Allocation under Dictatorship: Research in Stalin's Archives

Gregory, Paul R.; Harrison, Mark

doi:10.1257/002205105774431225

Cited by 116 publications

(40 citation statements)

References 97 publications

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“…With greater harshness of conditions in the Gulag, the dictator can pay less for labour while increasing output. The logic of this section is as described by Gregory and Harrison (2005): to get more resources for investment or war, the actual wage must be compressed; and to avoid incentive problems the harshness of prison can be intensified. The end result is what Solzhenitsyn (1974) The most important principle of the State he constructed is that it is a State without freedom.…”

Section: Proposition 3 Reducing the Standard Of Living In The Gulag Wmentioning

confidence: 99%

In the shadow of the Gulag: Worker discipline under Stalin

Miller

Smith

2015

Journal of Comparative Economics

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An 'efficiency wage' model developed for Western economies is reinterpreted in the context of Stalin's Russia, with imprisonment -not unemployment -acting as a 'worker discipline device'. The threat of imprisonment allows the state to pay a lower wage outside the Gulag than otherwise, thereby raising the "surplus" left over for investment: this externality provides a reason for coercion over and above the direct productivity of those in custody.Just how credible the threat of imprisonment was under Stalin is documented using archival data now available; but the enormous scale of random imprisonment involved is, we argue, attributable not to economic factors but to Stalin's insecurity in the absence of a legitimate process for succession.We develop a model of demand and supply for industrial labour in such a command economy. To get more resources for investment or war, the state depresses the level of real wages; to avoid incentive problems in the wider economy, the harshness of prison conditions can be intensified. This is the logic of coercion we analyse.

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Section: Proposition 3 Reducing the Standard Of Living In The Gulag Wmentioning

confidence: 99%

In the shadow of the Gulag: Worker discipline under Stalin

Miller

Smith

2015

Journal of Comparative Economics

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“…Kliueva and Roskin, for example, persistently protested their loyalty. For further discussion, see Gregory and Harrison (2005).…”

Section: Transaction Costs and Secrecymentioning

confidence: 99%

“…The result was a state of fear, arising from uncertainty among government officials and managers about how the new regime would be applied, and to whom, and what punishments might follow. Managers and officials responded to such threats by avoiding decisions, for which they might be held responsible, as well as pooling risks and covering each others' backs (Gregory and Harrison 2005). If they responded to additional secrecy by withdrawing from sideline activities, therefore, they did not necessarily put more effort into the plan because they would divert some into self-protection.…”

Section: Transaction Costs and Secrecymentioning

confidence: 99%

“…In both cases, however, economically minded historians have shown that Stalin's behaviour is consistent with optimization subject to constraints; when the constraints changed, so did his choices. Stalin favoured investment over consumption when possible, but returned the priority to consumption when intelligence reports warned him that he risked violating the workers' fair wage constraint (Gregory 2004;Gregory and Harrison 2005). He preferred selective repression when possible, but switched to mass killing when internal threats became less well defined (making selection more difficult) and when external threats increased (making the neutralization of internal threats more urgent)…”

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confidence: 99%

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Secrecy, Fear and Transaction Costs: The Business of Soviet Forced Labour in the Early Cold War

Harrison

2013

Europe-Asia Studies

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This paper is about the costs of doing business under a harsh, secretive dictator. In 1949 the Cold War was picking up momentum. The Soviet state had entered its most secretive phase. The official rationale of secrecy was defense against external enemies. One of the Gulag's most important secrets was the location of its labour camps, scattered across the length and depth of the Soviet Union. As this secret was guarded more and more closely, the camps began to drop out of the Soviet economic universe, losing the ability to share necessary information and do business with civilian persons and institutions without disclosing a state secret: their own location. For some months in 1949 and 1950, the Gulag's camp chiefs and central administrators struggled with this dilemma and failed to resolve it. This episode teaches us about the costs of Soviet secrecy and raises basic questions about how secrecy was calibrated. Secrecy, Fear, and Transaction Costs: The Business of Soviet Forced Labour in the Early Cold WarWe had to write an essay on "the economic level of security." Total security led to paralysis, for only if no one said or did anything could nothing be given away. Too little security led to disaster. Where was the golden mean? It was as good, or as pointless, a subject for debate as the medieval argument about how many angels could sit on the head of a pin (Frankland 1999, p. 83; the assignment was part of his training for the British Secret Intelligence Service in 1958).A colleague of mine used to quip "Got an access denied? Good, the security is working." That means that security administration is fundamentally opposed to network administration -they are, in fact, conflicting goals … Essentially, the tradeoff is between security and usability. The most secure system is one that is disconnected and locked into a safe (Johansson 2004).When it comes to the costs of doing business, it would seem that an autocrat has many advantages. Leaders that do not have to account for their decisions may decide without counting costs; in the absence of procedural checks, they rule by fiat. Democratic leaders, in contrast, must uphold the constitution that gives them legitimacy, respect checks and balances, listen to public and private lobbies, build and maintain coalitions of voters, factions, and parties, ensure transparency of the process that leads to their decisions, and so share ownership of the decisions that result with others. 1 Or, if they do not, they are likely to pay a price in the loss of office or the ruin of their reputation.1 "Process," writes a former permanent secretary in the UK Ministry ofDefence (Quinlan 2004, p. 128), "is care and thoroughness; it is consultation, involvement and co-ownership; it is (as we were reminded by the failure of international process in the run-up to the Iraq war) legitimacy and acceptance; it is also record, auditability and clear accountability. It is often accordingly a significant component of the outcome itself; and the more awkward and demanding the issue -especia...

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“…This has been well documented by economic historians (Allen, 2003;Ofer, 1987) and it is clear that this reflects poor TFP growth reflecting incentive-structure problems that stifled innovation (Berliner, 1976). But, in addition, archival work has developed real expertise in the way in which planning was carried out and the insuperable problems that it encountered (Gregory and Harrison, 2005). Similarly, it is generally accepted that the Marshall Plan was good for early postwar European growth and new 'Marshall Plans' are frequently demanded.…”

Section: What Is Distinctive About Economic Historians' Expertise?mentioning

confidence: 99%

Economic History Matters

Crafts

2012

Economic History of Developing Regions

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This paper considers the future of economic history in the context of its relationship with economics. It is argued that there are strong synergies between the two disciplines and that awareness of the economic past is an important resource for today's economists. Examples are given that illustrate these points. It is clear that the past has useful economics but the potential value of economic history to economics will only be realized if economic historians are fluent in economics and organize the presentation of their research findings with a view to addressing questions that matter from a policy perspective.

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Allocation under Dictatorship: Research in Stalin's Archives

Cited by 116 publications

References 97 publications

In the shadow of the Gulag: Worker discipline under Stalin

In the shadow of the Gulag: Worker discipline under Stalin

Secrecy, Fear and Transaction Costs: The Business of Soviet Forced Labour in the Early Cold War

Economic History Matters

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