The necessary presumption (nd current)

Where the plans were forged back then, the Duma meets today: the former Gosplan headquarters

Foto: imago images/Russian Look

Pure coincidence and Theo Retisch would hardly have made Lenin laugh. According to a GDR joke, these were the names of the chairmen of the State Planning Commission. One of the great paradoxes of the 20th century is that an economic system that owed its existence to the utopia of the conscious appropriation of irrational conditions, even if its irrational consequences, could become the mockery of the “liberated” masses. For Friedrich August von Hayek, father of neoliberalism and archenemy of the Soviet model, it was the Lesson of human hubris. “The fateful presumption” was the last of his many polemics against the planned economy. It appeared in the late 1980s, when the Soviet experiment of the century was on the verge of collapse.

In spite of all the ideological blindness that one must accuse the “ideology critic” Hayek himself, his accusation of “presumption” hit the bull’s eye. Lenin & Co. was actually concerned with overcoming that capitalist “oikodicy” (Joseph Vogl), which is told in the fairy tale of the “invisible hand” of the market. The conscious political control of the economy through the entirety of its participants – that is, through a classless society as a whole – was already the formula of choice for the Western European socialists of the 19th century. In the eyes of the Bolsheviks, too, this could only mean the democratic mastery of “second nature.”

But this “presumption” by no means corresponded to a concept that was thought through from the start. The planned economy, as it “really existed” since Stalin in the USSR and later from the Elbe to the Pacific, was itself the product of an era of violence and civil war, contradicting experiments and the most heated political disputes. This also applies to the central administrative authority Gosplan, which was founded in Moscow on February 22, 1921 by order of Lenin – just at the time when the leadership decided to reintroduce goods markets in agriculture with the »New Economic Policy« (NEP) .

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Surprised by their own success, Lenin’s leadership had to improvise under the most adverse conditions from October 1917 onwards. Russian soil, all of large-scale industry and all banks were nationalized, and economic obligations abroad were unilaterally annulled. In the face of the counterrevolutionary danger, the entire population was called to duty with sometimes brute force: In “war communism” the Red Army confiscated food and valuables in the style of robber gangs. Industry, which was concentrated in Petersburg, Moscow and eastern Ukraine, almost completely collapsed. At first there was no thought of a utopian redesign.

However, that changed with the end of the civil war. When the English writer HG Wells visited the founder of the state in the closely guarded Kremlin in September 1920, he was surprised by Lenin’s optimism and zest for action. While the Cheka was hunting political opponents and illegal traders and a large part of the population, especially in Ukraine, was still suffering from hunger, Lenin contemplated his heart’s concern: the electrification of Russia. According to him, the infrastructural networking of the poor and isolated Russian rural population would shape them into a “society” in the modern sense. Supported by an educational offensive, primarily of a mathematical and technical nature, Lenin said, the citizens of the new state should gradually be enabled to take the management of their affairs into their own hands and thus fill the new Soviet institutions with life.

According to Lenin’s ultimately technocratic conception of the economy, “the whole of society” would end up being “an office and a factory with equal work and wages.” With an optimized centralized organization, so his famous statement, the mastery of the four basic arithmetic operations and basic knowledge of bookkeeping would be sufficient for the “management” of the high-tech communism, which is based on the division of labor. When this point has been reached, one could read in “State and Revolution” that the state would also lose its function as the “midwife” of the new society and finally “wither”.

Lenin founded the GOELRO authority in the spring of 1920 for electrification as the first act of obstetrics. At the time, nobody could have foreseen that this was the origin of the “central administration economy”, which 50 years later would become an everyday reality for billions of people around the world. Under the direction of Gleb Krschischanowski, a childhood friend of Lenin’s times in Petersburg, a few dozen engineers drew up the technical plans for 30 national energy power plants and coordinated the implementation with the countless companies and Bolshevik local and provincial committees. One of the engineers, the writer Andrei Platonov, recorded the peculiar parallelism of archaic means and utopian “spirit” that prevailed in this committee in the fragments of his never completed electrification novel, which tells the story of GOELRO itself in “electrifictional” poetics should.

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Due to the promising results of GOELRO, the Soviet leadership felt motivated to take the first concrete steps towards building a planned economy. The Gosplan, founded as a commission in the Council for Labor and Defense, was entrusted with the overall planning of Soviet industry. Together with only 40 economists and engineers, Krschischanowski first tried to draw up a statistical overview of the national economy – according to his later statements, a quasi “fictitious” undertaking itself. In line with the scope of this task, the commission grew rapidly in the years that followed, setting up branches in the regions and sending liaison officers to the factories. Soon it was employing tens of thousands of people. Linked by the common interest in the resource «information», Gosplan cooperated closely with the secret police Felix Dzierzynskis from the beginning. With its expansion, however, the authority itself soon moved into their sights.

Initially, the prerequisites for the desired overall planning were lacking. Gosplan switched to partial plans for individual industries. Only in the course of the 1920s did the pieces of the puzzle complement each other. Above all, however, only with the expansion of the authority did the political prerequisites for overall economic planning arise. After marginalizing the proponents of the NEP structures around Nikolai Bukharin, Stalin pushed for the expropriation of all independent actors in the Soviet economy. In 1928, Gosplan drafted the first five-year plan, the central element of which was the expropriation of the peasantry in favor of large state-owned companies.

Through the “original accumulation” that followed, Stalin’s government put Lenin’s utopia of transforming all of society into “an office and a factory” into practice. Gosplan, the office, became the “brain” of a gigantic industrial landscape – and thus itself a mammoth authority that was incessantly synthesizing information like a giant human computer. There could be no question of “simple bookkeeping”: the mathematical tasks sometimes exceeded what was humanly possible. Her real back was that a great social factory, whose merciless disciplinary regime stifled every impulse of non-conforming way of life with all its might.

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As much as the speed of Soviet industrialization since the 1930s still impresses us today, the characteristic problems that are inevitably inherent in an almost completely planned economy emerged early on. Without at least rudimentary free markets, there would be no information about changes in demand, but also no incentive to innovate. This is particularly evident in the consumer goods markets. The attempts to supplement the planned economy with “market economy” elements all failed, however: Neither the approaches of long-time Gosplan boss Vosnesensky under Stalin nor Khrushchev’s initiatives of the 1950s were able to prevail against the forces of persistence. As respect for and loyalty to the state gradually imploded since the 1960s, the unofficial parallel markets began to rampant. Since the 1970s, corrupt networks of operations managers gradually took over economic power. Lenin’s state actually died, but differently than intended. Even attempts to digitize Gos-plan could not change that.

As the planned economy developed back into a “fiction” whose numerical economy was less and less in line with reality, its “brain” also increasingly degenerated into the mockery of those masses whose instrument for the collective liberation from economic immaturity Gosplan was once imagined to be. The last attempt at reform ended in 1991 in the final disaster of this utopia.

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