LITMIR.BIZ

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       ‘WE CATCH UP OR THEY WILL CRUSH US’

      The Communist victors of the Russian Civil War inherited a ruined and backward land surrounded by enemies. By 1921, the level of the country’s economic activity had plunged to less than a quarter of that in 1913. Agricultural production had tumbled to a point where it was insufficient for the country to feed itself. The Communists were big dreamers, but their initial grandiose projects to modernise the transport network at a stroke by buying thousands of railway locomotives abroad and carrying out a national electrification scheme were soon scaled back when no foreign nation would advance them credit. In frustration, the leadership turned once more to their political vanguard and gave them a new task. The country had to be rebuilt and modernised and the Party’s elite was to bring to the factory floor the energy, drive and commitment responsible for the successes on the battlefield. Men like Shumovsky left the Red Army to lead the drive for industrialisation. The zealots were assigned to central roles in industry to replace the old, tired management teams.

      In 1925, Shumovsky transferred to the military reserves and was assigned the pivotal role as head investigator of the armaments industry on behalf of the People’s Commissariat (Ministry) of Finance.¹ War with the capitalists was expected to break out at any time and the armaments industry needed to be ready. Shumovsky brought his military experience and Party loyalty to the role. On his factory visits, he saw the dire state of Soviet industry, which after decades of neglect was suffering from an absence of training, underinvestment, and a lack of leadership. The plants he toured struggled under the burden of pre-war machinery that was worn out and outmoded. As a result, the end product was of poor quality and frequently obsolete. Across the armaments industry, productivity was unacceptably low, and this was not merely because of the quality of the machinery. Labour relations in the workers’ state were a complicated and delicate issue. Factory directors, former Tsarist middle managers of questionable loyalty and motivation, lacked authority on the factory floor as workers did not respect their orders. Foreign consultant engineers brought in to advise on improvements despaired at Russian working practices. They noticed large numbers of Soviet workers disappearing on endless smoking breaks. Female workers often carried out heavy manual work in factories, while the men sat idly watching.

      Early, piecemeal efforts to improve matters had failed. With their scant foreign exchange reserves, the Soviets had bought small amounts of expensive new manufacturing machinery abroad, which the unskilled Russian workers promptly ruined. Shumovsky noted that most of the new machinery sat unused in the factories, either uninstalled or broken. Spare parts were never on hand, nor were there engineers trained to conduct the regular maintenance required to service the machines. Faulty installation of new equipment was often to blame for the poor quality of the final output. In their current state, Soviet arms factories were incapable of making precisely engineered products even in small numbers. Above all, a chronic shortage of young engineers versed in the latest techniques and methods held the country back. Owing to a decade of war and strife, none had been trained. The armaments industry was in no state to support even a small-scale conflict. Shumovsky’s reports to the Finance Commissariat detailed his dire conclusions. The reports matched similar ones written by the other inspectors, visiting factories across the whole of Soviet industry. The flow of bad news exacerbated a building sense of crisis.

      The leadership was aware of the desperate issues and, under an ailing Lenin, a gradualist approach had been adopted. Lenin was a deep admirer of US invention, if not of its capitalist system. He spent considerable time in his office in Moscow’s Kremlin flicking through his subscription copy of the magazine Scientific American, the Advocate of Industry and Enterprise. The US monthly showcased all the latest technological inventions and innovations. Lenin wanted to secure the technology to help build Communism. On the day before his death, 20 January 1924, the leader of the world’s first proletarian state passed the day watching a film about the workings of a tractor assembly line in a Ford factory.² While Lenin believed that in the American factory, owners used machinery as a means of oppressing the working class, in the USSR the same US-made technology and modern production methods would help build Communism. Introducing modern machines together with efficiency measures in Soviet factories would eventually allow workers greater free time and higher living standards.

      Lenin hoped that greedy American businessmen would sell his government everything it wanted, even if the Soviets’ ultimate goal was the destruction of capitalism. He was said to have joked that if he announced the execution of all capitalists, one would sell him the rope to hang the others. As he predicted, the US was intent on selling its technology and had the best on sale, but only for hard cash. Lenin’s plans were expansive, but in the absence of credit he could buy only a limited number of US-built tractors, other advanced farm machinery and some factory equipment. In his business dealings, Lenin favoured market leaders, the likes of International Harvester and Ford, as his trusted partners. When the money ran out, which it soon did, he sold the nation’s treasures. The Kremlin’s famous bells had to be saved by the curator of its museum from being auctioned off abroad.³ It was not only the crown jewels that were given away; in a sign of the Russians’ commercial naivety, Trotsky negotiated to exchange the rights to exploit all Siberia’s vast mineral resources for the next seventy years to one American company for a pittance.⁴ The Communists had returned to the Tsar’s method of offering long-term concessions to foreign investors. In desperation, the Soviets even resorted to barter; to its complete bemusement, the Douglas Aircraft Company was offered payment for an aircraft in oriental rugs and antiques. For US entrepreneurs venturing into the USSR, the experience of doing business under Lenin’s New Economic Policy (NEP) was disappointing. Once profits began to flow from their Soviet concessions, the intrepid US investors complained that they were subject to unexpected taxes or the

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