Why Khrushchev Overhauled Industry
DENICKE, GEORGE P.
Why Khrushchev Revamped Industry By George P. Denicke Explaining the reasons for last year's reorganization of Soviet economic management, the Party organ Kommunist declared it was absurd to think...
...However, Khrushchev knew exactly what he wanted, and, with certain compromises, he imposed his own ideas...
...The new sovnarkhozy would be directed by economic managers, probably of ministerial stature, and the power position of the Party bureaucracy would drop...
...The capstone was placed on this process in June and December of last year (first after the Malenkov-Molo-tov-Kaganovich purge, then after the removal of Marshal Zhukov), with a series of changes in the composition of the Party Presidium...
...Why Khrushchev Revamped Industry By George P. Denicke Explaining the reasons for last year's reorganization of Soviet economic management, the Party organ Kommunist declared it was absurd to think that more than 200,000 factories and 100,000 construction projects could be efficiently directed on a centralized basis...
...However, Stalin demanded the greatest possible economic centralization as the essential basis for his totalitarian rule...
...If each of these regions included several oblasti, they would pass beyond the jurisdiction of the various obkomy...
...Since the Presidium is the real government of the USSR, the dictatorship of the Party "apparatus," led by First Secretary Khrushchev, is more absolute than ever...
...Khrushchev used the economic reorganization to strike at this increasingly powerful group—not only by creating "economic administrative regions" but by eliminating most of the big economic ministries in Moscow, which had been the strongholds of the economic bureaucracy...
...The reorganization was decided upon in principle in February 1957 by a plenum of the Party Central Committee...
...and, after a struggle, he succeeded in taking charge of the reorganization plan...
...The State Planning Commission of the Russian Republic will now have to coordinate 70 distinct economic plans—hardly a contribution to efficiency...
...In the Russian Republic, however, the 70 rayony are, with one exception, identical with the oblasti...
...Nevertheless, they represent a distinct social group with interests and aims different from those of the regular Party bureaucracy...
...George P. Demcke, former professor of history at Moscow University, is on the staff of Radio Liberation...
...Each of the smaller Union Republics constitutes an economic region...
...No details were provided, but the plenum resolution spoke of dividing the country into "basic economic regions...
...Of course, the economic managers are also Party members...
...It is impossible to find any economic motivation, however, in the distorted version steamrollered through by Khrushchev...
...Inevitably, the whole problem of economic organization acquired a political cast and could no longer be discussed on the basis of economic efficiency alone...
...The idea of a regional organization of the economy was discussed as long ago as the early Twenties...
...Clearly, Khrushchev feared that the creation of large economic regions would undermine the Party dictatorship...
...This represented such a complete reversal of the original concept that most Soviet economists, failing to grasp what had happened, continued to write about a limited number of "basic economic regions" for some time after Khrushchev's "theses" appeared...
...Economically, the creation of 105 separate "national economic councils'' (.sovnarkhozy) was sheer madness...
...In a booklet explaining the "historic" importance of the reorganization plan, one T. A. Kuler writes that the "Party and Soviet organs" in the various administrative regions will organize the new sovnarkhozy...
...The peculiar form which the reorganization ultimately took can be explained only in political terms...
...To anyone familiar with the terminology and practice of Soviet economic planning, this clearly indicated relatively large areas— probably 15 to 20 in number and based not on existing administrative units but on economic logic...
...Ten of the 15 Presidium members are now Party secretaries...
...In his "theses" on the plenum's report to the Supreme Soviet, he substituted the term "economic administrative regions" for "basic economic regions" and declared that the "regions" would, so far as possible, coincide with the regular administrative units of the Soviet Union...
...When Khrushchev finally decided to carry out decentralization, the political implications of the move made it a factor in the struggle that ended in the purging of Malenkov, Molotov and Kaganovich...
...In the Ukraine, Kazakhstan and Uzbekistan, where Khrushchev agreed to a compromise, there are fewer economic regions (rayony) than administrative regions (oblasti...
...This was, of course, true and it needn't have taken until 1957 to discover it...
...In principle, the idea of regional economic organization is a very sound one...
...As a result, the Soviet Union now has 105 "economic administrative regions" and the same number of sovnarkhozy...
...Since the "Soviet organs" are completely dominated by the regional Party committees (obkomy), this means that the sovnarkhozy will be run not by economic-management specialists but by Party bureaucrats...
...Khrushchev, however, had other ideas...
...Rather, it was for weighty political reasons that the latter decided to block the formation of larger economic regions...
Vol. 41 • February 1958 • No. 5
