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The Economics of the GULAG

Alexandr Solzhenitsyn gives the following example in his book, The GULAG Archipelago, of how insanely socialism and the decisions of the central authorities in the Soviet Union worked out in practice. The GULAG Archipelago was the chain of prison camps. On a map the area under prison camp authority, the GULAG, looked like a chain of islands, an archipelago.

Prisoners in work camps were assigned production quotas and food allotments were based upon fulfillment of those quotas. The food provided was not sufficient for the caloric requirememnts of the prisoners, particularly for those working in cold climates. The system provided for a food bonus for production in excess of the quota. With the food bonus the prisoners could survive, without it they were doomed.

In a logging camp of the Ust-Vum one prisoner, Vasily Vlasov, who acted as supervisor for the other prisoners, began crediting workers with timber they had not cut down. This gave them the bonus food they needed to survive. The timber-cutting was in a nearly inaccessible area so the shortfall in felled timber was not immediately observed. When the crews responsible for hauling out the logs began to report problems in finding all of the timber that was supposed to have been cut, a survey was ordered. The survey team reported the absence of the reported felled timber. Vlasov convinced his supervisor that the problem was the laziness of the survey crew and kept the lid on the problem for a while. Later Vlasov wrote a report arguing that the missing timber was there but it was located where it would be necessary to build a corduroy road to bring it out and the amount of timber required for the road would be greater than the amount of timber to be recovered and hence the missing timber should be left where it was. The report was so well done its recommendations were accepted. As Solzhenitsyn states so beautifully,

And so it was that the trees were felled, and eaten up, and written off--and stood once again erect and proud in their green coniferous garb.

But the GULAG administration was determined to end the problem of falsified work reports. The solution they came up with in 1947 for the logging camps was that the lumberjacks and teamsters would get credit for production only when the logs were received at the timber slide at the river bank. Likewise the log-rafting operation was tied to the operation down-river where the logs were transported by ships to the sawmill.

What the administrators did not realize is that the entire operation; log-rafting, shipping, and the sawmilling, needed the fictious output of the lumberjacks to inflate their production enough to get the extra rations they needed to survive. At the sawmills thererfore, incompletely filled train cars of lumber were shipped out. The recipient of a partially filled boxcar of lumber was faced with a dilemma. If the railroad car was rejected there was the uncertainty of when, or even if, a new shipment would come. Most recipients accepted the fact that a half a carload of lumber was better than no carload at all.

The system worked so well that there was a surplus of logs in the water at the shipping point at the end of the summer. The shipping operation personnel did not want to leave the logs in the water over the winter because there would be a frozen logjam that would require calling in a plane in the spring to bomb it to blast the logs free. So in the late autumn the shipping personnel let the logs float out into the White Sea. Thus the attempt to end the falsification of work reports did not increase production, it decreased actual utilized production. Solzhenitsyn commented that that was the way the supposedly rational system of socialism always worked. Official reports papered over the insanely irrational practices that prevailed. The GULAG itself existed primarily not for punishing anti-social behavior but as a cheap way of securing labor services, pointing up once again that socialism is simply a form of feudalism; industrial-utopian feudalism but still feudalism.


See Norilsk for a case study of a major project carried out as part of the GULAG.


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