The Soviet Transition from Socialism to Capitalism: Worker Control and Economic Bargaining in the Wood Industry*

THE SOVIET TRANSITION FROM SOCIALISM TO CAPITALISM: WORKER CONTROL AND ECONOMIC BARGAINING IN THE WOOD INDUSTRY*

MICHAELBURAWOY PAVELKROTOV Ur~i~~ersityof California, Berkeley Russian Academy of Sciet~ces

Analyses oftlze transition from state socialisnz to capitalism @picallyfocus on political im- pedimerlrs and underesritnate tlle economic obsracles to economic rransformatior1. Based or1 a c,ase srudy c?f'theSoviet ~'oodindusrr-y, we argue tlzur there Hill he no economic tr.ansition so long as enterprises rerain two hisroric features, nanzely anarchy in pr.oduction and bar- qainit~gin exrernal r.elarions. Far. jtom consrituting a re~~olution,tlze witllerirlg away of the party srate has esaggerared rlle parhologies of'rhe old econotnic order. Barrer has hecome nzo1.e inzpor.tant, conglonzerates ha1.e strengrhened their monopoly and ~wrkers1la1.e greater conrr.ol of tlze shop floor. If there is a nzolbemenrto~sar.d a nzar.ket economy at all, it is to~sar.da jb1.m of merchant capitalisnz rlzut deepens economic under.de~>elol~nzet~tand tlz~~arts tlze rise of nzodern bourgeois capiralism.

hereas for the first half of the twentieth ther too weak or where it has been strong it has Wcentury socialism was regarded as a real advanced its interests within capitalism rather than alternative to capitalism, now it appears to be no against it. The forces of international capitalism more than a will-o'-the-wisp. In advanced capi- have conspired to defeat attempts to install so- talism. the obstacles to the transition to socialism cialism through economic strangulation or direct have been multiple and diverse: capitalism has political intervention. Finally. the unattractiveness been able to overcome the crises it generates by of existing forms of socialism and the lack of plau- continually revolutionizing itself as its epicenter sible socialist alternatives have made the project- shifts from nation to nation: the state has effec- ed transition utopian. tively orchestrated economic relations and incor- In contrast, the conditions for the transition porated different groups into the capitalist order. from state socialism to capitalism are propitious. In particular, the working class, the supposed First, far from overcoming the crises it generat- agent of the transition to socialism, has failed to ed, Soviet state socialism succumbed to economic become a revolutionary class - it has been ei- stagnation. There is general agreement that the Soviet economy began to decline in the early " Direct all correspondence to Michael Burawoy, 1970s, a decline from which it never recovered. Department of Sociology, University of California, Second, the party state not only failed to effec- Berkeley, CA 94720. We would like to thank the tively coordinate the economy, but in the Soviet managers and workers at Polar Furniture as well as all the other people we interviewed in connection with Union, at least, it also failed to develop adequate this study. We are particularly grateful to the Trade auxiliary markets that would fill the "functional Union Federation of the Republic of the North and to gaps" left by planning. Third, the Soviet regime Dr. Tamara Kalyanova for support throughout the had limited success in eliciting the active con- research. In addition to the ASR editor and two anon- sent of subordinate groups, including the work- ymous referees we thank Kathryn Hendley, Neil Flig- ers but more importantly intellectuals, who often stein, Erik Wright and members of the Smith Disser- headed opposition to the party state. As pere- tation Group - Bob Freeland, Mary Kelsey, Hyun stroika unfolded, large fractions of the Soviet Ok Park, Chris Rhomberg, Brian Rich, Suava Sal- leadership abandoned their allegiance to a so- ameh, Anders Schneideman, Rob Wrenn, and Mona cialist future, turning their backs on the past as an Younis. Their comments became the basis for rewrit- ing the paper. Burawoy's research was partially sup- embarrassing failure. Fourth. international polit- ported by grants from the MacArthur Foundation and ical and economic forces are conspiring to pro- the Social Science Research Council, administered mote the most rapid transition to capitalism pos- through IREX. All names which appear in the text are sible. Economic aid is made contingent on intro- pseudonyms. ducing a stable monetary system. liberalizing pric-

16 American Sociological Review, 1992. Vol. 57 (February:16-38) THE SOVIET TRANSITION FROM SOCIAL1SM TO CAPITALISM 17 es, privatizing state enterprises and bringing down capitalism. For example. economists Sachs and tariff barriers. Fifth. even if there is no strong Lipton (1990. p. 63) claim that the biggest obsta- internal bourgeoisie. still capitalism has a magi- cles to the effectiveness of "shock therapy" lie in cal appeal to all strata in Soviet society - the government responsiveness to popular demands possible delivery from an economy of shortages for protectionism or reflating the economy, and and all the deprivation and degradation that this in paralyzing debate over privatization. Similar- entails. Finally. the transition is not utopian - ly, political scientist Przeworski (1991, chap. 4) there ar-econcrete examples of "successful" cap- has suggested that the more radical the strategy italist societies. from Sweden to Germany. from of transition the more likely it is to succeed but the United States to Japan, from South Korea to that implementation may be incompatible with Taiwan. In short, if ever there were favorable liberal democracy. Again. the focus is on the circumstances for a transition from one econom- political conditions of transition. In a less sophis- ic system to another, they surely exist in the new ticated and more triumphal analysis. historian Commonwealth of Independent States. Malia (199 1) celebrated the collapse of theMos- At least in their rhetoric and their programs, cow putsch (August 1991) as sweeping away the this optimism is echoed by the teams of Soviet past: "For the starkest fact of the Russian Revo- "economic experts" who have been planning the lution of 199 1 is that virtually nothing remains of transition to capitalism. For example, the five- the old Leninist system. No basic Communist hundred-day Shatalin plan, largely designed by institutions have proved salvageable for a 'nor- Yavlinsky and his collaborators, left little to mal' society" (p. 28). The Revolution installed chance - it laid out a detailed week-by-week liberal democracy with the mission "to put an program to be implemented during each of four end to the previous regime's equivocations about phases. Such programs bear the marks of the old moving toward a market system and privatizing Soviet order, not only in their devotion to plan- the economy, and to plunge ahead. while the new ning but also in their reliance on transforming government has the country's confidence, with the existing order through ideological mobiliza- 'shock therapy' on the Polish model, which is in tion and political decree. For seventy years ide- fact their inspiration"@ 27). ology and politics were directed to the most rap- In our view, these commentaries which focus id construction of socialism, now they have be- on the political conditions of the transition to a come instruments for the most rapid transition market economy underestimate the capacity of from socialism to capitalism. New legislation has the Soviet economy to reproduce itself and resist followed new legislation: the law on individual transformation. Nor do social surveys designed labor activity (1986), the law on the state enter- to assess social support for and resistance to prise (1987), and the law on cooperatives (1988), economic reform give an accurate account of eco- culminating in the law on ownership (1989) that nomic reality. These surveys may be relevant in in principle legalized the capitalist enterprise (Po- the fluid political sphere, but they overlook the morski 1991). These laws permitted new forms way interests are embedded in the day to day of organization and ownership -from coopera- operation of the existing economy. Even if all tives to small enterprises, from leasing agree- actors proclaimed themselves enthusiastic devo- ments to companies of limited liability, from joint tees of capitalism, still, they are locked into a ventures to joint stock companies. preexisting system of economic relations that is While Soviet scholars and journalists as well "indispensable and independent of their will" as politicians riveted their attention first on the (Marx [I8591 1978, p. 4). legislative enactment of economic reform and In this paper, we argue (1) that the Soviet po- then on the formal dissolution of the party state, litical regime was not overthrown but that it dis- there has been little regard for the effects of these integrated: (2) that the decomposition of the par- changes on existing social relations either within ty neither eliminated all obstacles to reform nor or between enterprises. Actual economic rela- reduced the economy to complete chaos; and (3) tions continue to be confused with their juridical that even in the unlikely event that liberal de- expression (Lewin 1974, chap. 8; Bettleheim mocracy should establish itself. it would not have 1976) as if banning the party marked the remov- the capacity to transform a tenacious Soviet econ- al of the last obstacle to full blown economic omy. Our argument is simple. We have not been reform. witnessing a "revolution," but the (long antici- Western scholars subscribe to the same politi- pated!) withering away of the state. Left behind cized view of the transition from socialism to Is an economy that exhibits many of the tenden- AMERICAN SOCIOLOGICAL REVIEW cies and pathologies of the Soviet order but in of socialized production was the exact opposite of exaggerated form. Specifically, the withering anarchy. It was the increasing organization of pro- away of the state has given workers greater con- duction, upon a social basis, in every individual trol of production, has intensified the monopoly productive establishment. (Engels [I8801 1978, p. 706) of economic conglomerates and has increased primitive bartering among enterprises. The gap Thus, anarchy at the level of the relations ofpro- between ideology and reality is as wide as ever duction leads to planning at the level of relations - the posturing of marketeers hides the resil- in production. ience of the old economic order. If a transition From this model of competitive capitalism toward a market economy is taking place at all. it Marx and Engels demonstrated capitalism's in- is in the direction of merchant capitalism which, evitable demise. On the one hand, the pursuit of as both Weber and Marx were at pains to demon- profit would lead capitalists to transform produc- strate, is a (real) revolution away from bourgeois tion, homogenizing the working class, creating a industrial capitalism. reservoir of unemployment. lowering wages, and intensifying work. Small capitalists would dis- appear and society would be polarized into two IDEAL TYPES OF CAPITALISM AND antagonistic classes. Class struggle would inten- SOCIALISM sify. On the other hand. capitalists would accu- We need benchmarks to evaluate real changes in mulate and accumulate. producing more and more the Soviet economy: ideal typical models of where goods and services which fewer and fewer peo- the economy has come from (state socialism) and ple would be able to afford. This would result in where it might be going (capitalism). The mod- crises of overproduction leading to the destruc- els draw on a metaframework that defines sys- tion of capital and its further concentration and tems of production by two sets of relations: rela- centralization. Crises would become deeper and tions ofproduction through which goods and ser- deeper as class struggle intensified. vices are appropriated and distributed. and rela- If Marx and Engels were correct in predicting tions in production that describe the production the demise of competitive capitalism. they nev- of those goods and services (Burawoy 1985). ertheless failed to anticipate the stabilization of a new form of organized capitalism in which competition among capitalists is regulated and class Capitalism struggle is contained. However, organized capi- Marx and Engels defined capitalism as the pri- talism is still capitalism. Regardless of changes tlate appropriation of production and its prod- in the character of competition, increased state ucts, undertaken with a view to accumulating supervision of competition, and the attempts by profit in a context of market competition. Capi- the largest corporations to eliminate competition, talists respond to market competition by lower- there are still markets. and there is still no agent ing the costs of labor power (wages), by intensi- of superordinate control. In short. organized cap- fying labor, by introducing new fosms of work italism did not eliminate the anarchy of the mar- organization, and above all, by technological ket but reconstructed it in different ways (Flig- innovations. Once one capitalist innovates, all stein 1990). Indeed some argue that organized competitors must innovate on pain af extinction. capitalism is becoming increasingly disorganized The gales of creative destruction are inexorable. as production becomes internationalized and at Capitalists do not know from where the next in- the same time fragmented (Lash and Uny 1987). novation will come; they only experience it when With the transformation of capitalist relations fellow capitalists undercut them, forcing them to of production, there have been corresponding follow suit in an attempt to survive. Thus, indi- changes in the sphere of production. Whereas vidual capitalists find the market to be a sea of Marx viewed production planning as despotic uncontrollable forces compelling them to focus and unidirectional, the extension of social guar- their entrepreneurial skills on controlling the pro- antees and political rights as well as changing cess of production. technical requirements prompted management to It became apparent that the production of society at introduce new forms of labor control. Edwards large was ruled by absence of plan, by accident, by (1979), Friedman (1977), Wood (1989), and Piore anarchy; and this anarchy grew to greater and greater and Sabel (1984) have demonstrated that unidi- height. But the chief means by aid of which the cap- rectional or despotic organization is often coun- italist mode of production intensified this anarchy terproductive. Effective planning proves to be a THE SOVIET TRANSITION FROM SOCIAL1SM TO CAPITALISM relation of domination involving bargaining and dictate output targets to enterprises, the relation- compromise. Defining work tasks in minute de- ship was in reality one of bargaining in which tail and then insisting on their execution is both enterprises sought to minimize what the state ap- technically infeasible and politically disruptive. propriated while maximizing what it redistribut- It is better to elicit workers' cooperation through ed. Rather than competition for profits in a mar- granting them a degree of autonomy, even though ket place, central ownership of the means of pro- that autonomy is strictly delimited by the appli- duction led enterprises to maximize their bar- cation of force. Advancing this literature into the gaining power within a hierarchy. They did this realm of management, Smith (1990) has shown by seeking to expand the resources they had at how corporate executives have tried to elicit the their command. Enterprises were not constrained participation of middle managers in streamlining so much by the need to make profit, by what their own managerial labor process. Whatever Komai (1980,1986) calls hard budget constraints, their differences, these studies all agree on two as they were by what the state was prepared to issues: namely the importance of hierarchical allocate. The insatiable appetite for resources control within the enterprise and the multiplicity under soft budget constraints created a shortage of its forms. In short, even though capitalism has economy in which enterprises were continually undergone major transformations in the last hun- scrambling for materials, technology, and labor. dred years it is still capitalism with anarchic rela- The result was a disjuncture between the logic of tions of production and planned relations in pro- allocation and the logic of production. whereas duction. managers under capitalism can never be sure whether they would be able to sell their products, State Socialism under state socialism they can never be sure whether they will have the supplies necessary for Classical Marxism identified the collapse of com- production. Socialist managers faced continual petitive capitalism with the rise of communism uncertainty both in the quantity and the quality -a new order in which planning would be re- of materials, technology and labor. In short,plan- constituted within the workplace and from there ning at the level of the relations of production would be extended to the entire economy.' "So- leads to anarchy of relations in production - cial anarchy of [relations ofl production gives the very opposite of capitalism. place to social regulation of production upon a Of course, capitalist managers also confront definite plan, according to the needs of the com- uncertainties but they are typically from the de- munity and of each individual" (Engels [I8801 mand side. Managers, therefore, can respond, at 1978, p. 7 12). Social appropriation would replace least in the short term, by expanding or contract- private appropriation and the plan would replace ing production. Moreover, capitalist managers the market, while work would be organized by have the advantage of controlling the labor pro- "associated producers, rationally regulating their cess. In state socialism the situation is very dif- interchange with Nature" (Marx [I8941 1967, p. ferent. First, supply uncertainty creates much big- 820). Communism was to be a society in which ger short-term problems for work organization, people collectively would make their own histo- since it necessitates the continual juggling of the ry based on their control of the means of produc- factors of production. Second, and even more tion. Both relations of production and relations important, state socialist managers cannot con- in production would be subject to planning. trol the labor process in attempts to adapt to sup- Instead of communism the Soviet Union cre- ply shortages. This is because they face not only ated an economic order that we call, following shortages of materials and technology but of la- KonrBd and SzelCnyi (1979), state socialism, a bor as well. Thus, the sanctions management can system characterized by the central appropria- wield over its work force are limited. Low levels tion and redistribution of goods and services. of unemployment, extensive employment rights, However determined central planners were to and shortages of labor make it virtually impossible for management to control production -they I Thus, Engels, Kautsky, and Luxemburg saw the must cede that control to workers (Bahro 1978, proletarian conquest of power as coinciding with the pp. 207-10; Holubenko 1975; Ticktin n.d.; Con- transition to communism, whereas the novelty of Le- nin was to work from Marx's Critique of the Gotha nor 199 1, chap. 5).2 Programme and theorize two stages -a revolutionary transition from capitalism to socialism and an We should distinguish between two explanations evolutionary transition from socialism to communism. of worker power on the shop floor. There are those, AMERICAN SOCIOLOGICAL REVIEW

Whether or not anarchy in production gives tion of supply facilities (Berliner 1957, 1976: rise to chaos depends on whether workers use Nove 1965. 1983; Komai 1959; Asselain 1981; their control in a "negative" or a "positive" way. Granick 1954, 1967; Hewett 1988; Bauer 1978; Even more important, however. are the objective Linz 1988: Aslund 1989). These irrationalities conditions of shortage. In the early period of prim- became even more harmful to the economy in itive socialist accumulation associated with the the period after Stalin's death during the transi- first five year plans of the 1930s and the Second tion from extensive to intensive development. World War appropriation and redistribution were which required more complex production pro- more centralized. To establish the Soviet indus- cesses and more stringent quality control. Ac- trial economy it was necessary to create a labor cordingly, the despotic order of command plan- force out of a primarily peasant population, to ning gave way to a system of hegemonic plan- construct an infrastructure that would integrate ning -an elaborate hierarchical game of negoti- an enormous country into a single economy. and ated targets, prices, and sanctions governing the to produce basic materials for a modem industry. appropriation and distribution of resources. It was a period of extensive development whose Enterprises were given more autonomy so that accomplishment could be measured in quantita- managers could devote themselves to garnering tive terns. Although primitive accumulation supplies some of which were used to bribe work- could be and indeed was achieved through com- ers to cooperate in the fulfillment of plan targets. mand, it created extreme disproportionalities and Unlike other countries such as Hungary.' physi- shortages, not to speak of appalling repression. cal planning remained in place and dampened The state reacted to the economic pathologies it the incentive for enterprises to overfulfil targets had generated by trying to regulate worker activ- either through innovation or expansion. Manag- ities through draconian legislation or socialist ers required minimal cooperation from workers emulation such as Stakhanovism. Although des- to ensure that plan targets were met, while in turn potic regimes of production were created, central workers expected managers to deliver adequate planners were never able to turn control over supplies and protect a minimum standard of liv- production to managers (Filtzer 1986: Andrle ing (Lampert 1985, particularly chap. 5; Lampert 1988: Siegelbaum 1988). 1986). These were the terms of what Voskamp Furthermore, the rational pursuit of plan tar- and Wittke (1991, pp. 36044) call the "plan- gets by enterprises generated widespread irratio- fulfillment pact." which however wasteful en- nality from the standpoint of the economy as a dowed work organization with the necessary flex- whole. such as the concealing of productive ca- ibility to deal with supply shortages. Thus. man- pacity, the hoarding of resources, the production agers could confront anarchy in production by of waste, the underestimation of investment re- ceding the shop floor to workers and could com- quirements to hook planners onto projects, and pensate for their lack of control over production backward integration with a view to the duplica- by seeking to regulate external relations through bargaining. such as Kornai (1980),who have viewed central ownership of production as causing a system of shortages InHungary, starting with the new economic mech- regardless of the specific policies pursued by the cen- anism of 1968, fiscal planning replaced physical plan- ter. Others, such as Granick (1987), have argued that ning and gave enterprises more autonomy to produce job rights and overfull employment are the deliberate what they wanted and buy what they needed. Manag- policies of central planners, either as part of an im- ers, therefore, had an interest in extracting more from plicit contractual relationship with labor or as a dis- their workers. But they were also in a better position tinct commitment to socialist principles. In Granick's to exert control. On the one hand, shortages were view changes in central policy could effectively erode often less severe so managers could more easily ratio- the power of workers while Komai would see no such nalize work organization. On the other hand, they possibility. In her recent work on transfers. Hendley could exercise more control over the labor process (forthcoming) could find no evidence that Soviet man- because workers could be mobilized on the basis of agers had taken advantage of new and favorable chang- economic incentives. This was all possible because es in the law which, in theory, gave them greater the expansion of the consumer market and the second control over workers. This points to the autonomous economy made it possible to buy almost anything logic of the shortage economy. Of course, where there with local currency. However, we should be careful was neither a shortage of labor nor of physical inputs not to exaggerate the differences. Hungarian industry and where job rights were more limited (as was often still suffered from shortages and similar trends to- the case in the military-industrial complex) managers ward the bifurcation of control can be found (Stark could exercise greater control over work. 1986, 1989; Burawoy and Lukacs 1992. chap. 4). THE SOVIET TRANSITION FROM SOCIALISM TO CAPITALISM 2 1 Relations of Production -- Relations Anarchy in Production Planning

Planning Communism Capitalism (1) (2)

State Merchant Anarchy Socialism Capitalism

Figure 1. Four Systems of Production

T~.ansitionto u Merchant Capiralisnz? (2) As political bodies reconstitute themselves as "parastatal" centers of economic power, re- Figure 1 summarizes the distinctions we have gional monopolies intensify whose common ob- made between capitalism, state socialism and jective is the maximization of profits rather than communism. In Lenin's model state socialism the satisfaction of some socially defined need. was to evolve into communism. Although the (3) The source of profits is based on trade. "dictatorship of the proletariat" has withered away speculation, or even extortion rather than on the as Lenin anticipated. the current transition is not transformation of production. the "rational capi- toward communism. In the official plans of the talistic organization of (formally) free labor" leaders of Russia and the other nations of the (Weber [I9201 1958, p. 21). Commonwealth. the desired transition is toward (4) Worker controlof production deepens as a Western style "market economy," and as be- monopolies become stronger and supply short- fore the objectives of the planners are at odds with ages intensify. In effect these monopolies con- reality. From the viewpoint of citizens their soci- trolling resources become large trading compa- ety is moving neither toward communism nor nies which "put out" production to worker col- capitalism but toward a universal halzlak (cha- lectives located within enterprises. os). But is a new order taking shape despite cha- We develop these theses through a case study os, or even through chaos? We suggest that if there of a single enterprise -Polar Furniture Factory is such an emergent order, it is to be found in cell in Arctic City. We believe that the systemic fea- 4 of Figure 1 where anarchy prevails in both re- tures of an economy and how it changes can best lations in and relations of production. This is not be grasped by studying enterprises from the stand- necessarily universal chaos, even if that is how it point of what defines and determines success. appears to the participants. Anarchy simply means Polar Furniture is such a successful enterprise. the absence of any agent of superordinate control Our explanation for its success is, in part, in- -it does not necessarily entail the absence of all formed by a comparison with an equally unsuc- coordination. cessful enterprise-- Rezina, a rubber factory in What then is this new order depicted in cell 4? Moscow (Burawoy and Hendley forthcoming). What happens when the party state first with- Our field work in Arctic City took place from draws from the economy and then disintegrates the end of March 1991 to the end of July 1991. leaving enterprises with greater autonomy? We During May and June Burawoy worked as a ma- believe that this withering away of the state leads chine operator at Polar Furniture Factory. while neither to communism nor to bourgeois capital- Krotov conducted interviews with the factory's ism but to a form of merchant capitalism. We managers.' In April and July we conducted inter- propose four theses: 'To convey the participatory character of Bura- (1) Self-generated. lateral linkages between woy's research he is referred to in the first person as enterprises, which had been restricted and con- "I" throughout this paper. Burawoy secured his job at trolled by the party, assume greater importance. Polar after being rejected by a number of other enter- This does not involve the rise of markets but the prises in Arctic City. It was difficult to convince Gen- expansion of a system of barter. eral Directors to give a foreigner permission to work AMERICAN SOCIOLOGICAL REVIEW views with managers in many different enter- rooms were spacious and clean. The modern prises and cooperatives connected with the wood buildings were easily accessible from the main industry as well as with trade union officials, road where signposts boasted the previous year's government officials, politicians in the Republic production figures. A quick tour around the fac- of the North, and executives of the Northern Ter- tory with the polished trade union chairman gave ritories Wood Association. Following the theo- us the impression of efficiency and rationality. retical framework set forth above. our analysis of The workers were young and busy. The plan of Polar begins with the relations in production and production from one shop to the next appeared to from there "extends out" to the complex bargain- be well-organized. It was very noisy and working relations that embed the enterprise within the ing conditions. particularly in the use of lacquer, Republic of the North's wood industry. were hazardous. When we asked about this, there was a shrug of shoulders -managers said that workers were free to leave, or that workers got WORKER CONTROL OF PRODUCTION used to the lacquer fumes and didn't notice them The main division of Polar Furniture lies toward after a few years. the outskirts of Arctic City, the capital of the Re- The Polar Furniture showroom suggested a public of the North, and has about 1300 employ- prosperous enterprise that changed its products ees. It specializes in the production of customer- regularly. The enterprise even sported its own assembled wall units - set combinations of museum that traced its history from the first artel shelves and cupboards made out of pressed wood. of furniture makers beginning- - in 1939 to the In addition the enterprise has three smaller sub- modem enterprise of today. Gone were the trap- divisions.' The first subdivision, which is also the pings of communism - there were no photo- oldest, is also in Arctic city. It produces soft fur- graphs of Lenin besides the still obligatory one niture for living rooms (550 employees). The oth- in the General Director's Office.' Gone were the er two subdivisions are in different towns -one placards celebrating the virtues of communism. subdivision produces bed units (170 employees) There was no party committee. The last posting on the Dartv notice board -who was to succeed and the other kitchen furniture (170 employees). & , Polar is the only enterprise in the Republic of the whom in the pyramid of power - was dated North to mass produce these items. During 1990 1989. The notice boards for socialist competi- all these categories of furniture became "deficit" tion, the youth organization, and labor discipline items and virtually unobtainable through state and political obligations were either empty or stores. contained out-of-date decrees that no one had goods in short supply such as clothes. cars, televi- sions, and furniture, but in the Spring of 1991 the main queue was for apartments. Employees who re- By all appearances, the main division of Polar ceived housing in July 199 1 had been waiting 12 years, has been very successful. Its workers were among a much shorter time than the average wait of 20 years the highest paid in the city. They received generat other enterprises. Food was available in parcels known at Polar as /labor (set). During the two months ous :uka,-i (orders) and could buy additional pro- I worked there I was able to buy two packages, each visions from the factory shop.' The changing of which contained 1.5 kilos of sausage and 5 eggs. if they were under pressure from within their enter- On other occasions I was able to order honey and prise, as was often the case (c.f. Burawoy and Hend- tinned meat. Because our work was "dangerous" we received coupons for milk, but it was not always avail- ley forthcoming). What distinguished Polar was the able. On one occasion we were able to buy our monthly self-confidence and cohesiveness of its top managers. ration of sugar (I .5 kilos per person) at the enterprise. The General Director was one of the grand old men of The city council distributed ration coupons (tulor~i) the Northern Republic's wood industry - he had but there was no guarantee that we would ever find little to lose from Burawoy's presence. the rationed food in the stores. so allocation at the Although we refer to Polar Furniture as an enter- enterprise was crucial. prise, technically it is a "production association" 'Actually. I did discover another photo -a very (proi:i,odsr\tenrzoe oh"edii~enie)- an organizational dusty one on top of my drilling machine. When I asked form created by the economic reforms of 1973 (Hewett my workmate Sergei what Lenin was doing up there 1988. pp. 245-56). he just shrugged his shoulders as if he had never even "n May I was paid 776 rubles before tax and in noticed him. About a month later Lenin suddenly dis- June 698 rubles, which at the official exchange rate appeared only to turn up in a pile of rubbish. I seemed was then equivalent to about $25 and $20 respective- to be the only one who noticed his absence. This was ly. There used to be a number of different queues for in June, before the dramatic events of August 199 1. THE SOVIET TRANSITION FROM SOCIALISM TO CAPITALISM 23 bothered to take down. The busiest notice board four parallel line machines, which took the pan- was titled "Information on Economic Education" els from Shop 2, occupied almost half the floor - it displayed articles on market research and space in our shop. From the line machines oper- announced seminars on the "ABC of the mar- ators stacked the panels into banks and pushed ket," offered by a local consulting firm. The en- them on rollers to the four electronic drills situat- terprise sent its deputy director for economic af- ed opposite the line machines. Each drill was fairs to a two-week business school run by Amer- itself set between rollers so that operators had ican academics and businessmen. easy access to the banks of panels. We worked in The enterprise possessed a computer system to teams of two: one person fed the panels while the record levels of daily production. It had recently other removed them from the conveyor after drill- obtained modem German production equipment ing. We could process a bank of 100 panels in at a cost of 12.5 million marks that was intended ten minutes. On average we drilled between 1,000 to replace older machines and enable the enter- to 1,500 panels in each shift, two to three hours prise to develop a new line of fumiture made from work. The skill lay in setting up the drills so that solid wood. The chief engineer outlined ambi- the holes, up to eleven to a panel, were in exactly tious plans for the reconstruction of the entire the right position, the right size, and the right enterprise to accommodate the new production depth. An experienced operator could set up the process. There was even talk of Polar taking over machine in twenty minutes. Since we changed the neighboring wood processing plant to assure the set up only twice or three times a shift, this itself of essential supplies for the new fumiture. would add only about another hour to the three Such moves toward rationalization were not dic- hours of drilling. tated by a state planning agency or by the Minis- When we were not setting up or drilling we try but were the initiative of a seemingly dynamic might engage in chit chat or go to the bathroom team of Polar's managers. The enterprise had for a smoke, but for the most part we disliked considerable autonomy to set its own prices and being unoccupied. Indeed, to be wandering its own production profile. It had moved onto around the shop floor with nothing to do was a arendu (lease) which meant that the enterprise mark of low status. So we would help out with a was leased from the state, supposedly a transi- series of auxiliary operations on smaller shelves tional step to full privatization. Far from being or on doors performed on a line of smaller, anti- stuck in a rigid bureaucratic hierarchy the enter- quated, foot driven drills, set up permanently for prise appeared to be an independent center of single operations. Some parts of the wall units, entrepreneurial activity. From this world of ap- such as the "wing shaped" shelves which often pearances let us step into the real world of pro- were touched up with a domestic iron, called for duction. delicate attention. The panels that came from the line machines needed to have their edges scraped clean with a knife. Members of the women's The Labor. P~.oc,essand Uncl~enTcc,hnolog~ team took turns doing this arduous work.' I (Burawoy, see note 4) worked for two months Uneven technology is one of the hallmarks of in Shop 3, the heart of the factory, drilling holes socialist production. Enterprises used to be given in panels that would become the "uprights" and machines by the All-Union ministry or the furni- "horizontals" of the wall systems. Like everyone ture association to which they belonged. These else, I was a member of a team and a brigade. "gifts" were often inappropriate to the produc- There were three teams in my brigade -the drill- tion exigencies of the particular firm and they ing team, the team of men who ran the four lines could be more trouble than they were worth. But of machines that trimmed the panels to size and enterprises had to accept them if they were ever taped the edges with veneer and the team of wom- to receive additional machinery. The main enter- en who cleaned the panels with acetone before prise of Polar Furniture began as an experimen- sending them on to the next shop. With forty tal plant in 1978 to test specially designed Soviet members mine was the biggest brigade in Shop 3 but there were two other small ones. In Shop 2 XTherewas a strict gender division of labor -the the major surfaces of the panels were covered with major exception being our brigade leader. a woman textile paper while in Shop 4 they were lacquered who worked on the drills. Since the women workers and packaged for customer assembly. shunned me, as they also did most of the Russian The shop appeared efficient and industrious- men, I did not have the opportunity to probe the intri- ness and it was laid out in an orderly way. The cacies of gender relations at work. AMERICAN SOCIOLOGICAL REVIEW

machinery. But the machinery did not live up to to make space on the floor for the new German expectations -it produced only half the planned machines. output. In an attempt to make up the loss, the All- The accumulation of scrap was a two-fold prob- Union ministry gave Polar some German ma- lem: scrap generation and scrap removal. The chines in 1980. On that occasion management official rate of scrap generation in the plan was 2 was lucky - the machines worked extremely percent. The nachal'nik (chief)' of the shop said well. Among the electronic drills, for example, that in reality it was more like 10 percent. It may although the German machine was twice as old have been even higher, so lax was the attitude of as the Soviet and Bulgarian machines, it was still management toward quality control. For exam- the most efficient and reliable. During the two ple, there were two inspectors at the drills, both months I worked on this machine it was down on unassertive women with no sanctioning power. only two occasions and each time only for a few In a single shift they might come around once or hours. twice (or sometimes not at all) to see if our holes While I was working at Polar in 1991, long- were in the right place and at the right depth. If awaited new machines arrived from Germany. they discovered a problem a joking discussion They had been chosen by the enterprise as part of would ensue between them and my workmate its reconstruction. Even so, problems of uneven Sergei, but the panels would often continue development remained. The full potential of the through the plant. In effect,workers themselves new machinery for Shop 3 could not be realized were responsible for the quality of the product. without a considerable increase in the supply of Indeed, Sergei regularly checked the holes and if panels from Shop 2, which looked unlikely. More- they were out of alignment he would spend con- over, the new line of German-made machinery siderable time readjusting the drills. I always was so advanced that it could effectively do the marvelled at his skill and his determination to get work of all the existing machines in Shop 3. Yet everything just right, even though there was no management did not plan to discard the old ma- pressure from above to do so. If we produced chinery because there was no guarantee that they scrap, if we mined an entire bank of panels, if our could buy spare parts for the new machinery and drilling was imperfect, we were not punished or because spare parts made domestically often even warned. The scrap simply piled up on the failed to meet foreign machine specifications. floor between the machines. Sometimes it was Even before the new machines arrived there were recorded as waste by the quality control depart- two Soviet-made drills in the shop that were per- ment but just as often it was not. manently out of commission and simply gather- But why was the scrap simply left to accumu- ing dust. late in the shop'?Management. claimed there was Regardless, unevenness in technology did not nowhere to put it. But in reality the scrap problem usually intesrupt the flow of work. This was be- became particularly acute when management cause workers, at least within a single brigade, decided to stop selling the scrap for firewood, were prepared to move from job to job and ma- wanting to sell it instead as finished wood for home chine to machine to pick up the slack. However, use. Management was trying to make a second- worker control over production did not always ary business out ofscrap panels but workers were enhance efficiency. not prepared to collect the scrap unless they received a cut of the profits. Indeed the workers wanted to organize the sale of scrap themselves. The Accl*tnulation of Scr-up At first management was reluctant but as I was The lay out of machines in Shop 3 was indeed leaving at the end ofJune the ntrchtrl'/iikwas cre- efficient; but the resulting distribution of scrap ating a special scrap brigade that would collect was not. Orderly banks ofpanels were everywhere usable items and send them on to Shop 4 for lac- stacked on the floor. But many of these banks quering before selling them to stores. Because were defective panels that stayed there as scrap there were no set prices for scrap and because for weeks or even months at a time, and inter- fered with the work flow. Production was some- '1; charge of each shop was a iltrc iitrl'iiik,the equiv- times held up at the beginning of the shift be- alent of a general foreman. Each shift had its own cause there was simply no space to move com- "foreman", knoun as a nlu.ctci.. So as not to confuse pleted work away from the machines and out of these managers with higher levels of management we the shop -it was a continual juggling act. The refer to the iiuc~l~ul'iiikand niaste~.as shop floor su- problem became particularly acute when we had pervisors. THE SOVIET TRANSITION FROM SOCIALISM TO CAPITALISM shelving was in such short supply, one nachal'nik shop floor, workers might straggle in later with- suggested they could make more money from out any punishment or even comment. There was scrap than from the completed wall unit kits. a half-hour break at 9:45 a.m. The lunch hour Another suggested that management had an in- from 12:00 to 1:00 p.m. often began at 1 1:45 a.m. terest in declaring a wall unit defective because it and if the card game was exciting it might go on could then use it for barter. There were definite until 1:15 p.m. That made the actual work day fiscal advantages to the accumulation of scrap, less than 6.5 hours. Afternoon shift alternated but the realization of profits required the cooper- weekly with day shift and began at 3:30 p.m. It ation of workers who demanded extra pay for work ended at 11:00 p.m. rather than the official mid- that was not strictly within their job description. night, which together with the dinner hour and The generation of scrap in Shop 3 created dif- break made the working day a maximum of six ficulties for Shop 2 since their plan was based on hours. a 2 percent scrap rate. At the end of every month There were also short shifts. Before holidays Shop 2 was under pressure to produce consider- workers would leave an hour early and Fridays ably more than planned to make up for the parts were often cut short by half an hour - even wasted in the shops following it in the produc- longer if it was second shift and work was slow tion process, particularly Shop 3. Tensions inten- because it was the beginning of the month. For sified because waste in Shops 3 and 4 meant that example, on the first Friday of June workers hosed workers in Shop 2 had to work longer hours to down their machines three hours early at 7:45 keep up with the demand for panels. On second p.m. Sergei turned to me and said we'd better do shift, for example, the workers in Shop 2 often the same or we'll be the only ones left. Whenev- worked until midnight when Shop 3 had already er there was no work at our individual machine knocked off at 11.00. The cooperation of work- we felt entitled to leave early. This was one side ers within shops did not extend to relations be- of the picture. On the other side at the end of the tween shops. month, we might work intensely, spending a night Top management was aware of the tensions or two or a Saturday in the factory without over- created by its lax control over quality but did time pay. Still, the time we "made up" amounted nothing. The director for quality control had giv- to only a fraction of the time we "cut out" the rest en 30 years of service to the enterprise, and until of the month. recently had been the director for production. The control workers exercised over their own She regarded her present position as a sinecure time became clear when the nachal'nik in Shop and was pessimistic about any improvement in 4 attempted to fire a worker for absenteeism. quality control. She blamed the Soviet system According to the law absence without permis- for the lack of interest in quality, the poor pay sion for more than three hours was punishable by given to inspectors, and managerial indulgence dismissal. But management must first secure the toward waste makers. She added that high rates support of the trade union committee. The work- of scrap were also a consequence of "declining" er in question had been absent without permis- discipline of workers and the weakness of the sion for two days. At the trade union meeting, nachal'nik. She herself took no responsibility. which Krotov and I attended, he claimed in his Of course, for managers in a shortage economy defence that he couldn't find his master to in- waste is not as problematic as it is for managers form her, that his brigade knew he was absent so in a surplus economy. Still, the abdication of why did he have to tell anyone else, that he had managerial control over production is part of a worked through breaks and dinner periods on broader pattern, epitomized by worker regula- previous days to earn the time off, and finally he tion of time. asked rhetorically what all the fuss was about since his brigade always made the plan. In other Flex Time, Soviet Style words, what he had done was all quite normal. Indeed, when I asked my fellow workers how to At Polar there was no system of clocking in or request time off they told me to go to the brigade out. I began on day shift and quickly learned that leader rather than Sveta, my master. work ended before 3:00 p.m. rather than at the In this case the nachal'nik wanted to dismiss official 3:30 p.m. Of course, this meant that there the worker because he was a tr~ublemaker.'~ was no contact or exchange of information between shifts. Although we were supposed to meet lo After examining many instances of dismissal our master (foreman), Sveta, at 7:00 a.m. on the Lampert concluded: "In the great majority of cases AMERICAN SOCIOLOGICAL REVIEW

According to her he had a bad record of disci- vis-a-vis the master and nachal'nik who were al- pline and was abusive to master- and nachal'nik. ready cast adrift without support from enterprise In testimony to the influence of the brigade on administration. But it also fostered the parochial the shop floor, she defended her action by saying interests of each brigade and thus reinforced un- that other brigade members wanted to evict him productive competition and conflict on the shop too. The trade union committee, made up of rep- floor. resentatives from the shops, were inclined to sup- For example, poor coordination between Shops port the nachal'nik and approve the dismissal. 2 and 3 at Polar led to a "war" between shifts in One representative, however, argued that the Shop 3. Until the introduction of a new wall unit nachal'nik should also be disciplined for allow- in 1990 work was coordinated across shops so ing bad time keeping in her shop. The trade union that the first shift of Shop 3 processed the panels committee chair agreed and took the view that produced by the first shift of Shop 2. When the both worker and supervisors should be disci- new wall unit was introduced there were fewer plined. Thus, the nachal'nik was first criticized parts but their piece rate prices varied consider- for not exercising discipline on the shop floor ably. Rather than pay the two shifts very different and then disciplined for trying to enforce a dis- rates, the nachal'nik and mastera of Shop 3 de- missal. This paradoxical state of affairs was an cided to amalgamate the work of both shifts, so attempt by both management and trade union to that each shift processed all the types of panels. undermine the power of shop floor supervisors However. Shop 2 continued to divide the produc- in favor of worker control. tion of panels between the two shifts. This meant that one of the shifts in Shop 3 had to wait for the delivery of some of the parts at the beginning of Ceding Shop Floor Contr.01 to Brigades each shift making it more difficult for that shift to Brigade control of the shop floor was strength- make the plan each month. This was one source ened by the payment system." The wage fund of conflict between the shifts in Shop 3. for each brigade was based on the number of parts The conflict intensified when the nachal'nik its members produce. The fund was divided up decided to redistribute the work completed by by leading members of the brigade according to the two shifts so that both made the plan -not their assessment of each member's "coefficient just one. My shift appeared to work harder and of labor participation." The premium for plan more efficiently than the other shift. We always fulfillment was an additional 75 percent of this made the monthly plan. When the other shift basic pay. Shop floor management had no au- failed to make the plan in May the nachnl'nik thority to interfere with this distribution, although gave them credit for the excess production from management might be consulted. This payment our shift. This led to a walkout by the women system strengthened the autonomy of the brigades workers who formed a tightly organized team in my brigade. Why should they work for the other those who are dismissed are seen by management as shift's premium? They were furious. 'troublemakers' in a broad sense - either because Hostilities between shops and shifts were pub- they have flagrantly neglected their work duties and licly displayed when at the beginning of July the failed to meet their side of the bargain or else because deputy director for production posted a public they have fallen out with their superiors and have thus become an embarrassment" (1986, p. 260). attack on the work patterns of Shop 3. The at- Brigades are not new to the Soviet shop floor. tack, initiated by the supervisors of Shops 2 and However. in 1979 a resolution was passed to encour- 4, accused the supervisors of Shop 3 of allowing age the formation of brigades with greater autonomy bad labor discipline, bad time keeping, and the to organize. distribute. and remunerate work. In the accumulation of scraD. The nac*hal'nikand the 1980s the system spread to most industries so that by master of my shift were given a disciplinary wam- the end of the decade over two thirds of workers were ing while the master of the other shift was threat- enrolled in brigades (Lane 1987, pp. 182-2 13; Yanow- ened with demotion, which in fact later became itch 1991, pp. 2G24; Slider 1987; Connor 1991, pp. reality. Rather than try to coordinate relations 179-84). At Polar they introduced the brigade system between shops and regulate conflict between in 1988.Rather than careful observation of the operation of the brigade system in different settings. Soviet shifts, the administration abstained from inter- sociologists have used general surveys of the atti- vention, allowing each shop and shift to carry on tudes of workers and managers to evaluate its effica- struggles in defense of their own interests and at cy. Still, there is every indication that brigades en- the expense of productive efficiency. Instead of hance worker control over the shop floor. supporting its own shop supervisors, the admin- THE SOVIET TRANSITION FROM SOCIALISM TO CAPITALISM 27 istration publicly humiliated them in front of their the brigades in the hope that peace would prevail own work force. This lack of administrative sup- while management got on with the task of pro- port for the nachal'nik and mastera was also re- viding the materials of production. As one chief flected in the low pay they received -less than engineer said, "We are frightened of workers. At some of the workers they supervised. Already in any time they can stop work and we can do noth- my first month I earned almost as much as Sveta. ing." To give more support to nachal'niki and Under these circumstances it was naturally very mastera would be to risk rebellion from the shop hard to find workers willing to fill these manage- floor. rial positions. In earlier times the party would call on its members to become shop floor super- Governing Through the Plan visors but with the party defunct recruitment from the shop floor was almost impossible. Either su- To the extent that enterprise management gov- pervisors came from outside the factory, as was erned at all it was through the plan. Even though the case for the nachal'nik of Shop 3 (who came management didn't interfere in the process of from the construction industry) and Sveta (who production on the shop floor, it was nevertheless had completed five years in an institute in Mos- interested in the fulfillment of its plan. Brigades COW),or they were elected from within the bri- had no interest in exceeding the plan because any gade (like the master on the other shift). In the excess might be given to other brigades or might case of recruitment from outside, they didn't know lead to a tighter plan the next month. In this con- the details of the production process. When an- text flexible working hours and autonomous work other of my workmates, Sasha, who had never organization made a lot of sense - they were run the drills, had to take over from Sergei, the effective adaptations to a shortage economy. Flex- usual operator, he never dreamt of asking for ibility and autonomy on the shop floor are neces- help from the master or nachal'nik. Mastera, who sary when supplies are uncertain, the performance were elected from the brigade ranks, pooled their of machinery is erratic, and, most important in income with the other members of the brigade this case, when the technology is uneven. In ad- which then collectively decided how much each dition, shorter working hours concealed excess received. It was not surprising that the master on labor capacity of the brigade which was easily the other shift was demoted since he had no sanc- mobilized when extra effort and longer hours were tions with which to exercise control over the bri- needed at the end of the month. gade that elected him. Only with difficulty could Since workers were fired only for either gross nachal'niki and mastera elicit respect from work- violations of the disciplinary code or for making ers. At best they could try to coordinate relations trouble for their bosses (Lampert 1985)and since within and defend the interests of their respec- workers controlled their own pay, mastera were tive shift or shop.I2 more or less bereft of disciplinary power. If bri- Management deliberately undermined the po- gades worked an extra shift or two at the end of sitions of master and nachal'nik. They were sac- the month it was usually a decision made by the rificial lambs, punished for not maintaining dis- brigade itself in the light of plan targets. Mastera cipline on the shop floor but at the same time and even nachal'niki were powerless if the bri- denied the support and resources to maintain that gade decided otherwise. In Shop 4, for example, discipline. Rather than agents of higher manage- toward the end of one month workers threatened ment in the exercise of control ovCr the shop to stop work until they were given an extra bo- floor, supervisors were forced to cede power to nus. Shop floor management opposed the demand and so workers appealed directly to the '*In their study of Rezina, a Moscow rubber plant, highest levels of management which granted them Burawoy and Hendley (forthcoming) describe a dif- their bonus. In exchange for plan fulfillment man- ferent situation in which nachal'niki and masferatried agement ceded control of production to workers, to take advantage of their autonomy to establish co- even if this was at the expense of the authority of operatives in their departments. They were able to mastera and nachal'niki. offer extra pay to selected workers, three times the But in one area shop floor supervisors did exer- usual rate. The nachal'niki could use competition for such lucrative after-hours work to discipline workers cise influence. Each month production targets during the normal shift. The economic situation of were established by the production manager in Polar Furniture was much better than Rezina's and consultation with the nachal'nikiand mastera. At management did not encourage such entrepreneur- the beginning of every shift we would gather ship on the part of the nachal'niki. around Sveta to see what we had been assigned AMERICAN SOCIOLOGICAL REVIEW

and how we were doing in relation to the plan. lead to an enterprise as successful as Polar Furni- The targets were subject to renegotiatiofl through- ture. The secret of the capitalist enterprise lies in out the month, which could cause fluctuating managerial control over production, a control norms for daily output and contradictory requests entirely absent at Polar. In contrast to the capital- for parts, particularly at the end of the month. At ist enterprise, the secret of the successful Soviet the end of June 199 1, for example, there was some enterprise lies in its bargaining relations with ex- hard bargaining between the nachal'nik of Shop ternal organizations. "The successful 'entrepre- 4 and the production manager. The original plan neur' in this [Soviet] system is not a person who had called for 3,000 wall units. In the middle of develops new products and new technologies, but the month it was clear we were not going to make one who successfully develops a workable rela- the plan, so it was agreed to adjust the plan down- tionship with the government and party authori- ward to 2,700. At the end of the month even this ties supervising his enterprises" (Hewett 1988, p. adjusted figure was unrealistic. The production 199). Here, Polar was clearly successful. manager relented and gave us the figure of 2,500. In fact the month was particularly bad and we BARGAINING WITH EXTERNAL only made 2,036 units. But we still received our ORGANIZATIONS premium for making the plan! It was a rare event that workers didn't receive the premium. In a shortage economy the most important con- How was it possible to not make the plan and straints on an enterprise are from the supply side still receive the premium? There were actually -material resources, human resources, and in- two plans: a financial plan in rubles set in negoti- vestment resources. In the Soviet Union the or- ation with external planners and a production ganization of supply operated at three levels. At plan set by the enterprise in numbers of wall the first level were All-Union ministerial organs, units and handed down to the shop. Because of at the second level were government and party fluctuating prices the number of wall units that organs of the Republic of the North, and at a third corresponded to the financial plan varied but it level were direct contractual relations between was usually about 1700. The premium was paid enterprises, based on barter. Under the old sys- when we made this number although the produc- tem, that is to say until 1987 when the Law on tion plan target for any given month might be the State Enterprise introduced "state orders" as much higher -from 2,500 to 3,000. In bargain- a substitute for rigid plan targets (Osborn 1991; ing with outside bodies management worked with Kushnirsky 1991; Pomorski 1991), All-Union the financial plan while it demanded that the shop ministries were most important in guaranteeing floor meet the production plan. supplies. Territorial organs played a similar role There is an analogue here with the piece rate but were subordinate to central ministries and game of "making out" under capitalism -a game bartering, where it existed, was regulated by the played by dependent individuals under relatively party. Today in the wood industry the All-Union stable conditions (Burawoy 1979). "Making the ministry has become a parastatal "concern" that plan," on the other hand, was played by relative- is a business association of its own and has ceded ly autonomous worker collectives operating un- control of most enterprises to territorial organs, der unstable conditions. The autonomy of the particularly to the regional wood industry con- shop floor was secured on the one side by delib- glomerate, the Northern Temtories' Wood As- erately undermining master0 and ndchal'nikiand sociation (NTWA), but also to the Republic's on the other side by a payment system regulated Council of Ministers. At the same time enterpris- by the brigade and based on plan fulfillment. At es barter on their own behalf or through coopera- the same time, the weakness of shop floor super- tives to obtain products they cannot get through visors, the abstention of management, and the the territorial organs. brigade system of payment led to conflicts between shifts and shops. Management was con- Factnr.s Cnnrr.ihuting m Success: Supply, tent with this "plan-fulfillment pact" (Voskamp Bur.ter., Prices, ancl Influence and Wittke 1991, pp. 360-64) as long as minimal plan targets were met and workers' opposi- The basic material for the production of wall units, tion was deflected into lateral conflict or onto the wood, was also a major product of The Republic nachal'niki. of the North. Wood cutting was based in logging From a capitalist perspective it is difficult to villages from where it was transported to logging understand how such anarchy in production could enterprises. From there it was shipped by road or THE SOVIET TRANSITION FROM SOCIAL,ISM TO CAPITALISM

river to wood processing plants. Polar Furniture by an equivalent amount. Other enterprises, such used pressed wood obtained from two factories as the logging enterprises, faced regulated state -the better quality wood came from an auxilia- prices for their product and they had much less ry plant of the local paper mill. Textile paper was room to maneuver. Increasing product prices had also relatively easily obtained, either from St. implications for plan fulfillment since the plan, Petersburg or imported. According to the Direc- and therefore the amount Polar had to give up to tor for Supplies the most serious problems were the state, was based on rubles rather than the posed by shortages of the high quality plywood volume of production. Increasing prices while veneer that came from outside the Republic of keeping the volume of output fixed enabled Po- the North, of imported lacquer and of mirrors that lar Furniture to increase the amount of furniture came from Baku. For Polar, then, the first condi- it could barter since fewer units would be com- tions of success were met -major raw materi- mitted to the state. als were readily accessible and its supply profile The fourth factor that favored Polar Furniture was relatively simple. This already put Polar Fur- was its influential position within the regional niture at an advantage relative to other enterpris- woodconsortium, the NorthernTemtories' Wood es such as Rezina.13 Association (NTWA). Most enterprises connect- A second factor that favored Polar Furniture is ed to the wood industry belonged to NTWA, from the "barterability" of its product. During the year those that cut and processed wood to those that previous to our field work, wall units had com- made furniture. NTWA was like a large trading pletely disappeared from the shops and so they corporation, buying products from its member were in particularly high demand. As an essen- enterprises at one price while selling them at a tial part of every apartment, they could be used higher one. Its control over the sale of wood prod- as hard currency when things were needed, be it ucts depended upon its control over supplies need- food provisions for workers, places in kindergar- ed by member enterprises. Until 1989 Polar Fur- ten, holiday homes for employees, or mirrors from niture was part of a huge furniture consortium Baku. Both the finished wall units and stocks of whose center was in St. Petersburg. When it came pressed wood were bartered for things urgently to obtaining supplies and particularly new invest- required. It appeared that all Polar's major de- ment Polar was always last in line. Based on its partment heads were involved in bartering wall monopoly of the mass production of furniture in units to get what they needed, although the entire the Republic of the North, Polar's situation process was regulated by the General Director. changed dramatically after it joined NTWA. The Responding to the pressures of a shortage econo- association helped Polar obtain supplies not only my the General Director himself took every op- from within the Republic of the North but also portunity to demand that in return for fulfilling fromoutside. For example, when a Moscow-based state orders the government guarantee not only wood consortium failed to supply Polar with high Polar's supplies but also that 20 percent of its quality plywood, Polar management went imme- product be available for barter. diately to NTWA to request that it cut off that The third factor favoring Polar was the pricing consortium's considerable supply of wood from of its product. Polar was not dependent on fixed the Republic of North. NTWA also provided its state prices but negotiated "contractual" prices member enterprises with goods that could be used based on a system of cost plus profit. When man- for barter. Polar, for example, bartered unproc- agers wanted to increase the price of a particular essed wood for needed supplies -wood it ob- wall-unit or introduce a new one they submitted tained through NTWA. Finally, NTWA was able an account of the new costs to the government of to accumulate foreign exchange from the export the republic. It was generally approved without of wood and with this bought German machinery questions and by the middle of 199 1 Polar could for Polar to produce solid wood furniture. Con- increase the wages and premiums of its workers trolling all foreign sales, NTWA hoped to reap the dividends from this machinery when (and if) "Our theory of success, in part, derives from the Polar exported this furniture. study of this Moscow rubber enterprise which was in perpetual economic crisis. Rezina's production was dependent on a vast array of chemical supplies, its Corporate Strategy products were not readily barterable, many of its products had state regulated prices, and it did not have a The renewed strength of Polar Furniture's main cozy relationship with any production "association" division was in large part due to its influence with- or "concern" (Burawoy and Hendley forthcoming). in NTWA. This influence enabled Polar to pur- AMERICAN SOCIOLOGICAL REVIEW sue a more ambitious strategy with respect to its The events leading up to the absorption illus- three smaller subdivisions -soft furniture, bed trate the pressures enterprises faced in the uncer- sets and kitchen cu~boards.Before 1987 these tain Soviet economic and political environments three subdivisions were administered by the main of 199 1. Unlike the production of wall units, soft plant which negotiated with the state on their be- furniture production was dependent on supplies half. In 1987 the subdivisions went on khon.as- from outside the Republic of the North -steel chef (self-financing) which gave them their own springs were brought from Cherepovets, cloth bank accounts and more autonomy to develop from Cheboksari, foam rubber from Dzerzhinsk, their own contacts with both suppliers and buy- and glue and latex from abroad. For these sup- ers. The main division continued to obtain the plies the subdivision had previously relied on basic supplies required by all subdivisions, such support from the All-Union Ministry, but as this as pressed wood, but the subdivisions had to find Ministry began to dissolve supplies were more the supplies specific to their production profile. difficult to obtain. Moreover, the state was also In 1990 Polar Furniture became an arenda trying to impose limits on the amount of fumi- (lease) enterprise, which meant that its property ture that could be bartered. In this bleak situa- was leased from the state. But it also meant that tion, the chaotic economic conditions during the the subdivisions would be leased from the main winter of 1991 precipitated a rapid decline of division. Arenda itself gave rise to few changes production. There were a number of work stop- since the advantages that it once offered in terms pages due to shortages of materials. of taxation and wage funds had been eliminated. Employees at the soft furniture subdivision However, it did become the pretext for putting began to criticize their managers for not dealing relations between the main ~lantand its subdivi- with the crisis. They were spurred on by manag- sions on a more economic footing. The main ers from the main plant who told them that if division insisted that the subdivisions pay for ser- their subdivision became a department of the main vices provided by the center. Usually aretlda plant working conditions, pay, and food provi- agreements would be welcomed by subdivisions sions would improve. For workers at the soft of large enterprises since they offered the subdi- furniture division this was an attractive prospect vision more autonomy. But in this case arendu that had the added advantage of removing their strengthened the position of the main plant which unpopular director. In March 199 1 employees could impose more stringent conditions for con- voted overwhelmingly to become a department tinued affiliation. The subdivisions had to com- of the main plant. Soon afterward disillusion set ply because they depended on the sponsorship of in when workers began to hear rumors of lay- a major enterprise and because NTWA was not offs that would result from proposed reorganiza- willing to deal with them as independent firms. tion. In being relegated to the status of a depart- The soft furniture subdivision in Arctic City ment of the main enterprise employees had lost was the exception that proved the rule. The adop- much of their independence. tion of kho:raschet (self-financing) in 1987 co- In terms of our four conditions for economic incided with the election of a new subdivision success, the situation at the soft furniture subdi- director. The successful candidate was sponsored vision was mixed. On the one hand it produced by the party. He had been the trade union chair at items that had good barter value and whose price the main ~lant,often at odds with the General was not state-regulated. On the other hand, its Director who was not unhappy to see him leave. supply situation was precarious because it de- The subdivision grew under the new director but pended on materials from outside the Republic he continued to be a controversial figure from of the North in a situation where the All-Union the stand~ointof both his subordinates and the Ministry could be of less help. The subdivision management at the main plant. After Polar joined was indeed dependent on the main plant which NTWA, top management at the main plant be- was interested in maintaining its monopoly of gan to develop plans to modernize the soft furni- both hard and soft furniture production. ture subdivision, the oldest subdivision in the The situation at the bed set subdivision was enterprise. But the subdivision's director wouldn't different. Here the move to kho;rasc.het (1987) go along with the plans - he was opposed to became the occasion for managers to reduce the producing mattresses and becoming an a~.erlda number of employees and increase the wages of enterprise. His resistance to reorganization pro- those who remained. At the same time produc- voked the main plant to adopt a strategy of ab- tion was simplified. Unlike soft furniture this sub- sorption. division embraced ur.e~lduas an opportunity to THE SOVIET TRANSITION FROM SOCIALISM TO CAPITALISM 3 1

expand and become more autonomous from head lationship between the enterprise and the consor- offices. Being further from the head plant with tium. NTWA. looser connections and having potential access to large conglomerates in the local gas and oil Rising Power of Parastatal Conglomerates industries managers could take a more independent route. But there were limits to that indepen- As the central Soviet state became paralyzed by dence because NTWA and Polar's main division political movements for regional autonomy and still controlled access to the supplies of wood. as it withdrew from direct regulation of the econ- When the main plant instructed the subdivision omy, economic power was decentralized to large to stop producing wall units and concentrate on monopolistic concerns that controlled local ac- bed sets they had no alternative but to comply. cess to resources. NTWA was one such monop- A similar situation existed at the third subdi- oly concern or "parastatal" organization that con- vision, seven hundred kilometers north of Arctic trolled the wood industry from the logging vil- City. In 1991 this subdivision switched from the lages to the logging enterprises to the wood pro- producing wardrobes to producing kitchen cup- cessing plants. In 1988 Polar Furniture and Pitir- boards -a more lucrative venture, not only be- im Plywood Company joined NTWA and in 1991 cause no kitchen furniture was produced in the the huge paper plant in Arctic City applied for Republic of the North, but also because the pric- membership (see Figure 2). es of wardrobes were firmly fixed by the state It was no easy task for NTWA to manage all whereas prices for kitchen cupboards were "con- these links in the chain of wood manufacture. tractual" and thus followed a cost plus profit for- Most important were the logging enterprises that mula. When we visited this subdivision in July actually supplied the wood. In 1991 these logging enterprises faced a difficult situation -the 1991, the director was energetically involved in Northern Republic's Forestry Ministry controlled a major reconstruction of its social infrastruc- the amount of wood that could be cut and work- ture (apartments, hostels, houses) and of the plant ers were leaving due to low pay. These logging itself. The subdivision had managed to establish enterprises, therefore, tried to circumvent NTWA a direct relation with NTWA which financed the by entering into their own agreements directly conversion to kitchen cupboards and the impor- with cooperatives, joint ventures, and other or- tation of special plywood and plastic. However, ganizations that paid higher prices for their wood. rampant price inflation, particularly in building They were supposed to supply NTWA with about materials, had drained away profits and as a re- 70 percent of their wood at state-regulated prices sult wages had suffered, workers had left, and but in fact they didn't fulfil their contract. Fig- the trade union was fighting the director. In the ures we were given showed the supply of wood winter of 1991 when shortages were at their to NTWA to be falling every year: from 15.5 height, top management at Polar's main plant in million cubic meters in 1989 to an anticipated 10 Arctic City had appropriated for itself pressed million cubic meters in 1992. The logging enter- wood destined for this subdivision. According prises claimed that since NTWA did not fulfil its to the irate director the subdivision lost twenty promises to provide machinery, spare parts, food days of production due to the shortage of mate- and so on, they couldn't fulfil their side of the rials. As ever, lack of control over supplies lim- contractual agreement. On the other hand, NTWA ited the independence of the subdivision. still commanded economic resources and politi- Thus, the move to arenda became the occa- cal power sufficient to ensure the subordination sion for the Polar main division to adopt a dual of the logging enterprises. By cutting off resources strategy toward its subdivisions. On the one hand, NTWA could make life very difficult for enter- top management at Polar's main plant used the prises seeking to erode its monopolistic control supposed "autonomy" of the subdivisions as a of wood. pretext to reduce its obligations and put relations While the logging enterprises were probably to subdivisions on a more economic footing. On too small to stand up to NTWA, larger enterpris- the other hand, it used its control over supplies to es might have been able to do so. One enterprise, rein in, and if necessary absorb, subdivisions that the Pitirim Plywood Company, had a large appe- exhibited "too much" autonomy. Just as within tite for independence and tried to leave NTWA the enterprise head offices used fiscal measures in 1990. The company was founded after World and access to supplies to secure the dependence War 11. It was situated on a major river and next of subdivisions, so the same was true of the re- to the railroad three hours (by road) from Arctic 32 AMERICAN SOCIOLOGICAL REVIEW

All-Russian Wood "Concern" (Ex-All-Union Ministry)

Northern Republic Ministries I paper Plant t ?Northern

I--Line of formal lz;lii{liyi$5; authority - - - Proposed moves Logging Villages 1 Figure 2. Chain of Wood Manufacture (July 1991)

City. It had been attached to the great paper plant The example of Pitirim Plywood raises the in Arctic City but then became a member of question of the distribution of resources within NTWA in 1988. Pitirim management soon be- NTWA. An executive board, which included the came disillusioned with NTWA because NTWA directors of all the major member enterprises, had reneged on its promise to help set up a fumi- controlled NTWA's bank and much needed for- ture factory at Pitirim. Indeed, compared to Polar eign exchange. Which of NTWA's enterprises Furniture, Pitirim had received little support in received resources? It is instructive to compare the way of new machinery. NTWA had also failed the fortunes of Polar Furniture and the neighbor- to organize the delivery of the right quality wood. ing wood processing plant, Northern Wood - In 1990 MCI, a powerful Moscow based consor- one of the oldest enterprises in Arctic City. North- tium of the machine construction industry, be- em Wood exported its wood and thus brought in came interested in having Pitirim Plywood as a foreign exchange for NTWA. Foreign exchange member enterprise. MCI made some attractive was redistributed within NTWA so that, for ex- proposals to Pitirim, including an offer of new ample, Northern's neighbor Polar Furniture Soviet-made machinery, lower tax rates, and high- (which exported nothing) could receive new Ger- er retums from wood exports. The managers of man-made machines. Occupying adjacent areas Pitirim organized a meeting in November 1990 in the city, the contrasts between the two enter- at which the employees voted to leave NTWA rises were evident. The one was modem, com- and join MCI. NTWA immediately threatened to pact, and well organized while the other used cut off Pitirim's wood supplies. Undaunted, Pitir- unevenly developed technology scattered over a im Plywood sent the resolution to the Northern huge complex. In one wages were high, provi- Republic's Council of Ministers which denied sions were relativelv lavish, and workers were the enterprise permission to leave NTWA. At the young whereas in the other wages were low, time of our research, MCI was trying to overturn workers were older and in the previous year there the decision at the level of the All-Union Council had been a strike over poor conditions of work. of Ministers. Although it was uncertain that more How was it that Polar Furniture did so much resources would flow to Pitirim Plywood under better than Northern Wood in extracting resourc- MCI's sponsorship, it was clear that enterprises es from NTWA? First, as an inducement to join had to attach themselves to some large conglom- the conglomerate NTWA had offered Polar Fur- erate that had the resources to assure the delivery niture the hard currency to purchase new ma- of supplies. chinery and import materials such as lacquer. THE SOVIET TRANSITION FROM SOCIAL1[SM TO CAPITALISM 33

Second, the General Director of Polar Furniture waiting list for apartments was 17 to 22 years, had a long history of managing enterprises in twice as long as at Polar Furniture. Northern Star Northern Republic's wood industry. He had es- had begun producing trailers for cars and its man- tablished ties of patronage and an impressive agers were thinking about manufacturing saw managerial team that NTWA trusted. The Gen- mills. But no one knew where the necessary cap- eral Director of Northern Wood, on the other ital investment would come from to reconstruct hand, came from the Reg~onalParty Committee, an old and disorganized plant. Without a wealthy had much less experience in the wood industry, sponsor the situation at the plant would only de- and on top of that faced a divided management teriorate. NTWA was an obvious candidate - team. Third, NTWA regarded Polar Furniture as but why would this already overstretched con- a better investment than Northern Wood simply glomerate find Northern Star an attractive invest- because exporting furniture would be more lu- ment? crative than exporting wood. The managerial team The most surprising testimony to NTWA's ris- at Polar had managed to convince NTWA that ing power was the desire of Arctic City's huge they would be able to compete in the internation- paper plant to become a member. The paper plant al furniture market. Fourth, furniture was more had always prided itself in its independence from profitable than wood domestically because its NTWA. It had been established directly by the prices were unregulated. Moreover, Northern All-Union ministry to produce quality paper for Wood faced competition from the logging enter- books and journals throughout the Soviet Union. prises that supplied it with wood. These enter- It used ex~ensiveFinish and Austrian technolo- prises had begun processing wood themselves gy. In 1991, reflecting its own weaker position, with saw mills they had managed to buy. It was the central Ministry cut its orders for paper by 50 not only more lucrative for the logging enterpris- percent. Taking advantage of this turn of events, es but it was also more efficient to process wood NTWA threatened to reduce the paper mill's sup- where it was cut. Thus, in supporting Polar rather ply of wood by a corresponding amount. Since than Northern Wood, NTWA behaved like a com- NTWA had a virtual monopoly over the distri- mercial bank investing its money where the re- bution of wood, the paper mill found itself under turns were likely to be greatest. considerable pressure to join NTWA and surren- Nevertheless NTWA was also a large trading der its independence. For NTWA the accession organization that affected every enterprise con- would create many headaches, particularly with nected to the wood industry. Take the local trac- respect to the supply of wood and maintenance tor equipment factory, Northern Star, which was and replacement of foreign machinery, but NT- not a member of NTWA. With 2,000 workers it WA's bartering power would be considerably was one of the biggest factories in Arctic City. It enhanced. Again, the withdrawal of support from produced special equipment used in the logging central state organs led even the largest enter- villages for cutting and hauling logs. The equip- prises to seek affiliation with parastatal conglom- ment was attached to tractors imported from an- erates who thereby became even more powerful. other territory. Northern Star monopolized the The collapse of the party state, rather than creat- Republic's production of this equipment, which ing markets and competition, strengthens hierar- it sold directly to the logging enterprises at "con- chies and monopolies. tractual prices." In 1991 the central Ministry of the Russian Federation was still trying to dictate FROM STATE SOCIALISM TO the distribution of the equipment but it could no MERCHANT CAPITALISM longer guarantee supplies. This meant that North- ern Star had to barter its equipment for wood, Do all the proclamations and all the plans for a wood that was then used to buy new machinery, transition to a market economy mean that the obtain steel supplies, and so on. At the same Soviet system is actually moving toward capital- time, the state ordered fewer and fewer tractors ism? To answer this question requires going be- installed with the equipment (the number pro- yond political decrees or ideological mobiliza- duced a year dropped from I100 to 710) as the tion to examine real changes in economic rela- logging enterprises themselves became both more tions. The dynamics of capitalism rest on the con- autonolnous and less able to afford new machin- tinual pressure to transform products and work ery. Reflecting these difficult circumstances, organization in order to maintain profit in a com- Northern Star's average wage was only a little petitive market. Unable to control market rela- more than half that of Polar Furniture and the tions management is forced to concentrate on the AMERICAN SOCIOLOGICAL REVIEW transformation of production. On the other hand, regional party secretaries who would call their in state socialism, supply shortages and worker counterparts in other regions to help obtain ur- control make managerial control of production gently required supplies (Hough 1969; Hewett impossible - so management concentrates on 1988, pp. 162-70; Zaslavskaya 1990, pp. 60-73). bargaining with the state. The successful enter- So, although lateral exchange did exist, it was prise is one that succeeds in such bargaining and carefully monitored. The party state limited the is thereby able to forge a stable compromise with autonomy of enterprises through its control of the its workers. To what extent has this changed? promotion and demotion of enterprise directors. If managers did not comply with plan targets, they Amplifying the Past could lose their jobs or even be asked to "put their party card on the table." Now managers have great- Our case study suggests that with the withering er autonomy to bargain laterally which in turn away of the party state the Soviet economy, far gives them more leverage vertically. from collapsing or transforming itself, has as- One should not exaggerate the effects of the sumed an exaggerated version of its former self.I4 collapse of the party state. True, in our case study The dislocation between the shop floor and ex- the all-important department for wood and for- ternal bargaining remains. What has changed is estry in the Regional Party offices was liquidated the form of the external bargaining. Whereas pre- at the beginning of 1991, and across the central viously the enterprise bargained through hierar- square of Arctic City at the Council of Ministers chical channels with regional ministries, the re- a completely new ministry was created. And true, gional party committee, territorial conglomerates, this fledgling ministry is less effective than the and All-Union ministries, now the number of previous department in the Regional Party offic- channels is reduced, in our case study primarily es in controlling the production chain of the wood to the single conglomerate, NTWA. The collapse industry. It does not, for example, have the pow- of the party state has led to the consolidation of er to remove directors from their positions. At monopoly associations into parastatal conglom- the same time, many of the key party bureaucrats erates that seek to control all transactions. have found their way into new positions of pow- However, in substituting themselves for the er where they can reproduce their control over party state in the hierarchical order, the parastat- the economy. The plethora of cooperatives that als have not actually been able to maintain the have sprung up to mediate the bargaining and same monopoly over lateral ties. The parastatals trading between enterprises are often established do not command the power necessary to guaran- and run by former party secretaries.'What they tee supplies to their members who are therefore did before in the name of "communism" they compelled to use a portion of their production to now do as self-proclaimed "business men." The obtain supplies directly through barter. Often the ideology may have changed but the basic func- most intense negotiations concern the percent- tions are the same. age of production that the parastatal could claim as "state orders" and how much would be left for barter at the discretion of the enterprise. As para- Is Similar reorganization of old relations into new statals fail to deliver what enterprises need, bar- forms have been found in Poland (Staniszkis 199 1) and Hungary (Stark 1990; Burawoy and Lukics 1992, ter increases which in turn further undermines chap. 6). Interestingly, the literature on Soviet coop- the strength of the parastatal. eratives tends to focus on bureaucratic resistance to Of course, barter relations between enterprises their formation (Jones and Moskoff 1991; Slider 1991) existed under the old regime, but these were me- and overlooks the way the party has been able to diated either through tolkachi (pushers) who op- reconstitute itself through cooperatives. In 1991 co- erated semilegally between enterprises or through operatives occupied the bottom floor of the Regional Party headquarters in Arctic City. One of them, called '"ased on our survey of enterprises in Arctic City, "Prognos," was a sociology cooperative organized to we believe our conclusions can be generalized. But undertake surveys of public opinion to foster demo- we only examined civilian production. Military en- cratic responsiveness of leaders. Its president had been terprises are known to have strict discipline, effective the first party secretary for ideology. In many quar- work organization and few chronic supply problems ters sociology has become the new ideology to suc- (Zaslavsky 1982, chap. 3; n.d.). To what extent such ceed Marxism-Leninism.Thus, university departments work organization continues to prevail in the military of "Philosophy and Scientific Communism" have been sector, particularly where there is conversion to civil- renamed departments of "Philosophy and Sociology" ian production, we do not know. but the incumbents remain the same. THE SOVIET TRANSITION FROM SOCIAI,ISM TO CAPITALISM

To be sure economic relations are less politi- ing). But the result is the same: control is ceded cized. They are also increasingly carried out with to the shop floor. a view to augmenting "profit." Parastatal conglomerates such as NTWA conduct their bar- The Development of Underdevelopment gaining in the language of profitability. But the profits come from monopoly, from barter, from The double anarchy of relations in production and valuta (foreign currency) and not from produc- relations of production can be seen as an exag- tion. The newly created banks loan money for geration of the old economic system or as the trading ventures not productive ventures. Coop- harbinger of a new order. That new order is based eratives, small enterprises, and even joint ven- on domination by monopolies whose powers re- tures, the supposed harbingers of capitalism, are side in control of access to supplies. As we have barred from independent productive activities by seen, this economic system is driven by the pur- the monopolistic activities of state enterprises, suit of profit that comes primarily from trade rath- banks, and parastatal conglomerate^.'^ er than from transforming production. Work is in The pursuit of profit through trade and mo- effect "put out" to worker collectives in enter- nopoly dovetails well with the retention of work- prises. These are characteristics of merchant cap- er control over production. Indeed, if anything, italism. "The independent and predominant de- worker control is strengthened. First, increasing velopment of merchant's capital is tantamount to shortages of supplies leads to intensified anarchy the non-subjection of production to capital" (Marx on the shop floor and thus to spontaneous self- [I8941 1967, pp. 327-28). However, merchant organization by workers. Second, when supply capital does not evolve naturally into bourgeois shortages increase managers are more preoccu- capitalism. It contains no imminent tendencies pied with searching for materials and have even toward self-transformation. Quite the opposite: less time to regulate production. Third, as agents "[Merchant capital] cannot by itself conuibute to of managerial control shop floor supervisors be- the overthrow of the old mode of production, but come even weaker with the demise of party ap- tends rather to preserve and retain it as its pre- pointments. Fourth, monetary incentives become condition" (Marx [I8941 1967, p. 334). less effective as a means of regulating work be- The factors determining a successful transi- cause there is less to buy with extra wages. To tion to industrial capitalism vary with the specif- elicit the cooperation of workers management ic context in which merchant capital prevails. In must provide reward in kind, particularly food. the Soviet case such a transition would require In this regard, Polar was in a better position than replacing monopolies with competitive enterpris- most enterprises because it manufactured a prod- es, barter with market exchange, and worker con- uct that could be bartered for food. Less fortu- trol with managerial control. Since monopoly, nate enterprises must deploy alternative strate- barter and worker control form a mutually rein- gies to forge compromises with workers, such as forcing triad, nothing short of revolution could creating "cooperatives" or "small enterprises" transform the Soviet economic system into in- within plants to employ workers in overtime for dustrial capitalism. Certainly liberal democracy higher wages (Burawoy and Hendley forthcom- cannot be the instrument of such a change since it is powerless to counter merchant capital's ten- '6Kr~ll(1991) showed how government programs dency to fragment the Soviet Union into local to deconcentrate Soviet industry were based on an "suzerainties" (Humphrey 1991 ; Verdery 1991). overestimation of the effectiveness of political de- Merchant capitalism becomes the economic ba- cree. The programs assumed that "competitive indus- sis for intense nationalism and localism. As the trial structure can be created by bureaucratic fiat, rather than developing as a consequence of market forces" Soviet Union disintegrates, nations and regions (p. 17 1). Instead of breaking up monopolies and regu- will try to maximize their control over trade by lating prices (then government policy) Kroll proposes controlling the flow of goods across their bor- promoting the unrestricted growth of a private sector ders, by introducing their own currencies, and by alongside the state sector, the deregulation of prices regulating export licenses. and opening the country to international competition. If liberal democracy is not a remedy, what about This is similar to Kornai's (1990) program for a Hun- that other panacea: the world market? In general garian "road to a free economy." Both Kroll and Kor- external economic pressures cannot by them- nai underestimate the power of existing monopolies selves compel a transition to bourgeois capital- to protect themselves against any competition -in- ism without internal agents who have both the ternal or external. interest and the capacity to promote such a tran- 36 AMERICAN SOCIOLOGICAL REVIEW sition (Brenner 1976,1977). But do such internal tion of prices and the lowering of tariffs. Mer- social forces currently exist? Proposals to create chant capital is quite compatible with all these an independent capitalist sector ignore the strength economic reforms." In the face of competition of merchant capital. Foreign investors have so merchant capitalism preserves and deepens the far found it impossible to operate independently underdevelopment of the system of production of the parastatal conglomerates which control out of which it sprung and upon which it is supplies and infrastructure. Not surprisingly, founded. therefore, foreign capital works with these conglomerates to provide Western consumer goods Epilogue: The Radiant Past and extract raw materials. "The independent development of merchant's capital, therefore, stands There is, of course, an alternative scenario im- in inverse proportion to the general economic plied in the fourth cell of Figure 1, namely syndi- development of society" (Marx [I8941 1967, p. calism. Conceivably, existing forms of worker 328). As in the Third World, foreign capital en- control could be extended upwards so that the ters in the form of merchant capital and thereby economy would be reconstructed from below deepens underdevelopment because it leaves pro- rather than fragmented from above. Such a move- duction largely untouched (Kay 1975, particu- ment can be identified in the insurgency of the larly chap. 5). coal miners who in 1989 and 1991 broke the so- The advocates of shock therapy promise re- cial contract that bound them to their bosses and covery. Even if the pain is great, the transition undertook mammoth political as well as economic from a command economy to a market economy strikes (Friedgut and Siegelbaum 1990; Rutland will leave everyone better off in the end. This is 1990; Connor 1991, chapter 7). an empty promise, reminiscent of the communist But the miners are an exception. Far from be- utopia. Like communism, the popular models of coming militant or radical, the workers in Arctic capitalism fail to demonstrate their viability or City became more and more demoralized as pere- feasibility, just as they provide an ideological stroika unfolded. They are humiliated by the way cover for a very different form of existing soci- they have to live: "We'll soon be going back to ety. Thus, it is by no means obvious that "a free the woods . . ."; "This is no civilized country. . . ." market economy" generating "universal opu- They ask me why I didn't visit them five years lence" is viable anywhere in the modem world ago: "Things were much better then." When system let alone in the new Commonwealth of something went wrong on the shop floor, they Independent States. Second, even if the model blamed the reign of bardak (chaos): "We need were internally viable, there may be no feasible order. The old system worked much better." "So way of getting there once account is taken of the you want to return to the old system?" I ask. And resilience of an economy based on barter, mo- they reply, "On the one hand, it wouldn't be too nopoly, and worker control as well as the forces bad; on the one hand at least there would be of international capitalism. Third, the ideology order, on the one hand.. . ." They never get to of the market economy, which is now almost as the other hand. pervasive in Russia as was the ideology of com- Certainly, for most the future looks bleaker than munism before, obscures the enormous gap be- the past. A young apprentice asks me whether life tween merchant capitalism and bourgeois indus- is better "over there?" I shrug my shoulders and trial capitalism. This gap is no less daunting than say it depends on who you are. I ask him what he the one that separated state socialism from the thinks. "Of course, it's better," he replies, "There's promise of communism. everything there." For him and his generation We are not saying that the Russian economy is capitalism is simply a dream, a fantasy displayed heading for collapse. Merchant capitalism will on television in second-rate American films. It continue to reproduce itself, albeit on a diminish- has, of course, a special magic in a shortage econ- ing scale. Parastatal conglomerates will seek alli- ances with the more lucrative enterprises and let "Even in Poland, the supposed success story of the others fend for themselves. Thus, successful "shock therapy" through market reform, we find farm- enterprises like Polar Furniture will continue to ers responding to the flood of cheap food from abroad exist, although at the expense of failing enterpris- by retreating into closed cycle production. Encircled es such as Rezina. We are saying, however, that by trading monopolies, their entrepreneurshiphas been the solution to economic decline does not lie in stifled even though they are well endowed with pri- monetary stabilization, privatization, liberaliza- vate property (Salameh forthcoming). THE SOVIET TRANSITION FROM SOCIALISM TO CAPITALISM

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You have printed the following article: The Soviet Transition from Socialism to Capitalism: Worker Control and Economic Bargaining in the Wood Industry Michael Burawoy; Pavel Krotov American Sociological Review, Vol. 57, No. 1. (Feb., 1992), pp. 16-38. Stable URL: http://links.jstor.org/sici?sici=0003-1224%28199202%2957%3A1%3C16%3ATSTFST%3E2.0.CO%3B2-R

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3 Rethinking Internal Labor Markets: New Insights from a Comparative Perspective David Stark American Sociological Review, Vol. 51, No. 4. (Aug., 1986), pp. 492-504. Stable URL: http://links.jstor.org/sici?sici=0003-1224%28198608%2951%3A4%3C492%3ARILMNI%3E2.0.CO%3B2-%23

4 Between Perestroika and Privatisation: Divided Strategies and Political Crisis in a Soviet Enterprise Michael Burawoy; Kathryn Hendley Soviet Studies, Vol. 44, No. 3. (1992), pp. 371-402. Stable URL: http://links.jstor.org/sici?sici=0038-5859%281992%2944%3A3%3C371%3ABPAPDS%3E2.0.CO%3B2-7

11 The Brigade System in Soviet Industry: An Effort to Restructure the Labour Force Darrell Slider Soviet Studies, Vol. 39, No. 3. (Jul., 1987), pp. 388-405. Stable URL: http://links.jstor.org/sici?sici=0038-5859%28198707%2939%3A3%3C388%3ATBSISI%3E2.0.CO%3B2-2

NOTE: The reference numbering from the original has been maintained in this citation list. http://www.jstor.org

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12 Between Perestroika and Privatisation: Divided Strategies and Political Crisis in a Soviet Enterprise Michael Burawoy; Kathryn Hendley Soviet Studies, Vol. 44, No. 3. (1992), pp. 371-402. Stable URL: http://links.jstor.org/sici?sici=0038-5859%281992%2944%3A3%3C371%3ABPAPDS%3E2.0.CO%3B2-7

13 Between Perestroika and Privatisation: Divided Strategies and Political Crisis in a Soviet Enterprise Michael Burawoy; Kathryn Hendley Soviet Studies, Vol. 44, No. 3. (1992), pp. 371-402. Stable URL: http://links.jstor.org/sici?sici=0038-5859%281992%2944%3A3%3C371%3ABPAPDS%3E2.0.CO%3B2-7

15 Embattled Entrepreneurs: Soviet Cooperatives in an Unreformed Economy Darrell Slider Soviet Studies, Vol. 43, No. 5. (1991), pp. 797-821. Stable URL: http://links.jstor.org/sici?sici=0038-5859%281991%2943%3A5%3C797%3AEESCIA%3E2.0.CO%3B2-J

References

Agrarian Class Structure and Economic Development in Pre-Industrial Europe Robert Brenner Past and Present, No. 70. (Feb., 1976), pp. 30-75. Stable URL: http://links.jstor.org/sici?sici=0031-2746%28197602%290%3A70%3C30%3AACSAED%3E2.0.CO%3B2-J

Between Perestroika and Privatisation: Divided Strategies and Political Crisis in a Soviet Enterprise Michael Burawoy; Kathryn Hendley Soviet Studies, Vol. 44, No. 3. (1992), pp. 371-402. Stable URL: http://links.jstor.org/sici?sici=0038-5859%281992%2944%3A3%3C371%3ABPAPDS%3E2.0.CO%3B2-7

NOTE: The reference numbering from the original has been maintained in this citation list. http://www.jstor.org

LINKED CITATIONS - Page 3 of 3 -

'Icebergs', Barter, and the Mafia in Provincial Russia Caroline Humphrey Anthropology Today, Vol. 7, No. 2. (Apr., 1991), pp. 8-13. Stable URL: http://links.jstor.org/sici?sici=0268-540X%28199104%297%3A2%3C8%3A%27BATMI%3E2.0.CO%3B2-S

The Hungarian Reform Process: Visions, Hopes, and Reality János Kornai Journal of Economic Literature, Vol. 24, No. 4. (Dec., 1986), pp. 1687-1737. Stable URL: http://links.jstor.org/sici?sici=0022-0515%28198612%2924%3A4%3C1687%3ATHRPVH%3E2.0.CO%3B2-I

Managerial Autonomy in Soviet Firms Susan J. Linz Soviet Studies, Vol. 40, No. 2. (Apr., 1988), pp. 175-195. Stable URL: http://links.jstor.org/sici?sici=0038-5859%28198804%2940%3A2%3C175%3AMAISF%3E2.0.CO%3B2-V

The Brigade System in Soviet Industry: An Effort to Restructure the Labour Force Darrell Slider Soviet Studies, Vol. 39, No. 3. (Jul., 1987), pp. 388-405. Stable URL: http://links.jstor.org/sici?sici=0038-5859%28198707%2939%3A3%3C388%3ATBSISI%3E2.0.CO%3B2-2

Embattled Entrepreneurs: Soviet Cooperatives in an Unreformed Economy Darrell Slider Soviet Studies, Vol. 43, No. 5. (1991), pp. 797-821. Stable URL: http://links.jstor.org/sici?sici=0038-5859%281991%2943%3A5%3C797%3AEESCIA%3E2.0.CO%3B2-J

Rethinking Internal Labor Markets: New Insights from a Comparative Perspective David Stark American Sociological Review, Vol. 51, No. 4. (Aug., 1986), pp. 492-504. Stable URL: http://links.jstor.org/sici?sici=0003-1224%28198608%2951%3A4%3C492%3ARILMNI%3E2.0.CO%3B2-%23

NOTE: The reference numbering from the original has been maintained in this citation list.