Monday, May 13, 2019

Prison Labor Didn’t Spark Economic Growth under Stalin and Wouldn’t Under Putin, Experts Say

Paul Goble

            Staunton, May 12 – Recent suggestions that law enforcement agencies can play a significant role in boosting Russia’s economic growth has been sharply criticized as flying in the face of both international and Russian experience (

            But even more interestingly, it has led to the opening of a new debate between those who say that Stalin’s GULAG helped the Soviet economy to develop and those who argue that the GULAG cost more than it benefitted the country not only ethically but economically as well (

            In a survey of these discussions, historical writer Konstantin Baranovsky comes down on the side of those who say that the GULAG whatever political benefits it may have brought Stalin was economically a disaster, costing more than it produced and thus making it a poor model for Russia or any other country now.

            There are two views on the economic consequences of the GULAG, Baranovsky says. According to the first, this was a perhaps unfortunate but forced measure that allowed the Soviet Union to build its economy “a minimal cost.”  According to the second, it was an economic mistake that cost more than it generated in incomes.

            If the GULAG in the 1920s was first and foremost a prison system intended to punish those who violated Soviet rules, in the 1930s, it became part of the country’s economic system, supposedly capable of paying for itself and costing the regime far less than it produced, he continues.

            Because Moscow assumed this was the case, the GULAG continued until 1956 and certain parts of it into 1960. But it was never as productive or as economically efficient as most Soviet leaders thought. Yes, the state spent relatively little on the prisoners and many of them died; but the productivity of the inmates was shockingly low.

            According to Moscow State University historian Leonid Borodkin, the productivity of GULAG inmates in the best case was less than 50 percent of those working in other parts of the Soviet economy; and despite the exponential growth of the Soviet political prison camp system, it never produced more than four percent of the Soviet GDP.

            And because of the costs of the guards and other control mechanisms, the actual cost of production by GULAG laborers was five or more times that of production by workers in the “free” part of the Soviet economy. Consequently, anyone who thinks that this is an appropriate model for Russia today is misinformed and, if listened to, would sink the country’s economy. 

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