December 22, 2014

Back to the USSR: National Security in the Soviet Economy

Writing about web page http://postnauka.ru/video/30259

In Moscow 18 months ago, I made some short videos for Postnauka, a Russian science and social-science video magazine. One of the videos I made was about the security dimension of the Soviet economy. Under the heading of "security" I had in mind both external (mainly military) security and internal political security. The Postnauka people published it on line in August this summer and I think they forgot to tell me so I noticed it only recently. Anyway here is the interview(in English, just over 16 minutes).

Here's a translation of the Russian-language introduction on the Postnauka web page:

What approaches have been used to study the history of the Soviet economy? Why is it difficult to investigate the various influences on the Soviet economy? University of Warwick Professor Mark Harrison explains how to uncover the hidden connections between the agencies of government in the "Serious Science" project established by the Postnauka team.

At first [after the opening of the archives] researchers looked into just two aspects. One was the actual scale of the Soviet military-industrial complex, which was not the whole economy but still a very important part of it and it affected the whole economy, for example, through mobilization planning. So understanding the scale of Soviet rearmament and the military-industrial complex was one aspect, and the other was the effort to better understand the general context of the "great breakthrough" of the first five year plan of the 1920s and the transformation of the Bolshevik party into Stalin's personal power.

I want to mention here another researcher, Vladimir Kontorovich. He drew attention to the need to listen to what the Bolsheviks actually said. In Western economics there is often neglect of what politicians say because we think of our own politicians and their broken promises; we know that politicians lie, so why read what they write as opposed to looking at the outcomes? Kontorovichhas argued that we ought to take seriously what Lenin and Stalin said about their economic goals. In my view if you consider carefully what they wrote about economics you can see some things that emerged from the Bolshevik strategy and the Soviet system of power.

It's difficult for historians to evaluate the role of the security services in economic policy and decision making partly because we have access to the security archives only for the 1930s. Now this situation is changing because a group of independent states that were Soviet republics have chosen a different political path and some of them have opened thei security archives. These are primarily the Baltic countries — Latvia, Lithuania, and Estonia; Ukraine (to some extent) and Georgia have also opened their archives, so now we can find out how the Soviet security service operated in the [Soviet] borderlands. Based on this, we can try to infer how they worked in the Soviet Union as a whole.

To give an example of the kind of research that is now possible, over the last couple of years Inga Zaksauskiene of the History Faculty of Vilnius University and I have been writing a paper entitled "Counter-Intelligence in a Command Economy." Our paper, bassed on research in the documents of the Lithuania KGB held on microfilm at the Hoover Archive, has just been acceped for publication by the Economic History Review. Here's the abstract:

We provide the first thick description of the counter-intelligence function in a command economy of the Soviet type. Based on documentation from Soviet Lithuania, the paper considers the KGB (secret police) as a market regulator, commissioned to prevent the disclosure of secret government business and forestall the disruption of government plans. Where market regulation in open societies is commonly intended to improve market transparency, competition, and fair treatment of consumers and employees, KGB regulation was designed to enforce secrecy, monopoly, and discrimination. One consequence of KGB regulation of the labour market may have been adverse selection for talent. We argue that the Soviet economy was designed to minimize the costs.

And here is a preprint.


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I am a professor in the Department of Economics at the University of Warwick. I am also a research associate of Warwick’s Centre on Competitive Advantage in the Global Economy, and of the Centre for Russian, European, and Eurasian Studies at the University of Birmingham. My research is on Russian and international economic history; I am interested in economic aspects of bureaucracy, dictatorship, defence, and warfare. My most recent book is One Day We Will Live Without Fear: Everyday Lives Under the Soviet Police State (Hoover Institution Press, 2016).



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