BEFORE WORLD WAR I

1Before World War I the United States viewed the Russian Empire as the secondary economic partner. American exports to and direct investments in Russia remained relatively small, as well as other U.S. investments abroad.1 The Singer factory (sewing machines), International Harvester factory (both were established near Moscow), American car dealers garages in major cities, General Electric and Westinghouse equipment in some factories and public utilities, were the most important prewar American undertakings in Russia. Respectively, the Russian traders and manufacturers knew little about American industrial achievements, like mass production and scientific management. A few economists, scientists and engineers paid attention to American experience in labor-saving industries, agricultural machinery, packaging, refrigeration, oil refinery, railroad equipment.

2The educated part of Russian public knew little about the United States. Europe was a close neighbor and supplier of almost everything what was to be imported. American civilization was perceived as primitive and inferior to great European culture, arts and sciences. Every Russian visitor to the United States vividly described American “craze” about various technical appliances and machinery. In 1912 Emperor Nikolai II inspected the Ford Model T car, and recommended it for the Russian army. Two books by Frederick W. Taylor were translated into Russian and published in 1912, along with an attempt to taylorize one factory. But no idea of large-scale technological transfer, or any special attention to American know-how appeared at that time in Russia. Technologically the Russian Empire remained in the European mainstream.

DURING WORLD WAR I

3During World War I Russia’s economic relations with the United States grew up substantially — in place of antebellum Russian trade with Germany and other European powers. In 1915 the United States became the principal exporter of cars and trucks to Russia.2 That was not a buyers’ preference, but wartime necessity. Before the war German and French cars dominated in the Russian market. Ford Model T wasn’t very popular, and that car did not comply with the Russian War Department requirements. During the war years the Russian army needed bigger, heavier and more powerful vehicles. The American White trucks (produced in Cleveland, Ohio) were then in great demand.

4Nevertheless, the Ford Motor Company was looking forward to move her production to Russian market.3 On March 14, 1919 Ivan Stacheev & Company, the large and powerful Russian firm, which existed some time after the Bolshevist Revolution of 1917, was appointed exclusive Ford representative for European and Asiatic parts of Russia — according to Ford-Batolin agreement of the same date.4 Edsel Ford called Prokopiy P. Batolin, then the sole executive of this firm, an “extremely interesting man”. Henry Ford and Batolin even photographed together — gesture saying about personal benevolence of “Automobile King” to energetic Russian businessman. At that time Russia was in the State of civil war, and the decisive victory of the Reds made the agreement futile.

5The importation of consumer goods is not enough evidence for “Americanization”. More relevant was growing interest to the American tools, motors, factory equipment. In 1915 the American-Russian Chamber of Commerce and the Society for America-Russia Rapprochement were established in both countries. They issued commercial periodicals offering Russian customers a wide range of services and supplies, along with information about American market, products and techniques. Russian experts opened their offices in New York City to study American industries and products. Mechanical engineer Nikolai S. Lavrov visited Ford factories in 1916 and became the most ardent propagandist for Fordism: in 1916—1926 he gave about 1500 public lectures in Ford production methods, and published a book.5 He also recommended Ford managers to built an assembly plant in Russia.6

6A “home Americanization” of immigrant workers took place in the United States. In 1914-1920 the Ford Motor Company conducted her famous policy of “assembly-line Americanization”, as the specific goal of profit-sharing program and “Five Dollar Day”.7 According to Ford Educational Statistics, 1160 Russians were on the home plant payroll in January 1917.8 Their performance was, in general, quite good (bank savings, habits, living conditions, etc.), although they lagged behind in purchasing land and homes, learning English, acquiring U.S. citizenship9:

7The Russians occupied the last position among learning English immigrants (63%) and naturalized immigrants (less than 2%). But other factors give enough evidence that a good part of them successfully Americanized themselves.

FROM THE END OF 1920S TO THE BEGINNING OF 1930S

8The end of 1920s and the beginning of 1930s can be called the “Americanization” period in the Soviet Russia’s economic history, because of unprecedented growth of interest to the Western and particularly American techniques and methods of production. Large-scale technological transfer followed that interest.

9The Soviet Russia needed American production efficiency, perhaps, more, than any other European power after World War I. The very death or survival of the Soviet System depended upon economic growth and higher productivity. Theoretically it was predicted by Karl Marx. Since the Government and Communist Party became the driving force of the national development, getting together the modem production facilities and the “superiority of socialism” had become the major political goal. Such an approach was purely Soviet and applied nowhere else.

10The Soviet leadership understood significance of American mass production for quick rising of national economy and military might in the vast land, devastated by the civil war and revolutionary expropriations. European industrial experience also seemed important, but the U.S. economic might and technological superiority were evident. To create modem industry and large-scale mechanized farming in shortest time possible, to produce cheaper and in big quantities, the Soviets needed American-type industrial giants. They seemed a panacea for all lacks of young Soviet economy.

11Urgent need for catching up Western industrial experience to preserve the Soviet power and to make challenge to the “hostile” West, was clearly and pragmatically expressed, first of all, by the founder of the Soviet State Vladimir I. Lenin. He connected “efficiency” with the American industrial capabilities. It explains growing interest to Taylorism and Fordism in the land of Bolsheviks. Feliks Dzerzhinsky, the first chief of the Soviet political police and the Chairman of the Supreme Council for the National Economy in 1924-1926 (until his death), stressed urgent necessity to learn and implement Ford methods. He repeatedly said, that the central task for Soviet manufacturing industries was the necessity of rationalization and organization. Otherwise the socialism would never win.10

12The Soviet leaders never said about “Americanization”. Some of them used the words Fordism, or Fordization, as a symbol for rationalization and efficiency in all economic sphere. But, emphasizing the necessity of advanced technologies, machinery, workers skills, rational organization of production process, condemning wastes and ignorance, they rejected the capitalistic components of Western economy — private property, profits, “speed-up” System, strict discipline in the shop. The Central Institute for Work Studies (TzIT), created in 1920, learned and recommended the most advanced forms of shop process organization, safety control, scientific management, and, in the same time, tried to develop a new, “socialist” type of work and worker.

13The Soviet theorists wanted to let people work in one or two shifts, cultivate “factory democracy” and direct participation of workers in managerial and engineering decisions (workmen committees could discuss and reject them), to have longer breaks for lunch, longer vacations, etc. Old engineers were called “bourgeois specialists”, and their performance and decisions had to be checked by vigilant workers and labor unions. The Soviet factory was not only a production unit, but a political organization as well. Incentives for work were both economical (wages) and political. A clear sense that every “conscious worker” was the contributor to building communism had to drive people to work better.

14Rush for technical progress was nation-wide, but the Soviets wanted to get from the West only modem “hardware” — machinery, production methods, factory layouts, quality and safety control, cleanness, workers’ skills, efficiency. But “software” — relations in the shop, political and ideological pressures, as well as State supplying and distribution System, taking major decisions in central administrative and planning bodies, remained purely Soviet. The Soviet model of “Americanization” was narrow and half-way policy, dictated by very nature of the Soviet System. It is better to call it a modernization, or a technical reconstruction with strong reliance upon American know-how, aimed at strengthening the Soviet model of socialism.

15In the 1920s and the first half of 1930s channels for American influence in form of learning and transfer of technologies and skills were as follows:

16Wide circulation of books by Henry Ford, Henry L. Gantt, Frederick W. Taylor, Frank Gilbreth, etc. They were translated into Russian and used for training courses in “scientific organization of work”.

17Re-emigration of a part of Russian industrial workers who left the mother country before the Revolution.

18Volunteer workers from the United States, mostly IWW union members11, or admirers of socialism, who wanted “to help Russian proletarians” to build the new economic and social order.

19Exhibitions of American machinery and products.

20In absence of diplomatic relations between the United States and the Soviet Union, the Amtorg Trading Corporation (Soviet-American quasi-commercial organization in New York City and Moscow) actively hired and contracted American companies and specialists.

21Numerous trips of Soviet “red directors”, engineers, technicians, workers to the US to study advanced production methods as observers and probationers.

22Technical assistance contracts with American firms, mostly made in 1928-1930 (General Electric, Ford Motor Company, Austin Company (Cleveland, Ohio), International Harvester, Autocar, Radio Corporation of America, Du Pont de Nemours, Albert Kahn Inc., etc.). Practically all important industries were build anew or reconstructed with foreign assistance and technical transfers.12

23The idea to reinforce social and political achievements by modernization of the whole economy became the backbone of so-called Stalinist revolution. In 1927-1928, when the First Five Years plan was adopted, the “Americanization” was put on practical ground. By 1932 about 1 500 modem industrial enterprises had to be launched with direct foreign technical assistance.

24In general, foreign technical assistance contracts stipulated the following:

25The contracted foreign firm was obliged to make a detailed construction and technological design of the enterprise, and full descriptions and specifications of all necessary equipment, tools and machinery.

26To supply all her know-how, patents and improvements.

27To send her best engineers and technicians to the Soviet Union to render direct supervision at the construction site and help to start the enterprise.

28To permit Soviet specialists, engineers and workers to study her methods directly, at shops and factories.

29Soviet partner was obliged to compensate foreign firm all her expenses connected with the project, including fees, per diem subsistence allowances, to provide suitable lodgings for her specialists, to pay a certain reward (which made the company’s profit), to supply workforce and materials, and finance all construction works. Soviet organizations also purchased all necessary equipment, tools and machinery, according to given specifications, at the contracted company or elsewhere.

30Those contracts were easily agreed in place of less efficient “concessions”. Some attempts to carry out big projects without foreign aid remained futile. Well-paid technical assistance was more attractive for foreign companies, which did not like risky investments. For the Soviets it seemed the only possible and quick form of transferring American and other Western abilities and know-how to the Soviet Union.

31For example, the Stalingrad tractor factory, largest in Europe and erected by 1930, used technical aid and various supplies of more than 80 American and several German firms. The plant was American in concept, design, construction, equipment, and operation. It was built in the United States, dismantled, shipped to the USSR and re-erected at Stalingrad under supervision of American engineers.13

32“If the things are so good, why all is going so poor?”. That proverb is quite applicable to the “Americanization” (used here as a synonym for “modernization) in the Soviet industry. In reality, it looked like extremely difficult, torturous process of adaptation of backward business and workers culture (workforce was mostly of peasant origin), to modem factory requirements. For example, the Moscow cars and trucks assembly factory, built in 1930, was, technologically, an exact copy of Ford assembly plant, with Ford tools, machinery and equipment. But in 1931 it could not work in full capacity (only 56% was employed) mostly because of inadequacy of the Soviet supply System.14

33Shortcomings were typical: lack of imported Ford parts because of hard currency shortage, high production costs, high labor costs (a part of workers did nothing, when the line stopped), high overhead costs, piece work, which was abolished at all American Ford factories, too big administrative staff, lack of houses for the factory people, poor quality of supplies from other Soviet factories. The Assembly factory number1, in Nizhny Novgorod, also of Ford type, met much the same problems. Numerous archival sources say about awful disorder in the shops, lack of car blueprints, absence of Ford specifications translated into Russian, lack of safety control (no masks, gloves, protective glasses, etc.), poor quality of work.15 Such enterprise looked like American one only from a distance.

34If Western firms sometimes met difficulties with selling goods, the Soviet enterprises met another bottleneck — poor supplies of energy, raw materials, parts, fuel, transportation and great shortage of engineers and skilled workers. “Americanization” run across mismanagement and misunderstanding, lack of mechanization, deplorable shop and living conditions. But urgent need for large-scale production was a major political task, which had to be realized by coercive means, at any rate, despite inadequate economic, managerial, social, cultural conditions. It created unusual tensions and enormous challenges on both sides.

AT THE TURNING POINT OF SOVIET INDUSTRIALIZATION

35At the turning point of Soviet industrialization (the end of the 1920s and the beginning ot the 1930s) there were both collaboration and struggle between two business cultures — the American and the growing Soviet one. The latter presented a chaotic mixture of mismanagement and enthusiasm, of learning by doing and shackles of antiquated methods. Petty economy got on with enormous losses; almost religious belief in the Communist Party’s wisdom — with hard manual work, including wide employment of female laborers (the Soviet Constitutions declared equal rights of men and women); awful bungling got along together with irresistible sense of superiority of the Soviet System.

36Rush, busde, confusion, incompetence, lack of coordination between various Soviet departments resulted in bungling, which caused tremendous losses. As long as different organizations were responsible for purchasing American tractors, carrying them to the Soviet ports, maintenance and repairing, the Fordsons waited there for months in an open air, under rain and snow. Or they were carried to the places of destination without spare parts, which went either separately, or were not delivered at all. A simple idea — to build spare parts depots in Soviet sea ports instead of ordering them every week from the United States, and organize repairing works directly in the field, was prompted to the Soviets by Ford managers in 1926.16

37Much disorder took place on all big construction cites. One story is about building giant auto factory near the city of Nizhny Novgorod (“The Soviet Detroit”.) Its planned yearly output — 140 000 cars and trucks, was the largest in Europe. Its technological designer was the Ford Motor Company, construction designer — the Austin Company of Cleveland (architects, engineers and builders). The Austin advanced methods, which was a success in the United States — standardization and speed in designing and mounting17 seemed hardly possible to local Russian engineers and builders, and they opposed it. The Austin-Soviet cooperation was full of tension, conflicts and misunderstanding.

38However, Austin engineers weren’t discouraged and patiently taught Russians to work better. The Austin foreign works vice-president Harry Miter told to Soviet officials that local people gradually improved their work performance, although quality of their concrete works did not reach the American standards. Some of top Soviet engineers stressed the “decisive role” of the Austin specialists in the factory design, found their methods superior and strongly insisted to introduce them into Soviet practice.18 In the long run, American design and construction methods made breakthrough in the Soviet Union. What made the Austin specialists activities in Russia especially difficult?

39Incompatibility of American and Russian designing and construction methods.

40American building industry used ready standards and specifications for Steel frames, trusses, concrete and other building parts and materials.

41- Different economy drives. Russian architects and builders had almost no constructions standards and modem building materials. They used wood, bricks and, in small quantities, Steel frames and reinforced concrete. Soviet engineers carefully calculated each construction and considered such method economic and rational. American engineers and architects did not understand it. Many Russian engineers tried to change American projects according to their own tastes and experience.

42- Lack of mechanization. Most construction works including earth moving were done by primitive hand tools. Machines were used inefficiently, without proper care and maintenance.

43- Poor quality of labor. Most workers were seasonal, of peasant origin, who inherited traditional labor ethics. Many of them didn’t like hard and steady work to make money. They worked for mere subsistence — to earn daily eating and drinking, and no more. Russian builders were almost totally inexperienced in building modem plants.

44- Extreme crudity of living and working conditions. The Austin group enjoyed much better housing, than the Soviet personnel and workforce, but even American engineers suffered from severe cold in winter, lack of food, of office supplies, of typists and interpreters.

45- Inability to use American specialists effectively. Striking differences between American and Russian business practices left the Austin engineers without due administrative and supervision power. They had been involved, against their will, in quarrels and disputes between Soviet “trusts” and agencies responsible for various works at the construction site. Higher Russian officials and chief engineers appreciated the Austin methods and men. But local bureaucratic bosses often disregarded them and ignored their instructions.

46By the middle of the 1930s Russians roughly and superficially mastered mass production, modem technologies and huge constructions. Assembly lines, giant power stations, complex machinery and equipment, aircraft and radio sets, cars, buses and tractors became symbols of Soviet achievements.

47The Soviet “Americanization” of the 1920s and the 1930s had the following distinctive points:

48The process of technological transfer resulted in quite a superficial transfer of American industrial methods and techniques. Absence of American production System as a whole, acceptance and installation of its technical and technological components without due supply and distribution network, extreme rush and bungling led to making rather imperfect copies of modem enterprises and products. The gap between advanced technique and poorly trained, slack workforce, was evident. In the same time new Soviet forms of labor ethics and labor values appeared, especially among younger people. To answer new challenges — to master new machine tools, to drive truck, tractor of aircraft, to operate an excavator or crane was then the matter of pride and ambition in Soviet youth sub-culture.19

49The spirit of “socialist competition”, or struggle for leadership in work, had great moral incentive and, in many cases, was rewarded by medals, or souvenir gifts, or money. But too often a “breakthrough” in one operation wasn’t accompanied by respective advance in another. Literally, extra screws did not meet extra nuts, extra coal met no extra freight cars, etc.

50The tremendous technological transfer was successfully realized because of unprecedented, although temporary, openness of the USSR to Western know-how, careful study of Western economic and technical markets and opportunities, and mobilization of financial resources (hard currency).

51The Soviet official propaganda and newspapers praised, in most cases, American and European methods and men. News reporters, like Boris Agapov (For Industrialization newspaper), boldly criticized Soviet bunglers and bureaucrats.

52Some American businessmen thought that industrialization would make Soviet Russia more receptive to the industrial society values, like mass production and mass consumption. In one interview to The New York Times, June 23, 1929 Henry Ford said: “Transportation lies at the very basis of enlightenment. The Russian people are endowed with enterprise and ambition, and they should have as many automobiles as Americans in the course of their development”. Henry Ford and other liberal-minded businessmen thought quite logically, that great industrial works would benefit Russian people. They could not foresee what did the Stalinist model of development mean in reality.

53Tractors could help to rise crops, but the agricultural producers — peasants, were driven into collective farms and deprived of any private incentives to work. They became something like slaves or serfs on the lands converted into State property. Their most productive peasants, who performed like American farmers, had been deprived of their lots and homes and exiled to remote Northern areas or to Siberia. Cars and trucks, gazolene and service stations, were the State property, and could be used or rented by collective farms or other organizations. Numerous officials, chief executives, senior military officers, Communist party bosses were given the State cars and chauffeurs. Buses and taxi cabs also belonged to the State.

54Manufacturing sector was dominated by heavy industry. Mass consumption developed slightly. The new kind of workforce was created — thousands of exiles and convicts in concentration camps. They were also used for the construction of modem enterprises, railroads, etc.

55Taking into consideration extremely low starting point of production after the Revolution of 1917 and devastating civil war years, the progress was remarkable. But “Americanization”, as we may conventionally call those modernization efforts (left column), was delayed by counteracting factors (right column) in the whole: