The decree of June 28 ordered the nationalization, without recompense, of all industrial enterprises and railroads with capital of one million rubles or more owned by corporations or partnerships. Cooperatives were exempt. The equipment and other assets of the nationalized businesses were taken over by the state. Managers were ordered to remain at their posts under the threat of severe penalties.
From then on the process of nationalization proceeded apace. By the fall of 1920, the Supreme Economic Council was nominally in charge of 37,226 enterprises with a total work force of 2 million; 13.9 percent of the nationalized enterprises had one employee and almost half lacked any mechanical equipment. In fact, however, the council managed but a small portion of these establishments (4,547, according to one authority), the remainder being state-owned in name only.76 In November 1920, the government issued a supplementary decree nationalizing most small-scale industries.77 On paper, at the beginning of 1921, the government owned and managed nearly all of Russia’s manufacturing facilities, from one-man workshops to giant factories. In reality, it controlled only a fraction and managed even fewer.*
The Supreme Economic Council—that “trust of trusts,” as it has been called78—developed a massive bureaucratic machinery, headed by a Presidium. It was subdivided into agencies organized vertically (functionally) and horizontally (territorially). The vertical organizations were “trusts” called either glavki or tsentry. These numbered forty-two in late 1920, each responsible for one branch of industrial production and directed by a board. They bore melodious acronyms, such as Glavlak, Glavsol, and Glavbum, for the paint, salt, and paper industries, respectively.79 Larin, who played a major role in designing the council’s structure and operations, admitted later that he had borrowed his ideas from abroad: “I took the German Kriegsgesellschaften, translated them into Russian, infused them with worker spirit, and gave them currency under the name glavki.”80 In addition to glavki, the Supreme Economic Council had a network of provincial branches, of which there were nearly 1,400 in 1920.81 The organizational chart of the council resembled a celestial map on which the Presidium represented the sun and the glavki, tsentry, and regional agencies the planets and their moons.82
Abroad, this gigantic enterprise of “socialist construction” made a great impression. Soviet propaganda in the West spoke glowingly of the “rationalization” of Russian industry under the benevolent eye of an all-seeing government, but it stressed intent rather than performance. The graphs and charts depicting how Russian industry was regulated aroused the admiration of many Westerners trying to cope with the chaos of the postwar world. But inside Russia, from the pages of newspapers and journals, as well as reports of Party Congresses, a very different picture emerged. The claims of economic planning proved to be a travesty: as late as 1921 Trotsky confirmed that no central economic plan existed and that, at best, “centralization” was carried out 5–10 percent.83 An article in Pravda in late 1920 bluntly admitted: “khoziaistvennogo plana net” (“there is no economic plan”).84 The council’s glavki had but the vaguest notion of the condition of industries for which they were responsible:
Not a single glavka or tsentr disposes of adequate and exhaustive data which would enable it to proceed to a genuine regulation of the country’s industry and production. Dozens of organizations conduct parallel and identical work of collecting similar information, as a result of which they gather totally dissimilar data.… The accounting is conducted inaccurately, and sometimes up to 80 and 90 percent of the inventoried items escape the control of the relevant organization. The items which are unaccounted for become the object of wild and unrestrained speculation, passing from hand to hand dozens of times until finally reaching the consumer.85
As for the regional branches of the council, these were said to be in a state of constant friction with their Moscow headquarters.86
In sum, contemporary accounts depict the council as a monstrous bureaucratic jumble which meddled instead of administering and whose main function was to provide a living for thousands of intellectuals. At the beginning of 1920, the council’s regional branches and the economic departments of provincial soviets gave employment to nearly 25,000 people,87 overwhelmingly members of the intelligentsia. A crass example of bureaucratic bloating was the Benzene Trust (Glavanil), which had on its payroll 50 officials to supervise a single plant employing 150 workers.* One of the Supreme Economic Council’s officials has left a colorful description of the types who attached themselves to it. It deserves citation since it depicts a situation not unknown to other agencies of the Communist Government:
The lower posts were occupied mainly by hordes of young ladies and gents, previously bookkeepers, shop assistants, clerks, or university, gymnasium, or “external” students. This whole army of youths was attracted to the service by the relatively high salary and the low amount of work required. They spent entire days loitering in the many corridors of the vast structure; they flirted, ran out to buy halvah and nuts for the office pool, distributed among themselves the theater tickets or meat conserves which one of their number had managed to get hold of, and, as a sort of accompaniment to these business dealings, cursed the Bolsheviks.…
The next, most numerous category [of employees] consisted of onetime officials of the tsarist ministries. In joining the Soviet service they were motivated either by material need or, no less often, by longing for the accustomed work, to which each had devoted more than a decade of his life. One had to see with what passion they threw themselves on the “outgoing” and “incoming” materials, on “memoranda,” “reports,” and the rest of secretarial archwisdom, to understand that they found it more difficult to live without this atmosphere of paperwork than to make do without bread and shoes. These people tried to serve conscientiously; they were the first to come and the last to leave, they stuck to their chairs as if chained. But perhaps precisely because of this conscientiousness nothing ever came of their work except unbelievable nonsense, because the disorder and impulsiveness of the higher authorities confounded all the “incoming” materials and “memoranda” that they spun out with such loving care.…
Finally, the non-Communist majority of middle-level officials and a segment of higher ones consisted of intelligenty? of various types. There were here, so to say, romantic natures for whom service in one of the enemy’s citadels smacked of high adventure. There were people of no principle, entirely indifferent to everything in the world except their own well-being. There were ordinary shady characters who sought to attach themselves to the Bolshevik chaos so as to be able, under the cover of its darkness and confusion, to loot for all it was worth. There were people of another type as welclass="underline" specialists who hoped to salvage the work that they held dear, and those, like myself, who joined in order to “soften the regime.”88
So much for Lenin’s pet idea, “the transformation of the whole of the state economic mechanism into a single huge machine” operating on a “single plan.”
The Bolsheviks had somewhat better success in overcoming the managerial anarchy that followed the spread of workers’ control. The syndicalist policies of the regime just before and just after October 1917 were a device to lure workers away from the Mensheviks: it helped the Bolsheviks gain majorities in the Factory Committees. After the signing of Brest, it was decided to revert to traditional methods of individual industrial management with the employment of “bourgeois specialists.” Trotsky spoke about this in March and Lenin in May 1918.89 In fact, many of the previous owners and managers had never left their jobs, and by terms of the June 28, 1918, nationalization decree were forbidden to do so. The Supreme Economic Council was full of these people as well. In the fall of 1919, a visitor from Siberia noted that at the head of many of Moscow’s tsentry and glavki