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Harrison on Secrecy and Transaction Costs

"Secrecy and Transaction Costs: The Business of Soviet Forced Labour in the Early Cold War," by Mark Harrison, is no. 64 in the PERSA series. 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 labour 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 without achieving a resolution. This paper examines the costs of Soviet secrecy and raises basic questions about how secrecy was calibrated. The PERSA papers are available free of charge from

Sun 03 Jul 2011, 16:21 | Tags: Hoover Project