At the same time, the idea of a fixed Russian culture does not explain how Soviet secretiveness went so far beyond prerevolutionary practices. The idea of a fixed communist culture does not explain the variation of secrecy over time under communist rule. It might be useful to turn to a third way of understanding secrecy, one that is neither policy nor culture.
Secrecy as an Institution
An intermediate position is available: secrecy might be an institution in Douglass North’s sense of “rules of the game.”[126] In this view institutions are rules of interaction, which were adopted in the past and persist today, and while they persist, people make choices within them. The rules persist, not forever, but for as long as they have the support of a governing coalition. They change when the individual choices made within them give rise to new coalitions of people that have the power and will to change them.
A significant feature of Soviet history is that the “governing coalition” was often extremely narrow and, on occasion, depended entirely on the changeable will of a single person—the party leader. Thus, it is consistent with the idea of secrecy as an institution that the rules of Soviet secrecy could persist for quite long periods, and then be altered abruptly. Factors in the sudden shifts of Soviet secrecy included the break with the Left Socialist Revolutionaries and Lenin’s turn to a one-party state (in 1918); Stalin’s victories over the Left Opposition and the “Right deviation” (in 1927 and 1929); his anger at the unauthorized sharing of biomedical research (in 1947); Khrushchev’s unexpected denunciation of Stalin (in 1956), which disrupted the coalition of Stalin’s successors; and the prevailing winds that, by blowing radioactive debris from Chernobyl across half of Europe, forced Gorbachev into unprecedented disclosure (in 1986) of a domestic catastrophe.
To conclude, if we wish to understand why the Soviet Union’s leaders gave up substantial state capacity for the sake of secrecy, there are three approaches. Each of them is a simplified concept that has something to offer. I am not inclined to nominate one of them as the only correct approach to secrecy. In this book, we will see secrecy operating sometimes as a culture, sometimes as a policy, and sometimes as an institution.
At the same time, I should disclose my professional bias. As an economist, I was trained to look for costly behavior. Where a cost is incurred but could be avoided by choice, there should also be a benefit. This approach presumes rational choice, not as a matter of faith, but as a driver of investigation: if costly behavior is not explained by an apparent net benefit, then there must be some factor at work that we have not yet understood. Perhaps we should dig deeper. At all times, therefore, I will resist the temptation to describe Soviet secretiveness as “irrational.”
In the present case, if Soviet secrecy was costly, and if more transparent forms of government that avoided the costs were clearly available, then why did the Soviet rulers choose to accept these costs? The answer to which I will return again and again is that the expected benefit of secrecy to the rulers must have been commensurately large. It was not by chance that the Soviet system tended to merge security and secrecy into one. When decisions were pondered in secret, the ruler was secured against pressure from civil society. When the decisions themselves were censored, the ruler was secured against challenge. When the outcomes of bad decisions were concealed, the ruler was secured against accountability and criticism. For these reasons it was worth the rulers’ while to uphold the culture, to enforce the institution, to provide the career incentives for millions of administrators and managers to conform to the pattern, and to tolerate the very high costs to their effectiveness in other dimensions.
Finally, the idea of a secrecy/capacity tradeoff does not preclude mistakes. In the Soviet state it was possible to increase security to a point where usability became so difficult that people felt compelled to behave in “insecure” ways. I do not describe this as irrational, but it had unanticipated consequences and could reasonably be called a mistake.
The ultimate purpose of Soviet secrecy was to sustain a durable dictatorship. It does not matter much whether you ascribe the origins of Soviet secrecy to the inner drive of totalitarian single-party rule or to the external pressures of foreign encirclement.[127] The Soviet Union’s communist rulers made no distinction between the survival of the country and the security of the regime. Whichever way you looked at it, the need for secrecy was existential. If you wanted to run a durable dictatorship, and not be overthrown by the foreign enemy or the domestic enemy, you had to pay the costs, no matter how heavy.
Moreover, secrecy worked. It did sustain a dictatorship for seven long decades—more than the lifespan of the average twentieth-century Russian male. From that perspective, Soviet secrecy was generally extreme, sometimes weird, occasionally amusing—but irrational? Over a long period of reflection, I have come to think not.
The purpose of this appendix is to set out and explain the data underlying Figures 2.1 (tax shares) and 2.2 (ownership shares). It involves discussion of the comparability of statistics across both countries and accounting systems. Comparing tax shares in national income is primarily a problem of the accounting system for national income. Comparing ownership shares presents multiple issues.
For tax shares the problem is to estimate the country share of current government revenues (the numerator) in national income (the denominator) when the denominator is measured inconsistently. The countries of the OECD shared the System of National Accounts, in which national income is measured by the gross domestic product or GDP, the aggregate value of final goods and services at market prices. The Comecon countries and China used the material product system, in which national income is measured by the net material product or NMP, the aggregate value of final goods utilized for consumption and accumulation at prevailing prices. The main difference between the two lies in the treatment of final services. Contrary to what is often asserted, the NMP does include some services— the intermediate services that enter into the production of goods. It excludes only those services that enter directly into the final consumption and accumulation decisions of households, firms, and government. Thus, education and health expenditures are not counted in material production, and retail banking and passenger transportation are also left out. But freight transportation and distribution are included.[128]
The importance of final services in the global economy has tended to grow over time, and by 1980, the year of interest for our measures of state capacity, the difference between GDP and NMP measures was quantitatively large. In the final years of the Soviet system, official statisticians began to calculate the Soviet national income retrospectively using both measures. For 1980, they estimated the Soviet net material product utilized as 454.1 billion rubles, while GDP was 619 billion rubles, more than one-third larger.[129]
For tax shares, what counts on the side of the numerator is approximately equivalent between the two systems, both of which acknowledge the major categories of retail sales taxes and personal income and profit taxes. The denominator is the big difference. As Table 2A.1 shows, Com-econ country tax shares in the net material product in 1980 look much larger than OECD country tax shares in GDP, and there is no overlap at the near edge of the two distributions. But NMP is much less than GDP. When we adjust, we find that Comecon tax shares are still very much on the high side, but (as noted in the chapter text) they now overlap the high-tax market economies of northwestern Europe.
127
Totalitarian rule: Goriaeva, Politicheskaia tsenzura v SSSR, 8. Foreign encirclement: Kurenkov, Ot konspiratsiia к sekretnosti, 219.