Communist-style incentives at work

Friday, February 9th, 2018

While we were recently discussing flawed incentive systems, David Foster brought up some Communist examples:

There’s an old story about a Soviet-era factory that made bathtubs. Plant management was measured on the total tonnage of output produced–and valves & faucets don’t add much to the weight, certainly not compared with the difficulty of manufacturing them. So the factory simply made and shipped thousands of bathtubs, without valves or faucets.

He notes that the above story may be apocryphal. The version I heard involved cars and people stealing each other’s windshield wipers.

He continues with a more spectacular example from Viktor Suvorov, who was working on a communal farm in Russia, when the General Secretary of the Party announced that they needed to increase their output, and the fertilizer plant resolved to do its part:

A vast meeting, thousands strong, complete with brass bands, speeches, placards, and banners, was urgently called at the local Chemical Combine. To a man, they shouted slogans, applauded, chanted patriotic songs. After that meeting, a competitive economy drive was launched at the Chemical Combine to harvest raw materials and energy resources.

The heroic efforts of the factory workers filled the plant’s storage tanks to capacity, and the local communes had 24 hours to take possession of their liquid fertilizer:

There was a long queue of trucks of different makes, dimensions, and colours standing outside the Chemical Combine. But the queue was moving fast. I soon discovered that lorries, which had only a moment before been loaded, were already returning and taking up new places in the queue. Every one of these lorries ostensibly needed many hours to deliver its valuable load to its destination and then to return. But they rejoined the queue in a matter of minutes. Then came my turn. My tanks were rapidly filled with the foul-smelling liquid, and the man in charge marked down on his list that my native kolkhoz had just received the first one and a half tons of fertilizer. I drove my lorry out through the Combine’s gates and followed the group of lorries which had loaded up before mine. All of them, as if at a word of command, turned off the road and descended a steep slope toward the river Dneiper. I did the same. In no time at all, they had emptied their tanks. I did the same. Over the smooth surface of the great river, the cradle of Russian civilization, slowly spread a huge poisonous, yellow, stinking stain.

Foster warns us not to get too smug though. If you read the whole thing, he has an example of capitalist stupidity, too.

Comments

  1. Charles W. Abbott says:

    I believe the shortage of windshield wipers is well documented anecdotally. In Hedrick Smith’s The Russians (1975) he mentioned the chaos in Moscow when rain began suddenly and everyone had to pull over to put their windshield wipers on. If you left them on every day they would soon be stolen.

  2. David Foster says:

    Thanks for the link. Also very interesting in terms of incentives is Gennady Andreev-Khomiakov’s memoir Bitter Waters, which describes his experiences as deputy manager of a Stalin-era Soviet factory.

  3. Chedolf says:

    “may be apocryphal”

    This drives me insane.

  4. Lucklucky says:

    But that “smug” caveat does not apply, since they were not the result of capitalist incentives.

    In fact, it was because there weren’t capitalist incentives.

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