Gorbachev’s Bottom Line


During a recent visit to the Soviet Union,1 a small group from the Council on Foreign Relations, including myself, met with senior Soviet officials, Andrei Sakharov, and various dissidents, and had a three-hour session with Mikhail Gorbachev. My impression of the General Secretary was of a new chief executive officer: intense, dynamic, restless, driven, tough, but, emphatically, not just a chairman. Also, by Soviet standards, he is a young CEO. He is not subject to mandatory retirement—at least not for reasons of age. Therefore, he can take a longer view than some of his predeces sors. Indeed, it will take a long time for him to achieve even a fraction of what he has set out to do.

I believe that he is a chief executive who knows that his country is fundamentally not competitive in the world, and he foresees an economy that is both more competitive and more connected with the global economy. At the same time, this intense, dynamic man—to all of us a man with a commanding personality who could be a leading politician in any system and who no doubt is keeping an eye on some of his wolf-like comrades—is understandably anxious for short-term results so that he can consolidate his power and gain time to present his full vision of the future. So his problem in the economic and commercial spheres is to reconcile his long-term vision with short-term political necessities.

For the present, Gorbachev is trying to resolve this problem by squeezing results out of the economy through changing the behavior of workers and managers, what Soviets call the “human factor.” (We heard an old saying attributed to Soviet workers: “They pretend to pay us and we pretend to work.”) What is happening is a kind of productivity jawboning. The prescription, as I understand it, starts with a heavy dose of unrelieved criticism for which, ironically, dissidents formerly could have been put in jail. In my experience, there is now an unprecedented degree of self-criticism by Soviet officials—as well as exhortation and moral persuasion. I also found these Soviet officials far less defensive, ideological, rigid, and dogmatic than they seemed on my last visit in the early 1970s; now they appear much more pragmatic and flexible.

During the first year at least, the officials to whom I spoke said they have increased annual Soviet productivity to over 4 percent, perhaps twice the rate during the previous five years. They aim to increase productivity by a general program of “intensification” or modernization, including incentives for workers and managers, a restructured bureaucracy, greater decentralization in implementing plans, conservation of production inputs, and increased use of science and technology in the economy. For the longer term, however, they know they must invest more in capital equipment to improve productivity.

With respect to near-term results, they say that alcohol consumption is down by a third, accompanied by a 25 percent drop in violent crimes and a 30 percent drop in accidents. Drinking on the job…

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