Revisiting the type of economic system in the USSR

The peculiarity of the present interpretation of the USSR economic system by social science consists in the increased attention to the underreported in modern historiography characteristics of the Soviet type of economic management. The scientific literature views the development dynamics of the national economy, changes in sectoral proportions of the economy, spatial distribution, enterprise performance; the system of the five-year planning, economic reforms, the history of economic ideas, etc. are examined. A series of the USSR macroeconomic characteristics is also a focus of attention [1; 11; 12; 15; 18; 20]. The understanding of the Soviet history is developing in multiple directions, some of which have quite a long-standing tradition. The first direction was cultivated during the Soviet era. It is well-known and is associated with the presentation of the country’s history as a series of ongoing stages of building socialism. The second was formed abroad in the Russian emigration research centers (for example, in the Munich Institute for the Study of the History and Culture of the USSR) and the Sovietology centers in the United States and Western Europe. This approach involved the search for the negative aspects in the Soviet socialism; it has not developed any new conceptual landmarks. This approach was backed by modern Western historians [10; 13]. The third direction is the search for the new explanations of the USSR–Russia history. In that context the idea was expressed about the history of the USSR as a country that is developing towards state capitalism. Ideas about the role of state capitalism in the history of the country were for the first time conceptually formulated by V.I.

Lenin. Since 1918 he constantly addressed the inevitability of capitalism “to a certain extent” and the idea that it should be used “especially by deflecting it towards the direction of state capitalism”. In fact, in Lenin’s understanding, the Soviet government in the early 1920s involves state capitalism combined with proletariat dictatorship. Without state capitalism (this “vestibule” from a material, economic and production standpoint) Lenin could not see the way to socialism. Until the mid-1920s the idea of building state capitalism in the USSR was a subject of quite heated debate, but since 1925 the idea about the formation of the system of state capitalism in the economy of the Soviet Russia ceased to exist. Nevertheless, in the world of social thought of the 1930–1980s the common idea that the USSR was the country of state capitalism was still present. Since the mid-1930s the proponents of L. Trotsky and foreign authors (E. Goldman, T. Cliff, J. Schumpeter, etc.) wrote about the transition (deformation) of the Soviet system to state capitalism. Their ideas mostly included critical assessments, linking the process of the Soviet state capitalism development with the establishment of “a new class of state capitalists” and the exploitation of the USSR workers (see, for example, T. Cliff “State capitalism in Russia”, 1947). A new wave of evidence of the capitalist nature of the Soviet economy is related to the development in the 19701980s of a world-systems approach by I. Wallerstein and the influence of this theory. Wallerstein’s world-systems approach, A. Callinicos’s concept of state capitalism, P. Taylor’s, Ch. Chase-Dunn’s and P. Binns’s developments argue that state socialist countries were part of the world economic capitalist system [6; 7; 17; 19; 21]. At the beginning of the 21st century Russian historiography also gives arguments about state capitalism in the USSR [14; 16].

However, in the vast majority of works on socio-economic history of our country there is no reference to the issue of the USSR economic system. The socialist nature of the USSR economic system is recognized by default, taking into account all the attendant “positive” and “negative” aspects. The trend of the Russian historiography to depart from a political-economic view of the processes of the country’s economic development is not accidental – lack of attention to such subjects is connected with the political situation, lack of interest of the main political forces in the reconsideration of the existing political-economic patterns of interpretation of the Soviet economic system.

However, in our view, the objective of reaching a new level of consolidated studies of the Soviet type of economy is extremely important in terms of scientific and practical significance of the post-

Soviet transformations. Claims about the socialist nature of Russia’s socioeconomic system in the period of the Soviet Union, about the non-capitalist character of capital assets, lack of market mechanisms, classic financial tools, etc. (and, hence, gaps in exploring these issues) hamper the development of Russian social science, increasing its gap from the world research trends.

In the last decade, the authors of the article have done the work on studying the agricultural system of the Soviet Russia of the 1930–1980s [2; 3; 4]. The conducted research led to the conclusion on the capitalization of the Russian village of the 1930–1980s: the processes of capital accumulation, the increasing role of this factor compared to other factors of production, especially to direct labor. The latter was revealed according to the aggregate of Soviet statistics such as the cost of agricultural products (calculated on the basis of direct labor costs and capital for production). The study of capitalization processes of the village has demonstrated the different role of economic structures in this process. The state has approbated different capitalization and defarming schemes through the state structure (state owned farms, machine-tractor stations), and the collective-farm system played the pivotal role in the processes of initial capital accumulation in the country.

Accomplished within collective-farms, the type of exploitation based on public responsibility resulted in a large-scale “milking” of agriculture. The change in the village structure, when state owned farms come to the fore in terms of capital value and the mount of the manufactured products (that occurred in the 1970– 1980s), indicated the accelerated process of state capitalism formation in agriculture. Occurring economic changes led to the social restructuring of the village, the formation of new social classes. On the basis of economic and legal parameters, the authors have described the class structure of the agricultural society as a five-class society with the presence of classes of proto-bourgeoisie, managers, intellectuals, aristocracy of the working class and proletariat. Analysis of the agricultural system of Russia in the 1930– 1980s has helped arrive at a conclusion about the formation of state capitalism in the Russian village.

The purpose of this article is the introduction into scientific parlance of previously unused sources, which would serve as an important tool in the implementation of new approaches to the analysis of the USSR economic structure. The objectives are to test the sources which help reveal the correlation of factors of production in the Soviet economic mechanism (primarily, direct labor and capital). This refers, primarily, to the balances of the national economy as well as to the input-output economic balances1.

Input-output balances of the national economy are of great importance for the historians. An input-output balance (input-output method) is an economic-mathematical balance model which characterizes cross-sectoral production correlation in the economy. It describes the correlation between the output of one sector and production costs of all participating sectors required to ensure this output. Input-output balance was produced in money and kind and represented a table which reflected the process of formation and use of Global Social Product (GSP) by industry breakdown. The table demonstrated the cost structure for each product and the structure of its distribution in the economy [5].

The origins of this method date back to the works of Soviet economists and statisticians of the 1920s. The theoretical basis of the input-output method was developed by V. V. Leont’ev in Berlin. The Russian version of his article entitled “Balance of the Soviet national economy”

was published by the journal “Planned economy” in no. 12 in 1925. The scholar showed that the coefficients which reflect the correlation economic sectors are quite stable and can be predicted.

The first input-output balance was produced in the USSR in 1959 by the Central Statistical Administration of the USSR (TsSU USSR) by the Department of input-output balance under the direction of M. R. Eidelman. It was the world’s first performance input-output balance in physical terms (by 157 products) and performance input-output balance in value terms (by 83 economic sectors)2. Balance data were partially published in 19613, and the document was fully declassified in 20084. The first plan inputoutput balances in value and physical terms were produced in 1962. Later, this practice was extended to the republics and regions. According to the 1966 data, input-output balances were produced by all Union Republics and economic regions of the RSFSR. Soviet scientists created the groundwork for wider application of input-output models (including dynamic, optimization, physical-value, inter-

Table 1. Key indicators of the national economy balance in 1980–1986 (in then-current prices)

Indicator 1980 1981 1982 1983 1984 1985 1986 GSP, billion rubles 1079 1123 1237 1293 1346 1384 1426 Final social product, billion rubles 535 565 607 638 666 684 701 Manufacturing of production means (1st unit), billion rubles 678 697 791 825 860 886 923 Manufacturing of commodities (2nd unit), billion rubles 401 426 446 468 486 498 503 National generated income, billion rubles Including: 462 487 524 548 570 579 587 remuneration 225 236 248 258 264 272 284 surplus product 237 251 276 290 306 307 303 National generated income per capita, rubles 1741 1818 1940 2012 2074 2084 2096 National income spent on consumption and accumulation, billion rubles Including: 454 478 513 536 559 569 576 consumption fund 345 365 379 393 407 419 428 accumulation fund 109 113 134 143 152 150 148 National income spent on consumption and accumulation per capita, rubles 1710 1785 1900 1968 2032 2049 2056 National wealth (excluding land, mineral resource and forest value) at the year-end, billion rubles 2732 2913 3127 3330 3537 3738 3933 All fixed assets (including live-stock)at the year-end, billion rubles Including: 1747 1857 1975 2101 2236 2373 2516 fixed production assets 1158 1237 1322 1411 1505 1600 1695 fixed non-production assets 589 620 653 690 731 773 821 Material production costs, billion rubles Including: 617 636 713 745 776 805 839 costs of material and supplies (raw materials, supplies, fuel, etc.) 542 536 628 654 678 697 723 depreciation* 75 80 85 91 98 108 116 GSP materials-output ratio, kopeks per 1 ruble of GSP: including depreciation* 57.1 56.7 57.6 57.6 57.6 58.2 58.8 excluding depreciation* 50.2 49.5 50.8 50.5 50.3 50.4 50.7 regional models, etc.). Part of the balance data was published in restricted circulation (for official use only)5.

The most general basic indicators of the balance of the national economy over the 1980s are presented in Table 1 . They characterize GSP, the manufacturing of production means and commodities, national income, fixed assets, material costs and GSP materials-output ratio. All these characteristics are important for the study the type of economic structure of the society.

One of the parts balance data was labor costs input-output balance, which represented an economic table in which the process of production manufacturing (or service delivery) and the correlation between economic sectors were expressed in labor costs. The labor cost inputoutput balance data helped determine the total costs of direct and materialized labor on the production of individual products (service delivery) and establish the correlation between these costs by each economic sector separately. Materialized labor costs indicators by each economic sector were identified on the basis of direct labor costs data of a particular sector, which were distributed in proportion to the use of the products of this sector in other economic sectors. Each row of the labor costs input-output balance table showed the distribution of direct labor costs for product manufacturing of a particular sector between other sectors consuming the production of the former, as well as for final consumption and gross capital formation. If we consider balance data vertically, the same labor costs are as well the costs of past labor, embodied in products used by different sectors in intermediate consumption. In addition, direct labor costs are displayed vertically in each column. At the end of the table each group of sectors included a sum of direct and materialized labor costs for product manufacturing in each sector (aggregate labor costs). The main source of information for producing the labor costs input-output balance were data from input-output balance and labor statistics6.

Let us consider one of such sources characterizing important aspects of the completion of the capitalization process in the USSR at the end of the existence of the “socialist” type of economic management ( Tab. 2 ).

Data from the table characterize the dynamics of the share of direct and materialized labor costs in the total labor costs in a relatively short period of time – the last decade before perestroika. They are calculated according to the USSR labor costs input-output balance. This calculation, as shown by the note

Table 2. Proportion of direct and materialized labor in total labor costs for 1975–1985 according to labor costs input-output balance of the USSR* (as a percentage of total labor costs)

Industry (sector)	1975		1980		1985
	Direct labor costs	Materiali zed labor costs (direct)	Direct labor costs	Materialized labor costs (direct)	Direct labor costs	Materialized labor costs (direct)
Total in production industries	59.9	40.1	60.3	39.7	60.4	39.6
Including:
Industry	43.1	56.9	45.0	55.0	45.0	55.0
including:
power engineering	49.1	50.9	48.3	51.7	48.9	51.1
oil and gas industry	13.9	86.1	13.0	87.0	11.8	88.2
coal mining	50.8	49.2	52.2	47.5	53.8	46.2
ferrous metallurgy	40.8	59.2	41.2	58.8	41.5	58.5
non-ferrous metallurgy	44.8	55.2	47.7	52.3	47.5	52.5
chemical and petrochemical industry	47.8	52.2	47.1	52.9	45.5	54.5
mechanical engineering and metalworking	66.2	33.8	65.4	34.6	66.1	33.9
forest, woodworking and pulp and paper industries	56.9	43.1	58.3	41.7	58.7	41.3
construction and building materials industry (including glass and porcelain and pottery industry)	53.6	46.4	53.1	46.9	53.8	46.2
light industry	44.3	55.7	45.5	54.5	45.6	54.4
food industry	13.5	86.5	15.4	84.3	15.4	84.6
Construction	77.4	22.6	79.3	20.7	79.7	20.3
Agriculture and forestry	73.9	26.1	72.1	27.9	72.4	27.6
Transport and communications	82.8	17.2	82.6	17.4	82.5	17.5

* The calculation of labor costs input-output balances is produced on the basis of the indicators of input-output performance balances of in then-current prices.

Source: Key input-output balance indicators of the national economy: statistical yearbook. Moscow, 1987. P. 21.

to Table 2, on the basis of the indicators of input-output performance balances of in then-current prices. According to these calculations, the ratio of direct and materialized labor in total labor costs in all sectors of material production appears very stable over the decade under analysis, with only slight deviations of the direct labor costs in 1975, the indicators of 1980 and 1985 vary around the share of 60% and direct materialized labor costs – around 40%. The situation varies dramatically for main groups and sectors of material production. The situation in industry for the past decade is the following: a small increase in the share of direct labor costs, from 43% in 1975 to 45% in 1985, and a respective small decline in the share of materialized labor in the total labor costs – from some 57% in 1975 to 55% in 1985. The calculation reflects a marked predominance of direct materialized labor costs over direct labor costs in industry.

Within industry the trend is rather diverse: from the absolute predominance of direct labor costs (in mechanical engineering in 1985 its share was 66%, in construction and building materials industry and coal mining – 54%) to prevailing materialized labor costs (in 1985 in oil and gas industry its share was 88%, in food industry – 85%, in ferrous metallurgy – 58%, in chemical and petrochemical industry – 55%). In some industrial sectors the share of direct and materialized labor costs was approximately equal: in 1985 in power engineering – 49 and 51% respectively; in non-ferrous metallurgy 48 and 52%.

The situation in construction, agriculture and forestry, transport and communications was specific. At the beginning of the decade and at its end, direct labor costs prevailed accounting for 75%–80% of the total labor costs.

Of course, the described tendency needs to be connected with other characteristics in order to solve political and economic problems, in particular to study the type of economic system. Therefore, we will refer to the problem of the ratio of the number of workers involved in mechanized and manual labor (Table 3).

Data from the table show that in the country’s industry of the 1970–1980s, the share of workers involved in work with machines and mechanism, as well as automation device maintenance, approached 50% of the total number of workers, and in the middle of the 1980s this share rose to over 50%. If the number of workers engaged in machine and mechanism repair and setting-up is taken into account, this share amounted to more than 60% in the 1980s. The share of workers involved in manual labor in industry fell from 42% in 1975 to 35% in the mid-1980s; in other words, by the end of the Soviet period only about 1\3 of industrial workers were involved in manual labor (both on and off machines and mechanisms). Balance indicators for the calculation of the ratio of the number of workers involved in mechanized and manual labor highlighted another industry – construction, where the share of manual labor over the decade (1975–1985) also considerably decreased and approached the 50%-point.

A completely different situation is reflected in agriculture in terms of the same indicators. First of all, the proximity of the characteristics of the shares of manual and mechanized labor in collective farms and state farms should be noted: the

Table 3. Ratio of the number of the USSR workers involved in mechanized and manual labor (1975–1985) (according to one-time surveys, %)

Economic sector	Total number of workers	Including workers engaged in
		work with machines and mechanism, as well as automation device maintenance	manual labor (on and off machines and mechanisms)	machine and mechanism repair and setting-up
Industry
1975	100	45.7	41.5	12.7
1982	100	48.8	37.4	13.8
1985	100	51.0	34.9	14.1
Agriculture Collective farms Crop husbandry
1982	100	23.6	75.2	1.2
1985	100	25.5	73.3	1.2
Animal husbandry
1982	100	23.5	73.9	2.6
1985	100	28.3	68.5	3.2
Collective farms Crop husbandry
1975	100	24.9	75.1	-
1982	100	27.0	71.2	1.8
1985	100	28.5	69.8	1.7
Animal husbandry
1975	100	17.7	78.8	3.5
1982	100	19.4	76.9	3.7
1985	100	23.6	72.4	4.0
Construction
1975	100	36.8	59.9	3.3
1982	100	38.8	57.4	3.8
1985	100	40.0	56.4	3.6

Source: Key input-output balance indicators of the national economy: statistical yearbook. Moscow, 1987. P. 118.

share of the former varies around 70– 80%, the latter amount to 20–30%. The underlying dynamics is the growing share of mechanized labor and, respectively, the reducing share of manual labor. The gradual and slow pace of the process should be noted. In collective farms, the share of mechanized labor in animal husbandry at the end of the reporting period exceeded the mechanized nature of crop husbandry, but in state farms in 1975 and in the middle of the 1980s, that share was less than the former. A very small share of labor costs of repair and setting-up of machinery in agriculture exponentially less than the corresponding indicator in industry. Thus, it can be noted that mechanized labor in the USSR becomes predominant only at the end of the Soviet period and only in the industrial sector. Most agricultural workers were involved in manual labor. This is evident from the ratio of occupational groups of agricultural workers. In 1970, there were 1 837 000 tractor drivers and other machine operators in the RSFSR agriculture and the number of crop husbandry workers, forage workers and workers without a qualification totaled 4 346 000 people, the number of milkmaids and other personnel mainly engaged in manual labor – about 2.5 million people; in 1979, the number of tractor drivers, combine and machine operators in the RSFSR agricultural plants amounted to 2 250 000 people, and the number of crop husbandry workers mainly engaged in manual labor – to 2.7 million, in animal husbandry – approximately 2.4 million people7.

The materials of the USSR inputoutput balance of the national economy for the end of the Soviet period suggested in the article provide a reasoned approach to speculating about the role of major production factors – labor and capital – with new historical and economic data. The level of socio-economic development of our country in the 1970–1980s can now be assessed using the calculations of direct and materialized labor costs, rather than by a “rough” estimation. The study of the methods of producing such calculations, of the comparison with the shares of manual and mechanized labor in production and with data on capital depreciation etc. deserves serious further research. Of course, the type of economic system is characterized not only by the ratio of the factors of production. It is also determined by other economic parameters: methods of regulation, types of marketability, mechanisms of workforce mobilization, etc. When it comes to social and economic system, for capitalized economy it is important to determine the type of property relations, peculiarities of enforcement of the right of ownership. These factors were more relevant in the so-called state ownership in the USSR, which only “disguised” the possession, disposal and use of means of production by a particular social class which became a source of post-Soviet Russian classic bourgeoisie.