If the idea of Soviet entertainment seems a contradiction in terms, that’s what this year’s Berlinale Retrospective, the Red Dream Factory, is all about.

The dream factory was the Mezhrabpom studios in Moscow, which was in fact a German-Russian joint venture set up in 1923 to make and distribute films in the Soviet Union with investment — of both hard money and the latest film technology — from Germany. Through a subsidiary in Berlin, Prometheus, the films would be sold in Germany and contribute to the cash flow.

Ironically, the Soviet partner, Moisej Alejnikow, was the capitalist — a struggling film producer from the Tsarist era — and the German, Willi Muenzenberg, was the Communist, a leftist Berlin media mogul adept at raising both consciousness and cash.

Muenzenberg had been drafted by Soviet leader Vladimir Lenin to produce a documentary about the Volga famine to raise money internationally for hunger relief. The venture was successful and Muenzenberg began making more films to promote what became known as Workers International Relief, in Russian “Mezhsdunarodnaya Rabochaya Pomoshch.”

Alejnikow first appeared Berlin in 1921 with the only film he had left after the Soviet nationalization — a Tolstoy adaptation, “Polikushka.” An introduction to Muenzenberg led to a successful booking at the UFA Palast cinema. Russian themes were a fad in Germany and the two saw an opportunity. They sold shares on the stock market and put together a unique construct that was neither part of the Soviet system, nor a purely German company subject to national control.

The new company took both the infrastructure from Muenzenberg’s relief organization and the name, abbreviated from the Russian to Mezhrabpom. It would capitalize on the radical visual styles developed by the likes of Sergei Eisenstein (though not a Mezhrabpom director), Pudovkin and Vertov to exploit the foreign market, and offer commercial entertainment to the Soviet audiences.

The slogan of the Soviet state film enterprise was “100% ideologically correct and 100% commercially viable” but of course when the chips were down, ideology always won. But Mezhrabpom, operating outside the official apparatus, was able take that goal a lot more seriously.

Their first production, “Aelita,” mixed a light-hearted story of everyday Moscow with a fantasy trip to a Constructivist-looking Mars, and included the interplanetary export of the Revolution. “Miss Mend,” a thrill-packed adventure serial, had as its villain a capitalist cabal intent on destroying the Soviet Union. And both were smash hits that got the company up and running.

While “Storm Over Asia” carried an anti-imperialist message, it was also an exotic adventure of man against the system, with a nod to Kipling’s “The Man Who Would Be King,” made as Mezhrabpom’s contribution to the 10th anniversary of the October Revolution,

Pudovkin’s “The End of St. Petersburg” was less about the epic sweep of Eisenstein’s “October” than a story of one man caught up the current of historic events.

The light comedies of Boris Barnet, like “Girl With a Hat Box” or “Dom na Trubnoi” (The House on Trubnaya Street) both reflected and satirized the tribulations of the common man struggling to find his proper place in “the new world.” Barnet’s more sober entry, “Okraina” (Outskirts), about a WWI German POW finding acceptance in a Russian village, may have run afoul of hardline critics, but delivered a truly utopian one-world message.

At the same time, the robot adventure “Gibel Sensazii” (Loss of Sensation) used its sci-fi subject matter to both skewer the capitalist businessman and celebrate the ultimate collaboration of man and machine, while also sneaking in criticism of rampant forced progress.

Meanwhile, its German arm, Prometheus, infused with cash from successful distribution of these films, began producing its own pics, with almost the opposite strategy. As a corrective to the escapist fare dominating the German market, films like “Kuhle Wampe” (featuring the participation of Brecht and Eisler), “Jenseits der Strasse” (Harbor Drift) and “Mutter Krausens Fahrt ins Glueck”(Mother Krausen’s Journey to Happiness), offered a real world — if oftentimes dire — reflection of people’s lives and hardships, provoking instant identification from their audiences.

Mezhrabpom’s biggest hit was probably “Putjowka w schisn” (Road to Life) the first Soviet sound film. Released in 1931, it played through 1935 — a drama of homeless youth finding their way forward, reminiscent of “Boy’s Town” and the ripped-from-today’s-headlines aesthetic. But by then the writing was on the wall.

In the end, Mezhrabpom was the victim of its own success. Too decadently commercial for Stalin and too influentially leftist for the Nazis, the death blows fell in Germany in 1933 and the Soviet Union in 1936. But by bringing to light yet another rare piece of film history, this year’s Retro is also reflects a never ending battle within the film industry itself — the attempt to reconcile the well-meaning with the well-paying.