Abstract: The Soviet ruling elite, the nomenklatura, used both cooption and political repression to encourage loyalty to the communist regime. Loyalty was critical both in defusing internal opposition to the rule of the nomenklatura and in either deterring or defeating foreign enemies of the Soviet Union. The cost of coopting people into the communist party was a decrease in the standard of living of members of the nomenklatura, whereas the cost of political repression was the danger that members of the nomenklatura would themselves be victimized. We assume that the nomenklatura determined the extent of cooption and the intensity of political repression by equating perceived marginal benefits and marginal costs. We use this assumption to construct the following account of the historical evolution of the policies of cooption and political repression in the Soviet Union: Under Stalin's leadership the nomenklatura, after initially emphasizing a strategy of cooption, then experimented with political repression as a substitute for cooption, and finally, in response to the threats posed by German militarism and the onset of the Cold War, employed a combination of cooption and political repression. After Stalin was gone the nomenklatura, having learned the cost of repressive excesses, adopted a policy that combined more cooption with less intense political repression. The rapprochement between the United States and China, the emergence of Islamic fundamentalism, and the escalation of the cold war arms race resulted in the final episode of increased cooption.