Russia: Borrowing from the Capitalists

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Soviet planning's faults are chiefly two: too many cooks from the Supreme Economic Council on down, and more often than not the wrong recipe in 15 copies. Two months ago, a Supreme Soviet Deputy cited the example of the Izhora factory, which received no fewer than 70 different official instructions from nine state committees, four economic councils and two state planning committees—all authorized to issue Izhora production orders.

Since factory output goals are either laid down in weight or quota by the planners a knitwear plant ordered to produce 80,000 caps and sweaters naturally produced only caps: they were smaller and thus cheaper and quicker to make. A factory commanded to make lamp shades made them all orange, since sticking to one color kept the assembly line uncomplicated. Tire production one year was fixed without checking the plan for motor-vehicle output. Taxi drivers were put on a bonus system based on mileage, and soon the Moscow suburbs were full of empty taxis barreling down the boulevards to fatten their bonuses.

No Ceiling. The tonnage norms particularly piqued Khrushchev's peasant common sense. Machine builders used eight-inch plates when four-inch plates would easily have done the job. "We make the heaviest machines in the world," sighed Nikita. His choice complaint, however, had to do with a Moscow chandelier factory: the more tons of chandeliers the plant produced, the more workers earned in bonuses. The chandeliers grew heavier and heavier, until they started pulling ceilings down. They fulfilled the plan, admitted Khrushchev angrily, "but who needs this plan? To whom does it give light?"

Many able economists and engineers had long known that much of the Soviet economy was a joke, and started saying so. Typical was the protest about the construction of the Novo-Lipetsk steel mill. The plans took up 91 volumes comprising 70,000 pages, specified precisely the location of each nail, lamp or washstand—everything, in fact, except whether the project was economically sound. An engineer estimated perhaps half in jest that at the rate the paper-wafflers were multiplying, by 1980 the planning agencies might well employ every man and woman in the Soviet Union. One mathematician made the astonishing calculation that Russia's G.N.P. might well be doubled simply by cleaning up the planning mess.

Last year, in Russia's largest republic alone, deliveries of 257 factories had to be suspended because their goods simply would not be bought. Moreover, state trade organizations returned or marked down 20% of all clothing, 10% of hosiery and 9% of shoes produced. Russian refrigerator factories received 56,000 written complaints about faulty products—including refrigerators from the Baku factory lacking refrigerant gas in their coils. As a result of the consumer's stiffening standards and an increased inclination to complain, an incredible $3 billion worth of unsellable junk has accumulated in Soviet inventories.

The Right Man. As early as 1956, Evsei Liberman had published an article in Kommunist suggesting that local plant efficiency and quality could be improved by greater emphasis on profitability. For Liberman, then still an obscure scholar in a provincial school, it was merely the modest proposal of a man who knew the day-to-day problems of a plant manager.