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Roots of Stagnation

 

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. 

The 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.

In a 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 working population.

In 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 society.

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Brezhnev's Stagnation

 

Soviet Russia

Understanding the Soviet Period
Russian Political Culture
Soviet Ideology
The Soviet System
Soviet Nationalities
The Economic Structure
The Socialist Experiment
"Great Leap" to Socialism
Stalinism
The USSR in World War II
Stalin's Legacy
De-Stalinization
Brezhnev's Stagnation
The Economy in Crisis
Political Reform
The USSR's Collapse

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