Vladimir Ivanovich Shcherbakov

Владимир Иванович Щербаков
Soviet Union Russia 1949– ○ Office dissolved with USSR · living

The last Gosplan chairman who presided over the dissolution of Soviet planning

On the end of the planned economy: "We proposed a mechanism to bring the vulnerable closer to public goods through the market. But nobody wanted to listen."

The last steward of Soviet central planning, he managed the transition from plan to market as First Deputy Prime Minister and inaugural Minister of Economy and Forecasting under the Pavlov government, when Gosplan was reorganized into the new ministry in May 1991. After the USSR's dissolution, he transformed into a successful post-Soviet industrial entrepreneur, founding the Avtotor auto assembly group.

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The Structural Defects of the Soviet Planned Economy Model

Vladimir Shcherbakov analyzed the collapse of the Soviet economy not as a failure of management but as stemming from a "genetic defect" in the model itself. In his 2021 memoir The Perishing of the Soviet Empire Through the Eyes of the USSR State Planning Committee's Last Chairman, his central thesis is that the Soviet economic model was built on the doctrine of "cheap labor."

As Shcherbakov explains, the Soviet system inherited Marx's thesis of full appropriation of surplus labor, revised and reinforced by Lenin: the state, acting as the embodiment of society, appropriated virtually 100% of the surplus product at the planning stage. Gosplan, Gossnab, and the Ministry of Finance set directive targets and allocated material resources accordingly, with permissible deviation for enterprises limited to ±1–3%. Surplus value was absorbed into the state treasury before production even began.

The fundamental defect was the suppression of labor's real value. Wages were set not by a market but by a bureaucratic tariff system, and the operative concepts were not "earning" but "obtaining" and "procuring." Enterprises and workers alike were structurally indifferent to technological innovation and productivity gains. Shcherbakov glimpsed fragments of this problem during his 15 years of hands-on planning experience at VAZ and KAMAZ, but only grasped its systemic nature fully when he became Chairman of the State Committee for Labor and could survey the labor economy as a whole.

He concluded that the ultimate difficulty of perestroika-era reform lay not in improving management methods but in replacing the entire model, and that neither expanded enterprise autonomy nor partial market mechanisms could resolve it. Even after the USSR's dissolution, he maintained that "planning was, is, and will be" necessary. But its form had to be one of coexistence with the market, not state monopoly.

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