WORK, EMPLOYMENT AND UNEMPLOYMENT IN THE SOVIET UNION

WORK, EMPLOYMENT AND UNEMPLOYMENT IN THE SOVIET UNION

Work, Employment and Unemployment in the Soviet Union J. L. Porket Senior Associate of St Antony's College, Oxford Palgrave Macmillan

ISBN 978-1-349-10932-6 ISBN 978-1-349-10930-2 (ebook) DOI 10.1007/978-1-349-10930-2 J. L. Porket. 1989 Softcover reprint of the hardcover 1 st edition 1989 All rights reserved. For information, write: Scholarly and Reference Division, St. Martin's Press, Inc., 175 Fifth Avenue, New York, N.Y. 10010 First published in the United States of America in 1989 ISBN 978-0-312-03095-7 Library of Congress Cataloging-in-Publication Data Porket, J. L., 1925- Work, employment and unemployment in the Soviet Union / J.L.Porket p. cm Bibliography: p. ISBN 978-0-312-03095-7 1. Unemployment-Soviet Union-History-20th century. 2. Underemployment-Soviet Union-History-20th century. 3. Central planning-soviet Union-History. 4. Soviet Union-Economic policy-1917- I. Title. HD5796.P67 1989 33L13'7947-dc19 88-37127 CIP

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Contents List of Tables and Figures Introduction XI XIII PART I TYPES OF ECONOMIC SYSTEM AND UNEMPLOYMENT 1 1 Types of Economic System 1.1 Pure Types and Actual Economies 1.2 Economic Systems and Political Systems 1.3 Market Capitalism and Command Socialism 1.4 Trade Unions Conclusion 3 3 4 6 10 13 2 Types of Unemployment 2.1 Forms of Unemployment 2.2 Unemployment by Origin 2.3 Voluntary and Involuntary Unemployment 2.4 Attitudes Towards Employment 2.5 Employment and Work 2.6 Non-political Consequences of Unemployment 2.7 Political Consequences of Unemployment 2.8 Full Employment Conclusion 17 17 19 22 24 25 28 30 34 38 VII

viii Contents PART II A HISTORY OF THE SOVIET CASE 3 The First Decade 3.1 The Normative Dimension 3.2 The Empirical Dimension 3.3 The End of Registered Unemployment 3.4 Soviet Views on Unemployment Conclusion 4 The Stalin Era 4.1 Collectivization 4.2 Industrialization 4.3 The Standard of Living 4.4 The Post-war Years 4.5 Soviet Ideology Conclusion 5 The Post-Stalin Era 5.1 Khrushchev's Rule 5.2 The 1965 Economic Reform 5.3 Developed Socialism 5.4 From Brezhnev to Gorbachev 5.5 The Standard of Living Conclusion 41 43 43 47 50 51 54 56 56 59 64 65 68 70 72 72 76 79 84 86 88 PART III AN ANALYSIS OF THE SOVIET CASE 91 6 Open Unregistered Unemployment 6.1 Labour Turnover 6.2 Labour Exchanges 6.3 Women 93 93 99 101

Contents ix 6.4 Young People 106 Conclusion 110 7 Overmanning 114 7.1 The State Sector 114 7.2 Shchekino 125 7.3 Work Collectives 128 7.4 The Brigade System 130 7.5 Collective Farms 133 Conclusion 141 8 The Use of Educational Qualifications 144 8.1 Attitudes towards Education 144 8.2 Educational Requirements and Educational Qualifications 148 8.3 Employment above Skill Level 150 8.4 Employment below Skill Level 152 8.5 Employment at Skill Level 156 8.6 Change of Occupation 159 Conclusion 162 9 Labour Supply and Demand 165 9.1 Labour Shortage 165 9.2 The Demand Side 166 9.3 The Supply Side 171 Conclusion 178 10 Prospects 181 10.1 Options 181 10.2 Soviet Scholars 186 10.3 Gorbachev's Initial Years 191 Conclusion 199

x Contents Notes and References 204 Select Bibliography 237 Index 248

List of Tables and Figures Tables 2.1 Types of unemployment by form 19 2.2 Types of unemployment by origin 21 3.1 Registered unemployed, 1922-30 47 4.1 White-collar and blue-collar workers, 1922-40 59 4.2 White-collar and blue-collar workers, 1940-55 66 5.1 White-collar and blue-collar workers, 1955-70 79 5.2 Economic activity rates of the population of working age 79 5.3 Labour productivity 84 6.1 Labour turnover and total separations 94 6.2 Participation in social production and full-time study 102 6.3 Applications and admissions to full-time higher education 108 7.1 Deposits in savings banks and retail trade turnover 124 7.2 Factors contributing to a worsening of workers' attitudes towards their work 125 7.3 Collective farmers' participation in collective farm work 136 7.4 Share of women among collective farmers taking part in collective farm work 136 7.5 Average number of man-days devoted to collective farm work by male and female collective farmers 136 8.1 Destinations of secondary general school leavers 147 8.2 Practitioners in Soviet industry 151 8.3 Use of educational qualifications in the Soviet Union 153 xi

xii List of Tables and Figures Figures 2.1 Categories of persons of post -school age by participation in gainful economic activity 2.2 Work versus employment 6.1 Open unregistered unemployment 8.1 A simplified schema of the educational system 26 27 111 145

Introduction The official Soviet ideology contends that socialism is not only completely different from capitalism, but also in all respects (i.e. socially, economically, politically, culturally, and morally) superior to it. In order to substantiate this claim, the ideology cites a long list of achievements, one of them being that while unemployment is an endemic feature of capitalism, socialism abolishes it entirely and once and for all. If the term 'unemployment' denotes exclusively open unemployment of the registered kind or the dole, then the assertion is fully justified, because in the Soviet Union the payment of unemployment benefits was stopped as early as October 1930. On top of that, over the years the Soviet regime has succeeded in mobilizing for participation in the social economy the vast majority of able-bodied men and women of working age. While open unemployment of the registered kind is absent and the labour force participation rate is high, open unemployment of the unregistered kind has not disappeared. In addition, there is chronic and general overmanning as well as voluntary and involuntary employment below skill level, i.e. underutilization of employed persons in terms of both working time and educational qualifications. Although underutilization of employed persons keeps open unemployment down, it has a number of adverse consequences, which should not be overlooked. Amongst other things it contributes to slack work discipline, low labour productivity, divorce of rewards from performance, low real wages, inflation, and shortages of consumer goods and services. Thus, from the point of view of the situation in the labour market or the relation between the supply of and demand for labour the official Soviet economy may be characterized as a high-employment one; from that of the utilization of the employed labour force or the relation between labour input and the output of economic values it may be characterized as a low-productivity one; and from that of the income received by individuals for playing the role of employed persons it may be characterized as a low-incentive one. Since this economy is centrally planned and managed, it raises the question of non-political compliance and deviance. Since it does not xiii

xiv Introduction meet the expectations of individuals, families, enterprises and other role-players, it raises the question of the unofficial or second economy. And since it involves in social production most able-bodied men and women of working age, it raises the question of the time available for domestic chores and leisure. As outlined above, the subject-matter of the book will be examined at four analytically distinct but in practice interrelated levels, namely, the normative, the institutional, the behavioural, and the attitudinal. The reason lies in the author's belief that their combination leads to a more comprehensive understanding of work, employment and unemployment in the Soviet Union than any single one could provide separately. In general terms, the first level pertains to the sphere of official values and commitments, ideological precepts, legal and other formal provisions, and the patterns of behaviour and interaction desired or expected by the regime. The second refers to sets of interdependent positions and roles normatively prescribed by the regime and integrated by it so as to make up a social system. The third covers the observed patterns of behaviour and interaction on the part of role-players. And the fourth denotes the role-players' learned and more or less generalized and affective tendencies to respond in a particular manner to ideas, values, objects, other role-players, events, structures, processes, and situations. More specifically, the inquiry will include an examination of the Soviet regime's views on work, employment and unemployment, of its employment and anti-unemployment policies and measures, and of how it regulates behaviour on the job and interaction within and between formal organizations. The relevant aspects of its demographic, wage and social policies will also be reviewed. Since these policies are pursued by the regime within an economic system that is a variant of command socialism, it will be necessary to take into consideration its nature, functioning and performance. Of the various indicators used by economists to measure its performance, attention will be paid especially to the labour force participation rate, the unemployment rate, efficiency, the population's standard of living, and the distribution of income. Both the nature of the Soviet economic system and the regime's policies have an impact on the behaviour of Soviet citizens, whether employed or not, albeit not always in the manner intended by the regime. Therefore, overt behaviour will be divided into conformist (complying with centrally promulgated formal norms) and deviant

Introduction xv (evading and violating centrally promulgated formal norms), and the latter will in turn be subdivided into typical (chronic and general) and atypical (occasional and sporadic). However, the behaviour of Soviet citizens has not only systemic but also attitudinal causes. On the basis of the available evidence it will be argued that attitudes are to be found which the regime dislikes and tries to stamp out; that the population perceives a gap between its expectations and the reality it faces; and that there is a conflict between individual, family, group, enterprise, departmental and local interests on the one hand and those of society, as defined by the regime, on the other. Before turning to the Soviet case, Part I will provide a theoretical framework. Types of economic system will be discussed, as well as forms of unemployment and the oft-neglected difference between work and employment. It will be proposed that while neither market capitalism nor command socialism escapes unemployment, different forms of unemployment prevail under each. Against this background, Part II presents a history of the Soviet case between the October Revolution and the mid-1980s, with special emphasis on continuity and change, whereas Part III approaches the Soviet case systematically, dealing in detail with open unemployment of the unregistered kind, overmanning, the use of educational qualifications, and the supply of and demand for labour. Since the Soviet Union faces a number of problems and experiences various tensions, the concluding chapter will ask what the party leadership wants to do (the question of preferences), what it can do (the question of constraints), and what it will do (the question of response). It should be remembered, of course, that any decision made by the party leadership in response to the perceived problems and tensions still leaves unanswered the question of its implementation and that of its intended and unintended consequences. The author would like to express his thanks to Michael Kaser and Archie Brown of St Antony's College, Oxford, as well as to the readers of the draft version. He also wishes to record his gratitude to the librarians of St Antony's College, the School of Slavonic and East European Studies, the London School of Economics and Political Science, and the Royal Institute of International Affairs. Finally, and most importantly, he must thank his wife Barbara for her unceasing support. J. L. PORKET