Secrecy, Fear, and Transaction Costs: The Business of Soviet Forced Labour in the Early Cold War

31 Pages Posted: 26 Jan 2012

See all articles by Mark Harrison

Mark Harrison

University of Warwick; University of Birmingham

Date Written: October 17, 2011

Abstract

This paper is about the costs of doing business under a harsh, secretive dictator. In 1949 the Cold War was picking up momentum. The Soviet state had entered its most secretive phase. The official rationale of secrecy was defense against external enemies. One of the Gulag’s most important secrets was the location of its labor camps, scattered across the length and depth of the Soviet Union. As this secret was guarded more and more closely, the camps began to drop out of the Soviet economic universe, losing the ability to share necessary information and do business with civilian persons and institutions without disclosing a state secret: their own location. For some months in 1949 and 1950, the Gulag’s camp chiefs and central administrators struggled with this dilemma and failed to resolve it. This episode teaches us about the costs of Soviet secrecy and raises basic questions about how secrecy was calibrated.

Keywords: Cold War, Forced Labour, Secrecy, Transaction Costs, Soviet Union

JEL Classification: K42, L14, M48, N44, P26

Suggested Citation

Harrison, Mark, Secrecy, Fear, and Transaction Costs: The Business of Soviet Forced Labour in the Early Cold War (October 17, 2011). Available at SSRN: https://ssrn.com/abstract=1992434 or http://dx.doi.org/10.2139/ssrn.1992434

Mark Harrison (Contact Author)

University of Warwick ( email )

Department of Economics
University of Warwick
Coventry, CV4 7AL
United Kingdom

HOME PAGE: http://warwick.ac.uk/markharrison

University of Birmingham ( email )

Birmingham, B15 2TT
United Kingdom

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