First of all, there was an urgent need to reexamine yet again the
direction of Soviet economic development. In the 1960s the Soviet
economy continued to follow the trajectory imparted to it by
Stalin’s forced industrialization launched in the 1920s. Its main
objectives remained largely the same as they had been under Stalin:
expanding the country’s industrial and military capacity and
restructuring the entire economy on the basis of machine production.
In this sense, the industrialization process during the Soviet
period was not confined to the initial five-year plans, but lasted for
almost five decades. In effect, the economic development under
Khrushchev and Brezhnev represented the deepening of industrialization
and the attempt to spread it to all branches of the economy.
Soviet Union continued to industrialize at a time when the
industrialized capitalist countries were entering a postindustrial
stage, reaping the benefits of the technological revolution. While
advanced Western countries began utilizing new and intensive
technological methods, the Soviet economy continued to develop in
the extensive way, by putting ever more human and natural resources
into production. This resulted in a labor deficit and even led to
the growing demand for unskilled manual labor.
country that had pioneered space flight and was a world leader in
some spheres of science and technology, manual workers accounted for
40 percent of the entire labor force in industry, 60 percent in
construction, and about 70 percent in agriculture. Even in more
mechanized branches of industry serious problems developed, caused
by poor management and the low discipline and motivation of workers.
The time-honored practice of wage leveling at the expense of more
enterprising and better qualified workers and engineers led to the
virtual disappearance of people with top skills and qualifications.
The attempts to replace material incentives with “socialist
emulation” failed to stimulate production. Apathy and indifference
to matters of production were widespread among all groups of the
addition, bureaucratic overcentralization could no longer cope with
managing efficiently the increasingly sophisticated branch structure
of the Soviet economy. From 1965 to 1985 the number of ministries
and economic departments with all-union competence increased 5.5
times, reaching a total of 160. The economic ministries became true
citadels of Soviet bureaucracy, running branches of the economy
under their command as absolute monopolies. They not only controlled
from the single center all productive resources but also directly
administered all companies and enterprises belonging to their branch
across the entire country. Their enormous economic power allowed
them to exert pressure on party and state structures at all levels
and to lobby their departmental interests.
However, members of the party-state-managerial nomenklatura did not
have any strictly economic interests of their own, as they were not
private owners of productive assets. Their real interest was in
maintaining at any cost their privileged position in society because
it allowed them to grab the biggest share of the national product.
The chief criteria of personnel selection within the nomenklatura
were not competence or professionalism, but obedience and personal
loyalty to leaders at the higher level. Administrators and managers
were not elected or even rotated, but were appointed through the
nomenklatura networks of patronage and nepotism. The ruling elite
was increasingly transformed into a privileged caste and an
antielite, whose members stood above the law and the rest of