Ayn Stalin: Soviet Inequalities In 1929-1954

While researching my article on Soviet economic performance relative to the US (it was bad), I came across this fascinating graph showing income inequality in the USSR since 1946.

As you can see, the 10% richest Soviet citizens in the first postwar year were more than seven times as rich as the 10% poorest. That is actually substantially higher than in many capitalist social democracies today: Czech Republic (5.2), Finland (5.7), Germany (6.9), Japan (4.5), Sweden (6.2). Russia’s current R/P ratio is about 13 IIRC.

And there’s lots of factoids that support this assertion:

(1) Stalin increased his own salary as General-Secretary from 225 rubles (until 1935), to 500 rubles in 1935, 1,200 rubles in 1936, 2,000 rubles by the end of the war, and a cool 10,000 rubles by 1947.

(2) While in the 1920’s there were strict limits on managerial salaries as a percentage of workers’, in 1929-1934 they were quietly lifted. In the 1920’s, the “Party maxim” was 175 rubles compared to average worker salaries of 50 rubles; whereas by 1937 the average manager-worker differential increased to 5:1 (higher than in contemporary Paris, where it was 4:1). This figure doesn’t include unofficial payments in envelopes and huge bonuses for over-fulfillment of the Plan.

(3) In the military, a lieutenant’s salary in 1939 was 625 rubles, compared to a colonel’s 2000 rubles. This was a higher differential than in France, where it was 2,000 francs and 5,000 francs, respectively. Or for that matter far higher than in today’s “oligarchic” Russia, where a lieutenant now gets 50,000 rubles and a colonel 75,000 rubles.

(4) The highest administrative salaries reached into the 10,000’s of rubles, e.g. the director of one Kharkov enterprise in the late 1930’s got 22,000 rubles. The chairman and deputy chairman of the Supreme Council got salaries of 25,000 rubles. These figures are 100x the salary of an average worker which was 250 rubles and a minimum industrial wage of 110-115 rubles.

Another interesting factoid I discovered was that the supposedly education-worshiping Soviet government made people pay for it from 1940 onwards. The 8th-10th classes of schools, as well as colleges, now cost 150-200 rubles per year to attend (10% of an average worker’s yearly salary), while higher education cost 300-500 rubles. This system was only removed in 1954.

So apart from the well-known features of Stalinism (repressions, etc) it seems to have also been a period of privilege – in which bureaucrats may have been very unsafe but did enjoy incomes that were unprecedented compared to the rest of Soviet history. Overall inequality wasn’t astoundingly high because private enterprise had been banned for the most part, but inequality within the actual state structure was; quite possibly, more so even than today. Needless to say it was also full of informal hierarchy in terms of privileged access to scarce goods – the 1930’s-40’s was a horrible period for Soviet consumers.

I wonder what Russian Stalinists who idealize the period would make of all this?

  • Mark Sleboda

    lol….and after Stalin (ie after the beginning, after the revolution and the civil and the world wars and their immediate aftermath, which is the semantic equivalent of talking shit about the Russia Federation since 92, based only on Yeltsin and the 90’s and ignoring all 12 years after) how does the wealth inequality, health, housing, and education provision in the Soviet Union stack up when compared to life under the late Imperial Romanov Dynasty or today’s capitalist Russia or America for that matter?

    • AK

      This post was quite exclusively about the Stalinist period.

      • Mark Sleboda

        Extemely convenient for your argument 🙂

        • charly

          That the USSR was surprising unequal during Stalin?

          • @charly: No the inconvenience comes from the fact that, according to the 2013 credit suisse report, wealth inequality is now exponentially worse. It’s not an opinion, and feel free to justify that however you wish, but disregarding that fact is lying by omission.

  • seansrussiablog

    The inequality for the graph above would be worse if it included kolkhozniki rather than just workers and the broad “sluzhashchie,” which included everyone from a bureaucrat to a nurse to a professor. As one passage in the article you linked states: “The monthly wage for kolkhozniki in 1950 was only 16.6 rubles, four times lower than the average monthly salary of workers and sluzhashchie.” And keep in mind that this is the average kolkhoznik monthly salary. The reason why the average is so low is because many didn’t get a “salary” at all. Kolkhozniki were only paid money when their farm produced a surplus, and then according to the completely chaotic system of labor days, the salary categorizations of of which varied from kolkhoz to kolkhoz. Granted, unlike workers, et al, kolkhozniki had other income streams–sale of produce from their private plot in kolkhoz markets–the main source, wages from labor migration, work in state bureaucracies (i.e. kolkhoz post office), or pensions from army service, work in the city. But this hardly put them on par with their urban counterparts. According to O.M. Verbitskaya, (Rossiiskoe krestianstvo ot Stalina k Khushchevu, 1992) the average yearly total income for a kolkhoz household in 1950 was 3648 rubles. Also consider that the average taxes for a household in 1952 was 628 rubles.

    As for Mark’s question. It’s hard to tell because the measurement of standard of living in the USSR included both wages and services in kind. Also, Soviet Russia experienced a number of catastrophes–war and famine–putting them in constant catch-up mode. My wife is writing about the postwar kolkhoz so all of my information comes from her research. In my estimation, again based on her research, is that the vast majority of kolkhozniki lived the same or worse in the Soviet period (before 1953, when a number of tax and price reforms for implemented) than their Imperial ancestors. They weren’t given the same rights and benefits as Soviet workers–passports, pensions, guaranteed income, though many did have land, though taxed heavily. But their housing was shit, with many in the postwar period living in houses build in the per-revolutionary period or in the 1920s. And if their house was destroyed in the war, they were responsible for rebuilding it, unlike urbanites. Much of the money and materials for housing reconstruction came from state loans.

    • AK

      Good point, Sean!

      If 16.6 rubles was the average salary for kolkhozniki, then the salary differential would go from 7.2 to truly Latin American levels (if not infinity… after all, if say more than 25% of farms didn’t produce a surplus…)

      That said, 3,648 rubles doesn’t actually sound that bad… or realistic. That’s 152 rubles per adult in a nuclear family, though of course most households had many more adults (do you know the average?). The average salary for workers and sluzhashchie was 72 rubles in 1951-55.

      • In 1950, a kolkhoz household averaged 4 people. I don’t have an RSFSR breakdown of feeders vs. eaters to use the parlance of the time. You had the option to join the kolkhoz when you turned 16 so any person over that age could earn a wage. Still, I wonder if a differentiation needs to be made between salary and total household income. The 3,648 yearly salary includes all forms of income–private plot, pensions, work day wages, remittances from migrant labor. I don’t think it includes after taxes.

        Again, I don’t think inequality can be measured in wages alone since urbanites had much more access to in kind services–housing, transportation, leisure,
        health care etc than collective farmers. Another statistic I have from Verbitskaya is that in 1950, 72-92% of kolkhozy in several central provinces paid less than one kilo of grain per work day. 4-8% kolkhozy in those regions paid nothing at all. Things improved by the mid-1950s, after procurement prices were raised. But sill a kolkhoznik earned only half the wage of a sovkhoz farmer and 36% an industrial worker.

  • This was actually widely known at the time. Stalin was an unashamed believer in differentials and the wide differences in income between the Soviet elite and the lower strata was a cause of great embarrassment to pro Soviet socialist intellectuals in the west. I remember reading a book by the British historian Isaac Deutscher from this period in which he urged the Soviet leaders to eliminate differentials in the cause of greater social justice and economic efficiency! There were even books written by anti socialist writers in Britain in the 1940s and early 1950s (such as Dennis Wheatley and CS Lewis) that complain bitterly of the supposedly inferior conditions of life provided to the professional and intellectual classes in Britain as compared with their peers in the USSR.

    Stalin did not only privilege the Soviet elite with higher wages. He also provided them with far superior housing (think of the great Stalin era apartment buildings, which provide elite housing even today, with the so called “House of Lions” built to provide housing for Soviet Marshals and Generals being perhaps the most ostentatious example). Stalin also provided the elite with superior access to food, clothing and consumer goods as well as (horror of horrors!) domestic servants (think of Margarita’s maid in The Master and Margarita). The Stalin era was also the time when the various “Gosdacha” settlements were created in and around Moscow for writers, scientists, military officers, political leaders etc. Stalin himself had the use of several Gosdachas including the famous one in Kuntsevo. When on leave in the Crimea his favourite residence was the Vorontsov Palace. In a book I recently read about Stalinist architecture I found that even restaurants during this period, though often of very high quality in terms of food and service (in contrast to the situation in the later Soviet period), were strictly off limits to anyone except those specifically granted access to them.

    The policy was reversed by Khrushchev following Stalin’s death, a fact which by the way may in part explain the weakening of elite support for Khrushchev that ultimately led to his fall. However Khrushchev’s egalitarian policies were largely continued by Brezhnev and by the late 1970s the level of inequality in the USSR was certainly far below what it had been in Stalin’s time even if it did not quite achieve Scandinavian levels.

    Khrushchev and Brezhnev also reversed Stalin’s policy of limiting Communist Party membership to a small group of dedicated and loyal cadres (or “swordbearers” to use the then fashionable phrase). Both expanded the party membership especially amongst working class Russians to the point where by the late 1970s it included around a tenth of the adult population. The result arguably diluted the party’s quality and weighed down the party with a large membership that had little commitment to it. Incidentally both Putin and Medvedev were party members. It is difficult to believe that someone like Medvedev would ever have been admitted to the party in Stalin’s time.

  • Scowspi

    “think of the great Stalin era apartment buildings”

    I lived in one of those for a couple of years, on Frunzenskaya Embankment. 14 stories high, and it resembled a fortress, topped with massive turrets. Lazar Kaganovich actually lived in the podyezd next to mine.

  • anon

    the soviet union had high inequality during the war because it was necessary to win. however, inequality fell greatly after the war. it wasn’t as low as western europe, but it was better than most developing countries at the time.

    it’s not appropriate to compare the western european states like france or spain to the ussr because these countries were in a different geographic convergence club, not to mention they were far smaller, more densely populated, and more evenly developed.

  • Pingback: The Poverty of Income Inequality » Choosing Life - God's Gift To The Unborn()

  • Pingback: The Poverty of Income Inequality | Strangers and Aliens()

  • Pingback: State-based class structures | spreadtheinfestation()

  • Gregory Rose

    This is ludicrous. The graph doesn’t even begin until Stalin’s death (the line begins in 1953, not 1946). It serves no purpose except to give a false veneer of science to the author’s anti-Stalin diatribe.

    • kevin lynch

      It’s well known, that if you were a member of the communist party, which was a tiny percentage of the overall population, you had a much higher standard of living than the average citizen, all through the failed experiment of the USSR. Whatever way it’s presented here that’s true nonetheless.
      “anti stalin” is that a bad thing? He was a mass murderer after all.

  • An Evil Stalinist

    Hm, I suppose I will get right to it:

    1. Much of the inequity results simply from skilled labor shortage: In order to attract as many people as possible into the rapidly expanding need for engineers, doctors, technicians, etc. they had to be well rewarded.

    2. During the war many people were impoverished, particularly those who lived on the frontier, but those inside the safe confines of factories had their incomes stay the same or increase. Hence inequality increases (from about 5 in ratio if I am not mistaken).

    3. At the time, wage inequality in many European countries & their offshoots at that time was from 10 to 30 times. Income inequality was similar if not higher.

    4. Income inequality between Europe and its colonies was even higher than that above. I think it is grossly misleading to exclude the cheap labor and raw material sources from an analysis, particularly considering the Soviet Union was a large country that was relatively autarkic compared to Europe.

    5. I think it a very hyper egalitarian fantasy, (often promulgated by westerner social liberals), that all should be equal or close to under socialism. The main motto of the Marxist-Leninist at the time was “From each according to his ability, to each according to his deed” (and not title deed, for income through ownership is what is illegitimate under Marxist eyes).

  • Nemo Starem

    Actually the main problem is that he has no evidence that inequality overall increased on Stalinism. The graphic only shows inequality decreasing after it but nothing of what was in or before it. It may very well be that it was decreasing the whole time from the absurd Imperial levels. Forced collectivization must have had a very big impact anhilating the kulak landlordshp.

  • Pingback: Anatoly Karlin: Short on Marxist Economic and Social Theory | Jason Unruhe()