Home > political-economy, shorter work time > More on the Soviet Union and shorter working time…

More on the Soviet Union and shorter working time…

Bear with us as we touch on a topic that normally is not covered on this blog.

We have argued (here and here) that there may be similarities between the Soviet Union and the United States with regards to hours of work and the crises suffered by each – the Soviet Union in its last years, and the United States now. This might sound far-fetched to some readers, since we are led to believe that there are few things more dissimilar in this world than those between these two arch-rivals of the 20th Century.

If you think that it is preposterous to maintain the similarity between the two economies, you are right on one level. The Soviet Union was a planned economy, where all businesses were public property; while the US economy is a market based, collection of privately owned companies. This is a legitimate reason to treat the two economies as qualitatively different for purposes of drawing any lessons of significant importance, even when lessons appear to be based on similarly experienced problems. Controls for those differences must be clearly stated.

For example, although we could argue that in both systems the owners of the “company” had reason to complain of difficulties bringing accountability to their respective  managements, we would have to acknowledge that the problem of the oxymoron  “shareholder democracy” is not quite the same as the lack of democracy in the Soviet Union. The democracy of the shareholders is based on the complete lack of democracy for workers in a typical American corporation. For the Soviet Union, however, democracy for the “owners” would have meant greater voice for workers in the management of the economy as well.

Despite this caveat, however, it is immediately obvious why both the management of the typical American corporation and that of the Soviet Union would resist greater say by their respective owners in how things were being managed. In the American case it might bring under scrutiny the questionable business practices aimed at boosting quarterly performance, and, therefore, the compensation of executives – people might even begin to question why the management is being paid bonuses while companies are on life support from Washington. In the case of the Soviet Union, had Gorbachev been successful in establishing a workable democratic arrangement, how long would it have been before questions were raised about the economy’s slowing performance, and the extent of the salaries and open and hidden perks of the top management of the country’s infrastructure? What might an audit have revealed?

In two papers (here and here), David Kotz compares the top management of the Soviet Union to the shareholders of an American corporation – to the members of the capitalist class, in other words. Actually, they were comparable to the top management of any American corporation – well compensated salaried managers, who, over time, replaced the totally superfluous owners of the company as managers. In both cases, their compensation (salaries, perks and bonuses) came with the positions they occupied, not because they owned the company.

Kotz characterizes the Soviet managers as:

… a privileged group of officials, who not only received high money incomes but also had substantial perquisites that included special stores stocked with high-quality goods made in special enterprises (and lacking the long lines found in ordinary stores), homes built by special construction enterprises, and so on.

Later on he notes that they enjoyed a level of privilege that “had to be hidden because they lacked justification within the accepted ideas of the system.”

So, what does all this have to do with hours of work? The privileges enjoyed by this elite was essentially the unpaid surplus hours of work performed by the citizens of the Soviet Union who were also the rightful owners of the “company.” The Soviet leaders were engaged in a massive hidden pilfering of the company’s assets, which pilfering was made possible by the complete lack of accountability in the country – the lack, in other words, of democratic controls. The drive for greater openness in the political system under the Gorbachev reforms was a threat to these privileges. To protect them it was necessary to break up the company and convert its parts into private property – which is exactly what happened.

That however is not the real lesson here. The real lesson was that those unpaid hours of surplus labor – actually, superfluous hours of labor – were always a deadly threat hidden within the Soviet system. The only way to deal with this threat was to not let those superfluous hours of labor accumulate in the first place – and this required the progressive reduction of hours of labor. This is not that different than the situation that would be found within, for instance, Exxon-Mobil. An American capital – company – cannot tolerate the accumulation of superfluous hours of work within the organization. Such accumulation necessarily leads to a periodic purge of a portion of the workforce into the ranks of the unemployed – where it then operates as a lever to hold down the wages of the employed.

In the American case, this leads to a collapse of demand generated by this army of unemployed, forcing governments to artificially stimulate demand. The first result is the proliferation of government services in the form of the modern welfare state. But, it eventually leads to the commercialization of household tasks and chores (lawn care, daycare, restaurants, personal care, etc.); the wasteful effort to encourage people to replace existing consumer goods with new ones, which inevitably require additional paid services to make them useful; litigation; “health-care”, instead of medical care; the vast expansion of the financial services sector, and of real estate and insurance; and, above all, the constant expansion of credit encouraged by an entire industry of debt manufacturers. The expansion of this wasteful services sector becomes the condition for the stability of the economy itself.

What differs in the Soviet case is that unemployment could not occur because the entire economy was public property – the superfluous hours of work had to be converted into free time. It is this conversion of superfluous hours of work into free time – into the opportunity for free, unfettered, self-directed activity – that constitutes the creation of communism, and imposes the transitional character on the socialist economic organism. Superfluous labor time, by its very nature, was a mortal threat to public ownership; it either had to be converted into private property or into free time enjoyed by all.

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