Inside Soviet Industry:
SELIGMAN, BEN B.
WRITERS and WRITING Inside Soviet Industry Factory and Manager in the USSR. By Joseph S. Berliner. Harvard. 386 pp. $7.50. Reviewed by Ben B. Seligman Economist; contributor, "Dissent,"...
...Perhaps the most fascinating industrial phenomena of which Berliner speaks are blat and the tolkach...
...Premiums make up a substantial part of a Soviet manager's income and evidently have been increasing over the years...
...it seems to be equivalent to our own "drag...
...They may be paid for plan fulfillment or for cost and raw material savings...
...This is strakhovka, literally "insurance," a built-in margin in the planned goal, so that the factory boss will have some reserve to fall back on should something go awry...
...If two welders can do a job, the chief engineer will say for safety's sake that he needs three...
...But the Soviet manager does not mind "borrowing" output from future periods, declaring goods-in-process to have been fully completed, overstating values, transferring materials "temporarily" from warehouse to shop, switching accounts, manipulating norms, subcontracting work to save wage costs, or merely producing inferior goods...
...Many of Berliner's respondents suggested that Russia's economy could not function even at its present level in the absence of blat and the tolkach...
...Any collection is incomplete without it...
...We here would simply call it faking...
...But to acquire a tactile sense of the real Russia, one had to be able to speak to people...
...contributor, "Dissent," "Diogenes," "Labor and Nation" This book, published under the auspices of Harvard's Russian Research Center, is a work which must be read and studied closely by anyone who wants to know how the Soviet system actually operates...
...As one of Berliner's respondents remarked: "Why fool around with it...
...But weaving all of these instruments into a fantastic social tapestry is the principle of mutual involvement by which all are blameworthy...
...A shrewd use of these materials has enabled many students to pierce the thick palimpsest of official propaganda...
...More and more Soviet planners "charged with finding a remedy for a particular problem recommend a special premium as an effective way of inducing managers to devote attention to this problem...
...It is one of the chief instruments for organizing and directing the work of the Soviet system...
...The final picture drawn is, as the London Economist once remarked, that of a Wild West frontier town in which every man is out for himself, pirating labor, stealing supplies, suspicious of his neighbor, tough, resilient but answerable nonetheless to an Inquisition which insists that each be able to recite on demand a changing, arid, complicated catechism...
...So long as the inspector will pass them, anything goes...
...Berliner's able discussion of these controls covers the ubiquitous inspector, pressures from the various ministries, the Party apparatus, trade-union sections, the state bank and the inescapable secret police...
...Thus, extra earnings by shop chieftains of 5,000 or 6,000 rubles a month are quite common...
...This book is clearly a major addition to the already extensive shelf of recent Soviet studies...
...One comrade in 1947 received a salary of some 8,400 rubles, but by virtue of a basic premium, several "specific" premiums and a "premium from the director's fund for medical treatments" earned himself another 8,000 rubles...
...Hundreds of interviews were held and a good deal was learned of the way in which Soviet managers are motivated, how decision-making is carried on and how the economic order itself engenders the weird practices that were discovered...
...This simply underscores the terrible shortage of commodities in Russia, a shortage which recent advances have not markedly reduced...
...But if he produces 102 machines and no spare parts, then he and the chief engineer and all the technicians get premiums...
...A buyer will be found for it anyway...
...In 1950, a research team of which Berliner was a member went to Germany to speak to Russian refugees...
...All this culminates in an increasing pressure to get results...
...What he wants is premiums...
...True, as Berliner says, we have been able to learn much from Russian newspapers, texts, journals, handbooks and treatises...
...Important benefits stem from a successfully attained profit margin, for it is the source of the enterprise fund, without which continued operation is impossible...
...Ergo, no spare parts...
...The Soviet manager is less interested in his basic wage than he is in the extras given for work supposedly well done...
...But it frequently has strange results, some of which explain why so many odd things happen there...
...A factory director who meets a goal of 100 machines with the requisite number of spare parts gets no premium...
...Without doubt, Berliner's discussion of these facets of Soviet society constitutes an important and significant contribution to our understanding of Russian life...
...This practice, Berliner points out, stems from the fact that successful production is judged not in absolute figures, but as a percentage of a stated goal...
...Furthermore, if the manager is too good, he is apt to find the planners loading even higher goals onto him the next time a plan period comes around...
...Plant managers have always considered pots, pans and bedsteads as unimportant items, since their premium is so much less than that for steel I-beams...
...The fact is that most consumer goods are manufactured by producer's-goods enterprises as auxiliary lines...
...Berliner clearly demonstrates that the motivations of the Soviet businessman are founded on quite the same base as that of his Western peers — namely, pecuniary emoluments...
...So, if a certain manufacturing process takes an hour, the careful manager will see to it that the plan specifies an hour and a half...
...Simulation is another way of weakening the fetters imposed bv the plan...
...Obviously, this becomes a powerful motive for carrying through whatever tasks Moscow wants done...
...And insofar as consumer needs are concerned, the situation is even more severe...
...Of course, numerous efforts are made to control such unofficial behavior patterns...
...The tolkach is the "5-per-center" who uses his blat to get things done...
...Hence, preserving the strakhovka gives the manager a flexibility without which he can hardly survive...
...That is to say, the premium has acquired operational meaning...
...Consequently, the Soviet manager, who doubtlessly suffers from ulcers and hypertension as much as his American counterpart, seeks relief in what Berliner calls the "safety factor...
...The former is the use of personal influence to secure favors to which an enterprise is not really entitled...
...This evidently is an important defense against the monstrous pressure for more production, ever more output, pushing people far beyond the limits to which they would go if left to their own ways...
...As a means of exerting some restraint on the short-run trends that the premium system encourages, the Soviets require plant managers to meet a "profit" target...
Vol. 41 • January 1958 • No. 4
