Soviet Decentralization

...Future of big industrial managers at stake this week Soviet Decentralization: The Target Is Malenkov By Franz Borkenau Moscow plans to "decentralize" the entire administration of Soviet industry and construction—so Nikita Khrushchev announced in his "theses" published in Pravda on March 30...

...The central economic ministries, which had been arranged according to industry and divided into branches, will be replaced by regional economic councils, which are to control the entire economy in their areas...

...That seems to be Malenkov's only hope at present...

...Weakening of the central direction would therefore lead to the fragmentation of accumulation funds, to their utilization for purposes other than those of expanded production...

...Thanks to the West's inaction, the So\ iet regime has now obtained a breathing space, permitting the formation of a coalition between Khrushchev and the Stalinists against the moderates...

...There is nothing to indicate that these new institutions will be less bureaucratic than the old...

...Khrushchev s theses, filling four entire pages in Pravda, do not contain a single word about expanded rights for individual enterprises or combines...

...henceforth, they will come partly from offices representing all of the region's branches of industry organized in a regional center...

...The stress is simply on "decentralization," with FitBorkenau, author oj European Communism, writes on Soviet affairs jor numerous European periodicals...

...This collegium is to deal with the main problems of the development of the total economy as well as the various branches...

...they will gain immediacy only if Khrushchev's prospective adversaries attempt to protect Malenkov in order not to lose an ally in the future struggle...

...If it does not materialize, he and his supporters may well suffer a devastating defeat at the meeting of the Supreme Soviet which opens May 7—or, more properly, at the Party Central Committee deliberations which are preceding it...

...The Planning Commission is receiving not only the task of planning but also "control of the plans' execution...

...Khrushchev's theses offer little concrete information on the actual composition of these councils...

...The individual manager may succeed in playing his two superiors off against each other or may he crushed between them...

...According to the "theses...

...The top managers will be deprived of their power—seemingly in favor of smaller managers, actually in favor of the Party chieftains...

...Previously, the orders came exclusively from offices which were subordinate to a "branch" department in Moscow...

...Yet, there has been a change...

...More decisive is the fact that the authoritarian character of the N viet ecunomic administration inevitably produces conflict between superiors and subordinates—a conflict which gets more bitter the more power subordinates acquire...

...But another element in Soviet society is certain to obtain more leeway: the Communist Party apparatus...

...Will these regional offices be more responsive to regional needs than the old central departments...

...There is an inner logic in all this...

...The first blow is to be struck in the realm of personnel...

...This could spell the complete victory of ultra-Stalinism...

...Now, as in Stalin's day...

...The projected reorganization of the Soviet Government itself is contained in this proposal: "The Council of Ministers of the USSR will, in addition to the remaining ministers and the head of the central Planning Commission, also include in the future the head of the [projected] central Committee for Technology, the head of the Central Statistical Administration, and, on the recommendation of the Premier, the vice ministers and chiefs of the most important sections of the Planning Commission—all of them to hold the rank of Union minister...

...Also slated for dissolution is the top-level State Economic Commission, only recently refurbished under the chairmanship of First Deputy Premier Mikhail Pervukhin...

...definite echoes of Yugoslav statements on the subject...

...Under the guise of decentralization, the Party will gain in power over the central economic bureaucracy...

...For that is the crux of the whole organizational shift—not only because the theses constantly stress the leading role of the Party, hut because the hitter, amid the multiplication of economic authorities, remains unitary and completely centralized...

...This, too, is precluded...

...slated for formal approval at this week's meeting of the Supreme Soviet, the regime will dissolve almost all the central economic ministries and boards located in Moscow (except those for agriculture...

...The priority of heavy over consumer-goods industry, according to the theses, must be preserved under all circumstances...

...As before, they will take orders from above down to the smallest detail...

...The chiefs of these branch divisions are, "in regard to training and experience, to be equal in caliber to the present ministers...

...For this purpose, it will, in addition to a planning division, contain "special divisions for the various branches of the national economy, with appropriate subdivisions...

...But these are questions for the future...

...The united front of economic managers is to be split...

...It may happen," the theses declare, "that certain [Union] republics will accumulate funds, whereas stale necessity requires promoting the economy of other republics...

...The Party dictatorship cannot survive if, alongside it, the managerial class constantly gains influence as a virtually independent power...

...the Party is attempting lo banish this political danger without depriving itself of the managers economic services...

...Thus, the chiefs of the various principal branches of Soviet industry are in the future to be ministers after all—in their capacity as section chiefs in the Planning Commission...

...Now the Party—and not just its district leaders but the very top echelon —can give direct orders to the economic districts...

...The theses assert that individual plants will in the future be subordinate, on the one hand, to the regional economic authorities (to be known euphoniously as "councils") and, on the other, to the central Planning Commission (actually, therefore, to the economic ministries which have been transformed into sections of the Commission...

...The expression "economic councils,' to say nothing of "regional economic councils," suggests the idea of self-administration...

...The danger that the managers would outstrip the Party has never been greater than in the terrible crisis that faced the Soviet regime last October...

...Yet...

...Over the last four years, the managers have been making more and more effective demands for greater decentralization in the economy...

...but neither can the Party build industry and bolster its armaments and power without the managerial class...

...The [central] planning office must check all tendencies to autarchy and to a narrow local defense of interests...

...The current reform of the economic administration represents the first attempt to give this hatred of the intermediate for the upper echelons an organized form— in other words, to systematically goad the second level of economic managers against the top level...

...It will be interesting to see Malenkov, now Deputy Premier and Minister of Electric Power Stations, in the role of a section director in the State Planning Commission (subordinate to the insignificant Baibakov) and a member of the Council of Ministers only by the grace of Premier Bul-ganin...

...Hence, industry and construction must be financed in accordance with the directives of the central State Planning Commission...

...The only two central agencies surviving are the State Planning Commission (Gos-plan) under the colorless N. K. Baibakov, which had previously concentrated on long-term planning studies but will now receive broad plenary powers, and the Ministry of State Control, of hazy functions, which is headed by Vyacheslav Molotov...

...Would-be dictator Khrushchev would still lack a terrorist police, and he would still have to face struggles with the Stalinists and with the Army command...

...Previously, the Party had to give orders mainly to the ministries, which were strong, self-contained bodies, skilled at passive resistance and endowed with the superiority that specialized knowledge and daily administrative experience give to permanent institutions vis-a-vis meddling politicians...

...The "reform" of the economic administration is such a blow...

...Since Stalin's death, an undisguised struggle has raged between Khrushchev as representative of the Party dictatorship and one-time Premier Georgi Malenkov as spokesman of the managers' demands for independence...

...Never have Malenkov and his adherents been in greater peril...

...To be sure, even the elimination of the Malenkov group would not put the current ruling group firmly in the saddle...

...At the head of the Planning Commission is to be a collegium, which, "in addition to the chief of the State Planning Commission and his deputies, includes the heads of the most important divisions [that is, of the branch administrations] and leading experts...

...Whether this double system will give Soviet plant managers a little more leeway is hard to say...

...All the other big industrial chiefs would be in the same position —including Mikhail G. Pervukhin, who was only recently raised to the very heights and has now suddenly been deprived of any function, and including planning chief Baibakov himself, who hardly seems the man to exploit politically the tremendous power of his office...

...This coalition cannot win unless it strikes a decisive blow at the group of moderates around Malenkov and their social base, the managerial class...

...Hence, Khrushchev and his ally Lazar Kaganovich have devised this scheme as a circuitous plan for undermining the managerial class...

...the nominal elevation of an unimportant man, to the disadvantage of the real leaders of the Soviet economy, is not the main point...