Guns and Rubles: The Defense Industry in the Stalinist Stateby Mark Harrison
For this book a distinguished team of economists and historiansR. W. Davies, Paul R. Gregory, Andrei Markevich, Mikhail Mukhin, Andrei Sokolov, and Mark Harrisonscoured formerly closed Soviet archives to discover how Stalin used rubles to make guns. Focusing on various aspects of the defense industry, a top-secret branch of the Soviet economy, the
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For this book a distinguished team of economists and historiansR. W. Davies, Paul R. Gregory, Andrei Markevich, Mikhail Mukhin, Andrei Sokolov, and Mark Harrisonscoured formerly closed Soviet archives to discover how Stalin used rubles to make guns. Focusing on various aspects of the defense industry, a top-secret branch of the Soviet economy, the volume’s contributors uncover new information on the inner workings of Stalin’s dictatorship, military and economic planning, and the industrial organization of the Soviet economy.
Previously unknown details about Stalin’s command system come to light, as do fascinating insights into the relations between Soviet public and private interests. The authors show that defense was at the core of Stalin’s system of rule; single-minded management of the defense sector helped him keep his grip on power.
"This volume covers a hugely important topic and is bursting with findings. It marries rich empirical detail with sophisticated theoretical treatment."—Yoram Gorlizki, University of Manchester
"This book presents a clear picture of the role of the defence sector in economic planning in the USSR in the pre-World War II period. It combines economic analysis with archival research."—Michael Ellman, University of Amsterdam
"In the last decade a group of scholars have finally shown us how Stalin's dictatorship worked. Now they demystify one of the paradoxes of the Soviet Union: how could central planning have defeated the Nazis? The book will be a must read for all those interested in dictatorship and the political economy of development."—James Robinson, Harvard University
"Mark Harrison and his colleagues have produced a volume that is as important as it is fascinating. The defense industry has always been the heart of the Soviet economy, and to understand the command economy it is best to begin by studying its development under Stalin. Harrison and his colleagues combine archival work and economic analysis to explain the development and operation of the defense sector and its relationship to the rest of the economy. This book will greatly add to our understanding not only of the Stalinist economy and central planning, but to the study of dictatorships in general."—Barry W. Ickes, The Pennsylvania State University
". . . [A] richly rewarding collection of papers on a central but secretive component of the Stalinist economy. . . . makes astonishing use of hundreds of archival documents to shed microeconomic light on the early decades of the Soviet defense industry. . . . A fascinating study . . ."—Steven Nafziger, EH.Net Book Review
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Guns and RublesTHE DEFENSE INDUSTRY IN THE STALINIST STATE
Yale University PressCopyright © 2008 Yale University
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Chapter OneThe Dictator and Defense
Why did Stalin spend as much as he did on defense? Given their cost, why did he want a big army or large specialized defense industries? At first sight these questions seem too trivial to deserve much thought. There are several obvious answers. The trouble is that the answers that are obvious are not necessarily consistent, and none provides a satisfying explanation of the stylized facts of Soviet military-economic development.
The economic and historical literatures on this subject offer several different explanations of Soviet policies with regard to defense, which I will summarize under three headings:
Soviet Defense Against External Threats? According to informed historians such as Lennart Samuelson (2000), Soviet defense spending responded to perceived external threats. In the hands of an experienced economist such as Paul R. Gregory (1974) this hypothesis comes to down to supply and demand: there was a demand for national security as a public good and the economy supplied the inputs. Their supply price was likely to fall with economic growth, which increased supply, while the demand price varied directly with the number and intensity of external threats.
This approach suggests that we may look at the motives driving Soviet allocations to defense and the defense industry in much the same way as for any state. But this implication is also the main problem: it seems unsafe to assume anything of the kind. The Soviet state was not like other states, judged by its extreme propensities to secrecy and dictatorship, or at least it lay at one extreme of the spectrum of states. At the most superficial level, we know that dictators like guns and uniforms and rule by force. This makes an explanation that owes nothing to the facts about Stalin unsatisfying to say the least.
Soviet Aggression: The Export of Revolution? According to Viktor Suvorov (1990), Stalin built up his army and defense industry because he planned an aggressive war to conquer western Europe; his plans were frustrated a first time in 1941 because Hitler struck first, and a second time in 1944 when the western Allies opened a Second Front against Germany by landing in France. This view has considerable support among Russian historians, many of whom are generally disposed to believe the worst about Stalin. A few Western scholars share this view (Raack 1995; Weeks 2002).
But there are also some problems with the aggressive-war hypothesis. One problem is its historical origins, which lie in the self-serving rationalizations of Hitler's policies offered after the war by former National Socialists in Germany. Another is that it is based largely on memoir and hearsay; the evidence found in the archives does not support it; for these reasons most qualified Western scholars now reject it (for example, Gorodetsky 1999; Uldricks 1999; Mawdsley 2003). In short, Stalin's generals may have planned for the contingency of an offensive war, but Stalin did not seek to create the opportunity for one.
A Soviet Military-Industrial Complex? Sooner or later most Russian scholars who have written about Soviet defense industry (for example Simonov 1996; Bystrova 2000) have ended up using the term "military-industrial complex" to describe the simple fact that the Soviet armed forces and defense industry were large and interrelated. In the West, however, this term has often been loaded with a further implication (discussed by Rosen 1973; Aspaturian 1973; Agursky and Adomeit 1978; Holloway 1982): the idea that powerful military leaders might be colluding with the leaders of the defense industry to boost the military budget and so extract vast sums of money and resources from the economy to build their power and prestige. Applied to a Soviet context, this suggested that the Soviet Union ended up spending vast sums on its army and defense industry mainly because they were there.
Historically, there is evidence for and against. On the plus side, the next chapter by Andrei Sokolov will show that the military were already demanding forced industrialization in the mid-1920s as a precondition for developing the defense industry on the scale they claimed was necessary to counter external threats; it may be that Stalin bought their loyalty by subscribing to their program. Once he had made himself dictator, however, the idea loses its fit to the facts; it requires, for example, that Stalin, although dictator, was not a very good one since he could not stop his subordinates from combining to make him spend more than he would have chosen on defense. On the evidence now available this did not happen. He did not leave defense policies or outlays to his underlings and took nothing for granted. Formally the Politburo decided how much would be spent on defense (Davies and Harrison 1997: 385-92) but Stalin's word was decisive on all major issues. Stalin also took a much more active interest in the detail of foreign policy than previous historians would have thought (Davies, Khlevniuk, et al. 2003: 14). Well versed in divide-and-rule, he expertly prevented military and industrial lobbyists from colluding (Harrison 2003). Possibly a military-industrial complex formed after his death (Bystrova 2000)-although even here traditional Western scholarship would often take a skeptical view (Holloway 1983: 159-60).
In this chapter I will set out a view of the uses of Soviet military force in Stalin's hands that is intellectually straightforward and also sits well with the facts that we know. It starts from simple premises: Stalin had gained power, and wanted to continue to hold it, but to do so he had to ward off multiple threats. These threats were both external and internal. Military force was one of the means at his disposal for holding power, but not the only one. The other instrument of his regime that will share center stage in this chapter is repression.
Stalin's use of repression is puzzling in its own way. The origins of the Great Terror of 1937/38, when 700,000 were executed for "counter-revolutionary crimes," have been much debated. Did Stalin intend it, or was it an unintended consequence of the structure of his regime? Some historians always saw Stalin's hand at work, but its sheer scale and often revolting cruelty made his motivations hard for them to penetrate (for example, Conquest 1971; Medvedev 1971). The terror appeared excessive, counterproductive, or just plain irrational. This led other scholars (for example, Getty 1985) to try to explain how the terror might have run out of Stalin's control because of bureaucratic rivalries and social tensions. Now that the official documentation of the terror has been made available (Getty and Naumov 1999; Kozlov et al. 2004) the "unintentional" explanation seems less tenable. The terror did not run out of control. Stalin managed it personally; he switched repression on and off and fine-tuned it to a surprising degree. His motivation has also become clearer: he perceived the threat of a fifth column of the embittered and fainthearted who would turn against him in time of war, and he set out to destroy it beforehand (Khlevniuk 1995). In short, the scale and timing of the terror were largely the result of the conscious decisions of a small group of people, and very largely of one man. But why Stalin perceived the problem as he did, and why he regarded the scale of the solution as appropriate and timed it as he did, remain unclear.
To summarize: we would like to understand why Stalin wanted a large army and defense industry. To do this we will set them in the context of his system of rule and his other means of ruling. In this chapter I will pursue the idea of military force and repression as parallel instruments in the joint equilibrium between Stalin and his potential opponents abroad and at home. The most efficient use of military force was to counter external threats. However, I will provide evidence that the balance of military power also had the capacity to influence the level of domestic discontent and opposition. Likewise, repression at home could influence the conduct of foreign adversaries as well as of internal opposition. In other words, Stalin's foreign and domestic policies were intimately related. Stalin himself had no doubt of their connections, and particularly feared the consequences of internal opposition in the context of an external crisis, when foreign enemies might exploit collaborators to challenge his regime from within. Arguably, a coalition of internal and external enemies was his worst nightmare. His changing choices over repression and rearmament can be fully understood only in this context.
What Stalin Feared
THE SOVIET UNION FACED REAL FOREIGN THREATS
Given the well-known history of the twentieth century it is not difficult to show that the Soviet Union faced real external threats. Russia's separate peace with Germany in January 1918 prompted her former wartime allies to turn on the new Soviet government and make common cause with the anti-Bolshevik forces. Soviet Russia was invaded on all sides. Despite eventually prevailing over the White and Allied armies the Bolshevik regime remained understandably fearful of renewed intervention through the 1920s. Russia was now neighbored by countries such as Finland and Poland, lesser powers it is true, but all more or less hostile; the neighbors' hostility was exacerbated by the memory of actions on the Soviet side such as the failed attempt to export revolution to Poland by force in 1920. Behind the neighbors, it was generally thought, stood the armies of much more powerful countries, including Britain, France, the United States, and Japan (see Chapter 2). Only Germany was a friend at this time, motivated chiefly by convenience.
In the 1920s, as a result, Moscow was subject to periodic outbreaks of nerves that were sometimes exaggerated for dramatic effect. In the most famous case, the "war scare" of 1927, we do know that no one was actually planning to attack the Soviet Union. The great powers generally lacked either the popular will for war or the means to wage it. The United Kingdom certainly lacked both will and means; when the United Kingdom broke off diplomatic relations with the USSR in May of that year, the rupture was symbolic rather than truly threatening. In the Far East there was a local dispute over the Chinese Eastern Railroad, but the fact is that none of Russia's neighbors had immediate plans for war and Moscow knew it (Simonov 1996; Samuelson 2000: 34-36). The true significance of the war scare was somewhat different and we will return to it.
The long-term danger to the Soviet Union did not lie with the neighbors but with Germany and Japan. In September 1931 Japan invaded Manchuria; this was the first step along her path to World War II. Although strong Soviet defenses eventually deflected Japanese ambitions to easier pickings in the British and Dutch colonies in southeast Asia, there can be no doubt that Japan originally intended to make gains at the expense of Soviet territory. Within a year a "Russian National Union" had been formed in Manchuria with the aim of forming an independent state in Siberia allied to Japan (Davies 1996: 278). Japan continued to eye Soviet territory until the border war of 1939.
As for Germany, on taking power in 1933 Hitler began secretly to prepare the military means to carve out a colonial living space for ethnic Germans in eastern Europe and European Russia. By 1935 the scale of his preparations could no longer be concealed. On March 31 of that year the Red Army commander Mikhail Tukhachevskii published his article in Pravda attacking "The War Plans of Contemporary Germany"; on December 3, Stalin was warned that one of Hitler's ministers had told a French banker that Germany intended to divide the Ukraine with Poland (Davies and Harrison 1997: 390). Hitler risked war with Britain and France over Austria in 1936 and Czechoslovakia in March and October 1938, went to war with them over Poland in September 1939, and finally took the opportunity to go to war with the USSR in June 1941.
FOREIGN THREATS STIMULATED DOMESTIC OPPOSITION The capacity of external threats to stimulate internal opposition is a pattern deeply rooted in Russian history. Russia's military confrontation with Britain, France, and Turkey over the Crimea in 1854 brought simmering peasant discontent to the boil and eventually forced the abolition of serfdom in 1861. What Marxist could forget that the uprising of the Parisian communards in 1871 had been sparked by France's defeat by Prussia the previous year? And what Russian could forget that it was Russia's defeats at the hands of Japan and Germany that set the scene for the insurrections of December 1905 and February and October 1917? Oleg Khlevniuk (1995: 174) has noted: "The complex relationship between war and revolution, which had almost seen the tsarist regime toppled in 1905 and which finally brought its demise in 1917, was a relationship of which Stalin was acutely aware. The lessons of history had to be learnt lest history repeat itself."
Soviet leaders read secret police reports of the volatile mood among the peasants and workers before and during the "war scare" of 1927, therefore, with trepidation. At the beginning of 1927 the president of the Soviet Republic Mikhail Kalinin told the Politburo: "I have talked with many peasants and can say straight out that in the event of a conflict with foreign states a significant stratum of peasants will not defend Soviet power with any enthusiasm, and this is also reported in the army." From August 20 of that year an OGPU (security police) report summarizes workers' reactions to the prospect of war (cited by Simonov 1996: 1358): "Kill all the communists and Komsomols [party youth members] who want a war." "If there's a war we'll kill the administration first, then we'll fight." "If you give us war we'll get weapons and make a second revolution."
If this was the mood at a time when any prospect of a real war lay far in the future, it was more serious when social tensions deepened further and the threat of war became still more actual. An OGPU summary dated January 19, 1932, from the time of deepening difficulties over grain sowings and procurements from the new collective farms, claimed the threat of war with Japan had "enlivened 'kulak' activities. In the Moscow region, for example, the kulaks were alleged to assert that 'the kolkhozy are a second serfdom ..., but we must put up with it for a time, soon Japan will attack Soviet power and we shall free ourselves'" (Davies and Wheatcroft 2003: 15-16). Similar summaries of the popular mood in 1936 reported such remarks as: "Soon there will be war and the Soviet regime will collapse"; "Germany and Japan ... will begin the war, and we will help them" (Fitzpatrick 1999: 205).
The idea that internal and external threats may feed each other is not new. Comparing terror in the French and Russian revolutions, Arno Mayer has described the revolutionaries' belief in the "interpenetration of internal and external counterrevolution." In France as in Russia the terror was, in part, a response to military weakness and external threat. In 1793 Robespierre condemned "the moralists who sought to protect internal enemies 'from the sword of national justice,' insisting that by doing so they 'blunted the bayonets of our soldiers' who were risking their lives fighting the armies of foreign tyrants" (Mayer 2000: 205, 208). In turn, the rise of counter-revolutionary disaffection in the French provinces was often the consequence of the huge military levies ordered by the revolutionary government to fight off the foreign armies gathering to crush it.
An understanding that domestic opposition may be highly responsive to foreign threats is evident in the earliest historical records. In the Peloponnesian wars among the Greeks, for example, it was not uncommon for the armies or navies of one side to parade past the cities allied to the other in the hope that the demonstration would provoke a rebellion within the walls, causing the city to change sides. When the Athenians attacked Spartolus in Chalcidice in 429 B.C. they counted on assistance from the democratic faction within the city; on this occasion they were frustrated because the ruling oligarchs called up forces from an allied neighbor that defeated them in battle (Thucydides 2:79). But the tactic worked often enough that both Athenian expeditions to Sicily, the second of which ruined Athenian power, were raised not to occupy the island militarily but in the expectation that they would weaken the influence of Syracuse, a colony of Athens' enemy Corinth, within the island's other city states, and bring them over to Athens (Thuc. 3:86; 6:17).
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Meet the Author
Mark Harrison is professor of economics, University of Warwick; honorary senior fellow of the Centre for Russian and East European studies, University of Birmingham; and distinguished visiting fellow of the Hoover Institution on War, Revolution, and Peace, Stanford University. He lives in Coventry, UK.
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