The Duma

One upon a time there was Gosplan, otherwise knows as the State Planning Agency. Located near the Kremlin, Gosplan was charged with planning the entire economy during Soviet times. Plants were built, roads laid, power grids set up -- and an entire economy designed around a vast array of mathematical input-output tables. Costs, resource constraints and potential damage to the environment were irrelevant. All that mattered were political goals such as opening "virgin lands" to agriculture, increasing cotton production in Uzbekistan, mining raw materials in Siberia, or increasing car production, no matter how awful the auto was. Consumers were completely unimportant. The result was a country full of industries that wasted raw materials and made goods no one wanted to buy. As a result, the USSR was filled with value-subtracting firms whose end products were sometimes worth less than the things used to make them. The results could get pretty weird Sometimes, cheap bread was fed to livestock because it cost less than the grain used to make it. Producers had no incentive to conserve inputs or improve technology.

Under Gosplan, resource prices and costs meant nothing, resulting in an economic system firmly divorced from reality. In the sane world, factories were built to make money and were located with access to raw materials, markets, capital and labor. Under the planning system, none of this mattered. Car factories were built in places with no roads, mines were dug in places with no labor, and energy intensive industries were built in the arctic. The use of resources was irrelevant. To solve these problems, people were shipped to the north, energy was supplied free, and no one counted costs. Only output counted. Other resources were dumped down the rat hole of military spending.

As system ground on through the 60s, 70s and 80s, it bled resources ever faster, making it increasingly unsustainable over the long run. Eventually, the system got so rotten that it could no longer continue supporting even the average Russian's austere standard of living. Fear of long-term disintegration is what triggered Gorbachev's attempts at perestroika. Unfortunately for him, the system was so weak that repairing it was impossible. When it opened up, it simply fell apart.

Located near the Kremlin, the planning agency building did a lot better than Gosplan itself, which was abolished in 1991. In 1993, the Duma (Russian Parliament) was relocated here after being shelled at its first location in the Russian White House. Yeltsin probably moved the Duma nearer to the Kremlin to better keep an eye on it.

The Duma was quite nice inside. Former Gosplanners told me that they did a very good job renovating the building, which contained both the Duma chamber and cramped member offices. It had new elevators and a big Russian eagle over the sweeping red carpeted stairs near the entrance. The cramped offices have little card keys, like the type they use in fancy hotels. I thought Duma Deputies, like US Congressmen, would have larger offices. At least the views of the Kremlin were nice. The interior had nicely renovated hallways, fully stocked gift shops (I looked in vain for some Duma T-shirts or pen sets) and a very inexpensive "special" cafeteria.

These "special" or "spets" facilities also included motor pools, clinics and schools, were relics of Soviet times where the nomenklatura (party elite) had access to much better goods and services than the general population. In those days, only the nomenklatura had right to hold hard currency (i.e. real money), to travel and use these special facilities. The fall of Communism severely dented the system and opened things up. After the Soviet Union, access to some spets facilities was opened to those with money.

When I visited the Duma for a meeting, the notice of my arrival went to the wrong entrance. Even though our well-connected contacts tried to bring us in, the guards were adamant: We were forbidden to enter. The only way in was walk 15 minutes outside around the building to another entrance. Bureaucracy conquered all. We also needed permission to LEAVE. I wondered what might happen if someone lost his documents. Would he need to set up house-keeping in the Duma? Either way, the building that Gosplan built was just as remote as ever from the people.

Note: This is only a partial excerpt of the book, which is available on request.  I will be adding photos to this page in the near future.



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