It has now been 20 years since Nikita Khrushchev promised that the economy of the Soviet Union would match that of the United States by 1980. But the state of the Soviet economy today shows that Khrushchev's dream has faded into a bad memory.
Khrushchev's heirs manage an economy where total national income, or gross national product, stood at slightly more than $912 billion in 1979, far smaller than the 1960 prediction for a $1.52 trillion economy and more than $152 billion below targets that were set five years ago.
Western analysts are doubtful that the Soviet GNP, which increased only marginally last year, can make the 14 percent gain in 1980 targeted by the party last winter. Industrial indicators such as steel, oil, coal, chemicals, electricity, forestry, paper products and machine-building have fallen far behind party goals.
It is true that the Soviet-directed economy has shown formidable power to concentrate massive resources for quick mastery of atomic weaponry and strategic missile technology. Equally impressive civilian projects, such as the huge Bratska high dam project in the 1950s, western Siberian oil development in the 1960s and 1970s and the Baikal-Amur railroad being built to bring Siberia's mineral wealth to the Pacific coast, have dazzled foreigners.
These are the successes of the Soviet Communist Party bureaucracy, which wields its Stalinist legacy of managing national productivity to achieve ideological, political economic goals.
The Soviets make much of their efforts to increase productivity. "According to census results, 135 million people were employed in the national economy, 17 percent more than in 1970," the Ekonomicheskaya Gazeta recently proclaimed in a report on the 1979 Soviet population count.
But the impulse to keep the economy centralized increasingly conflicts with the need for modern economic management distinguished by speed, imagination and flexibility. As impending energy and manpower squeezes promise to cause serious economic strains in the 1980s, the dislocations produced by centralized control are growing in ways that reinforce weaknesses and ensure waste.
Meanwhile, open criticism is reaching unprecedented levels. It focuses on billion-dollar investments for factories never finished, poor quality in workmanship and worker inefficiency. In Soviet plants, workers productivity rose less than 1 percent last year, far short of the 4 percent goal.
Pyotr M. Masheroy, 62, a tough, alternate member of the Politburo and Communist Party chife of Byelorussia, acknowledges that Soviet industry is fraught with problems.
"In the machine tool industry, almost half the metal goes for scrap," he said. "Efforts to economize on fuel, heat and electric power remain lax. [There are] serious grievances against the building industry. Capital investments are still being scattered. Right now, over 20,000 construction projects are underway in the republic. The time it takes to complete many of them is several times longer than the norms."
Several years ago, economist Y.L. Manevich found that "most Soviet machinery plants employ 30 to 50 percent more workers than similar plants in the major capitalist countries. Japan and West Germany require only one-fourth to one-third as many designers and researchers as we do to develop and produce comparable amounts of new machinery." He added that surveys show that on average, "workers spend only 50 to 70 percent" of their paid time actually on the job.
Goldbricking has become part of the Soviet way of life. This is aggravated by increased job switching and drunkenness that have raised the level of disorder on assembly lines. A recent decree on workplace discipline underscores the authorities' concern.
Trud, a worker's newspaper, recently offered a rare glimpse at the dimensions of the problem in a single factory. The paper related how a drunken worker had slain a security officer at the Kirov metallurgical plant in Gorki Province, and then went on to say: "In 1978, 184 law-breakers were detained at the plant, almost half of them intoxicated. In the first nine months of 1979, 65 of the plant's workers were brought up on criminal charges, 222 were punished for petty hooliganism, and 1,127 paid visits to the sobering-up station."
A new study reports taht sobriety in the workplace would achieve a minimum 10 percent increase in productivity.
But drunkenness is only one factor contributing to industrial nonproductivity. In increasing numbers, dissatisfied Soviet workers are leaving their jobs to look for better work. Job turnover in some key industries is more than 30 percent a year.
Andrei Sozykin, chairman of the Russian Republic state labor committee, found that "every time an employe leaves a job, there is an average 28-day interruption in work. Personnel turnover leads to major loss of working time." Sozykin discovered that an employe leaving must pass through as many as 25 bureaucracies while changing jobs.
"Since several million people are hired in the Russian Republic each year and a similar number leave jobs, the streamlining of formal procedures in such cases could create a substantial labor reserve," he said.
Soviet industrial salaries average $270 a month, and planners have developed incentives for most industries to spur performance. But in a nation of chronic consumer shortages, salary bonuses are not highly regarded.
"What is blue, crackles, and is worthless?" goes a Soviet joke."A new five-ruble note."
Black-market rates for hard currency are five times that of the official exchange rate, and Western items such as jeans can be sold for 10 times their original price.
"We pretend to work and they pretend to pay us," is an old Soviet witticism that summarizes the limited horizons for material improvement here.
Underlying these problems in the factory is the crisis in the organism meant to direct the economy -- the powerful State Planning Committee. Politburo dissatisfaction with the planners has been recounted often in the Western press during the past three years, but a close look at the way the Soviets handle capital investment and depreciation is required to understand how chaotic management is.
To head off obsolescence and encourage technical innovation, the state in 1966 set a goal of reequipping existing factories every 17 years. But the planners have been unable to restrain the construction trusts of the industries. The trusts receive bonuses for erecting new buildings and are spurred ahead by parent industries that also receive bonuses for expanding their work force. Instead of a mix of brand-new plants and refurbished older factories, the nation has been on a building binge that has strewn unfinished projects from the Polish border to the Pacific Ocean.
Last November, N. Kachalov, vice chairman of state construction, revealed that uncompleted construction accounted for 85 percent of annual capital investment -- $35 billion worth of empty or unfinished buildings for 1979 alone.
The reinvestment policy aimed at improving worker productivity has also stumbled. The estimate is now 22 years to reequip factories -- a retirement rate of 1.6 percent of all assets for obsolete plants in the early 1970s. This delay widens the gap between Soviet industry and the West, making it harder for the Soviet Union to compete in world markets for manufacturing goods.
"There was no acceleration in the technical reequipment of labor," economist A. Tsygichko sourly noted in the magazine Planning Management. "Instead, vast sums were wasted on the creation of new work places for which no work force existed. There is convincing proof that unfilled jobs have a negative impact on production discipline, labor intensity, personnel turnover and qualifications, and hence, on production efficiency."
Despite repeated attempts under the leadership of Leonid Brezhnev to reform management, the slide toward industrial obsolecence has been tremendous and resistant to change. For the Communist cadres, the stakes are simply too high. Attempt at reform by Premier Alexei Kosygin in the mid-1960s died at the hands of the cadres, who feared they would lose control to entrepreneurial industrial managers.
A new way to measure profits was launched last year, but it is too soon to tell whether these "reforms of reforms" will be effective. Some Western analysts believe that they already can see an improvement in Soviet efficiency in the first half of this year and think that this bodes well for the rest of the decade.
But pointing to the resilience and sheer size of the Soviet economy, most analysts say the Kremlin under Brezhnev and his immediate successors will be content with muddling through. No one is predicting a move toward the mixed market economies pioneered in Hungary and Yugoslavia during the past two decades. That is seen as too threatening to the party's control.
Party and planners are now drawing up the economic plan for 1981 to 1985. It appears certain the planning will continue the policy of the 1970s of staving off basic reforms by buying advanced technology from the West. But the U.S.-led embargo on such trade in reprisal for the Soviet invasion of Afghanistan is already having a serious impact throughout Soviet industry.