I think the big tragedy for USSR was when Khrushchev shut down Artels that were operating under Stalin. These were basically worker cooperatives, and they could’ve filled the role of a socialist market economy. China addressed a similar problem by introducing controlled capitalist enterprise within the system during reforms. And we can see how well that worked out.
If you remember, how did you come across Artels? Ie what did you read when you discovered this? Sometimes not just the new information is useful but the process of how that new information was discovered is also useful.
I was talking to a friend actually, we were chatting about China’s market economy and how USSR approach of only having state industry failed to deliver economic development in the civilian sector. And he pointed how it’s basically all Khrushchev’s fault.
Honestly, Khrushchev killing the artels is one of the clearest examples of how ideology and bureaucracy can strangle a good thing. Stalin developed a whole sector of worker-owned cooperatives making everything from furniture to clothes. They were actually responsive, filled gaps the state sector ignored, and paid their members decently.
Khrushchev was trying to purify the economy after Stalin. To him and the party purists, the artels were a ideological stain. They were a leftover from the NEP days, a form of petty bourgeois activity. Real socialism, in their minds, meant everything owned by the state, not by groups of workers themselves.
But it wasn’t just dogma because the state factory bosses hated them too. The artels competed for materials and skilled workers, and they were often more efficient. Their success made state sector look bad. So you had this alliance of ideologues who wanted purity and bureaucrats who wanted no competition.
Khrushchev was also big on giant, modern industries. He saw these small, flexible artels as backwards. He wanted everything big, centralized, and under the thumb of Gosplan. So he crushed them to make the economy look more like his vision of a modern superpower.
I’ve just thought up a follow up question: given what you said, would you say Krushchev is an example of left deviation or a right deviation from Stalin (or maybe neither)?
(I have always thought of leaders after Stalin as a general trend of right deviation till Gorbachev who then just capitulated to capital with his final act but now I am thinking it is not so straight forward)
I would argue that it was neither. It was a deviation towards far less competent leadership. In my opinion, the main lesson of USSR is that you really have to make sure there are strong selection mechanisms within the system that ensure competent people rise to the top. This is where China does a far better job incidentally. I did a deep dive on that here if you’re interested https://dialecticaldispatches.substack.com/p/rethinking-governance-through-outcomes
and also USSR losing most of their industrial base as all western Russia was gutted by nazis in ww2 made it significantly harder for USSR to match production against USA. and by the 70’s and 80’s USSR was shadowed by China as well in most sectors…
considerately, China had a comparably similar industrial base to USSR, up until the 1950’s. CPC has been playing the long game with the US it seems
Yeah, the industrial base in the west being gutted certainly didn’t help things. Although, I think if internal markets were allowed to operate, USSR could’ve developed a lot more rapidly. The problem with the centrally controlled approach is that decisions makers end up having to deal with a lot of noise and delays. Information takes time to reach them, and it’s not always accurate, then when the decision is made, it takes time for it to propagate, and so the whole cycle ends up being inefficient. Using markets allows allocation to happen dynamically within the system, and then the planners are able to focus on high level flows without having to micromanage things. The Artel approach would’ve been strictly superior to capitalist markets as well since it would’ve been worker owned enterprises where you’d have democratic control over the workplace.
I think the big tragedy for USSR was when Khrushchev shut down Artels that were operating under Stalin. These were basically worker cooperatives, and they could’ve filled the role of a socialist market economy. China addressed a similar problem by introducing controlled capitalist enterprise within the system during reforms. And we can see how well that worked out.
Thanks - added to my reading list.
If you remember, how did you come across Artels? Ie what did you read when you discovered this? Sometimes not just the new information is useful but the process of how that new information was discovered is also useful.
I was talking to a friend actually, we were chatting about China’s market economy and how USSR approach of only having state industry failed to deliver economic development in the civilian sector. And he pointed how it’s basically all Khrushchev’s fault.
Thanks for explaining (I asked just in case there may be a new book/article/resource for me to consider!)
Would you know the material conditions that led to shutting down of Artels? Was there a greater interest it was a threat to?
Honestly, Khrushchev killing the artels is one of the clearest examples of how ideology and bureaucracy can strangle a good thing. Stalin developed a whole sector of worker-owned cooperatives making everything from furniture to clothes. They were actually responsive, filled gaps the state sector ignored, and paid their members decently.
Khrushchev was trying to purify the economy after Stalin. To him and the party purists, the artels were a ideological stain. They were a leftover from the NEP days, a form of petty bourgeois activity. Real socialism, in their minds, meant everything owned by the state, not by groups of workers themselves.
But it wasn’t just dogma because the state factory bosses hated them too. The artels competed for materials and skilled workers, and they were often more efficient. Their success made state sector look bad. So you had this alliance of ideologues who wanted purity and bureaucrats who wanted no competition.
Khrushchev was also big on giant, modern industries. He saw these small, flexible artels as backwards. He wanted everything big, centralized, and under the thumb of Gosplan. So he crushed them to make the economy look more like his vision of a modern superpower.
I’ve just thought up a follow up question: given what you said, would you say Krushchev is an example of left deviation or a right deviation from Stalin (or maybe neither)?
(I have always thought of leaders after Stalin as a general trend of right deviation till Gorbachev who then just capitulated to capital with his final act but now I am thinking it is not so straight forward)
I would argue that it was neither. It was a deviation towards far less competent leadership. In my opinion, the main lesson of USSR is that you really have to make sure there are strong selection mechanisms within the system that ensure competent people rise to the top. This is where China does a far better job incidentally. I did a deep dive on that here if you’re interested https://dialecticaldispatches.substack.com/p/rethinking-governance-through-outcomes
Thanks again! Will add that one too to my reading list
Thank you so much for this insight
oh good to know about Arkels.
and also USSR losing most of their industrial base as all western Russia was gutted by nazis in ww2 made it significantly harder for USSR to match production against USA. and by the 70’s and 80’s USSR was shadowed by China as well in most sectors…
considerately, China had a comparably similar industrial base to USSR, up until the 1950’s. CPC has been playing the long game with the US it seems
Yeah, the industrial base in the west being gutted certainly didn’t help things. Although, I think if internal markets were allowed to operate, USSR could’ve developed a lot more rapidly. The problem with the centrally controlled approach is that decisions makers end up having to deal with a lot of noise and delays. Information takes time to reach them, and it’s not always accurate, then when the decision is made, it takes time for it to propagate, and so the whole cycle ends up being inefficient. Using markets allows allocation to happen dynamically within the system, and then the planners are able to focus on high level flows without having to micromanage things. The Artel approach would’ve been strictly superior to capitalist markets as well since it would’ve been worker owned enterprises where you’d have democratic control over the workplace.