The Economy of the OGPU, NKVD and MVD of the USSR, 1930-1953

The Scale, Structure and Trends of Development

By Oleg Khlevnyuk


            The amount of economic research that has been done on issues of forced labor in the USSR has been meager, and this becomes a problem for us at a time when we are attempting to outline the range of facilities that were used for this purpose. Historians focus most often on enterprises and construction projects that were managed directly by the OGPU, NKVD and MVD. But a certain portion of prisoners, special settlers, prisoners of war and others who were under the overall administration of the OGPU, NKVD and MVD were sent to work for other ministries as well. In addition, millions were sentenced to correctional labor, and in most cases they served the sentences at their place of employment (see chapter by Sokolov). Finally, there were various types of forced-labor institutions for individuals who were nominally free. One example was the so-called tyloopolchentsy (logistical guardsmen) during the 1930s[1]. Certainly we could continue to expand this list as we delve deeper and uncover additional  types and forms of forced labor in the Stalinist system. But it is hardly debatable that the nucleus and most significant part of the forced-labor economy was the economy controlled by the Soviet punitive bodies—the OGPU, NKVD and MVD. The development of this sector of the economy is the subject of this paper.

            Our time frame (1930-1953) covers the period in which the Stalinist version of the forced-labor economy took shape and proliferated. While prisoner labor was used on a fairly wide scale both in pre-revolutionary Russia and during the early post-revolutionary years, the fundamentally new system of the Gulag economy did not emerge until the end of the 1920s and beginning of the 1930s, as a result of the policy of the great industrial leap forward, forced collectivization and the mass repressions that accompanied them. The Gulag economy was typified by large-scale projects whose construction and operation required massive use of unskilled workers, as a rule, in regions that were hard to reach and had an extremely unfavorable climate and a lack of basic infrastructure. Relentless exploitation of prisoners in hard physical work, primarily in construction, mining and logging, was the essence of the Stalinist version of the forced-labor economy.

            Immediately following Stalin’s death in 1953, the Gulag economy began to be dismantled (if not completely, then at least substantially). On the one hand, a mass amnesty and subsequent rehabilitations significantly reduced the number of prisoners. On the other, many costly projects that were under construction by prisoners were scrapped, and the MVD itself lost a large portion of its production functions as it transferred most of its enterprises to economic ministries. While this process was erratic and was marked by a great deal of backsliding, the overall trend of dismantling the MVD economy in its Stalinist form continued. A gradual transition was under way from a system of camps that served as a source of unskilled workers to a system of correctional labor colonies that had their own production base. This stage of the evolution of the camp economy after Stalin’s death remains to be studied with care.

            This paper, based on the available literature[2] and mostly archives, will attempt to examine two key questions. First, to sketch a general picture of the development of the OGPU-NKVD-MVD economy and its quantitative parameters. Second, to outline several approaches to studying the important but extremely complex problem of the efficiency of the Gulag economy and the role of forced labor in the industrial development of the USSR

Origins, Terror and War

            To some degree we can say that the starting point of the Stalinist Gulag and its economy to the Politburo resolution of June 27, 1929, “On the Use of the Labor of Convicted Criminals.” To supplement the Solovetsky camp (see Joyce), which was the only one at the time, the resolution directed that a network of new camps be created in the country’s remote areas in order to colonize them and develop “natural resources by using prisoner labor”[3]. Initially the intention was to set up small camps—with a total capacity of up to 50,000 inmates. But the tremendous wave of terror associated with a radical turnaround in policy, so-called “dekulakization” and the forcible creation of collective farms substantially changed these initial plans. Thousands of peasants were arrested and exiled in a few months. At the same time that so-called special settlements for “kulaks” were being established, there was a sharp increase in the number of inmates in newly created camps—almost 180,000 as of January 1, 1930, which was several times more than the limits that had been set just six months earlier.

            The OGPU leadership now faced the problem of making economic use of these several hundred thousand inmates and special settlers. Initially there were no coherent plans in this regard. Exiled peasants were turned over to work at other ministries’ enterprises, mostly for logging. Camp inmates were used for various construction projects and in the timber industry. In many cases camps entered into their own agreements with various enterprises and supplied them with manpower.

            The development of the OGPU economy was strongly influenced by the decision to build the White Sea-Baltic Canal (see chapter by Morukov). Construction of this transportation system, which started in the second half of 1930, was completed in the record time of two years. At certain times more than 100,000 prisoners were being used in the construction. It was the first time the camp economy demonstrated its “advantages” in practice: rapid deployment of large worker contingents at a needed site and the capacity to exploit prisoners in any conditions, regardless of casualties. Methods of organizing the Gulag’s major economic projects were refined in the course of White Sea-Baltic Canal construction, and OGPU leadership personnel gained experience. After the White Sea-Baltic Canal project, the OGPU began to establish other major economic divisions. On November 11, 1931, the Politburo adopted a decision to form a special trust, which was later named Dalstroi (Far Northern Construction), “to speed up the development of gold mining in the upper reaches of the Kolyma[4]. For more on Dal’stroi, see the chapter by Nordlander.  On September 30, 1932, the Politburo adopted a decision to turn over to the OGPU the construction of a canal linking the Volga with the Moskva River, and on October 23, construction of the Baikal-Amur Railroad in the Far East (BAM)[5]. Also in October 1932, the OGPU formed the Ukhta-Pechora Trust in order to organize coal and oil production and develop other resources in the Pechora Basin[6].

            These decisions shaped the structure of the Gulag’s economy, which existed and developed right up until the mid-1950s. The nucleus of this system was large construction projects and mining complexes that required massive use of unskilled labor in extreme conditions. By the beginning of 1935 more than 150,000 camp inmates were building the BAM, and 196,000 were working on the Moskva-Volga canal. The White Sea-Baltic projectthe system of transport and industrial enterprises concentrated in the Karelia region (see chapter by Joyce)—employed 71,000 prisoners. A total of 21,000 inmates from the Ukhta-Pechora camp were extracting oil and coal. The Far Eastern camps (60,000 inmates) were building railroads, a shipyard in Komsomolsk-on-Amur, mining coal, and so on. The 63,000 inmates from the Siberian camp were building railroads and carrying out projects for metallurgical and other enterprises. At the Svir camp, 43,000 inmates were procuring lumber and firewood for Leningrad, 35,000 inmates of the Temnikovo camp were performing similar jobs for Moscow. The Karaganda and Central Asian camps (about 26,000 inmates each) specialized in agriculture, but they also supported industrial enterprises and construction projects[7]. In the mid-1930s the Dalstroi trust (36,000 inmates in January 1935) was rapidly building up the mining of gold. In the first six years of operation (1928-1933) 1,937 kg of gold was obtained on the Kolyma, whereas in 1934 a quantum leap occurred. During the 1934-1936 period Dalstroi produced more than 53 tons of gold, and in 1937, 51.5 tons (for more, see Nordlander).[8]

            The situation on the Kolyma, on the whole, reflected the general state of the NKVD economy in the mid-1930s. After an extremely severe crisis in 1932-1933, marked by mass famine and mortality in the Gulag (as well as throughout the country), the system stabilized. While prisoner population growth was insignificant, there was an increase in production and in major projects carried out by camps. In June 1935 the Gulag was assigned the priority construction of the Norilsk Nickel Integrated Plant (see Chapter by Ertz). The NKVD also used substantial capital investments in carrying out construction projects for the Committee on Reserves, such as warehouses for storage of reserve state stocks of foodstuffs and industrial goods.

            The relatively successful development of the forced-labor economy was interrupted by the Great Terror—the mass repressions of 1937-1938. Between January 1, 1937, and January 1, 1939, the population of camps and colonies rose from 1.2 million to nearly 1.7 million.  But in spite of the formidable increase in the prisoner population, the Gulag economy was going through a severe crisis. The NKVD leadership, preoccupied with carrying out the mass repressions, was not able to focus on economic problems. Enterprises under NKVD authority were disorganized by the arrests of their directors (see, for example, the chapter by Ertz), by mass executions and by the sharp increase in the mortality rate and the physical exhaustion of camp inmates. The plans for capital construction and industrial production were not being fulfilled.

            The negative impact of the Great Terror on the Gulag showed that the political motives for the Terror took absolute priority over economic ones. The critical condition of the camps and the impossibility of making economic use of hundreds of thousands of additional prisoners were an important reason for the unprecedented number of death sentences—between August 1937 and November 1938, according to official data, almost 700,000 people were executed[9]. A significant portion of them, a list of those executed shows[10], were able-bodied men, highly qualified specialists and workers, who were constantly in short supply at NKVD projects. The main purpose of the Great Terror was declared at the very outset to be the physical annihilation of “enemies” rather than their use as “cheap” labor.

            The NKVD economy stabilized somewhat and then grew between 1939 and early 1941 as the Terror abated. This economic growth was achieved through the “utilization of internal reserves”—intensified exploitation of prisoners, and some adjustments in the management of camps. To this end, the new USSR people’s commissar of internal affairs, Lavrenty Beria, carried out administrative “reforms” of a sort in the spring and summer of 1939. Their nucleus was to eliminate so-called “work-day credits.” This system provided for reducing the convict’s sentence by a certain proportion of the time worked in production. Its elimination allowed the worker contingents to stabilize, but brought about the destruction of the last quasi-economic incentives in the NKVD economy. The elimination of “credits,” which had been the most effective way of motivating prisoner labor, was accompanied by tougher repressions against the “disorganizers” of camp production (up to and including execution)[11].

            As World War II approached, the Soviet government feverishly and hurriedly adopted numerous resolutions on the construction of military enterprises and facilities. A large portion of these plans was assigned to the NKVD. The most massive effort during this period was the railroad construction in the Far East and the northern part of the European USSR, NKVD hydraulic-engineering projects accounted for the second-largest volume: canals (specifically, the Volga-Baltic and Northern Dvina waterways, which linked the Baltic Sea and the White Sea with the Caspian), hydroelectric stations and ports. The NKVD’s nonferrous metallurgy production surged sharply during the prewar years: there were increases in the production of gold, nickel (Norilsk integrated plant and the Severonikel [Northern Nickel] integrated plant in Murmansk Province), tin and copper (Dzhezkazgan integrated plant). The NKVD played a substantial role in the program to increase aluminum and magnesium production, adopted in October 1940.

            Prisoners set up a new oil installation in the European North and built hydrolysis, sulfite-liquor and aircraft plants, roads and many other facilities. In 1940 the NKVD’s capital investments amounted to 14 percent of total centralized capital investments[12]. An intensive construction plan was approved for 1941 as well. The transfer of new industrial enterprises and construction projects to the NKVD continued right up to the German invasion in June 1941. The most significant NKVD assignment, dating to March 24, 1941, was to build and renovate 251 airfields for the People’s Commissariat of Defense in 1941. To carry out this assignment, the NKVD had to allocate 400,000 prisoners, and the People’s Commissariat of Defense had to form 100 construction battalions of 1,000 men each.

            While many NKVD assignments during the prewar period were already of value for military mobilization, the outbreak of war caused substantial adjustments in its economic activities. The development of the NKVD economy during the war was influenced by several important factors. There were quantitative and qualitative changes in the worker contingents managed by the NKVD. Because some camps and colonies had to be evacuated and conditions in the Gulag deteriorated in 1941, 420,000 inmates were given early releases. In 1942-1943 157,000 inmates who had been convicted of minor offenses were given early releases and turned over to the army[13]. The mortality rate in the Gulag during the war was extremely high. From 1941 through 1945, according to ministry statistics, 1,005,000 inmates died in camps and colonies[14]. As a result, despite an influx of new inmates, the total number of inmates declined considerably. Between July 1, 1941, and February 11, 1945, for example, the population in the camps and colonies dropped from 2.3 million to 1.4 million. Moreover, a high percentage of prisoners were sick and exhausted. Even according to official data, the share of camp inmates working in production declined between 1942 and 1944 to 65-70 percent, and the percentage of sick inmates was about 20 percent[15]. The prisoner shortage was partially offset by the so-called “mobilized contingents”—400,000 Soviet citizens with ethnic backgrounds from countries that were at war with the USSR (Germans, Finns, Romanians). Some 220,000 of them were sent to NKVD economic facilities, while the rest were turned over to other ministries[16]. Some of the “mobilized” individuals were housed in camps on the same footing as prisoners. During the last period of the war, prisoners of war and contingents from screening and interrogation camps were increasingly used for forced labor.

            The limited number of able-bodied workers, along with such factors as the mass evacuation of many facilities and war-mobilization restructuring, had an impact on the scale and structure of the NKVD’s economic activities. Although the NKVD remained one of the most important construction agencies, its capital construction activity (at least in cost terms) declined significantly. At the same time there was a substantial change in the overall structure of capital investments. The share of railroad, road and especially hydraulic-engineering construction declined from the prewar period. Meanwhile there was an increase in the NKVD’s role of the people’s commissariat in the construction of enterprises for the steel industry and nonferrous metallurgy, the fuel industry and in airfield construction[17]. Military needs necessitated the conversion of many NKVD industrial enterprises to the production of ammunition, uniforms, and other war materials.[18]

The Postwar Years:  Stalin’s Death and Amnesty

            The reduced number of inmates during the war, the postwar amnesty and the release of various categories of prisoners who had been detained at NKVD facilities until the war ended, substantially reduced the capabilities of the NKVD economy. According to estimates by the NKVD itself, the total worker shortfall at its enterprises for the second half of 1945 was 750,000 men[19]. In addition, the NKVD leadership took a rather skeptical view in late 1945 and early 1946 of its economic prospects. This skepticism fully manifested itself when the NKVD apparatus drew up plan targets for the fourth Five-Year Plan (1946-1950), which provided for a decrease in prisoner manpower and a commensurate reduction in the plans[20].

            An increase in repressions, however, actually caused the number of prisoners to rise after the war. As a result, the MVD not only could allocate a large number of prisoner workers to other ministries, but also continued to build up its own economic activities throughout the postwar period up to the death of Stalin.

            The MVD remained the largest construction ministry during this period. The structure of MVD capital projects that was typical of the NKVD during the prewar years was largely restored after the war. This was caused, on the one hand, by a halt to the construction of steel-industry enterprises and airfields that was being done during the war, and on the other hand, by the MVD’s active participation in the increased railroad and especially hydraulic-engineering construction. Beginning in 1950, prisoners built numerous hydraulic facilities, which official propaganda dubbed “Stalin’s construction projects of communism”: the Volga-Don, Volga-Baltic and Turkmen canals and the Kuibyshev and Stalingrad hydroelectric stations. Military-industrial facilities occupied a special position in the MVD economy, above all atomic-energy industry projects. The share of these so-called special (denoting “military”) construction projects in the total volume of capital construction by the USSR MVD during the decisive period of the atomic project’s implementation rose from 24.6 to 30.5 percent in 1947-1948, whereas in 1949 it was 21.3 percent[21].

            The amount of capital construction performed by the MVD roughly doubled from 1949 to 1952, reaching about 9 percent of total state capital investments in 1952[22]. In large measure this rapid pace was a result of the overall economic policy, which was marked during the last years of Stalin’s life by an acceleration of investment in heavy industry, primarily military sectors. The substantial jump in capital projects overheated the economy, immobilized resources in unfinished construction, exacerbated budget problems, and contributed to the further decline of agriculture and the social sector. The estimated cost of construction projects included in MVD plans for 1953 was 105 billion rubles, whereas only 13 billion rubles were allotted.[23]  The only solution was to scrap a number of projects and reduce capital investments.

            Shortly after Stalin’s death, on March 17, 1953, Beria, who had taken over the new Ministry of Internal Affairs, which had merged with the MGB [Ministry of State Security], sent the Presidium of the Central Committee a memorandum addressed to Georgy Malenkov. On the basis of this memorandum the government adopted a resolution the next day to transfer all construction and industrial enterprises from the MVD to economic ministries. (A decision to transfer the MVD’s agriculture was adopted in May.) At the same time, on Beria’s instructions, the MVD apparatus prepared proposals for a substantial cutback in the MVD construction program. Large construction projects with an estimated cost of 49 billion rubles were to be shut down (out of a total estimated cost for all of the MVD’s construction projects of 105 billion). Meanwhile, the plan for capital projects at other facilities for 1953 was reduced from 13.3 billion to about 10 billion rubles. On March 21, Beria sent the relevant draft resolution to the Council of Ministers, where it was approved with dispatch. A decision to issue a broad amnesty and release about 1 million of the 2.5million prisoners followed. The reorganization concluded with a Council of Ministers resolution on March 28, 1953, to transfer the camps and colonies (except for special camps) from the MVD to the USSR Ministry of Justice[24].

            The overextension of the capital-projects front was only one component (albeit an important one) of the 1953 decisions. The political component of the crisis consisted of unrest in the camps, rebellions, and increases in “camp banditry.” Beria’s arrest and execution constituted only a temporary interruption in the dismantling of the Gulag system, which came to a conclusive end in October of 1959 (see chapter by Sokolov). 

Incentives and Productivity

There is also evidence indicating that the inefficiency of forced labor was already obvious while Stalin was alive and that the leadership of the MVD and the government realized it.  The issue of incentives for prisoner labor was contentious. Despite the fact that there was a strict legislative ban on the use of “work-day credits,” which had been eliminated in 1939, the Gulag leadership claimed that credits were the most effective way of rewarding prisoner labor, and it sought after the war to reinstate credits for certain projects. As a result, by September 1950, “work-day credits” were in use at camps housing more than 27 percent of all prisoners[25] and the process was on the upswing. Although the proliferation of “credits” intensified the shortage of manpower (due to its effect on early releases), the Gulag leaders preferred this course, acknowledging, in effect, the inefficiency of administrative punitive measures.

            Readiness for gradual change in the Gulag was evidenced by the active support in the MVD for campaigns of early release of prisoners followed by their assignment to outside enterprises as free workers. In August 1950, the USSR minister of internal affairs issued an order for the early release of 8,000 prisoners and their assignment to build railroads[26]. In January 1951 Internal Affairs Minister Sergei Kruglov requested that Lavrenty Beria authorize the early release of 6,000 prisoners to be transferred as free workers to the construction of the Kuibyshev and Stalingrad hydroelectric stations. Kruglov based this request on the fact that these construction projects did not have enough skilled personnel who were able to operate machinery[27]. In February 1951 the Council of Ministers approved the MVD’s proposals for early release of a group of prisoners and their use “for the purpose of increasing permanent worker cadres” in the Pechora coal basin[28]. Consequently, the authorities increasingly preferred to deal with relatively free workers, who provided higher labor productivity and did not require a well-oiled system of guards and overseers. As a result of these measures, the proportion of free workers at MVD projects increased. In the first half of 1950, the total number of free personnel employed in the MVD’s production and construction activities (excluding the free members of camp management) was 662,000, or 38.9 percent of all those employed.[29]

            One reason for the gradual reorientation of the MVD economy toward skilled free workers was the change in the nature of the work at the ministry’s projects. For example, mechanized timber haulage under the NKVD-MVD made up 24 percent in 1939, 41 percent in 1947, and 54 percent in 1950. The share of mechanized timber cutting (with power saws) rose from 20 to 42 percent[30]. The number of excavators at NKVD-MVD construction projects was 158 at the beginning of 1940, and 955 at the end of 1952.[31]  The mechanization of earth-moving operations increased between 1946 and 1952 from 52 to 88 percent[32].

            With a view to raising the labor productivity of prisoners, the MVD leadership also sought, starting at the end of 1940, to convert certain camps to a wage system, thereby violating one of the key principles of the forced-labor economy—the absence of remuneration. On March 13, 1950, yielding to the MVD’s persistent demands, the government adopted a resolution to introduce wages for prisoners at all correctional-labor camps and colonies, except special camps, which housed “especially dangerous” common and political criminals[33]. Soon thereafter, wages were even introduced at special camps.

            Economic expediency made it necessary to break the strict rules of prisoner confinement. The practice of so-called “raskonvoirovaniye” [removing escorts]—the release of prisoners from being watched by guards and relatively free movement outside camp zones—became widespread. Given the general shortage of guards, camp administrators either sought official permission for raskonvoirovaniye or introduced it without prior permission but with the center’s tacit acquiescence.

            These and similar measures pointed to a postwar trend to transform prisoners into partly free employees—a kind of conversion of slaves to the category of serfs. Further development of this process inevitably had to result in a fundamental reorganization of the Gulag, especially since the MVD economy faced mounting problems on the eve of Stalin’s death, despite the above-mentioned attempts at limited “reforms.” The share of prisoners who were being used in production was declining. Labor productivity was falling (26 to 28 percent of the prisoners employed in piecework failed to meet production targets in 1951-1952)[34]. These problems made it easier to begin the dismantling of the Gulag in the spring of 1953.

Was Forced Labor Necessary?

            The dismantling of the Stalinist forced-labor economy immediately after the dictator’s death provides some proof of its inexpediency and inefficiency, but does not answer the question about its real role in implementing Soviet industrialization. In terms of the moral and legal criteria applied in civilized societies, the Stalinist terror and its derivative, the forced-labor economy, can only be categorized as crimes. In the context of the overall trends of world development, which demonstrate the indisputable advantages of free labor, no forced-labor economy can be deemed efficient. The “historical” approach sets aside legal and moral issues and evaluates the Gulag economy in the context of the realities of its time.

            The key reality of the period 1930-1953 was Soviet industrialization, which had the objective of catching up to more advanced neighbors. “Catching up” required the state to use coercive methods. A number of historians accordingly regard the Gulag economy as a necessary means of accelerating industrialization. Wide-scale use of “conventional” coercion and force (for example, of emergency laws governing labor activities) would have been insufficient. Hence, a forceful leader, such as Stalin, would be expected to create a large sector of absolutely forced labor, which by many parameters was slave labor. While forced began as a result of political factors (mass political repressions), it later mostly followed an economic logic of development, and, when it required new workers, it provoked further repressions itself. In the opinion of such historians, the forced-labor economy performed several functions, which could not have been achieved by “conventional” methods of coercion and labor incentives.  First, it developed remote regions where attracting free workers required substantial resources. Second, it supplied extremely mobile manpower, which was easily transferred from project to project in accordance with the state’s needs. Third, this manpower could be exploited virtually without restriction, to the point of total exhaustion. Fourth, the threat of the Gulag served to “discipline” “free” workers. Fifth, the existence of a substantial population of prisoners and “special contingents” relieved pressure on the meager consumer-goods market, and made it easier to solve the most serious social problems, such as housing. The use of prisoners was characterized as “a type of labor mobilization that was fully in line with the stage of extensive industrialization that ended in the 1950s”[35].

Such arguments about the “historical necessity” of the Gulag are based upon misconceptions.  First, this view was largely based on the notion that there were an extremely large number of prisoners in the country. One researcher concluded, for example, that in 1940 and 1950 prisoners made up about 23 percent of all the workers in the nonagrarian sector[36]. The archives, however, provide much lower figures for the camp population. For example, in 1950 the camps, colonies and prisons held an average of about 2.7 million inmates, while about 2.5 million were probably in special exile[37]. A significant portion of these 5.2 million, however, were disabled. On January 1, 1950, about 2 million of the 2.5 million prisoners in the camps and colonies were able-bodied[38], and the 2.5 million special settlers included family members. Since only a portion of the able-bodied were employed in industry and construction, the total number of prisoners and “special contingents” sent to industry, construction and transportation in 1950 was probably not much higher than 2 million. Meanwhile, the total number of persons employed in these sectors in 1950 was 28 million, not including prisoners.[39]  Forced labor therefore accounted for seven percent of total labor devoted to the industrialization effort at its peak.

In order to comprehend the Gulag’s role in Soviet industrialization, we must, above all, ask how the prisoners were employed. At first glance, the Gulag clearly played a significant role in nonferrous metals (gold, platinum, nickel, etc.) and logging. But these industries employed only a small portion of the “special contingents”, and did not constitute large shares of output.  Forced labor was of unique importance in large labor-intensive projects, such as prisoner-built production complexes, railroads, and canals.  Hence, the Gulag’s contribution should be judged on  the basis of these large-scale projects.

The Stalinist type of industrialization was extremely cost-intensive and inefficient. Huge investments were allocated to projects that eventually were either left unfinished or proved economically useless. Why this phenomenon was so widespread requires separate study. But one of the reasons was obviously that the state had available large contingents of the Gulag’s “cheap” and mobile manpower, which encouraged economic voluntarism and made it possible to undertake expensive but economically dubious projects without particular difficulty or hesitation.

The first such project was the first significant OGPU project—the construction of the White Sea-Baltic Canal (discussed by Morukov). It was built because Stalin was convinced of its military-strategic and economic importance, despite objections not only from the “rightist” head of the government, Aleksei Rykov, but also from his loyal associate, Vyacheslav Molotov.[40]  Second, the OGPU had a large number of prisoners available from the mass operations against the “kulaks.” The use of 140,000 prisoners for canal construction removed the critical problem of labor utilization of the camps’ growing population and opened up enormous prospects for economic activities for the OGPU. The canal’s transport capabilities were limited. The start-up of the White Sea Canal and then the Moskva-Volga Canal were of limited importance, since two old connections—the Mariinsk and Moskva River systems—were not modernized[41]. In 1940 the canal was used to 44 percent of capacity, and in 1950, 20 percent[42] and “remained as an expensive monument to the mismanagement of the Soviet system.” “The canal’s value to the region’s economic development, as soon became clear, was minor. And strategically, the waterway’s value was negligible”[43].

There are similar skeptical conclusions concerning another major OGPU-NKVD project—the Baikal-Amur Mainline (BAM). At the beginning of 1938, BAM camp housed more than 200,000 prisoners. Despite the considerable material and manpower resources invested in the railroad and the numerous casualties among prisoners, the results were meager. The individual sections were actually put into operation were of no substantial importance. The construction of many lines was suspended[44]. “On the whole, the prewar phase of construction of the BAM, despite the large amount of work performed by 300,000 prisoners, ended as yet another unfinished project”[45].

The BAM (and railroad construction as a whole) were a typical example of the ruinous Stalinist system of forced-labor mobilization. The disorganized construction of many railroads without the necessary feasibility study resulted in the immobilization of enormous resources. By 1938, 5,000 km of track (excluding railroads that had been built but not used or only partially used because they weren’t needed) was suspended. The total increase in the rail system from 1933 through 1939 was only 4,500 km[46]. A substantial portion of “dead roads” were built by prisoners. Similar examples during the postwar period are well known; the most striking one being the unfinished Chum-Salekhard-Igarka railroad, whose construction in the Arctic cost the lives of many prisoners, not to mention the pointlessly expended, huge material resources valued at 3.3 billion rubles[47].

A similar fate befell other Gulag projects. In September 1940, the construction of the Kuibyshev hydroelectric system was frozen after three years construction due to “a lack of free manpower” to perform work at the Volga-Baltic and Northern Dvina water system.[48]  By the time construction at the Kuibyshev project was suspended, a huge sum—126.7 million rubles[49]—had already been spent, and 30,000 to 40,000 prisoners had been concentrated at the Samara camp, supporting the project[50]. After Stalin’s death, the government halted the construction of various plants and hydraulic-engineering installations, where work costing rought the annual capital investment budget of the MVD had already been done.[51]

There are no separate studies of the unfinished or useless construction by the OGPU, NKVD and MVD. These individual examples above at least show that the camp economy’s performance cannot be evaluated on the basis of the amount of capital expenditures. Many prisoner-built projects were indeed very difficult or almost impossible to build with free workers, but was there a need to build these projects altogether? The availability of large prisoner contingents made it relatively easy to adopt plans for major projects without serious economic or engineering calculations, scrap them, and transfer the prisoners to new ones.

Unfinished and useless construction was only one example of the negative impact of the Gulag economy on the country’s development. The extreme exploitation of prisoners, even if economically profitable from a short-term perspective, caused enormous damage in the long run. The untimely death of hundreds of thousands of people in the Gulag and the senseless waste at their labor and talents, such as the use of skilled workers for the wrong purpose, and in heavy physical work, a common complaint in NKVD and MVD documents substantially weakened the country’s human capital. In addition, tens of thousands of able-bodied persons guarding prisoners were not engaged in production.

Such endemic features of the Soviet economy as excessive bureaucratization and weak internal incentives reached their most extreme limits in the Gulag economy. Heightened secrecy and isolation promoted the wide proliferation at Gulag projects of padded statistics and false reports, especially since many NKVD-MVD construction projects were funded without designs and estimates, but according to actual expenditures. The reminiscences of former prisoners are full of testimony about how tenaciously and resourcefully people at the camps “pulled a tufta.” This term, which came into universal use in the Gulag, referred to the wide use of padded statistics, which not only prisoners (whose lives were often saved by tufta) but also their bosses had a stake in preserving.

The mining industry of the NKVD and MVD was based on predatory exploitation of resources. With enormous territories and a steady flow of manpower at their disposal, the heads of NKVD enterprises preferred not to set up permanent facilities that required substantial investment, but to obtain maximum short-term yields from the most resource-rich sites.  Short-term exploitation was the reason for Dalstroi’s “economic miracle” in the second half of the 1930s and the nominal “cheapness” of Kolyma gold. Whereas the average gold content between 1935 and 1938 (thanks to the exploitation of the richest deposits) was 19 to 27 grams per cubic meter of sands washed, in 1946-1947 it had fallen to 7 grams. Accordingly, the amounts mined dropped sharply as well.  Despite its secrecy and isolation, the forced-labor economy had a corrupting effect on the “free” sector of the economy. Economic ministries preferred to solve problems by issuing “requisitions” for prisoners, which slowed down the development of the labor market and the social infrastructure and reduced pressure for technological progress. Prisoner labor was becoming a kind of narcotic for the economy.

The NKVD and the MVD became one of the largest economic ministries between the 1930s and the 1950s because of the absolute priority of politics over economics. The mass political repressions and the extremely brutal system of criminal penalties, which served as sources for expanding the forced-labor economy, aimed at fulfilling political objectives.  Whether the use of the resulting forced labor was a “losing operation,” only a country rich in manpower and natural resources could have weathered the physical annihilation of hundreds of thousands of able-bodied citizens, the ruin of millions of peasant farms, and the maintenance of an enormous punitive apparatus. The state hoped to use the Gulag economy to minimize these enormous material losses.  In practice, the exploitation of prisoners ultimately increased those losses. It promoted economic voluntarism and the mindless inflation of capital-construction plans, including ruinous (and in a number of cases useless) projects. When more detailed studies than those available today are done, they will most likely show that the role of forced labor in building up actual industrial capacity was far smaller, than the formal economic indicators of the NKVD and MVD show.



[1] Krasilnikov, S. A. and D. D. Minenkov. “Tylovoye opolcheniye kak element sistemy prinuditelnogo truda: etap stanovleniya (1930-1933 gg.) [The Logistical Guard as an Element of the Forced-Labor System: The Formative Stage (1930-1933),” in Gumanitarnyye nauki v Sibiri [Social Sciences in Siberia], 2001, No. 2, pp. 41-46.

[2] Dallin, D. J., and B. P. Nicolaevsky. Forced Labor in Soviet Russia. New Haven, 1947; Jasny, N. “Labour and Output in Soviet Concentration Camps,” in The Journal of Political Economy, October 1951; Swianiewicz, S. Forced Labour and Economic Development. An Enquiry into the Experience of Soviet Industrialization. London, 1965; Yelantseva, O. P. Obrechonnaya doroga. BAM: 1932-1941 [Doomed Road. The BAM: 1932-1941]. Vladivostok, 1994; Kraveri, M. and O. Khlevnyuk. “Krizis ekonomiki MVD (konets 1940-x—1950-e gody) [The Crisis of the MVD Economy (From the Late 1940s to the 1950s)],” in Cahiers du Monde russe, XXXVI (1-2), 1995, pp. 179-190); Ekonomika Gulaga i yeyo rol v razvitii strany. 1930-e gody. Sbornik dokumentov [The Gulag Economy and Its Role in the Country’s Development. The 1930s. An Anthology of Documents]. Compiled by M. I. Khlusov. Moscow, 1998; Gvozdkova, L. I. (ed.). Prinuditelny trud. Ispravitelno-trudovyye lagerya v Kuzbasse (30-50-e gody) [Forced Labor. Correctional-Labor Camps in the Kuznetsk Basin]. Vols., 1-2, Kemerovo, 1994; Shirikov, A. I. Dalstroi: predystoriya i pervoye desyatiletiye [Dalstroi: The Background and the First Decade]. Magadan, 2000; GULAG (Glavnoye upravleniye lagerei). 1917-1960 gg. [The GULAG (The Main Administration of Camps). 1917-1960]. Compiled by A. I. Kokurin and N. V. Petrov. Moscow, 2000; and others.

[3] RGASPI, f. 17, op. 3, d. 746, ll. 2, 11.

[4] RGASPI, f. 17, op. 162, d. 11, l. 57.

[5] RGASPI, f. 17, op. 3, d. 902, l. 8; d. 904, ll. 6, 46-52.

[6] RGASPI, f. 17, op. 3, d. 904, l. 10; d. 906, ll. 40-44.

[7] GA RF, f. R-5446, op. 16a, d. 1310, ll. 13-14

[8] GA RF, f. R. 5446, op. 17, d. 278, l. 75; op. 20a, d. 949 b, l. 2; d. 984, l. 2; Shirokov, A. I. Dalstroi, p. 103

[9] GULAG (Glavnoye upravleniye lagerei), 1917-1960 gg., pp. 433.

[10] See numerous memorial books and martyrologies issued in recent years in almost every region of Russia, as well as: Ilic, M. “The Great Terror in Leningrad: A Quantitative Analysis,” in Europe-Asia Studies, Vol. 52, No. 8, 2000, pp. 1515-1534.

[11] GA RF, f. R-5446, op. 23a, d. 76, ll. 6-9; d. 121, ll. 6-9; f. R-9414, op. 1, d. 1152, ll. 2-4.

[12] GA RF, f. R-5446, op. 25a, d. 7181, ll. 35-36.

[13] GULAG (Glavnoye upravleniye lagerei), 1917-1960 gg., pp. 275.

[14] Kokurin, A., and Yu. Morukov. “GULAG: struktura i kadry [The GULAG: Structure and Cadres],” in Svobodnaya mysl, 2000, No. 10, p. 118.

[15] GA RF, f. R-9414, op. 1, d. 330, ll. 56-61.

[16] GULAG (Glavnoye upravleniye lagerei), 1917-1960 gg., pp. 281.

[17] Calculation based on: GA RF, f. R-5446, op. 50a, d. 3888, ll. 83-85.

[18] GULAG (Glavnoye upravleniye lagerei), 1917-1960 gg., pp. 289-294.

[19] GA RF, f. R-9401, op. 1, d. 2204, l. 118.

[20] GA RF, f. R-9401, op. 1, d. 2209, ll. 106-109; f. R-5446, op. 48a, d. 2465, ll. 62-66.

[21] Calculation based on: GA RF, f. R-5446, op. 50a, d. 3888, ll. 83-85; f. R-9401, op. 2, d. 234, l. 15; f. R-5446, op. 80a, d. 7595, ll.8-9; f. R-9414, op. 1, d. 326, l. 30.

[22] RGAE, f. 1562, op. 33, d. 250, ll. 64-65; op. 41, d. 52, ll. 67, 94-95.

[23] GULAG (Glavnoye upravleniye lagerei), 1917-1960 gg., pp. 788-789.

[24] GULAG (Glavnoye upravleniye lagerei), 1917-1960 gg., pp. 786-793.

[25] GA RF, f. R-5446, op. 80, d. 7561, ll. 40-43.

[26] GA RF, f. R-9414, op. 1, d. 1363, l. 10.

[27] GA RF, f. R-5446, op. 86a, d. 7384, ll. 26-27.

[28] GA RF, f. R-5446, op. 81b, d. 6557, ll. 83-84, 124.

[29] GA RF, f. R-9401, op. 1, d. 3586, ll. 61-62.

[30] GA RF, f. R-5446, op. 24a, d. 2940, ll. 2-3; op. 50a, d. 4111, l. 159; op. 81b, d. 6512, l. 118.

[31] GULAG (Glavnoye upravleniye lagerei), 1917-1960 gg., pp. 778; RGAE, f. 1562, op. 33, d. 1531, ll. 101-102.

[32] GA RF, f. R-9401, op. 1, d. 2641, l. 384; RGAE, f. 1562, op. 33, d. 1531, l. 100.

[33] GA RF, f. R-5446, op. 80a, d. 7641, ll. 51-54.

[34] GA RF, f. R-9401, op. 1, d. 3821, l. 190.

[35] Van der Linden, M. “Forced Labour and Non-Capitalist Industrialization: The Case of Stalinism (c. 1929-c. 1956),” in Brass. T., and M. Van der Linden (eds.), Free and Unfree Labour. The Debate Continues. Berne, 1997, pp. 351-362. This paper summarizes the basic points of the above view.

[36] Data from S. Rosenfield, quoted in the aforementioned paper by M. Van der Linden.

[37] Naseleniye Rossii v XX veke: Istoricheskiye ocherki [Russia’s Population in the 20th Century: Historical Essays]. Vol. 2, edited by Yu. A. Polyakov. Moscow, 2001, pp. 173, 181 (section author V. N. Zemskov).

[38] GA RF, f. R-9414, op. 1, d. 326, ll. 25, 30.

[39] Raymond Powell, “The Labor Force,” in Abram Bergson and Simon Kuznits (eds.), Economic Trends in the Soviet Union (Cambridge, Mass: 1963), pp. 77, 82.

[40] Pisma I. V. Stalina V. M. Molotovu. 1925-1936 gg. [Letters from J. V. Stalin to V. M. Molotov]. Compiled by L. P. Koshelyov et al. Moscow, 1995, pp. 214-215.

[41] Orlov, B. P. Razvitiye transporta SSSR. 1917-1962 [The Development of Transportation in the USSR. 1917-1962]. Moscow, 1963, pp. 198-200.

[42] GA RF, f. R-5446, op. 81b, d. 6645, ll. 51-53

[43] Kilin, Yu. Kareliya v politike sovetskogo gosudarstva. 1920-1941 gg. [Karelia in the Policies of the Soviet State]. Petrozavodsk, 1999, pp. 122-127.

[44] Yelantseva, O. P. “BAM: pervoye desyatiletiye,” in Otechestvennaya istoriya, 1994, No. 6, pp. 89-103.

[45] Granberg, A. G., and V. V. Kuleshov (eds.). Region BAM: kontseptsiya razvitiya na novom etape [The BAM Region: The Strategy for Development at a New Stage]. Novosibirsk, 1996, p. 9.

[46] Yelantseva, O. P. “BAM: pervoye desyatiletiye,” p. 102.

[47] GULAG (Glavnoye upravleniye lagerei), 1917-1960 gg., pp. 182-184.

[48] RGASPI, f. 17, op. 3, d. 1027, l. 75.

[49] GA RF, f. R-5446, op. 81b, d. 6691, l. 69.

[50] Smirnov, B. M. (ed.). Sistema ispravitelno-trudovykh lagerei v SSSR. 1923-1960. Spravochnik [The System of Correctional-Labor Camps in the USSR. 1923-1960. A Reference]. Moscow, 1998, pp. 370-371.

[51] GULAG (Glavnoye upravleniye lagerei), 1917-1960 gg., pp. 789.