BOOK REVIEWS

Michael Ellman and Vladimir Kontorovich (eds), The Destruction ofthe So-
viet Economic System: An Insiders' History, Armonk, New York: M.E. Sharpe,
1998.

Michael Ellman and Vladimir Kontorovich have compiled a marvelous

set of studies from 18 participants in the Perestroika process, which culmi-
nated in the end of the Soviet Union. Most contributors were Soviet partici-
pants, but the list includes Philip Hanson and Vladimir Shlapentokh, who
provide frames of reference of Western advice and sociological surveys. Wisely,
Ellman and Kontorovich selected "insiders" who prepared the position papers
and provided the advice upon which perestroika was founded, not the actual
policy makers, who may have been tempted to interpret events favorable to
their own roles. Ellman and Kontorovich provide introductory chapters that
conveniently summarize the main findings.
As a reader who has devoted several decades to the study of the Soviet
administrative-command economy, I have warned against stereotyping of the
Soviet system and have concluded that we really know relatively little about
how the system worked above the level of the enterprise. The Ellman-
Kontorovich book confirms this line of thinking. Although they describe the
system in its final phases, we nevertheless learn a great deal about how the
mature system worked and we encounter quite a few surprises along the way,
such as the vacuum that paralyzed the Party during Chernenko, and the sur-
prising role of regional Party officials in bolstering Gorbachev's minority posi-
tion within the Party heirarchy.
We learn of the extreme power of the General Secretary position a
feature of the Soviet system that allowed Gorbachev to press through his
"radical" reforms, despite their general unpopularity within the Politburo and
Central Committee. We learn ofthe extraordinarily bad advice that Gorbachev
received from his academic economic advisors, who promised major short-term
improvements from minor changes. Contributors confirm that the Soviet lead-
ership was well aware that it was in for decades of relatively low growth, but
that there was considerable support among the populace and leadership for
the existing system. Radical reform happened not because of its inevitability
but because of the historical accident of Gorbachev' s rise to power in 1985.
Some insiders address some of the major unresolved issues of perestroika.
Did Reagan's Star Wars break the Soviets' back? How good was Soviet knowl-
edge of U.S. military capabilities? Former Soviet military specialists were di-
vided on the importance of Star Wars, but there seems a consensus that the
Soviets were poorly informed about U.S. military power. Whatever incorrect
assessments were made by the U.S. intelligence community, they were made
three-fold by Soviet intelligence. Surprisingly, Soviet military planners felt that

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the West could outperform the Soviet economy in a time of mobilization (de-
spite the fact that resource mobilization was supposedly a strength of the
Soviet system); hence, the Soviet economy required excessive weapons stock-
piles to give it a sufficient head start. Information on the military-industrial
complex was kept separate from information on the general economy. Top
decision makers, therefore, operated in the dark about the military and its claim
on resources. Remarkably, there appear to be no accepted figures on the actual
Soviet military burden (military expenditures as a percent of GDP), except a
figure of around one third proposed by Pavlov.
The contributors relate how unprepared Soviet economists were for
market reform; virtually none had an understanding of markets. Moreover,
they failed to appreciate how little they really knew. The contributors reveal
the deep chasm between the academic proponents of reform and the "better
informed" specialists from the economic bureaucracy. Their contrasts of
Gorbachev, who is described as a talker and a poor listener, with reverence for
the better-informed Kosygin, are damning. Ryzhkov, with his engineering men-
tality, is characterized as a particularly bad choice to lead the country through
a radical reform. Gorbachev's reputation as a reformer was not deserved; con-
tributors describe his reform ideas a little more than banal platitudes.
Ellman and Kontorovich date the end of the Soviet system to the re-
moval of the Party from economic management. "The Party's withdrawal from
the economy ... caused an institutional vacuum, which resulted in the serious
disorganization of the economy" in September of 1988. (Chapter 7.1.3). Prior to
the Party's withdrawal, the industrial ministries had been largely emasculated,
given Gorbachev's fear that they had the power to veto reform.
Ellman and Kontorovich's contributors provide valuable information on
the bureaucratic etiquette of the Soviet system. Khanin's almost-comical tales
of his search for a dissertation advisor unafraid of his controversial research
and of the KGB's apparent "unofficial" interest in his work are particularly
enlightening. We fnially get a glimpse of the working of the economic commis-
sion of the Central Committee, which is described as a "Council of Ministers"
with considerable power but no responsibility. The collection provides a num-
ber of case studies of how commissions were formed, important issues dis-
cussed, the attitudes of the rank-and-file of Gosplan, and the dependence of
events on personalities. Surprisingly, the most sacrosanct area appeared to be
price reform. There was an extreme aversion to discussion of price reform until
rather late in Perestroika that is, the radical reformers wanted market reforms
without markets!
Ellman and Kontorovich are to be most highly commended for their
work. We have too few examples of this type of long-term project, which deals
with the fundamental intellectual issues of an economic system in the process
of collapse. We owe them a debt of gratitude. I believe that if we had devoted
more attention to this type of research, we in the West would have been less
caught off guard by the extreme complexities of the Russia and Ukrainian
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transitions and by the spontaneous emergence of the "virtual" economy from

the ruins of the administrative-command system.

Paul R. Gregory
University of Houston