The reforms yielded short-term gains (especially in labour productivity), but soon foundered on several major obstacles. First, despite the incentives for productivity (e.g. penalties for excessive production costs), it was the State Price Committee, not the market, that set prices and therefore determined costs, value, and ‘profitability’. Second, managers lacked the authority to discharge unproductive or redundant workers—a legacy of caution after events in Novocherkassk. Third, despite lip-service to technological innovation, ‘success’ meant fulfilling quarterly and annual production plans; that low time horizon effectively militated against long-range strategies and drove managers to focus on short-term results. Recentralization meant tighter control by the Moscow partocracy a major impediment to innovation and change. And despite the fanfare about ‘automation’ and ‘cybernetics’, the Soviet Union missed the computer revolution: the number of computers per capita in the United States was seventeen times higher and at least a full generation ahead. By the late 1960s the Soviet leadership abandoned the pretence of economic reform and settled into an unruffled commitment to the status quo.
As reform at home stalled, the regime intervened to suppress change elsewhere in the Soviet bloc—above all, the famous ‘Prague Spring’ of 1968. After the Czech Action Programme’ of April 1968 proclaimed the right of each nation to follow its ‘own separate road to socialism’, the country was engulfed by autonomous movements demanding not only economic efficiency, but fundamental changes in the social and political order. On 10 August the Communist Party itself drafted new party statutes to require secret balloting, set term limits, and permit intra-party factions. Although the party chief Alexander Dubček promised to stay in the Warsaw Pact (seeking to avoid Hungary’s provocative mistake in 1956), Soviet leaders found the experiment of ‘socialism with a human face’ too threatening and led a Warsaw Bloc invasion on 21 August to restore hardliners to power.
The regime also had to suppress dissent at home. It had grounds for concern: the KGB reported that 1,292 authors in 1965 had composed and disseminated 9,697 ‘anti-Soviet’ documents (mostly posters and leaflets). It identified about two-thirds of the authors—a motley array that included workers (206), schoolchildren (189), university students (36), state employees (169), pensioners (95), collective farmers (61), and even party members (111). Protest also became public for the first time in decades, as some two hundred dissidents held a demonstration on Pushkin Square, with one demonstrator bearing the sign, ‘Respect the Constitution’.
Although most dissenters were dealt with ‘prophylactically’ (a KGB euphemism for intimidation), the Kremlin leadership decided to send a clear message to dissidents. In February 1966 it staged the famous show trial of two dissident writers, Andrei Siniavskii and Iulii Daniel, who had published satirical works abroad and, of course, without official permission. The court predictably found them guilty of ‘anti-Soviet’ activity and meted out harsh sentences (seven years of hard labour for Siniavskii, five for Daniel). The KGB boasted that the trial not only evoked an outpouring of popular demands that the ‘slanderers’ be severely punished, but also that it had intimidated the intelligentsia. Simultaneously, authorities launched an attack on Alexander Nekrich’s historical monograph,
