Industry and Purge in the Donbass, 1936–37

THE S. M. KIROV IRON AND STEEL PLANT in the town of Makeevka (Donetsk oblast', part of the vast Donbass coalfield), came under the fire of the Great Purgers at the beginning of 1937. This was the time of the celebration of the Pyatakov Trial (23-30 January), the suicide of the Heavy Industry Commissar, G. K. Ordzhonikidze (18 February) and the notorious February-March Plenum of the Central Committee (23 February-5 March). The Makeevka plant was one of the biggest metallurgical factories in the Soviet Union and in the world, staffed with some 20 000 workers and hundreds of clerks and technical and economic personnel. The Kirov plant had recently played a prominent role in Soviet industrial policy.' At the end of 1934, under the direction of Ordzhonikidze, it started a remarkable experiment in economic and technical efficiency, the so-called 'struggle for profitability'. This slogan largely dominated official economic statements all through the Soviet economic system. The director of the plant, G. V. Gvakhariya, boasted of his factory's success in increasing financial 'profits', thanks to a consistent rationalisation of work both at the shop-floor level and in the administrative departments. Efforts were made to reduce the number of workers, improve productivity and encourage technical personnel (ITR) to exploit installed capacity to the maximum. The heads of the shops and engineers in line were paid according to a highly performance-linked salary system.2 Gvakhariya proudly claimed that polnyi khozraschet (consistent implementation of the profit and loss principle) ruled the factory's work, down to single machinery complexes (agregaty). Great financial autonomy was granted to the shops, including the right of hiring and firing. The celebrated 'six conditions' for economic efficiency, put forward by Stalin in 1931, had allegedly been successfully carried out at the Kirov plant. The economic experiment at the Kirov played a pioneering role in working out the important changes in the financial organisation of Soviet industry implemented in April-June 1936. The prices of capital goods produced by heavy industry were increased, the factories were endowed with special funds in order to award bonuses and incentives to deserving workers; enterprises were firmly invited to renounce the notorious state subsidies (funding or grants) which the government was compelled to pay, given the huge deficit they normally accumulated.3 The 'struggle for profitability' launched by Gvakhariya and his staff can be seen as a remarkable attempt to overcome some of the major shortcomings of central planning and breakneck