Pyotr Alekseevich Bogdanov

When Bogdanov took charge of VSNKh, industry was run by the hyper-centralized apparatus of War Communism, in which every enterprise had to fulfil directives handed down from above and all output went to state bodies bypassing the market. His stated starting principle was "decentralization of the management of industry itself, bringing the management body closer to the factory and plant, while at the same time centralizing the leadership of industry as a whole." As the program of this doctrine he called for a partial reduction of the state sector, through denationalization and leasing of unprofitable enterprises to domestic entrepreneurs, cooperatives or foreign concessionaires; decentralization of enterprise management with transfer to self-financing and khozraschet; abolition of labour conscription and return to free hiring with piece-rate and collective wages; and economic regulation of production through finance and credit. He argued that restoring small and medium production was indispensable because the state lacked the means to run all of it, and welcomed cooperation with private capital, leasing and cooperatives: "we must give the machines of those thousands and tens of thousands of small and medium factories a chance to turn, which can supply the peasantry, but which we cannot set going, because we will not have enough forces and means for all this small stuff, because we must think about the bigger things." Under Bogdanov the VSNKh Presidium issued an instruction on leasing state enterprises. By the end of 1921, 3,860 enterprises and 1,000 mines and similar facilities had been leased out, and private capital reached roughly 75 per cent of retail turnover and about 80 per cent of the rural market. On attracting foreign capital he argued that it was simply unavoidable: "The attraction of foreign capital is completely inevitable, since the equipment of whole branches of our industry depends entirely on abroad, inasmuch as they were never created and maintained in Russia by its own means." He treated the trust as the organisational form best fitted to market methods of management: a state association of enterprises enjoying broad economic autonomy, acting freely on the market and optimally using the factors of production. On 14 September 1921 the Politburo instructed "comrade Bogdanov immediately to carry out the formation of a state trust" from the Ridder and Ekibastuz plants and mines, Lenin adding that production should rest on the greatest financial and economic independence. In large measure "thanks to the efforts of P. A. Bogdanov" and the VSNKh Presidium he headed, the trust became the principal organisational form of production management. By the summer of 1922 the number of trusts reached 421, ranging from giants such as GOMZ (39,500 workers) and Yugostal (35,000) to dwarf trusts, while the number of main administrations (glavki) was sharply cut and the VSNKh apparatus staff greatly reduced. He expounded khozraschet as "conducting enterprises on such foundations that all outlays at the enterprise are strictly accounted for and recouped, and the result of the enterprise's work must be an increase in material goods." The decree on trusts of 10 April 1923, resulting from the contest between his and Larin's positions, substantially reflected his views, though it still treated factories only as production units inside trusts. A separate strand of this managerial work was his 1925 book Administrators and Specialists in Soviet Industry and accompanying articles. He held that the success of the economic reform depended on professional managers, demanded an end to the deadening formalism and excessive tutelage of enterprises, and insisted that frequent rotation of managers was harmful: three years was the minimum to master a post, and five better for large ones. He attached great importance to drawing workers into management, especially production conferences, which he called the school through which the ideas and achievements of science and technology should penetrate the lower strata of the working masses, and stressed implementation of conference decisions rather than formal meetings. His line of abolishing most glavki was a sharp break with the bureaucratic-administrative system created under Rykov in the War Communism era, and by the mid-1920s the turn to a rigid centralized planning system made leaders inclined to democracy such as Bogdanov unnecessary. In spring 1921 he proposed measures to protect engineering and technical staff: full equalisation of engineers and technicians with workers as full members of the relevant unions, a separate room for each engineer and technician, revision of tariffs and food supply to remove the need for second jobs, encouragement of scientific-technical societies and journals, and a special decree on the treatment of specialists; on the basis of his proposals a decree signed by Lenin was issued in August 1921. He repeatedly petitioned to have arrested intellectuals released on his personal surety, mostly engineers: in June 1921 for the "valuable and irreplaceable worker" in the metal industry M. A. Aleksandrov, and in December 1921 asking the Cheka to hand over engineer Gezentzveig and others; in October 1921 he vouched for the former director of the Feodosia gymnasium A. P. Kuchinsky. His doctrine was articulated and applied across the whole NEP period: he oversaw the building of the Kashira and Volkhov power stations, promoted trust-building as the active conductor of NEP, and after a three-month foreign study tour of German, French and English industry at the end of 1925 was transferred from Moscow to the North Caucasus in 1926, where he won funding in 1927 for work on the Volga-Don canal and was among the initiators of the Rostselmash plant.