What happens when a state tries to run an economy? It ends up running the people. Inside the Totalitarian Economy is a gripping tour of how Soviet central planning replaced prices with targets—and truth with obedience. Guided by F.A. Hayek’s warnings in The Road to Serfdom , the book shows, step by step, how “success” was measured in rubles of gross output (“val”) instead of useful goods—rewarding repeat counting, cosmetic relabeling, and costly inputs while shelves sat empty. The result was a total shortage equilibrium : queues, hoarding, and a second economy that smuggled real signals back into daily life. You’ll see why innovation often hurt the plan (cheaper, better designs could shrink “val” and get managers punished), how leveling (uravnilovka) turned payrolls into ceilings on excellence , and how coercion — trudodni, internal passports, Gulag labor, mobilized industry — filled the gap where signals failed. The story continues through industrialization at any price , monetary unravelling of the late USSR, and Russia’s 1990s loans-for-shares auctions that created owners without hard budgets . The verdict is Hayek’s: planning leads to power, and power leads to coercion. Freedom and prosperity require general rules, sound money, and prices that speak. This book shows the mechanisms—and the bill. Book structure: Part I (Ch.1-3): When Theory Meets Reality — Hayek’s knowledge problem meets factory floors, rail yards, and ministry dashboards. Why replacing prices with targets breeds beautiful numbers and empty pantries. Part II (Ch. 4-6): The Machinery of “Val” — Total Shortage, When Innovation Hurts the Plan, and Leveling: how ruble metrics, wage-fund formulas, and ratchets punish thrift and reward bloat. Part III (Ch. 7-10): Coercion, Mobilization, and Foreign Crutches — Trudodni, Gulag, collectivization and famine; Western blueprints bolted onto a command system—output on paper, value destroyed in life. Part IV (Ch. 11-12): When Power Became Property — The transition trap: insider auctions that pawned the commanding heights; ownership without hard budgets; the virtual economy and the 1998 reckoning. Part V (Ch. 13-16): Hayek’s Verdict — Why decentralization limits power; why small states survive on big rules; why liberty is costly —and the only durable choice. Each chapter ends with a Reader’s Hayek Checklist for real-world diagnostics. What’s inside: • How targets beat truth: Why “val” (gross output) made repeat counting, expensive inputs, and long rail detours look like growth. • Why shelves were empty: The economy of total shortage and “assortment washing” that killed cheap essentials (soap, needles, toilet paper). • Innovation as career risk: How polymer valves, profiled blanks, and thriftful designs lowered “val” and endangered wage funds. • Leveling (uravnilovka): The ceiling-from-the-average wage algorithm that punished front-runners and subsidized laggards. • Coercion as coordination: Trudodni, passports, Gulag projects, and a permanent war-economy logic. • From planning to pawnshops: Loans-for-shares privatization , insider auctions, and Russia’s virtual economy—ownership without hard budgets. About the Author Dr. Sergey Mazol is a policy analyst with over 20 years of experience in public governance, corporate administration, and trade regulation. A PhD in Economics and Associate Professor, he has worked with UNECE, OECD, and WTO, and authored 35+ publications on governance and economic policy. As a member of the European Corporate Governance Institute, he contributes actively to global research and reform initiatives.