A Laboratory of Economic Reform: Estonian Experiments with Agro-Industrial Associations in the Era of Late Socialism
- Peripheral Histories ISSN 2755-368X
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- 11 min read
Donald Morard
In 1965, the French Communist journal Démocratie Nouvelle, in its special issue on the “young, advanced republic” of Estonia, described the occupied Baltic country as a “laboratory” for the future of the Soviet economy. In an article titled “Un Domaine d’experimentation Economique” (“A space for economic experimentation”), Estonia was presented as an ideal space for the Soviet government to test new forms and methods of economic management to later be scaled up. This was due to a variety of factors, such as the republic’s small population and the “advanced” nature of Estonian industry. The article’s authors, Leonid Brutus and Ülo Ennuste from the Estonian Academy of Sciences, believed the republic was also chosen due to Estonia’s high agricultural output and, importantly, the expertise available in Estonian universities.[1] While Soviet Estonia’s status as an economic ‘laboratory’ was not actually imposed by Moscow, the metaphor captures how central authorities treated the republic as an ideal space for experimenting with new methods of management and planning.[2]
As Artemy Kalinovsky argues in Laboratory of Socialist Development: Cold War Politics and Decolonization in Soviet Tajikistan, union republics acted as key spaces where central authorities experimented with socialist economics. Tajikistan, for instance, was a space where socialist development not only constituted a decolonial project for Tajiks both by local elites and party officials in Moscow, but also provided a model to be replicated in states like Afghanistan. Such development allowed some space for local knowledge-producing elites to negotiate with the center, but only within certain limits so as not to undermine the Kremlin’s authority over the republic.[3]
Similarly, Estonia also operated as a laboratory, but one that was meant to be at the forefront of Soviet economic innovation. While Tajikistan was the poorest republic with its laboratory role meant to highlight how socialist development was an ideal model for other post-colonial spaces, Estonia was the wealthiest republic of the Soviet Union. This made it an ideal space for experimenting with novel ideas of complex economic management. For instance, the Soviet newspaper Ekonomicheskaia Gazeta echoes in a 1967 article the idea of Estonia being a laboratory space due to the republic’s favorable economic conditions. In the article, the director for the Estonian Ministry of Agriculture’s Economic Planning Administration, along with the Deputy Minister, stated that the relative wealth of the republic led to it being given the honor to be the first to experiment with new models of financing for state farms.[4]
Estonia, the other Baltic republics of Latvia and Lithuania, and the western regions of Ukraine annexed during the Second World War, were all a part of a “Soviet West” that fostered a distinct identity. First described in Western academic literature by Roman Szporluk in the 1975 edited volume The Influence of East Europe and the Soviet West on the USSR, the term “Soviet West” stresses that Western Ukraine and the Baltics developed differently than the rest of the USSR, primarily due to these regions’ late Sovietization. This was further compounded by the “Soviet West’s” greater contact with the West through diaspora connections and the need for the center to compromise with these areas out of fear of rebellion.[5] This idea that Estonia, in particular, was more Western was also shared by foreign journalists who visited the republic. In 1962, the New York Times published Theodore Shabad’s article on Soviet Estonia titled “'Bourgeois' Estonia: Visitor Finds Soviet Republic Retains Individuality and Western Atmosphere.” In the article, Shabad described how Estonia’s period of independence and contacts with Finland made it distinctly Western compared to the Russian parts of the Soviet Union.[6] Former Estonian president Toomas Hendrik Ilves also noted the Finnish connection during the late Soviet period, stressing that from the 1960s, access to Finnish television let Estonians know about Western political developments and popular American shows, notably Dallas.[7]
In 1953-1959, the Baltic republics experienced an overall period of increased autonomy, with the center allowing a greater role for local decision-making. However, the leadership of the three Baltic republics acted differently during this time. The relative Estonian autonomy lasted over an extended period from 1950 until 1978 under the leadership of Johannes Käbin, a Russian-Estonian who served as the First Secretary of the Estonian Communist Party (ECP)The Estonian party organization was not immune to the purges conducted against other republic-level party organizations that removed high-ranking officials from power. However, the fact that the ECP was purged in 1950 - earlier than other republic-level organizations - meant that figures like Käbin learned how to delicately maneuver for greater Estonian rights without angering Moscow. When compared to neighboring Latvia, whose local party pushed more aggressively for autonomy and was subsequently purged in 1959, Estonia sustained a relative degree of local agency for much longer, outlasting the 1950s period of “national communism.”[8] These less restrictive conditions allowed not only a space for the local reformers to experiment, but also attracted dissident-minded engineers, scientists, and intellectuals from across the Soviet Union to Estonia’s universities and research institutes.[9]
One example of Estonia serving as a laboratory were the experiments with district agro-industrial organizations. Known as raionnoe agrarno-promyshlennoe ob’’edinenie (RAPO) in Russian, district agro-industrial organizations combined farms, processing facilities, and other auxiliary enterprises in a particular district under centralized management. Estonia was not the first republic or region in the Soviet Union to experiment with RAPOs or all-republic agro-industrial complexes. Moldova implemented all-republic horizontal reforms in the early 1970s, while both Latvia and Georgia also experimented with RAPOs at around the same time as Estonia in the mid-1970s.[10] However, Estonia represented the most pioneering attempts at agro-industrial integration in the most advanced economy of the Soviet Union. Its greater access to scientific-technical knowledge through Finland and the relatively highly developed base of the Estonian economy made it a crucial lynchpin in the development of Soviet integrated agriculture. The First Secretary of Viljandi and later Pärnu District Committee Valter Udam, a key architect of this project, explained that it was inspired by his visits to Finland in the 1970s, along with reflections on the period of Estonian interwar independence, when farmer cooperatives played a key role in the rural economy. However, while these earlier forms of farmer cooperatives were based on private property, RAPOs were based on the kolkhoz and sovkhoz systems. Udam states that his experiment was possible since leaders like Käbin “could defend the interests of Estonia.”[11] The clearest examples were the aforementioned Viljandi and Pärnu RAPOs.
Established under Udam’s supervision in 1975, the Viljandi RAPO pursued the expressed goal of improving the overall efficiency and labor productivity of agriculture in the region for the benefit of the working people. All kolkhozes, sovkhozes, processing facilities, and agro-construction offices fell under the management of the Viljandi RAPO, which elected a council that distributed funds to member enterprises within the organization. These funds, collected from all enterprises within the association, were used for production development, social services, material incentives for workers, and mutual assistance.[12] In 1978, the Estonian party newspaper, Sovetskaya Estonia, stated that chairmen of kolkhozes and enterprise managers sat on this council as equals, working to resolve issues not only related to production within the Viljandi district. Enterprises also shared financial resources amongst each other to “improve everyday and cultural life in the countryside.”[13]
Following the success of Viljandi RAPO, Valter Udam was tasked with repeating it in Pärnu in 1979. In Pärnu, the role of the RAPO expanded beyond purely coordinating production and cultural activities. For example, in 1981, the association trained farmers in the efficient use of mechanical equipment.[14] These efforts apparently paid off in the eyes of the local party, with the Central Committee of the ECP highlighting in 1983 how Pärnu should serve as a model for other RAPOs in managing labor and interactions with labor unions.[15] Both the Viljandi and Pärnu models were further praised by ECP officials in 1984 as useful examples of organizing rural party activity in non-production tasks such as building housing and conducting “ideological and educational work in the conditions of the RAPO.”[16]
By the 1980s, the success of the Estonian RAPO experiments was celebrated by the all-union press. An article in the state newspaper Izvestiia in 1981 focused on the use of labor in Estonia, highlighting how the Viljandi and Parnu RAPOs saw more efficient use of resources and increased labor productivity.[17] An April 1982 article published in the all-union party newspaper Pravda stated that the “Estonian variant” of the RAPO system, where enterprises pooled financial resources together, meant that more profitable enterprises could help support less successful firms. While more profitable firms contributed more to the common fund, they also saw a large return in the shared income and were able to reinvest excess profit either back into their enterprise or in social construction like housing.[18]
It is important to stress that the metaphor of “laboratory” implies that there were limits as to what could be done and that Estonia was not simply a bastion of economic or political liberty within the oppressive Soviet system. Like an actual scientific laboratory, there were limitations in both the space available and the rules of experimentation. Estonia’s status as a space for innovation was restrained in 1967, when the Central Committee of the Communist Party of the Soviet Union issued “On the Work of the Central Committee of the Estonian Communist Party with Leading Cadres.” The resolution accused the ECP of not doing enough to ensure proper values were being taught to the republic’s intelligentsia and instructed the local party organization to ensure that Moscow maintained ideological and political control. This was to be achieved by the party re-emphasizing the importance of ideological education for potential new cadres. Nonetheless, Estonians continued to play an essential role in the local administration to better translate the center’s policies to local conditions.[19]
Although this was a warning rather than a purge, it signaled the center's concern with maintaining ideological control while still allowing republic-level power networks to govern the republics. Regarding the RAPO experiments, the all-union State Planning Committee, State Committee for Supply, and Ministry of Finance attacked Udam’s plan for the complexes to be able to finance themselves from their own profits, rather than asking the planners and state banks for resources. Party loyalists from the aforementioned economic committees and ministries perceived this as undermining key pillars of the Soviet economy; Udam later said this was when the “Soviet straitjacket tightened.”[20]
When implemented on an all-union scale, the concepts of agro-industrial integration and the RAPO were unable to save the Soviet agricultural economy from declining productivity. Agro-industrial integration was embraced by Mikhail Gorbachev as part of his perestroika reforms with the State Agro-Industrial Committee in 1985, subsuming all food-related ministries ranging from the Ministry of Meat and Milk to the Ministry of Land Reclamation and Water Management. However, due to interests entrenched within these ministries from older officials resistant to change, the committee was disbanded in 1989, and Gorbachev turned towards more liberalized forms of agriculture policy, such as land leasing.[21]
In Estonia, officials like the then First Secretary of the Pärnu District Party Committee, J. Raidla, claimed that the RAPO system was useful during the period of “stagnation” and was a helpful tool to help democratize the countryside. However, RAPOs were no longer viable as enterprises were expected to self-finance, and the APK was not designed to accommodate private farmers. This led to Pärnu dissolving its RAPO in 1989.[22] In January 1990, Arnold Põldmäe, a RAPO official in the Harju district, claimed that there was no point in having the RAPO system since management instructions were no longer being centralized in state institutions. This was further compounded by the introduction of self-financing, where enterprises no longer relied on state subsidies but were instead meant to cover all expenses through whatever revenues they accumulated. Nevertheless, Põldmäe wished to emulate the cooperative structure of the RAPO system, which valued input from the farmers involved.[23]
*The research for this post was partially sponsored by the Blinken OSA Archivum and the Fonds de recherche du Québec (https://doi.org/10.69777/362221).
Donald Morard is a PhD Candidate in the Department of History and Classical Studies at McGill University. His current project focuses on Soviet agricultural reform in the 1970s and 80s focusing on the case study of Estonia and its entanglement with the global rise of industrial farming and agribusiness. He can be found on Bluesky @donnie-m.bsky.social and Twitter @DJ_Cubed3.
[1] Leonid Brutus and Ülo Ennuste, “Un Domaine d’experimentation Economique,” Démocratie Nouvelle: Revue Mensuelle de Politique Mondiale, March 1965, 90-91.
[2] V. Stanley Vardys, “The Role of the Baltic Republics in Soviet Society,” in The Influence of East Europe and the Soviet West on the USSR, ed. Roman Szporluk (Praeger Publishers, 1976), 157-8.
[3] Artemy M. Kalinovsky, Laboratory of Socialist Development: Cold War Politics and Decolonization in Soviet Tajikistan (Cornell University Press, 2018), 8-12.
[4] I. Kovalenko, “Republika Gotovitsia k Eksperimentu,” Ekonomicheskaia Gazeta, June 1967, Blinken OSA Archvium (HU OSA) 300-2-8:54/5.
[5] Roman Szporluk, The Influence of East Europe and the Soviet West on the USSR, 6-7. Also see William Risch, “A Soviet West: Nationhood, Regionalism, and Empire in the Annexed Western Borderlands,” Nationalities Papers 43, no. 1 (2015): 64-65.
[6] Theodore Shabad, “‘Bourgeois’ Estonia: Visitor Finds Soviet Republic Retains Individuality and Western Atmosphere,” New York Times, May 19, 1962, 4.
[7] Toomas Hendrik Ilves, ‘Some Kind of Solution: Estonia, Finland and the Enlargement. “No longer a poor cousin awed,”’ Helsingin Sanomat (May 1, 2004), quoted in Annika Lepp and Mervi Pantti, “Window to the West: Memories of Watching Finnish Television in Estonia During the Soviet Period,” VIEW Journal of European Television History and Culture 2, no. 3 (2013): 77.
[8] Li Bennich-Björkman, “Pragmatic political practice: The Estonian Communist Party, the intelligentsia, and Moscow,” in Moscow and the Non-Russian Republics in the Soviet Union: Nomenklatura, Intelligentsia and Centre-Periphery Relations, eds. Li Bennich-Björkman and Saulius Grybkauskas, (Routledge, 2021), 212-217; Elena Zubkova, “Tsentr i Baltiyskiye Respubliki: «Perezagruzka» Vzaimootnoshenii v 1950-e Gg.,” Ural’skii Istoricheskii Vestnik 63, no. 2 (2019): 116–17.
[9] Aro Velmet, “The Blank Slate E-State: Estonian Information Society and the Politics of Novelty in the 1990s,” Engaging Science, Technology, and Society 6 (March 14, 2020): 167-169.
[10] Everett M. Jacobs, “Management & Planning and the 1982 Administrative Reform,” in The Soviet Rural Economy, ed. Robert C. Stuart (Rowman & Allenhead, 1983), 280-86.
[11] Valter Udam, “Earlier Generation Socialist Entrepreneurs from the Economic Nomenclature,” interview by Ilkka Alanen, Jouko Nikula, and Rein Ruutsoo, in Jouko Nikula and Ivan Tchalakov, Innovations and Entrepreneurs in Socialist and Post-Socialist Societies (Cambridge Scholars Publishing, 2013), 62-65.
[12] Elmar Jarvesoo, “The Viljandi Experiment in Estonia,” Radio Liberty Research (Radio Free Europe/Radio Liberty, March 25, 1981), HU OSA 300-80-1:1198/4; Sovietskaya Estonia, “The Viljandi Experiment: Year Three,” February 8, 1978, HU OSA 300-2-8:59/1.
[13] Sovietskaya Estonia, “The Viljandi Experiment: Year Three.”
[14] J. Isand, Informatsioon Farmiseadmete Tehnohoolduse Kvaliteed Kontrollimine Kohta Pärnu Rajoonid (Pärnu Rajooni ATK, 1981), National Archives of Estonia (Rahvusarhiiv, RA) VAMA.R-1159.1.91.
[15] K. Vaino, “O Rabote Piarnuskogo Raikoma Partii Po Rukovodstvu Profsoiuznymi Organizatsiiami v Usloviiakh Agropromyshlennogo Ob”edineniia" (December 27, 1982), RA ERAF.1.4.6484.
[16] TsK KP Estonii, “o nekotorykh voprosakh dal’neishego sovershenstvovaniia form raboty partiinykh i obshchestvennykh organizatsii v usloviiakh raionnykh agropromyshlennykh ob”edinenii” (February 27, 1984), RA ERAF.1.4.6857, 3.
[17] T. Gerasimova and E. Ivanova, “Ratsional’no Ispol’zovat’ Trudovye Resursy,” Izvestiia, January 31, 1981, HU OSA 300-80-1:1194/4.
[18] O. Dronov, “Estonskii Variant,” Pravda, April 5, 1982, HU OSA 300-80-1:1198/4.
[19] A. G. Egorov and K. M. Bogolyubov, eds., “O Rabote TsK Kompartii Estonii s Rukovodyashhimi Kadrami,” in Kommunisticheskaya Partiya Sovetskogo Soyuza v Rezoliuciyah i Resheniyah s”ezdov, Konferencii i Plenumov TsK, vol. 11: 1966-1970 (Politizdat, 1986), 140–45; Yoram Gorlizki and Oleg Khlevniuk, Substate Dictatorship: Networks, Loyalty, and Institutional Change in the Soviet Union (Yale University Press, 2020), 262-63.
[20] Udam, 68-71.
[21] Chris Miller, The Struggle to Save the Soviet Economy: Mikhail Gorbachev and the Collapse of the USSR (University of North Carolina Press, 2016), 131-141; Jim Butterfield, “Devolution in Decision Making and Organizational Change in Soviet Agriculture,” in Perestroika in the Countryside, ed. William Moskoff (M.E. Sharpe, 1990), 41-43.
[22] S. Vagin and J. Raidla, “Na Puti k IME,” Sovietskaya Estonia, September 6, 1989, 3.
[23] G. Golub, “Selo Bez RAPO — Eto Shag Vpered Ili Nazad?,” Sovietskaya Estonia, January 25, 1990, 2.