow: Nauka, 1981); V.M. Polterovich, "Optimal Distribution of Goods under Nonequilibrium Prices," Economics and Mathematical Methods, 16, (4), (1980).

17. N.Ia. Petrakov, Cybernetical Problems to Control an Economy (Moscow: Nauka, 1974).

18. V.N. Burkov, and A. Ia. Lerner, "The Principle of Open Control for Active Systems," Automation and Remote Control, 1970, no. 7: 1288-97.

19. V.I. Danilov-Danilian, and M.G. Zavelsky, A System of Optimal Strategic National Planning (Moscow: Nauka, 1975).

20. Iu.N. Gavriletz, Social-Economic Planning (Moscow: Ekonomika, 1974).

21. E.Z. Maiminas, ed., Problems of National Planning (Moscow: Ekonomika, 1982).

22. G.M. Khenkin, and V.M. Polterovich, "Shumpeterian Dynamics as a Nonlinear Wave Theory". Unpublisahed manuscript, 1989.

23. See reference 1.

24. Apparently, the main reason for Fedorenko's downfall was his impatience in trying to gain the position of Peter N. Fedoseev, the vice president of the academy, after the latter "luminary" turned seventy. A most skilled apparatchik in the Stalinist mold, Fedoseev had no intention of leaving his post even at such an advanced age. The proximate cause of Fedorenko's tragedy, according to persistent rumors, was his appearance at a public place in a state of excessive inebriation. We should note that though Fedorenko liked to drink, he never got drunk or lost control of his senses. But given the realities of the antidrinking campaign of the time, his very appearance at a public place in a somewhat fuddled condition sufficed to seal his fate.

25. A.I. Katsenelinboigen, S.M. Movshovich, Iu.V. Ovsienko, Basic Economics and Optimality (Seaside: Intersystems Publications, 1987).

26. Ibid.

27. N.P. Fedorenko, "The Directions of Development of Economic-Mathematical Management in Soviet Economics," Economics and Mathematical Methods. 20, (4), (1984): 18-27.

[193]. "Radical Revision Is Necessary," Economical and Organizational Problems of the Production System., 1983, no. 8:16-39.

1. Y.A. Kronrod, "On the Problem of the Socialist Mode of Production and the Stages of Its Development," Izvestiya Akademii Nauk SSSR, seriya ekonomicheskaia, no. 3 (1971): 82-99.

[195]. In 1960 in the city of Gorki I witnessed the reunion of Leonid Kantorovich and one of his high school friends, who reminisced warmly about some of the former's brilliant answers during mathematics classes at school.

[196]. "In Commemoration of the Sixtieth Anniversary" Uspekhi matematicheskikh nauk: 27(3) (1972): p. 165.

[197]. See a more detailed account of the development of functional analysis in the U.S.S.R. in the memoirs of the prominent Soviet mathematician, L. A. Lusternik, published in Russian Mathematical Surveys in the 1960s.

[198]. A. L. Vainshtein, "Origin and Development of Linear Programming in the USSR," Ekonomika i matematicheskie metody 3, (1966).

[199]. In 1939, Leningrad University issued a small booklet by Kantorovich describing the plywood trust problem and the method of solving it, as well as a number of other practical problems involving optimal resource use. (L. V. Kantorovich, "Mathematical Methods in the Organization and Planning of Production", Matematicheskie metody organizatsii i planirovaniia proizvodstva. [Leningrad: Leningrad State University, 1939.] A mathematical treatment of Monge's problem, "The Problem of Translocation of Masses", was published by Kantorovich in the reports of the U.S.S.R. Academy of Science in 1942.

The booklet now has historical value, for it contained the first serious attempt to solve certain problems in linear programming. Naturally, there are limitations on Kantorovich's achievements in this field; he did not furnish a computation procedure in terms of a strict well-established algorithm, and so on. But he did point out the fundamental principle for solving the new class of optimal problems. Twenty years later, the booklet was translated into English and published in Management Sciences with Professor Tjalling Koopmans' assistance.

Linear programming methods were discovered independently in the West in the mid-1940s, primarily through the efforts of G. Dantzig, and were considerably advanced compared with Kantorovich's work; nevertheless, this does not detract from Kantorovich's originality

[200]. This decision was not only based on ideology but, like any other primitive theory, accorded well with common sense. Most Soviet leaders and economists, uneducated and out of touch with Western economics, had to rely entirely on untutored, ideologically tinged reasoning. Clearly, the labor theory was congenial to the idea of that values could be clearly compared in terms of hours of basic labor and "elemental" justice: equal exchange can be carried out on the basis of equal labor spent in the production of these goods.

7. See examples in A. Katsenelinboigen, Studies in Soviet Economic Planning. (White Plaines: M. Sharp,1978).

8. A. Katsenelinbigen, I. L. Lakhman, and Iu. V. Ovsienko "Optimal Control and the Price Mechanism," Matekon, 6(3) (1970): 260-85.

9. In Kantorovich's wit is a manifest tendency toward unexpected comparisons of mathematical and economic facts. Thus, he once made a brilliant joke in which he proposed to convert the Institute of Complex Problems of Transportation of the U.S.S.R. Academy of Sciences into the Institute of Real and Imaginary Problems of Transportation. (For the mathematically uninitiated reader, a complex number is a pair of numbers -a real number and an imaginary one.)

10. Neumann analyzed important properties of optimal economic problems, in particular those connected with prices, but did not provide a method of solving these problems

11. I was told by Shamaj Ia. Turetskii, former head of the price-formation department at U.S.S.R. Gosplan, that in the late 1930s, Kantorovich's letter could have had some very tragic personal consequences.

12. R. Campbell, "Marx, Kantorovich, and Novozhilov: 'Stoimost' versus Reality," Slavic Review, October 1961.

13. I refrain from detailing a conversation with him in 1960, when he asked me to read one of his papers in which, upon questioning, he admitted having included a redundant "surplus product" in a growth model for "tactical" reasons.

[208]. This is the technique I had used frequently in conversations with traditional economists, provided they were willing to acknowledge merely that 1) at any given point in time the country had only so many available resources and 2) a planning body had to set priorities in the output of finished goods. If it could be shown then that the prices derived from average labor costs do a better job than the marginal prices, I would gladly swallow my pride and return to the fold.

There were many traditionalists who rejected the two conditions that I mentioned. They held that resource constraints were but a statical category, whereas one had to look at a real-life economic system from a dynamic perspective that included the progress of technology; they also believed that goods could not be compared in terms of utilities, and that only labor costs served as a universal yardstick of value.

15. American readers will note the omission of any comparison of the work of Kantorovich with that of Leontief, the eminent pioneer in input-output analysis. Leontief, coming to a similar set of problems from the standpoint of economics, enriched our understanding of the practicality of general equilibrium methods and boldly organized data from the real economy to demonstrate the interdependence of the components in the total system. My inattention is not to be interpreted as a lack of appreciation of Leontief's enormous scientific contribution. Rather, my orientation has been toward the Soviet perspective and my desire to acquaint more readers with the development of Kantorovich's thought.

16. L. V. Kantorovich, An Economic Analysis of Optimal Utilization of Resources, Moscow: "Nauka", 1959. Published in English as The Best Use of Economic Resources (Cambridge: Harvard University Press, 1965).

17. In his last book, Optimal Decisions in Economics (Moscow: Nauka,1972), written in collaboration with A. B. Gorstko, Kantorovich cited a homely example: "Let us imagine that a number of various objects need to be tightly packed within a certain space (a railroad car, a container). With larger or geometrically regular objects, the most effective approach would be to try to find some rational way of packing through calculations and comparisons of different alternatives. With smaller and geometrically irregular objects, however, we will be better off if we simply insert them in a haphazard fashion without resorting to any calculations, and afterward give them a good shakedown" (p. 205).

[212]. Parallels are obvious in the world of physics, where the greatest revelation of soul-searching occurred in the Oppenheimer-Teller confrontation over the nuclear bomb.

1. R. Pipes, Survival is Not Enough (New York: Simon and Schuster, 1984).

2. As the Soviet literary critic Iuzovsky wrote in his "Polish Diary," published in the journal New World in the late 1950s, prisoners in the fascist concentration camps preferred to have as their guards men who were cynics, rather than fanatics. You could at least come to some sort of understanding with the cynics, but not with the fanatics.

3. V. Lefebvre, "Behind the curtain of ideology and morality," Strana i mir, 1985, no. 6: 46-56.

4. V. Chalidze's article "One party democracy," Vnutrennie protivorechiia, 1987, no. 19: pp. 18-29, is extremely interesting in this connection.

5. In this regard it is interesting to analyze the reasons for the failure of such eminent Russian pre-Revolutionary reformers as Sergey Y. Witte and Petr A. Stolypin who, since they held the post of prime minister, were in a position to really affect the course of events.

6. The army is more sensitive to nationalism since it is called upon to defend the country, whereas the party and the KGB defend first and foremost the regime, which, of course, does not exclude the presence of strong nationalist sentiment.

7. Novoe Russkoe Slovo, 6 October, 1977.