|
Abstract
|
An 'efficiency wage' model developed for Western economies is reinterpreted in the context of Stalin's Russia, with imprisonment - not unemployment - acting as a 'worker discipline device'. The threat of imprisonment allows the state to pay a lower wage outside the Gulag than otherwise, thereby raising the "surplus" left over for investment: this externality provides a reason for coercion over and above the direct productivity of those in custody.
Just how credible the threat of imprisonment was under Stalin is documented using archival data now available; but the enormous scale of random imprisonment involved is, we argue, attributable not to economic factors but to Stalin's insecurity in the absence of a legitimate process for succession.
We develop a model of demand and supply for industrial labour in such a command economy. To get more resources for investment or war, the state depresses the level of real wages; to avoid incentive problems in the wider economy, the harshness of prison conditions can be intensified. This is the logic of coercion we analyse.
Highlights
• The Gulag had incentive effects on Soviet labour akin to unemployment in the West.
• Stalin's use of imprisonment for terror and so-called shirking is documented.
• An efficiency wage model shows how the threat of prison raises investible surplus.
• It helps explain use of monitors, promises of a better future and harsh punishment.
• But random incarceration, used for political purposes, raises the efficiency wage.
Language: en |