Economic Power Struggle In The USSR: Soviet Workers Press For Self-Management

David Mandel

In the sixth year of the perestroika, people are waking up to the realization that despite the increased freedom of speech, the competitive elections, and the removal of the party apparatus from the levers of political power, they themselves almost as powerless as ever.

Seventy-three per cent of the respondents in a survey conducted in the Soviet Union in the summer of 1990 stated that their ability to influence political life had not increased over the past two years. In another survey in Moscow in the fall, sixty per cent claimed that “power in the localities belongs not to the soviets but to the chiefs of the mafia.”

People, who only a year ago were fervent supporters of the schemes of the radical marketeers, now typically express fear that the elimination of state control over the economy means that “it will all fall into the hands of the mafia.” The term ‘mafia’ reflects the popular perception of a growing fusion of the bureaucracy, especially the economic administrators, with the ‘affairistes’ of the private sector. These are the people who hold power in the economy.

Any Soviet citizen can readily offer a list of examples drawn from personal experience to support this view. The ‘mafia’ has lately also become a major theme of the press, liberal as well as conservative ( there is no mass socialist press). As a social phenomenon, its contours are illusive and fluctuating - its shadowy character is in the nature of the beast. But the term most often refers to two principal kinds of related activity: the creation and maintenance of shortages by monopoly structures, and the illicit transfer of state resources and funds into private hands. Both involve the collusion of administrators of the state sector with the ‘shadow’ economy itself often indistinguishable from the legitimate private sector. Here are a few examples of ‘mafia’ activity that could easily be multiplied.

In September 1990, a deputy of the Moscow Soviet travelled to Astrakhan to find out why tomatoes and water-melons were arriving from this southern region in such small quantities. The local authorities showed him a pile of telegrams from administrators of Moscow’s wholesale-retail produce network instructing them to stop shipment because of the oversupply in Moscow, which, of course, did not exist. “prices are now mostly ‘by agreement’,” explained the deputy. “The less goods, the higher their price can soar. Who profit from this reduced supply of vegetables? Those who sell them. I consider that ‘mafia’ links along the lines warehouse-shop-speculator are real!”

As for dry goods, the director of a Moscow department store chain estimates that only 18% of the goods in high demand that are produced and imported actually reach the ordinary consumer. Enormous lines stretch around the state shops, while at the private market - and sometimes only a few yards from the door of the state shop itself - one can purchase the same goods without any wait for several times the state price. The volume of illegal trade in medicine is already approaching that of the state pharmacies.

Direct robbery of the consumer is only one source of ‘mafia’ profits. Parallel to this, and sometimes overlapping, is theft from the state. This also takes many forms. In atypical case, the director of the state research and manufacturing association Gidrolizprom authorized the creation of the co-operative Khimtekhnika and transferred to it - free of charge - the association’s large store of defective titanium hydrolysis apparatuses. Khimtekhnika traded these for from six to nine million rubles worth of computers and video players, of which Gidrolizprom saw none. After several narrow escapes from the economic police and tax inspectors, Khimtekhnika’s directors transferred these assets to a joint Soviet- Swiss venture, Intercomplex, created specially for that purpose. (Joint ventures enjoy a two-year tax holiday.) Since then, the Gidrolizprom association has been disbanded. Its former institutes and factory, now independent, face large debts and bleak futures. Not so the former director of Gidrolizprom, who now stands at the helm of Intercomplex. As a minister in the Latvian government put it, “cooperatives and joint enterprises are often oriented not toward the production of consumer goods but toward their redistribution. From the state’s pockets into their own. That is, if we are to call things by their name, they are involved in speculation on a very large scale.”

The struggle over power in the factories

The accelerating ‘mafia-ization’ of the economy has forced workers to directly confront the issue of power in the enterprises. Labour conflicts in the first year of the perestroika generally centered around issues of wages and work conditions. Although these remain important, a new type of conflict has emerged over the past year. Rather than putting forth economic demands and pressuring management to meet them, workers are themselves seeking an active role in management of their enterprises. Here are just a few examples of these conflicts.

At a Voronezh machine-construction factory, the director was misappropriating the factory’s equipment and material for his personal benefit. A small, poorly organized enterprises that was in bad economic shape, it nevertheless maintained seven well-paid assistant directors. A workers’ conference elected a committee, which it mandated to investigate the state of affairs and to restore order in the factory. The director was replaced through competitive elections, and the enterprise’s situation began quickly to improve.

It has become increasingly clear that the liberals’ market reform promise only more ‘mafia-ization’ of the economy.

At a Novosibirsk machine construction factory, the workers shut down a co-operative that management had entrusted with the enterprise’s supply and transport services. This occurred after the workers forced open the assistant manager’s safe proving that he was an employee of the co-operative which had been selling the factory’s own raw materials on the side at two and three times the state price.

At the VAZ auto factory, the workers first learnt from an interview in the newspaper that the managers were preparing to convert VAZ into a ‘concern’. In response, the work-collective (self-management) committee declared VAZ and all its production the property of the work collective.

The limits of trade-unionism

Until recently, one could not speak of a self-management movement in the Soviet Union. There were only isolated conflicts over power and isolated committee activity in the enterprises. The organized labour movement, that began with the miners’ strike of July 1989, was characterized by a strong trade-unionist orientation. For a movement that arose out of nothing after almost 60 years of very effective repression, it has made impressive organizational gains, culminating in the founding of an independent Miners’ Union in the fall of 1990.

Nevertheless, this movement has not really succeeded in spreading outside of the mines and mining regions. The unions of workers’ committees in other regions are small groups of activists, who emerge out of their isolation only when serious conflict arises in their enterprises. In the mining areas themselves, rank-and-file activism has significantly declined. This is a political crisis in the context of economic collapse. The attempt through strictly trade-unionist activity to protect living standards and labour conditions in a collapsing economy has reached its limits. Not only are wage gains soon rendered meaningless by inflation and shortages, but this orientation leads to solidarity between workers and their own administrating - for higher prices or greater subsidies - at the expense of the rest of the population, which can ill afford to pay the bill.

The miners’ movement did put forth political demands relating to the democratization of the state. But the basic question remained unanswered: what to do with this democracy if and when it was won? The most politicized elements have tended to advocate a trade-unionist orientation, and to the extent that they put forth a positive economic program, it was the market reform borrowed from the liberals. But it has become increasingly clear that the liberals’ market reform promise only more ‘mafia-ization’ of the economy. It would also mean the closure of many mines as unprofitable.

The emergence of a self-management movement

The impasse of trade-unionism, the mounting conflicts over power in the factories, and the realization that “destatization” in practice means the transformation of state enterprises into the property of the bureaucrats and ‘affairistes’ formed the background for the emergence of an organized self-management current in the labour movement in the late summer of 1990.

The immediate impulse came from a new Law on Enterprise in the USSR passed without any public discussion in the spring 1990 that annulled the broad self-management rights given to worker collective two years before. The new Law, which makes no mention of self-management, stipulates, that enterprises are to be managed according to their charters established by their owners.

The First All-Union Conference of Work-Collective Councils at the end of August was a direct response to this law. The conference, attended by about 100 delegates from enterprises employing some two million people, approved the law’s intention of broadening the economic autonomy of the enterprises but otherwise condemned it as anti-democratic, reinforcing the arbitrary power of the administration and the ministries.

The conference demanded that the work collectives be given the right to decide the fate of their enterprise: either to become collective owners, without any payment to the enterprise, or the managers of the enterprises left in state ownership. In both cases, the administrating would be hired by the collective. The meeting called for revision of the law and its submission to a national discussion. An organizing committee was elected to co-ordinate the activities of the self-management councils, to act as their spokesperson and to convoke a full congress of self-management committees to establish a permanent organization.

This was the first organized expression of how at least a significant part of the workers see ‘destatization’ and as such, it made clear the workers differences with the liberals, whose market reform calls for the establishment of full private property rights, including the right of the owners to manage and dispose of their property. The workers’, in contrast, support market reform and enterprises autonomy as conditions for producers’ self-management.

The Union of Work Collective Councils

The Founding Congress of Work Collective Councils on December 7-10 was attended by 700 delegates from enterprises employing 7 million people. It reaffirmed the positions of the August conference, adopted a plan of action and created the Union of Work-Collective Councils with a council representatives from all the major regions. The Union’s program of immediate measures took note of the “critical situation in the country linked to the attempt by the administrative-command system to consolidate its power through the appropriation of the property belonging in common to the people and to leave the toilers in the situation of hired labourers deprived of rights.” The Union’s basic goals are the achievement of “legal guarantees and... free choice by the work collectives of forms of property and management”; as well as the “drawing of work collectives into the process of managing their enterprises... The union unites the labour collectives in the aim of mobilizing their civic activity to improve the situation in the country, to place constant pressure from below on legislative and executive organs, and, finally, to block anti-popular actions and facilitate the precise and swift execution of plans and decisions in the interests of the toilers.”

Self-management and the socialist alternative

From a socialist point of view, this program is not unambiguous. In particular, it lacks any overall economic conception. The program implicitly support market reform (enterprise autonomy), but is this a system in which the market dominates society, or one in which market relations are subordinated to the collective will of the society? The emphasis on enterprise autonomy and collective ownership could serve as a basis for an eventual restoration of capitalism as well as for the construction of a socialist economy based upon self-management, depending on whether the accent is on the market or on the collective power of the workers. If it is on the former, there seems little more reason to welcome monopolism based upon workers’ self-management than bureaucratic monopolism; both involve the pursuit of particular, corporatist interests at the expense of the collectivity.

Nevertheless, the creation of the Union of Work-Collective Committees is itself a sign of weakening of liberal ideological influence in an important sector of the labour movement. The very recognition of the need for co-ordinating the activities of the self-management committees indicates a growing understanding of the limits of a corporatist approach to their struggle for enterprise autonomy. This is occurring under the impact of what they have already experienced of the market and the threat posed by the growing economic dislocation. “Certain elements very much would like to split up the workers as potential owners,” explained a delegate to the Congress from the Elabuga auto factory. “When they are isolated from each other, it will be easier to manipulate them in the service of alien interests.”

Much was said at the congress of the need for a strong central authority capable of restoring respect for laws and harmony among the republics, uniting regions and establishing stable economic relations in a unified economic space. But the congress rejected Gorbachev’s authoritarian solution. According to V.Kataev, a delegate from Cheboksar, “such an authority cannot be established from above with the aid of a club and decrees. It will be established by the work collectives themselves if they become the complete masters of the socialist property. In that case, as the resolution of the Congress states, the work-collective as owners are prepared to bear full responsibility for the results of the economic activity of their enterprises and for order in the country.”

The self-management movement is potentially democratic alternative to Gorbachev’s authoritarian answer to the disintegration of the Soviet economy and state. It also hold out the promise of an end to the isolation of the socialists, the only political current that stands for a genuine democratization of political and economic relations.

David Mandel teaches political science at the University of Quebec in Montreal.



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