The trouble wasn’t that the factory managers disobeyed orders. The trouble was that they obeyed them precisely. If a shoe factory was told to produce 1,000 shoes, it produced 1,000 baby shoes, because these were the cheapest and easiest to make. If it was told to produce 1,000 men’s shoes, it made them all one size. If it was told to produce 1,000 shoes in a variety for men, women, and children, it produced 998 baby shoes, one pump, and a wing tip. If it was told to produce 3,000 pounds of shoes, it produced one enormous pair of concrete sneakers. The factory managers weren’t doing this because they were evil or stupid. They did it because their livelihoods, their futures, and sometimes their necks were at stake. They didn’t have to satisfy customers. They didn’t have to please stockholders. What they had to do was meet the gross-output target, no matter what. Getting the raw material and machinery to meet the gross-output target was as hard on Soviet factory managers as wearing enormous concrete sneakers was on Soviet consumers. Soviet factories were not allowed to deal directly with each other. All requisitions had to go through the State Planning Committee (the well acronymed GOSPLAN) and the State Committee on Material-Technical Supply (the wonderfully acronymed GOSSNAB). These entities worked as well as everything else worked in the Soviet Union. Thus when a factory manager was told to produce 1,000 shoes, he ordered 1,000 tons of leather. That way, maybe he’d get at least a couple of pieces of cowhide. And if he got too much, great, he’d hide it. A black market of strange bartering grew up among factories as managers traded unneeded things to make unwanted stuff. And a special class of bureaucrats called tolkachi, “pushers,” arose to facilitate these deals. Tolkachi were, essentially, hired to be white-collar criminals. Many of today’s filthy-rich New Russians were tolkachi and still are, since the Russian government has by no means untangled itself from the economy. Members of the Soviet managerial class were forced to become liars and thieves, and ordinary workers took the hint. The amount of on-the-job theft in the Soviet Union was astonishing. In 1990, the USSR Academy of Sciences reported that “losses of the objects of labor total approximately 70 percent” and “losses during the use of the means of labor [i.e., tools and raw materials] total 40 percent to 50 percent.” If any of that contradicted the spirit of marxism, you’d be hard put to learn it by reading Marx, especially reading the Theory of Surplus Value. The value of a
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