In the shadow of the Gulag: worker discipline under Stalin
Marcus Miller () and
Jennifer Smith ()
CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)
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.
Keywords: Labour discipline; asymmetric information; efficiency wage; Soviet Union; Stalin (search for similar items in EconPapers)
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Journal Article: In the shadow of the Gulag: Worker discipline under Stalin (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:cge:wacage:218
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