Material Incentives – Even in the USSR

1867

To continue our reflections on the fall of the Berlin Wall, and the eventual collapse of Communism in Eastern Europe and Eurasia… I had one of those experiences yesterday when you look at something you’ve seen dozens of times before and you see it in a new light, and get to thinking about it more deeply.

But first, a small digression… on a recent trip to Russia, I bought a friend of mine a postcard-size copy of the following Soviet-era propaganda poster:

The text, literally translated, means “As you worked, thus you earned,” or, in plainer English, the message is, “The more you work, the more you get paid.”

I bought the postcard because my friend was pondering his reentry into the job market after a lengthy break, and I was trying to tease him about the upcoming job hunt.  But he landed a job rather soon thereafter, so I never gave him the card; instead, it remained in my kitchen.

Last night, I looked at the card again, and I got to thinking.  The poster was produced in 1964.  What was the reasoning for the Soviets to produce a poster like that?  Clearly, they had an interest in encouraging their workers to work harder — to build more roads, factories, planes, and so on.  But for the workers themselves, what was the incentive to do so?  In a country founded on Marxist principles, shouldn’t it have been to glorify the party, or to build socialism, to surpass the West, or some such?

But no — in this poster, the clean, healthy worker joyfully counts a big stack of 10-ruble notes, while his slightly intoxicated, cigarette-smoking counterpart scratches his head over a wad of single rubles.  The message is clear: work harder, earn more.

So how did monetary compensation — and particularly, different levels of monetary compensation based on levels of effort — fit with Soviet ideas? What of “From each according to his ability, to each according to his need,” one of Marx’s oldest slogans?

To me, the poster plainly means that even Soviet propagandists had to admit some basic human psychological truths about motivation and drive… and those are the forces that lead us to markets — the forces of risk, effort and reward.  Plainly put, people require material incentives to perform.  Of course, there are other kinds of satisfaction — a job well done, being part of a team, believing in an organization’s mission and goals — but those motivations can’t surpass an individual’s desire to be well paid for a hard day’s work.  If that was clear in the USSR in 1964, then the fall of the Wall was just a matter of time.

Published Date: December 10, 2009