Academic journal article Monthly Labor Review

Perestroika and Its Impact on the Soviet Labor Market

Academic journal article Monthly Labor Review

Perestroika and Its Impact on the Soviet Labor Market

Article excerpt

Two books assess, respectively, the success of perestroika and the Soviet transition to a market-based economy; much remains to be done, and certain detrimental effects of the transition must be alleviated or avoided

The breakup of the Soviet Union, spurred in part by the failure of its economic system, is a world-shaking event, unforeseen by most and pregnant with unforeseeable consequences. It is widely being argued that a market economy will in time evolve in the Soviet Union, but enormous obstacles remain in the path of such an evolution; and it is far from assured whether and how they will be overcome. In Restructuring the Soviet Economy, Nicolas Spulber analyzes the salient issues posed by the Soviet leadership's attempts to deal with them.(1) In doing so, Spulber examines the factors behind the inability of Soviet economic institutions to narrow the productivity gap between Soviet and Western industries and to ensure adequate living standards for the Soviet people.

These same factors have inhibited the development of a work force trained and skilled in up-to-date production methods in industry and agriculture and in the efficient delivery of consumer services. Occupational and geographic mobility have been retarded, and large-scale unemployment threatened. The problems faced by the Soviet labor force under the pressures of restructuring and reform are discussed in detail in In Search of Flexibility, a collection of papers published by the International Labour Office and reviewed in the second part of this essay.(1) Historical background

Over the past half-century, economists have devoted much thought and research to the sources of economic growth; economic failure on the scale and at the rate experienced in the Soviet Union has not come within their (or anyone else's) purview. There is no modem precedent that might serve as a model to help us understand this failure. However, the Soviet economy was originally itself modeled by what its chief theoreticians-Lenin, Bukharin, and Preobrazhensky-conceived as monopoly capitalism, the bearer of advanced technology and production methods typified by a large-scale and hierarchically structured work force. While Spulber does not address this aspect of the Soviet economy's origins, he opens many chapters of his book with brief presentations of the thinking of Marx and Engels. Such thinking, whatever the intentions of Marx or Engels, became part of the Soviet economic dogma that powerfully influenced the course of the Soviet economy.

It is noteworthy that Eduard Bernstein, a German social democrat and intellectual, had already provided overwhelming evidence in the 1890's of the continued growth and viability of small and medium-sized businesses and of the essential role these businesses played in the economy, thus disproving a fundamental tenet of Marx' economics. The Bolsheviks scornfully rejected Bernstein's evidence as part of an unacceptable "revisionist" tendency, and this only stiffened their dogmatism.

Spulber lists four noteworthy institutional features of the Soviet economic system, all of which derive either from the Bolsheviks' early conception of monopoly capitalism or from what they construed to have been Marx' theory: (1) The economy is-or was until the mid- 1980's directed by the Communist Party of the Soviet Union; (2) its "commanding heights" are nationalized; (3) it is managed by a centralized apparatus; and (4) production of the means of production has primacy over production of consumer goods. The policy of perestroika, initiated by Mikhail Gorbachev in 1985, subjected all four of these features to attempts at drastic reform. The achievements of perestroika remain highly ambiguous, and Spulber virtually dismisses them, with the exception that the Communist Party's directive powers were sharply curtailed and shifted to agencies of the State. (More recent events, such as the apparent dissolution of the party, are not covered in the book. …

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