Facts on Google and facts in the minds

Mark Jones mark.jones at tiscali.co.uk
Fri Dec 14 16:10:14 MST 2001

At 14/12/2001 21:59, Néstor wrote:

> > What are the material underpinnings, rather than psychological 
> characteristics, of > this defeat. Why _materially_ can't the Russian 
> working class overcome their new > oppressors ? What are the objective, 
> not subjective , barriers to revival ?
>A good question. Whoever can answer it will have the clue to revolution in 

Mark Harrison has suggested that the Soviet economy never recovered from 
WW2, unlike those of its past and future adversaries; growth never got back 
to the trendline of the 1930s. One reason for this was the economic costs 
resulting from the relocation of heavy industry to the Urals, to keep it 
out of harm's way during the war. see below.

The USSR finally collapsed when decades of overstrain produced irreversible 
breakdown in the industrial base and above all, the Soviet energy complex. 
This produced crises in the eastern bloc countries which could only be 
dealt with militarily. The Gorbachev leadership was not prepared to face 
down the west and was afraid to eliminate dissident movements in Poland, 
the GDR and elsewhere. Once Poland and the GDR were lost, the entire Soviet 
geostrategic position swiftly unravelled. Once the collapse penetrated 
inside Soviet borders (the Baltic states were the first to go) an 
unstoppable avalanche of change swept thru Soviet industry and society. 
Only the most severe and brutal repression, and the complete, forced 
mobilisation of society, might have stopped this accelerating collapse, 
butg there was no Stalin around to impose such harsh disciplines. The 
Soviet leadership simply gave up and with two years the country was swept 
by anarchy and crime, and the Soviet state itself ceased to exist in 1991. 
After this, there was no way back. It was impossible to unscramble the 
omelette, and everybody knew it. Soviet agriculture collapsed and the 
economy was ruined. There was literally nothing left to defend. The 
population became dependent on western food handouts and loans. The 
socialist project was clearly and comprehensively defeated, and the 
population had lost faith in it decades before anyhow.

Mark Jones


To: <eh.eastbloc at eh.net> Subject: EH.EB Economists, Soviet Growth Slowdown, 
and the Collapse Date: Wed, 1 Dec 1999 14:05:04 +0100

----------------- EH.EASTBLOC POSTING -----------------

May I offer a few thoughts on Soviet economic growth.

First, outside the Soviet official statistical apparatus there was   much 
less real disagreement over Soviet growth rates than is   commonly 
supposed. Thus the last CIA estimate for annual   average growth in Soviet 
real GDP from 1950 to 1987 was 3.8 per   cent. The alternative figure 
offered by Grigorii Khanin for material   product growth over the same 
period was also 3.8 per cent.  Khanin's estimates of Soviet growth were 
higher in earlier years  and lower in later years (i.e. he suggested a more 
dramatic  deceleration). However, the basis of Khanin's figures remains 
less  transparent than that of the CIA's.

On CIA estimates and forecasts Kontorovich's new paper (which  presumably 
sparked the present discussion) is well worth reading.  Other useful 
reflections on the western record in evaluating Soviet  economic growth, 
with substantial bibliographies, include:

Becker, A.C. (1994), "Intelligence fiasco or reasoned accounting?:   CIA 
estimates of Soviet GNP", Post-Soviet Affairs, 10(4), 291-329


Schroeder, G.E. (1995), "Reflections on economic 
Sovietology",   Post-Soviet Affairs, 11(3), 197-234

A useful dataset in connection with this discussion is Angus   Maddison, 
Monitoring the world economy, 1820-1992 (OECD),   supplemented by Maddison 
(1998), "Measuring the performance of   a communist command economy: an 
assessment of the CIA   estimates for the USSR", Review of Income and 
Wealth, 44(3),   307-23.

Maddison's figures suggest that Soviet GDP per head was   approximately 28% 
of the United States in 1913 (this percentage   would be far lower in 1917 
if we had reliable figures for that year,   but I do not believe that we 
do), peaking at 36% in 1973, drifting   down to 33% in 1987 before 
collapsing to 22% in 1992.

Second, there was a sharp deceleration in Soviet growth in the mid- 1970s 
which cannot be explained by the exhaustion of postwar   recovery 
possibilities, for example. Soviet underlying growth rates   were much 
slower after the mid-1970s than before -- but still not   negative. They 
remained positive in per capita and per worker terms  through much of the 
1980s. In fact, growth temporarily accelerated   under the impact of 
Andropov's disciplinary shock to the economy.

Third, personal consumption of goods and services per head   continued to 
rise, although more and more slowly, until the mid-  1980s. The idea that 
the country "couldn't feed itself" at this time is  simply untrue. (Sure, 
they imported food, but so do many   industrialised countries, and at this 
time the Soviet economy did   not have a serious external debt.)

Rising monetary overhang and so on are relevant in so far as the   welfare 
benefit of rising availability of consumer goods and services   was offset 
by the welfare cost of growing disequilibrium on the retail  market 
(repressed, not "hidden" inflation which is already   discounted in the 
unofficial estimates already mentioned).

What is acceptable for us to count as the truth in this regard  should be 
decided on the basis of statistical research, not belief,  plausibility, or 
personal observation. Thousands of observations  are better than one. Nor 
should they be decided on the basis that  a lower estimate is always better 
than a higher one. In the Soviet  case it can be demonstrated that, while 
official growth estimates  were almost always too high, unofficial growth 
estimates were  sometimes too low.

Fourth, the impact of the war losses between 1913 and 1973 can  be looked 
at in different ways. The capital losses to the Soviet   economy were 
certainly enormous. On the other hand these were   not necessarily losses 
which could never be made up. Other   economies such as the German and 
Japanese showed that after a   devastating war it was possible to recover 
and exceed the prewar   growth trend of income per head. The Soviet economy 
performed   much less well. To be sure it was unable to benefit 
from   globalisation as did Germany and Japan. On the other hand, as 
the  postwar decades went by the obstacles to Soviet partication in   world 
trade became more and more domestic rather than foreign.

Detailed estimates of the scale of war losses in World War II and  their 
impact on different economies, including that of the Soviet  Union, can be 
found in Harrison, M., ed. (1998), The economics of  World War II 
(Cambridge University Press).

Recent research on underlying growth and slowdown in the Soviet  Union and 
eastern Europe, with some consistency of outcomes,  includes:

Harrison, M. (1998), "Trends in Soviet labour productivity, 1928- 1985: 
war, postwar recovery, and slowdown", European Review of  Economic History, 
2(2), 171-200


Good, D.F., and Ma, T. (1999), "The economic growth of Central  and Eastern 
Europe in comparative perspective, 1870-1989",  European Review of Economic 
History, 3(2), 103-38.

Best wishes .

Professor Mark Harrison Department of Economics University of Warwick 
Coventry, England CV4 7AL +44 (0)1203 523030 (office) +44 (0)1203 523032 (fax)

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