Stalin’s Think Tank: The Varga Institute

A review of Stalin’s Think Tank: The Varga Institute and the Making of the Stalinist Idea of World Economy and Politics, 1927-1953, by Kyung Deok Roh.

Evgeny Varga (1879-1964), the USSR’s foremost expert on the capitalist economy, has come to represent many things to many people. To some, he was a loyal Stalinist, to others he was a maverick Marxist who dared to think outside the restrictive parameters of officially sanctioned Soviet dogma, and to still others he was a reluctant conformist and opportunist who shaped his views to meet the demands of the ever-changing political landscape in Moscow. Almost all of the previous scholarship on Varga has been based on published materials, such as his scholarly and popular articles and the reminiscences of his colleagues. Kyung Deok Roh’s dissertation repositions Varga as an innovative thinker, as an advisor to Stalin, and as a significant player in the political intrigues that marked the Soviet 1930s and 1940s. He does this in part by delving into party, state, and academy archives and in part by contextualizing the evolution of Varga’s thought over a long period of time. The findings Roh presents have a direct bearing on how we understand the history of Soviet economic ideas, high politics under Stalin, and the early years of the Cold War.

How did Stalin view the world?  Roh begins with the reasonable assumption that Stalin’s conceptualization of international affairs was shaped by the advice and reports he received from subordinates. Varga’s Institute of World Economy and World Politics was by far the most important Soviet “think tank” charged with analyzing the capitalist world. Memorandum created in the institute consistently percolated up to the highest echelons of the party/state apparatus. Varga met with Stalin personally a number of times to report on his findings.

Roh’s first two substantive chapters (after a long introduction that reviews the historiography) provide a history of Varga’s institute. In 1927 Varga took charge of a relatively small group of scholars and set about transforming them into a major force in shaping Soviet policy analysis of the outside world. Three things were central to this process. First, Varga recruited scholars who were experts on the political economies of particular countries, rather than generalists or broadminded theorists. Second, he cultivated relationships with powerful political leaders and insisted that the institute’s work address practical questions of immediate importance to international politics. Third, he maintained a tightly controlled administrative structure that allowed him and his most-trusted associates to monitor closely the institute’s activities and publications.

Successfully balancing scholarship, policy, and propaganda was not easy. The Great Depression, the Terror, Collective Security, the Non-Aggression Pact with Germany, the Second World War, the integration of Eastern Europe into a Soviet bloc, and the onset of the Cold War all made understanding the economic foundations of the capitalist world urgent, but perilous. It was common for the party’s propaganda apparatus to call for one thing, scholarship to suggest another, and the policy demands of certain sectors of the party/state apparatus to demand a third. And all three might change, seemingly overnight. Some factors helped shield Varga and his institute from attacks. Roh suggests that the party organization in the institute was weak and, at the same time, controlled by Varga and his inner circle. He also notes that Varga and the scholars working for him were all dedicated Marxists. Unlike some scholars in other disciplines, they were at one with party authority and considered themselves part of the same milieu as the party personnel who oversaw them. Finally, when troubles did arise, Varga was able to bypass his immediate superiors in the party and appeal directly to Stalin. Until the postwar, at least, the institute maintained its authoritative position as “Stalin’s think tank.”

Roh’s next two chapters examine the evolution of Varga’s economic ideas. Roh shows that Varga developed an “eclectic” approach to political economy over the course of the 1920s and 1930s. On a theoretical level he borrowed from both Rudolf Hilferding and Rosa Luxemberg to understand the cycles of crises in capitalism. Roh suggests Varga’s most striking innovation came from his reading of the American economist W. E. Mitchell’s work on the business cycle. From Mitchell Varga gained two key insights that came to define his group’s approach: first, Varga accepted Mitchell’s emphasis on the importance of statistics and concrete data to support economic theory; and second, he insisted that, based on that data, capitalism played out differently in different political contexts. Marx, Engels, and Lenin may have provided the general outlines of the fate of capitalism in the long term – but when concrete policy had to be made in the short term Varga believed that building an analysis on statistics was crucial. To Varga and his associates, the “hard facts” suggested that different capitalist countries had their own cycles based on the particularities and peculiarities of state policy, history, and economic priorities. This led Varga to conclude that the state had some room for managing crises, even as he recognized that in the long-term capitalism was doomed to collapse.

Roh argues that Varga’s innovative interpretation of the capitalist economy made its way into the policy sphere. Varga’s ideas came to frame the discourse around capitalist economy both publicly and in Stalin’s inner circle. Varga recognized the general laws of capitalism but “tested” them in the concrete environment of the 1930s. He presented this analysis in published papers and in private correspondence with Stalin and other high-ranking officials. And he applied the same approach to understanding the wartime economy of Germany (which he saw as weakening even on the eve of the war) and the postwar western economy (where his recognition of “overproduction” in the US and “underproduction” in Europe led him to foresee an economic rationale for what would become the Marshall Plan.)  The broad theoretical horizons defined by Marx and Lenin remained – but always in the distance – made accessible and concrete only by way of a thicket of statistics that Varga and his institute associates gathered about each individual country.

In Chapter 5 Roh turns to the postwar controversy that saw the dissolution of Varga’s institute, the closing of its journal, and Varga’s obligatory public “self-criticism” for opinions deemed erroneous by the party apparatus. Roh’s access to archival materials is crucial to his revisionist take on the so-called “Varga affair.”  So is the carefully constructed institutional and intellectual history that Roh pieced together in the first four chapters of the dissertation. Unlike most previous scholars, Roh sees no major break between Stalin and Varga on theoretical issues. Varga seems to have continued to maintain close contacts with Stalin after 1947, he continued to publish in major academic and popular journals, remained an academician, and still directed a substantial research unit. Roh suggests that the best way to understand the postwar affair, then, is within the context of domestic Soviet politics. Rather than theoretical content, Roh points to the ethnic and generational make-up of Varga’s group of scholars to explain the Central Committee’s insistence on breaking up Varga’s team. Varga’s institute was staffed mostly by non-Russians – Jews in particular made up a large percentage of the institute’s senior leadership. This was unacceptable in the midst of the xenophobia of the zhdanovshchina and the anti-cosmopolitan campaign. Concerns about ethnicity and loyalty, rather than theoretical issues, were behind the Central Committee’s attacks. And on this administrative point, Stalin was unlikely to defend Varga, even as he valued his opinions on political economy.  Without Stalin’s support, the attacks continued until Varga recanted. But he was no means ostracized. In Roh’s interpretation, in the wake of the affair, Varga was free to produce “objective analyses” of the world economy without being encumbered by “propaganda and theory.” He remained highly influential, if slightly less visible.

Varga emerges from Roh’s dissertation as an innovative thinker, but one that challenged the basic assumptions of Marxism-Leninism much less than other scholars have suggested. And he appears as a constructor of the Stalinist worldview, not as a mouthpiece of the regime. Finally, he comes across as a survivor of the political infighting of the 1940s, not just as a victim. In the process of telling this story, Roh’s dissertation invites us to reconsider ideology, policy, and politics in Stalin’s USSR.

Ethan Pollock
Associate Professor
Department of History
Brown University
Ethan_Pollock@brown.edu

Primary Sources

Russian State Archive of Socio-Political History (RGASPI)
Archive of the Russian Academy of Sciences (ARAN)
State Archive of Russian Federation (GARF)

Dissertation Information

University of Chicago. 2010. 335 pp. Primary Advisor: Sheila Fitzpatrick.

 

Image: Photograph by Kyung Deok Roh.

1 comment

Leave Comment
  1. Pingback: April 2013 Posts | Dissertation Reviews

Leave a Reply