The phrase was originally coined by Yury Olesha and then used by Joseph Stalin, firstly during his meeting with the Soviet writers in preparation for the first Congress of the Union of Soviet Writers:
Stalin undoubtedly saw it as something to be proud of. It was taken up by Andrei Zhdanov and developed into the idea of 'Socialist realism'
The phrase is nowadays mostly used in a negative sense, rejecting this and many other sorts of control. It gets applied also to the cultural controls of Nazis, and also to some US culture.
Deng Xiaoping spoke approvingly of 'engineers of the human soul' in the post-Mao era, while also condemning the 'Gang of Four'.
This term is used extensively in the People's Republic of China to refer to the teaching profession.