Power and Ownership under a Dictatorship: Early Forms of Nomenklatura Privatization in Stalin's USSR

Power and Ownership under a DictatorshipEarly Forms of Nomenklatura Privatization in Stalin's USSR Oleg V. Khlevniuk (bio) Translated by Dmitry Halavach According to the official Soviet ideology, all who worked for the state were, at the same time, owners of state property. However, studies of management and distribution practices in the Soviet economy have revealed the real nature of Soviet state property.1 Based on these studies, it is possible to establish a hierarchy of state property owners during the era of Stalinism, which can be used as a starting point for the study of this phenomenon in the late Soviet, and to some degree post-Soviet, period. In this hierarchy, the dictator occupied the highest position and possessed supreme power to determine the main directions of economic development, the distribution of economic resources, and, of course, the realization of specific projects that came to his attention. Stalin, as many scholars argue, was de facto the supreme owner of the country.2 Numerous managers and officials of the party-state apparatus, economic ministries, and enterprises constituted the next rank. Their power originated from the Soviet leader's need to delegate the rights of day-to-day management [End Page 299] and control to his subordinates.3 The ownership of state property, which derived from the right to manage it, involved legal, semilegal, and illegal practices of redistributing and pilfering resources. These practices could be selfless (dedicated to "the right cause") or driven by a desire for promotion and personal enrichment.4 Most people had access only to the share of resources the dictator and party-state officials granted them. Repeated famines in which millions perished demonstrate that this meager allowance was often insufficient to survive. In response, a significant part of the population resorted to expropriating the state property by mass theft.5 Illegal expansion of private peasant farms at the expense of the land owned by collective farms became widespread.6 Private entrepreneurs sold the state's property at the higher market prices and used it to produce goods for sale in artisanal workshops.7 The state severely persecuted the practices forming this shadow economy. In sum, numerous contradictions and crises at every level of state property were an important factor in the evolution and final dissolution of Soviet socialism. This article explores a crucial part of this phenomenon: appropriation of state property by members of the nomenklatura during the Stalin era.8 Here I view the Soviet model of combining political [End Page 300] power and property ownership in the 1930s–50s as a result of the interplay of several factors. First is the nomenklatura's privileged position in the Soviet system of goods, services, and benefits distribution that its members enjoyed legally, which I refer to as nomenklatura provisioning. Second is nomenklatura appropriation—the expanding share of resources appropriated by its members above the legally mandated level. The sources refer to this as "self-provisioning." The most advanced form of nomenklatura appropriation was nomenklatura entrepreneurship. This peculiar type of business involved receiving regular income from state production facilities or from trade and speculation based on the state's resources. Finally, party-state officials enjoyed a form of legal immunity and were subject only to selective and lenient sanctions when they broke the law or abused their office. This immunity allowed them to transform power into ownership with relative ease. This attempt at conceptualization is based on the study of many cases described in recent years in the literature and identified in the archives.9 The nature of the sources largely determines both the approaches and the limitations of my article, as well as the state of the study of informal (illegal) socioeconomic processes in general. Informal practices were recorded in the documents only if they came to the attention of law-enforcing and controlling bodies of power. The archives of these organizations are for the most part (although not entirely) inaccessible to researchers. Besides, the selective, campaign nature of the Soviet criminal justice system makes it difficult to establish how frequent certain illegal practices were.10 This is particularly important for Soviet officials, because, as will be shown later, they often avoided punishment entirely. Even...