Did a Soviet nail factory produce useless nails to improve metrics?

Question

We've all heard the story, which sounds for all the world like a typical urban legend. It goes something like this:

Once upon a time, there was a factory in the Soviet Union that made nails. Unfortunately, Moscow set quotas on their nail production, and they began working to meet the quotas as described, rather than doing anything useful. When they set quotas by quantity, they churned out hundreds of thousands of tiny, useless nails. When Moscow realized this was not useful and set a quota by weight instead, they started building big, heavy railroad spike-type nails that weighed a pound each.

The moral of the story, depending on who's telling it, is either "be careful what you measure for because it's often not representative of the result you really wanted," or "ha ha, look at how silly central planning of an economy is; we never had messes like that over here with Free Enterprise™." But it makes me wonder, did the Soviet Nail Factory ever truly exist?

Answer 1

I can't find examples of nails, but there's a concrete example of chemical equipment where a factory avoided switching to producing superior models because they were lighter... and their output was measured by weight.

There's also articles on the subject of rolled metal products.

From the book "Planning Problems in the USSR" there are some specific examples.

A factory in Tambov,

It's also noted that there was a general problem with rolled metal products.

I can't speak russian but tracking down Zakruzhnyi [1966] may be worthwhile for anyone who can.

Answer 2

The book Social Problems in a Free Society: Myths, Absurdities, and Realities by Myles J. Kelleher (alt link) documents many of the idiosyncrasies of Soviet planned economy. It mentions the nail story and points to the cartoon in Krokodil, but it gives references for similar anecdotes.

Production managers frequently met their output goals in ways that were logical within the bureaucratic system of incentives, but bizarre in their results. If the success of a nail factory's output was determined solely by numbers, it would produce extraordinary numbers of pinlike nails; if by weight, smaller numbers of very heavy nails. (A cartoon in the satiric magazine Krokodil featured a proud factory manager displaying his record gross output - a single gigantic nail lifted by a crane.) One Soviet shoe factory manufactured 100,000 pairs of shoes for young boys instead of more useful men's shoes in a range of sizes because doing so allowed them to make more shoes from the allotted leather and receive a performance bonus.¹⁹

Answer 3

Seems pretty clearly a joke grown into an urban legend.

See, e.g., this memoir by Pail Craig Roberts:

A famous Soviet cartoon depicted the manager of a nail factory being given the Order of Lenin for exceeding his tonnage. Two giant cranes were pictured holding up one giant nail.

The cartoon in question may be the one pictured here:

Click to enlarge. Image Source

Of course, the problem of which this is an exaggerated example was, indeed, real.