The Bureaucracy

Max Weber's definition of bureaucracy includes two major concepts – a legal-rational one and a charismatic one. According to Weber, bureaucracy was always a tool in someone else's hands, always a means and never an end in itself. Weber's criteria for legal-rational bureaucracy are as follows:

1. (1) They are personally free and subject to authority only with respect to their impersonal official obligations.

2. (2) They are organized in a clearly defined hierarchy of offices.

3. (3) Each office has a clear, legally defined sphere of competence.

4. (4) The posts are filled according to a free contractual relationship.

5. (5) Candidates are selected on the basis of technical qualifications. They are appointed, not elected.

6. (6) The salary scale is primarily determined according to hierarchical rank.

7. (7) Administering the office is considered the sole, or at least the primary, occupation of the incumbent.

8. (8) The office constitutes a career. The promotion system is based on either seniority or achievement.

9. (9) The official's work is totally separated from ownership of the means of administration and without appropriation of his position.

10. (10) He is subject to strict and systematic discipline and control in the administration of his office.

The charismatic bureaucracy, according to Weber, may proceed in either of two directions: (1) the hereditary line, in which charisma transfers itself from the original charismatic leader to someone designated to be his successor, generally a blood relation, or (2) charisma may attach itself not to the individual, but to the office.

One of the forms of power acknowledged by Max Weber was the use of the bureaucracy as an instrument of ‘legal domination,’ where the role of civil servants was to protect state interests through legal means, while the role of the military was to protect such interests by means of force and violence. Weber's analysis has proven to be very seductive over the years because of Western capitalism's fascination with the values of rationality, law, efficiency, and order. Weber identified industrial capitalism as a principal force behind the bureaucratic rationalization of modern society. He saw an even deeper penetration of bureaucracy into the institutional foundations and individualistic ethic of contemporary society. In his Wirtschaft und Gesellschaft, he stated that ‘a bureaucracy, once it is fully implanted, belongs to the range of social formations that are most difficult to destroy.’Reference Lewin¹ Weber believed that the fate of any society in which officials usurped the functions of government was to fall into repressive backwardness.

Departing from the idealized view propounded by Max Weber, historians and social scientists have developed new paradigms that take into account the importance of personal and structural changes, the consequences of technological, economic and demographic development, war, power shifts and revolution. From ancient empires to modern times, bureaucracies have fallen into three categories of political orientation: ruler-dependent, corporatist (that is, centered on their own collective interests) or client-oriented. In reality, a particular bureaucratic organization has seldom conformed precisely to any of these three configurations; rather, they have exhibited characteristics of all three.

Imperial Russia

The Russian bureaucracy was a direct descendent of the domestic staff of medieval princes, and it continued to function under the direct jurisdiction of the monarch. An official could be dismissed without cause and without the right of appeal, and he could not resign without permission. In effect he was totally dependent on his superiors. On the other hand, the Russian civil servant was virtually sovereign in his dealings with the common people.

What is most confusing about Weber's terminology is his pejorative use of ‘bureaucracy.’ The term connotes inefficiency, excessive formalism, resistance to change and even corruption. Bureaucracy is castigated because it can neither attain its own stated objectives nor meet society's legitimate needs. An example of the resulting confusion may be found in the historiography of the reign of Nicholas I (1825–1855). His reign is usually viewed as autocratic and personal and as a period of intense government bureaucratization, centralization and militarization. Nicholas profoundly distrusted the inefficient and corrupt bureaucratic apparatus that he inherited with his rise to power. He created executive organs and legislative committees parallel to those that already existed, and relied on personal agents and his own inspection tours to gather information about the current situation in Russian.

State officialdom in Russia has always been the servant of the state, not of the citizens or the public. The prevailing norm has been the gosudarstvennaya sluzhba of the tsarist and post-communist eras or the partiinyi-sovetskyi apparat of the Soviet era.

In the nineteenth century, due to the administrative bureaucracy and a relative shortage of trading capital, domestic trading institutions were hindered from developing normally. Thus, imperial governmental structures have usually been seen as a stumbling block to progressive Russian economic development. By the early twentieth century, the real driving force behind the course of Russian history and society was not the constitutional façade erected by the autocracy to stifle the revolution, but rather the growth of the state bureaucracy. In modern times, power shifted from the nobility to a socially heterogeneous bureaucracy. However, the top levels of the bureaucracy were still in the hands of noble families, since the poverty-stricken state could not pay its employees decent wages; therefore the concept of public service was largely unknown.

At the end of the nineteenth century, political and institutional obstacles blocked the growth of a unified middle class that could have led Russia along a path of development resembling that of Western Europe. A conflict of interests prevented a durable alliance among the industrialists of St. Petersburg, Moscow and the south. Economic issues were not the only ones that divided progressive zemstvo ² reformers from liberals in the great Donbas coal and steel industry; the absence of any real political forum until 1905 hindered the formation of a middle-class or liberal coalition and delayed compromise among interest groups, even after the constitutional system was established. Moreover, inter-ministerial rivalry and bureaucratic obstructionism further complicated the task of political innovators. Alongside existing important bureaucratic and political obstacles, the engineer-managers of southern Russia had another perplexing problem. Their very identification with the regime impeded the possibility that liberal capitalists could drive Russia's industrialization forward. As loyal sons of the fatherland eager to prove their patriotism, how could they complain loudly about the shortsightedness and obstructionism of the Tsar's chosen officials?

Before 1905, tsarist Russia had to confront a difficult problem, namely how to sustain business interests without sacrificing the traditional noble estate on the altar of industrial supremacy. The problem of reconciling imperialism and industrialism was resolved by the regime's maintaining a substantial degree of direct or indirect bureaucratic control over Russian industry. This managed to satisfy those in the bureaucracy who had never lost their hostility to industrial enterprise and whose aversion grew with each passing year: ‘If there was a way to reconcile the rich complexities of being who they were, the engineer-managers could never quite imagine it. Their story tells us this: The Russian Empire did not lack liberal capitalists, but it did wear them down.’Reference McCaffray³

Far from constituting a ‘ruling class’ or even a partner in a political system dominated by bureaucrats from predominantly agrarian backgrounds, the Russian industrialists failed to break out of their cultural and legal limbo. The campaign by reactionary agrarians against the legal rights of corporation in 1914 can best be understood as the final episode in a long history of arbitrary economical management. When Nicholas II ascended the throne, Russian heavy industry still trailed far behind the West, in spite of the fact that the rate of increase in the Russian output of coal and iron during the previous decades had been much higher than that of either Britain or Germany, higher even than that of the United States. In addition, Russia's crude oil production made up half the world's total output.

What is most striking about the history of tsarist economic policy in general – and of corporate law in particular – is that it demonstrated the inability of tsarist bureaucrats to accept or even acknowledge the basic axioms of modern capitalist culture. In 1919, the French businessman Raoul Labry, who had supervised the publications of the Russo-French Trade Bureau, summed up his criticism of Bolshevik economic policies with a no less scathing attack on the tsarist system of corporate law:

Petrazhinsky, an eminent jurist, wrote about the glaring defects of Russian corporate law and by extension, of the entire legal system. To the degree that bureaucratic arbitrariness afflicted the economic realm, it hindered the fullest possible development of the Russian economy. This prevented the tsarist empire from joining the ranks of what Petrazhinsky called the ‘cultured States’ of Europe and North America, where constitutions set limits on executive power. Baron Wrangel, an aristocrat who had become a corporate director, saw the logical connection between tsarist repression and economic backwardness: ‘The fact that our bureaucracy had a special skill in extinguishing any living flame was well known to all except, of course, to the bureaucrats themselves, who never even suspected it’ (Ref. 4, p. 211). Conversely, it is only fair to be open-minded and give the tsarist bureaucracy its due. However monstrously contaminated by ignorance, arbitrariness, inefficiency and corruption, the imperial government waging its battle against modernity was truly an awe-inspiring machine.

Summarizing the gloomy condition of the Russian petroleum industry at that era, John McKay writes: ‘Rather than presenting a simplistic view of bureaucracy versus business, or of bureaucracy and business united for a common purpose, the petroleum industry was divided into complicated and unstable sets of parallel alliances of bureaucrats and businessmen arrayed against one another.Reference McKay⁵

The tsarist bureaucracy proved unwilling or unable to implement rational reforms in such key areas as rights over subsoil minerals, monopolies and corporate law.

Soviet Russia

A totalitarian government is based on two interlocking authoritarian hierarchies. The functioning of every factory, governmental office, army or secret police unit, as well as every cultural or social organization, is programmed, coordinated and supervised by some government agency. At the same time, however, it is also subject to propaganda, criticized, spied upon and incorporated into special campaigns by an agency of the totalitarian party, which is individually responsible to higher party authorities. The rationale behind this principle of dual government can be incorporated within the framework of Max Weber's analysis of bureaucracy. In his view, an ideally functioning bureaucracy is the most efficient method of carrying out large-scale organizational tasks. But this is true only if these tasks involve a more or less stable orientation towards norms that seek to maintain the rule of law and achieve an equitable administration of affairs. These conditions are absent when assignments are allocated by an omnipotent and revolutionary authority.

In Soviet Russia, the totalitarian organization was a result of institutionalized bureaucratic charisma. The bureaucracy constituted a ruling class with a power monopoly, and the social pyramid was capped by a bureaucratic ruling class that came to power through charisma that had been ingrained in bureaucracy.

Stalin and Stalinism

In the 1920s, after some years of intense infighting, the various opposition groups were successively eliminated, and the Communist Party was moving in a direction opposite to that of the broader NEP system, becoming ever more bureaucratized, centralized and depoliticized. The communist elites had become increasingly subject to a process of polarization, between a progressive intelligentsia and a reactionary party bureaucracy. In the political sphere, the widespread discrepancy between job positions and qualifications that pervaded the system, combined with the fallout resulting from a chaotic social situation, set the stage for the ‘cultural counter-revolution’ which can be seen in many ways as the central feature of the Stalinist political system. The proliferation of bureaucracies, networks, bosses and watchdogs must be attributed to the regime's efforts to retain control over the chaos brought about by immense feats of ‘social engineering,’ such as collectivization and massive industrialization. The first of these exploits was the most damaging, as it destroyed an economic system based on a largely autonomous peasantry and replaced it with one in which bureaucratized and coercive elements prevailed, weakening economic incentives.

The Soviet Union had a massive surplus rural population – according to the 1926 census, more than 80% of the population were peasantsReference Heinzen⁶ – with little scope for increasing agricultural productivity. The obvious developmental strategy, as Soviet economists were well aware, was to transfer the surplus rural population to industrial employment in the cities. The chief dilemma was how to achieve this. Stalin solved this problem by a brutal policy of collectivization, forced migration, compulsory requisitioning and heavy rural taxation. According to Leslie Benson: ‘The monstrous repressive apparatus of the state, originally mobilized to subjugate whole populations, could be made to serve the purpose of driving the bureaucratic leviathan into completing a breakneck industrial revolution, without the social and political revolution characteristic of capitalist development.’Reference Benson⁷ In 1929, Stalin broke apart the Soviet state administrative system by dismantling NEP institutions.⁸ For Stalin, as for his tsarist predecessors, bureaucracy was an essential instrument of domination. To bring the administration under party control, Stalin, in the best Russian tradition, turned to the knout. As industrialization advanced, institutionalized terror became the means by which Stalin sought to arrest the natural diffusion of power within the Soviet elite.

Hiroaki Kuromiya maintains that Stalin feared that broader ‘bureaucratism’ might hinder the implementation of revolutionary policy. In May 1928, Stalin declared to the Eighth Komsomol Congress:

Moshe Lewin rejects the idea that Stalin attacked the bureaucracy for fear that they might hinder the implementation of revolutionary policy. He wrote: ‘The Stalinist method of bloody purges looked like the ultimate weapon against the unstoppable growth, power, greed and malfunctions of the bureaucracy. But we will be able to demonstrate the futility of “the ultimate weapon”. Purges, however bloody, were entirely useless as a method for changing bureaucracy's way of being’ (Ref. 1, p. 56). Lewin points to Weber's observation that the absolute dictator ‘…is often completely in the power of his bureaucracy since … he has no means of discovering whether his policies are being enforced’ (Ref. 1, p. 67). Stalin can be seen as the anti-Christ of bureaucratic structures – and, in this sense, their product. They were ‘dedicated’ to him, but this does not change the fact that their underlying developmental momentum was detrimental to his system. Purges and the personality cult did not originate with Stalin, but were rather the result of a newly achieved centralization of political, military, economic and ideological structures. Such a degree of centralization – usually attainable only in the aftermath of revolution, war or similar upheavals – in turn brought into being the charismatic embodiment of a larger-than-life hero cum villain.

In fact, while an appeal to socialist constructivism provided the central justification for Stalin's industrialization campaign, Stalinism was not primarily a socialist industrial or state system; but neither was it a betrayal of socialism. Stalinism consisted of more than a revived Russian state, and it was more than just another chapter in the supposedly ongoing march of progress and the Industrial Revolution. Stalinism represented a unique kind of modern industrial state despotism, a complex, often contradictory, and constantly evolving political-economic system, encompassing bureaucratic relationships and social organization. The massive industrialization campaign initiated by Stalin in the late 1920s and the creation of a powerful state that accompanied the Soviet industrial revolution did not take place in historical isolation; it was part of the crisis and reconstruction that engulfed all of Europe after the First World War.

Recent scholarship has emphasized not only the power of the Stalinist bureaucracy, but also its intractability and inefficiency. Observers have come to realize that highly centralized systems have inevitably been undermined by infighting and resistance from below. The Soviet administration was no exception to this, as extreme Stalinism led to institutional and systematic paranoia. The more Moscow experienced administrative difficulties, the more it centralized its power; but with greater centralization came more inefficiency and a lessened ability to govern. The supposedly magic talent of the Communist Party to create a tailor-made bureaucracy is little more than a legend. In reality, the bureaucracy was insubordinate, disorganized and cumbersome enough to provoke the terror unleashed against it. In his study of the emerging steel complex and city of Magnitogorsk, Stephen Kotkin has noted how local and regional authorities modified even as they implemented the centre's grand campaigns. The Kremlin did not succeed in having its way in particular regions.Reference Kotkin¹⁰

Soviet Industry

The industrialization of the 1930s resulted in large-scale upward mobility of the working class and the peasantry. Stalin stated that like any other regime, the Soviet government needed its own elite, which should be recruited primarily from the working class: ‘Not a single ruling class has managed without its own intelligentsia … We do not need commanding and engineering-technical cadres. We need commanding and engineering-technical cadres capable of understanding the policies of the working class of our country, capable of mastering those policies and prepared to carry them out conscientiously.’Reference Fitzpatrick¹¹

The combination of a strong collective ethos with a futuristic orientation and the centralized bureaucratic expropriation of Russia's vast resources made possible the Bolsheviks’ glories as well as their infamies. The architecture of the Soviet state was determined by three institutions that had most contributed to the Bolshevik victory in the civil war: (1) the centralized and all-encompassing nomenklatura ¹² system of political-bureaucratic appointment that helped harness the segments of the former imperial bureaucracy; (2) the army; and (3) the industry. The Bolsheviks managed to achieve what Max Weber himself could not have imagined – a charismatic bureaucracy that negated the dichotomy between ‘utopia’ and ‘development’. This major innovation had its roots in three Western organizational breakthroughs: a bureaucratic government, economy and mass political party.

In the Stalin era, misrepresentation and false reporting by enterprise managers were rife. Ministry and supply officials understood that enterprises, being ‘greedy opportunists,’ demanded ‘too much.’ When the minister of heavy industry requested: ‘Tell us please how our enterprises received only 50 percent of the supplies they requested and fulfilled their production program by 100 percent,’ one manager responded thus: ‘In July, I told my people to prepare a report about fulfilling plans for individual branches. I then began to edit these reports and saw that the production programs had been fulfilled 102 percent, but only 40 percent of the supplies had been received. I believed there was something left over from the previous year. I looked into the report of the previous year – again 103 percent and supplies only 40 percent. I couldn't look at the one previous to that because I could not find it.’Reference Gregory and Harrison¹³

The Soviet system gave rise to enormous misrepresentations, some of which had serious consequences. The full measure of what was happening, however, was masked by the unrestrained use of the country's never-ending supplies of materials and labour. This practice was institutionalized by the deliberate decision to set low prices on raw materials. The low prices of raw materials were combined with an incentive system called ‘val’. The ‘val’ system rewarded managers for increasing the gross rouble of their output compared to what had been reported the year before. Since gross rouble output was measured simply by adding up the cost of inputs, managers were in effect induced to use as much input as possible. As a result, Soviet manufactured production became unwieldy, and large amounts of energy and raw material were wasted. This is exemplified by the way the Soviet Union constructed airplanes, which were heavy and required extra-powerful engines. This caused Soviet planes to be unmarketable in the capitalist world, since commercial airlines were unwilling to pay the high costs needed to fuel their engines. It seems obvious that the low percentage of exported engineering products was not due to limitations imposed by the West, but to the inability of Soviet industry to supply quality products, especially high-level ones, to an increasingly competitive market.

Research and Technological Innovation

The scientific and technological structures instituted by early Soviet administrators and planners were based both on what they inherited from the tsarist regime and on their vision of a socialist economy, which is different from and, in their opinion, superior to the capitalist economies of the West. Western science and technology, they thought, suffered from wasteful duplication of research as a result of competition among secretive capitalist industries, pursuit of profit to the detriment of public benefit, a lack of centralized planning and inadequate government financial support.

The most lasting scientific reform instituted in the 1920s by the Soviet government was the creation of a system of research organizationally based on institutes. Locating the most advanced research in institutes rather than in the universities was the early Soviet planners’ reaction to a political problem. Almost all the best Soviet scientists in the 1920s had been educated before the Revolution and were, at least in the minds of the leaders of the Communist Party, of questionable political loyalty. If these talented but untrustworthy scientists were placed in institutes separated from the universities, they could continue their high-level research without infecting undergraduates with their unorthodox political ideas.

The scientific system created by the Bolsheviks resembled that of tsarist Russia with one principal difference: the disappearance of private funding. Science in the Soviet Russia had become an exclusive government enterprise. Scientific institutions that had been financed by private patrons before the revolution were now funded by new patrons: state agencies. Even the Imperial Academy of Science managed to survive under the new regime, despite the objections of militant Bolsheviks, who wanted to abolish this odious remnant of the ‘bourgeois imperialistic past’. Many institutions, however, originated not from a deliberate state science policy, but rather from spontaneous efforts of scientists seeking funding to support their own research.

As in all other spheres of Soviet life, the Bolsheviks created a centralized, hierarchical complex of scientific institutions and a bureaucratic apparatus to supervise and manage it. They imposed tight control over the personnel of scientific institutions, particularly regarding the appointment of top administrators, namely laboratory heads, institute directors, and academy presidents. Shortly after the Bolsheviks began planning the Soviet economy, they found ways to control the direction of scientific research. The isolationist Soviet foreign policy also resulted in the total segregation of Soviet science: by the end of the decade, all contact between Soviet scientists and their foreign colleagues had been severed.

Mass propaganda campaigns, a series of purges and widespread arrests, which culminated in the Great Terror of 1936–1938, led scientists to develop rhetoric and rituals that would demonstrate their conformity to party policies and justify their research and institutional agendas in the eyes of bureaucratic party supervisors. By the end of the decade, Russian scientists no longer claimed that their work transcended ideological, political, and practical concerns. On the contrary: they pledged allegiance to every shift in the party line and employed all kinds of appropriate ‘Marxist,’ ‘practical’ and ‘patriotic’ language.

The Soviet leaders valued science for its contribution to the process of economic advancement, and they aimed at creating a centralized scientific organization that could be easily linked to economic planning organs. But the researchers working in the centralized institutions in the large cities gained a reputation for taking little interest in production at local sites. On the other hand, factory managers, worried about meeting output quotas set by the central planners, were reluctant to interrupt production in order to try out new ideas that existed only on paper. This failure to produce an intimate relationship between research and industrial production proved to be the greatest weakness of Soviet science and technology. Soviet science was extensive in several different ways: it involved large numbers of researchers, was organizationally highly centralized and was dominated by powerful leaders. The system emphasized quantity over quality, seniority over creativity, military security over domestic welfare and orthodoxy over freedom.

In the post-Second World War period, at Novosibirsk, Pushchino, Dubna, and other centres outside Moscow, large ‘science cities’ were established where thousands of researchers worked in close proximity. In the first decade after their initiation, these centres performed fairly well, benefiting from their distance from the stymieing political influence of Moscow, but soon they too were caught up in the evolving bureaucracy. Space exploration and the early phases of nuclear power development responded much better to centralized direction than fast-moving and innovative industries such as computer technology. Even regarding nuclear power, the records of the centralized Soviet bureaucracy, which concealed innumerable safety defects until the Chernobyl disaster revealed them to the entire world, do not demonstrate that a centralized and technocratic approach was effective. Major achievements in certain spheres of Soviet science and technology in the 1950s should not obscure the fact that in other areas development was slow. This was due, first of all, to the enterprises’ and ministries’ un-receptiveness to scientific and technical progress and secondly, to bureaucratic research structures monopolized by functionaries lacking in creative ability, who surrounded themselves with servility and mediocrity.

Communist administrators have for the most part been incapable of linking organizations into extensive networks, thereby fragmenting innovative processes. This problem has been clearly revealed in the Soviet effort to bring its economy into step with a highly technological world. To cite one important example, while the success of its centrally planned economy became increasingly dependent upon its ability to make effective use of computers, the Soviet Union met with particular difficulties in disseminating advanced computer systems and assimilating foreign computer technologies. Despite a high level of scientific, mathematical, and engineering capabilities, the Soviet Union was unable to create organizational structures that would facilitate the effective transfer of computer technologies and their implementation to a wide range of enterprises. Soviet educational achievement was subsequently hampered by political interference into educational matters; this is most blatantly demonstrated by the detrimental effects of the officially endorsed genetic theories of T.D. Lysenko on biological research.

As the dominant class in the USSR, the elite masqueraded as representing the Soviet people, depicting itself as an integral part of them. This gave rise to a dominant class lacking in innovative motivation. If an engineer, worker or scientist came up with an obviously beneficial innovation, he was forced to overcome the resistance of local and centralized elites, whose reaction to individual initiatives was not, as a rule, to ban or prohibit them, but to hinder and slow them down as much as possible. If an individual innovator attempted to break through these obstacles, he would confront serious political, legal, economical and ideological barriers. This ‘struggle with the system’ made it absolutely clear that innovations posed a really complicated problem. The ruling power of the CPSU did have its ‘shadowy’ purpose, and was successful in achieving it – a purpose that was neither written about nor spoken of in the USSR. This purpose was the self-advancement and reinforcement of the power of the ruling authorities: the Party, the Soviet elite. Not only such trends as industrialization and collectivization, but also other more or less noticeable innovations such as launching the Soviet satellite into space, the Kalashnikov submachine-gun, steel-casting technology and whatever novelties were born and put into practice – everything was done on behalf and for the purpose of praising the overall ruling and guiding force, namely, the CPSU, or rather the power that stood at its head.

Particularly unenviable were those innovators who were totally dependent on the bureaucrats, who controlled the means of production, finances and manpower. The innovating body could not obtain these from independent sources, for these were non-existent under the socialist system. As a result, the innovator was compelled to seek support and protection from the bureaucrat. This institutionalization of innovations was a product of socialist monopolism. The innovator, who was dependent on the monopolist, was unable to make independent decisions and begin producing the innovation; even if he did manage to initiate such a project, it would still be necessary to request funds and resources. Since the monopolist was interested in avoiding risk and minimizing expenditures, most of these requests were turned down.

The Khrushchev Era

After Stalin's death it became clear that the Soviet government would never again revert to being an autocracy; it had become a bureaucratic oligarchy. In the absence of terror, the new elite had to demonstrate its right to rule, its competence to do so, and its indispensability, while building up its authority. During his term as the head of the CPSU, Nikita Khrushchev pursued reformist policies, attempting to limit the hegemony of state bureaucracy and refashion it into a centralized governing mechanism. Khrushchev sought to combine decentralization of authority and its transfer to local government with a high level of party intervention in day-to-day economic management. This was intended to increase the effectiveness of Soviet centralism by purging it of its superfluous bureaucratic component. Of course the state bureaucracy resisted Khrushchev's attacks on its hegemony and played a key role in his subsequent removal in 1964. Khrushchev's fall from power ushered in a new era of orthodox neo-Stalinism, a centralized, repressive state adapted to contemporary requirements.

The Brezhnev Era

Stalin had allied himself not with the Soviet worker, but with the middle classes. In his ‘Big Deal,’ the delivery of material benefits in exchange for political support, the worker as a role model was supplanted by the image of the happy, satisfied careerist. During the 1960s and 1970s, workers’ morale continued to decline, as Leonid Brezhnev promoted his policy of ‘stability of cadres,’ a programme designed to guarantee material and job security to the middle-class bureaucrat and party worker. The main reason for economic sluggishness during Brezhnev's term as the head of the CPSU was the recognition that structural reforms were urgently needed and the fear that this aroused. These reforms would effect the transition to economic accountability in industry, cooperative reforms in the service sphere, and team and family contracts in the countryside, and most frightening of all, the necessity of restricting the supremacy of Brezhnev's main power base – the bureaucracy.

In the 1980s, the export model of the Soviet Union was based on raw materials (mainly energy) and low-grade manufactured goods, primarily due to the country's inability to compete in world markets with the high-quality industrial (especially engineering) production of more advanced countries. This situation was brought about by the low technological levels of Soviet industry on the one hand and an abundance of mineral resources on the other. In the 1980s, the Soviet Union was the largest producer of oil, gas, ferrous ores, coke, timber, steel, cast iron and cement.

Efforts to improve the quality of Soviet industry had already begun in the 1930s. ‘The situation of the quality of the industrial production is at a very low level,’ ascertained the 16th Congress of the Communist Party of the Soviet Union. In order to improve this situation, the congress passed a resolution emphasizing that the penalties for non-compliance with quality of production and quantity of output should be the same. Regardless of an intensive campaign, and in spite of naming the tenth Five-Year Plan (1976–1980) the ‘Five-Year Plan of Quality,’ 46 years later the situation, rather than improving, had gotten worse. The percentage of poor-quality goods was so ‘great’ that in 1982 State Control organs issued 2000 orders refusing to accept goods. The fact was that most machinery produced for the metal industry was heavier than that manufactured in the West, and certain types of plastics, synthetic fibres and instruments were also inferior to similar foreign-made products. In addition, many consumer goods such as footwear, outer garments, haberdashery and so on, were inferior in quality to those manufactured abroad.

From 1973 to 1982, the number of enterprises producing defective goods increased from 1000 to 2300.Reference Fakiolas¹⁴ This increase can be explained thus: even when producing faulty commodities, the workers employed in such enterprises could receive bonuses on condition that they had met ‘quantitative indices.’ Opportunities for managerial staff to improve this situation were minimal – often non-existent – because quotas were overloaded and left no margins. If a manager failed to comply with qualitative indices he might be reprimanded or fined. However, if he failed to meet quantitative indices, to fulfil the plan as required by law, he could either be sacked or demoted.

During the Cold War, official Soviet and CIA statistics showed that Russia was catching up with the American standard of living. Both sources suggest that in 1989 the Russian Per Capita Gross Domestic Product (GDP) was 68% of that of the United States. Yet, just two years later the figure had dropped to 14.7% according to the market rate of exchange.Reference Rosefielde and Hedlund¹⁵ Russia's relative backwardness on the competitive market had not diminished, but widened. The Kremlin has repeatedly demonstrated that it could mobilize resources and borrow technology from abroad in order to enhance productivity. But, despite its economic advantages, it has failed to recover lost ground because of its low rate of modernization. Russia had been able to achieve the statistical illusion of progress, but this was not backed up by substance.

The Gorbachev Era

The source of Mikhail Gorbachev's main difficulties in introducing economic and political reforms was an entrenched bureaucracy that, after repression had eased off, still had the power to protect itself from unwanted interference from above. Moscow became merely the central nexus for bureaucratic bargaining for resources and quotas, turning the Soviet economy into a wasteful, inert behemoth. The political logic behind Gorbachev's reform programme was to suppress the collectivist spirit of Soviet bureaucracies and render them more leader- and client-oriented. However, his reformist policies regarding insolvent enterprises met considerable bureaucratic and political opposition. Bureaucrats and party secretaries placed obstacles in the path of reform, and succeeded in neutralizing most of the Finance Ministry's new tight credit policies. As a result, the government bureaucracy and its ageing technocratic leadership succeeded in blocking any economic or political reform in the late Gorbachev period.

Post-Soviet Russia

The transition process got underway in the Soviet Union when an exhausted Communist regime began to lose the support and legitimacy it needed to remain in power. In the economic sphere, the de-legitimization phase was characterized by stagnant or declining economic performance. The Soviet GNP growth rate had declined steadily throughout the Brezhnev years, from 4.7% per year from 1961 to 1965 to only 2.0% from 1981 to 1985.Reference Dawson¹⁶ These declining growth rates were paralleled by a decrease in industrial production, agricultural output, labour productivity, capital investment and per capita income.

In post-Soviet Russia, very few Soviet-era industries have been able to meet world production standards of quality and efficiency, thus leading to bankruptcies, layoffs and unemployment. This situation has derived from the fact that in Russia, ‘enterprise’ was an integral part of bureaucracy, distinguished only by virtue of its special role in transforming on-paper directives into actual output. Plant managers were subject to the same hierarchical discipline and bleak career prospects as other members of the bureaucracy, so they had little if any motivation to care about what their potential ‘customers’ needed, or were prepared to pay for.

In the late 1980s and early 1990s, commercial legislation saw the appearance of the ‘pushers’ (tolkachi), as the ‘second economy’ emerged from the shadows. Reforms hastened the decline of the system of administrative command economy, but bureaucratic resistance slowed down the process. By 1992, Soviet ministries in charge of planning, prices and supplies had been eliminated, but the overall size of the Russian state bureaucracy has not diminished. In 1995, the government bureaucracy of the Russian Federation had grown to 1.7 times the size of the former Soviet government bureaucracy. An over-bureaucratized state of workers and peasants was replaced in the 1990s by an over-bureaucratized state of merchants and financiers. Recognizing the need for reform to reduce bureaucratic interference in the economy, President Boris Yeltsin pledged to streamline the Russian bureaucracy and reduce its size by 50% by the spring of 1998. But Yeltsin's governments were simply too weak to subdue the bureaucratic leviathan and stand up to a hostile parliament and an indifferent public. Furthermore, the president himself sought to protect his authority by playing off mutually antagonistic factions within the cabinet against each other. Small wonder, then, that Putin declared a year after his election that one of the chief lessons he had learned was that ‘…it's very hard to fight with the bureaucracy.’Reference Tompson¹⁷