ONE mistake of the Western Powers during the recent war was the refusal to exercise imagination as to what Europe would look like with the Red Army occupying the Eastern half. Today the West finds difficulty in conceding the possibility that the rate of economic growth--especially in strategic articles, not luxuries--is higher in Communist than in non-Communist countries, or to imagine the long-term consequences of this fact. But it is vitally necessary that we should have a view of the likely state of economic affairs after, say, two more decades of cold war. Here only a few tentative, initial materials can be offered for the education of our imaginations. Whether tension diminishes or not, whether Malenkov is or is not an improvement over Stalin, makes little difference in the trend which these materials indicate.

Part of the difficulty in appraising the relative rates of economic growth is due to the mendacity of Soviet statistics. But almost all experts agree that though some figures have to be rejected, some are usable; and from the most skeptical studies the fact of a superior rate of growth does emerge. Moreover, there is prejudice to conquer--prejudice far greater than that which obstructed the recognition that Nazi Germany was rearming faster than the West. For the Nazi economic system was essentially capitalist, and no one denied that it might be efficient. But the Soviet economy is not capitalist, and the whole theory of Communism is based upon its superiority. Some people are shallow enough to suppose that if this superiority is admitted the whole case of the free world is lost; and many are dogmatic enough to assert that there can be no such superiority. I shall argue here that by whatever other criteria economies may be judged, Communism is at any rate beating "capitalism," whether in the form of laissez-faire or of the welfare state, in its rate of growth. And in a long cold war the rate of growth is the most important thing, for in the end the country that grows most becomes biggest, and every economic advantage belongs to it, be it military power, dominance in world markets or even a high standard of living. This Communist superiority in rate of growth is not, of course, inexorable or permanent; it is traceable to specific features which "capitalism" could well imitate or improve on.

I shall not attempt to enter into the innumerable doubts and qualifications that beset the following estimates, but shall baldly quote some of the most approved. Before the war industrial production in the Soviet Union grew at, very roughly, a rate of between 10.5 percent and 13 percent per annum, and the labor force in industry at roughly an annual rate of between 8 percent and 8.3 percent (compound interest, 1928-40). In agriculture the very approximate figures show an increase in output of 1.4 percent and a fall in rural population of .9 percent. Productivity, therefore, rose by between 2 and 5 percent in industry, and about 2.3 percent in agriculture.[i]

How may we project this series into the future? Where the initial figure is small, growth is likely to be much quicker at first than later on. In other words, the law of diminishing returns tells us that further investments in the exploitation of any particular natural resource, such as, say, iron ore, are likely to yield less than the initial investment. It is thus obvious that any country can attain high rates of growth when it begins its industrial revolution, for the most accessible natural resources are the first to be exploited, but thereafter rates of growth are likely to be smaller. Moreover, the accumulated technical knowledge of other countries can be applied all at once, and there is a very sharp, once-for-all increase in skill. But it is too often forgotten that the law of diminishing returns applies with real severity only if there is no technical progress, that is, if no new technique is invented or no new natural resources discovered, whether of old materials or new. The inventions and the discoveries pull in the opposite direction to the law, and since in industry a substitute can always be found in the long run for any particular material that runs short, the law can only slow down, never stop, industrial growth. With the normal yearly supply of discoveries and inventions, any community that can maintain full employment and set aside sufficient savings to finance all the necessary investment can maintain indefinitely a high rate of industrial growth. And the U.S.S.R. notoriously can and does do both these things. In general terms, therefore, though the rate of industrial growth will tend to decline in the future--since the most obvious possibilities of the industrial revolution have been exploited and the initial surplus of farm labor used up--it seems wise to expect large further expansion.

This does not apply to agriculture, however, even allowing for a high rate of investment and for new inventions. For first the land itself is a natural resource of overwhelming importance to agriculture, occupying a position in that branch of the economy that no natural resource occupies with regard to manufactures, and secondly, new discoveries of useful land are nearly impossible and the reclamation of old land is exceedingly expensive. This certainly applies to the great Stalin projects for the remaking of nature: they are very expensive, their technical validity is doubtful, and they take up land and labor initially which might be used for ordinary agriculture.[ii] Thirdly, Communists are enthusiastic opponents of Malthus; they believe that a planned economy can support indefinitely many human beings on a given area of land. They take no steps whatsoever to restrict the supply of human beings, and this must, in the long run, be serious for them.

Agriculture is often described as the Achilles heel of the Soviet economy. But while this is true, it is less often remembered that Achilles could after all walk upon his heel. Not only did production per head of rural populations increase between 1928 and 1939, but so also--very slightly--did production per head of total population. The often-quoted decrease in yield per acre in these years may easily be explained by the spread of cultivation to less fertile acres. Moreover, the period includes the appalling years of collectivization itself, with its famine, its livestock slaughter and its approach to civil war. The peasants continue to detest the collective farm, but they no longer offer violent resistance. We may, then, perhaps predict the same low rate of growth as the figures above show for the past.

These guesses as to agriculture and industry are fortified by other considerations. The fifth Five Year Plan (1950-5) foresees a rate of growth of about 12 percent per annum compound in industrial production (measured by the published physical targets set); not different, then, from that obtained in the past. It should be remembered that achievement nowadays in Russia seldom falls very far short of plan, so that this rate may well be achieved. Thus, in the fourth Five Year Plan about half the physical targets set in industry, construction and mining were over-fulfilled and the remainder under-fulfilled.[iii] We may therefore assume that a rate of growth equal to 6 percent per annum, or one-half of that foreseen, is a safe minimum. The agricultural targets of the fourth Five Year Plan, on the other hand, fared much worse, and they were lower. The new Plan's targets imply an 8.5 percent rate of growth in this sector: we may safely assume gross under-fulfillment, and suggest 3 percent. Since the population rises by about 1.5 percent per annum[iv] this would be a very healthy state of affairs for the Soviets.

II

How do these rates of growth compare with ours? The search for an answer must keep two objects in view: one academic--to see which system grows more rapidly in roughly comparable circumstances; and the other practical--to see what the future has in store, starting from the existing circumstances. Let us begin with the academic comparison. At the outset of the plan era in 1928, the Soviet economy had two enormous advantages: a huge labor reserve on the spot, and a variety of natural resources awaiting exploitation. There was also a nucleus of industry in the older-established regions. Canada and the United States have both been in a similar or more favorable position--indeed, Canada still is--with two slight differences: the labor reserve was not on the spot but was quite easily available across the Atlantic and was better educated; and a great deal of foreign capital was borrowed. Output of U.S. industry (compound rates of growth per annum, 1860-1914) grew by 5.3 percent and the labor force by 3.5 percent. In agriculture (1870-1910) net output rose by 2.5 percent and the labor force by 1.5 percent. Thus productivity grew by 1.9 percent in industry and 1 percent in agriculture.

The inter-war period showed much lower rates of growth except in productivity. As we are giving what is still called in general terms "capitalism" the benefit of the doubt and assuming full or fuller employment henceforth, we shall omit these years. Of other sizable countries only Japan and Canada are or have been better advertisements for capitalism than the United States. Both can show, at any rate for long periods, a growth of manufacturing output in peacetime not exceeding 6 or 7 percent per annum compound. Smaller countries, of course, can beat these figures occasionally, just as could a county of a large country: but this is clearly no fair test. The growth of industrial productivity, as opposed to output, is also higher in the United States than the capitalist average. We are then much more than fair to capitalism in concentrating on the United States.

It is thus clear that by this academic comparison Soviet economic development betters all recorded data for the West. Only in wartime do capitalist systems show comparable rates of growth: that is, when they cease to be capitalist and borrow many of the vices and virtues of centralized Communist planning. Non-Communist countries, then, can do as well as Communist, but only at a cost in regimentation and effort which they are quite unlikely to accept. It may be objected that the quality of Soviet goods is much inferior. This is very true, but quality has improved in the plan era, so that the rate of growth is not understated by measurements that neglect that factor. Only in comparisons of the absolute level of output need quality be taken into account.

The practical aspect of the comparison is best shown by taking the last few years after wartime reconstruction and reconversion, for though such a comparison is no measure of the relative efficiency of capitalism, it is decisive for future Western economic and diplomatic policy. We have seen reason to assume that the Soviet rate of growth will fall slightly in coming years. But this is merely because the U.S.S.R. has only just emerged from the honeymoon of easy natural resources and large labor reserves. The United States and Western Europe emerged long ago, and, as far as these two considerations go, we may follow the Paley Commission in assuming the same rate of growth as in the immediate past. But will there be a slump? Or permanent slight unemployment? It is now known that inflation can cure capitalism of unemployment, and it seems safest to assume that this cure, unpopular as it is, will continue to be applied in future as it has been during the past seven years, over most of the world. This again is justification for prolonging the most recent rates of Western growth in our calculations. If not, of course, the case of what we call "capitalism" is more parlous.

What are the most recent rates of growth? Let us omit the immediate postwar years of hyper-inflation and easy reconstruction. In 1947-52 the United States performed as follows: Industrial output rose by 4.3 percent yearly and employment by .7 percent. Agricultural output rose by .5 percent and employment fell by 3.5 percent. Canada presents an exceptionally favorable case for "capitalism," since industrial output rose by 7 percent and employment by 3 percent. In making a comparison with the U.S.S.R., we may fairly say that the period of easy reconstruction lasted until 1948. Then, in the period 1948-51, industrial output rose by about 17 percent[v] yearly and employment by about 5 percent.[vi]

There is no direct information about the size of the labor force in Soviet agriculture, but the following figures throw some light:[vii]

These figures are healthier than those of many free countries.

1940 1952
Population (millions) 196    204   
Grain harvest (million metric tons) 119    125.5 
Sugar refined ( " " " ) 2.15 3.06
Cattle (million head) 54.5  60   
Hogs ( " " ) 27.5  32   
Sheep and goats ( " " ) 91.6  111   

True, the improvement is due to two non-recurrent factors: new territory was annexed and the growth of population was retarded during the war. Of genuine agricultural progress there is scarcely any sign, but at least the Malthusian wolf is at present far from the door, and agricultural collapse cannot be counted on at all.

It is correct that the Soviet citizen is still a very poor man, owing to the setbacks of the past: collectivization, purge and war. Real consumption in Moscow is less than one-half of what it is in Great Britain for equal work; though since nearly all housewives go out to work it is doubtless more than one-half per head of population.[viii] Moreover, Moscow is presumably the richest place in the country; forced labor camps and the grain-growing collective farms must pull the general average far down. The North Atlantic Treaty Powers and Australasia clearly have an immense head start in the standard of living. But outside the countries concerned this is a matter of little propaganda importance. Thus Japan, Argentina and Uruguay are on a rough par with Moscow, and the rest of the free world is a good deal poorer.[ix] Moreover, in the basic products that give strategic power the gap is narrower: Soviet Russia is not so very much "poorer" than France per capita, and of course much "richer" absolutely; and she easily surpasses Italy.

ANNUAL PRODUCTION PER HEAD OF POPULATION, 1951
France Italy U.S.A. U.K. U.S.S.R.
(approx.)
Coal (kg.) 1250 25 3903 4430 1400
Oil ( " ) 7 2470 232
Electricity (thousand kwh.) 850 631 2413 1175 510
Pig Iron (kg.) 206 23 416 193 110
Steel ( " ) 232 78 620 312 155
Cement ( " ) 198 120 267 202 61
Grain[x] 322 225 866 143 500[xi]
Raw Sugar ( " )[x] 27 13 16 12 15[xii]
  (processed from beet)
Population (millions) (42) (47) (154) (51) (202)

This table must, of course, be read as a whole, any individual row being misleading. Thus the United Kingdom's strength in coal and steel, which it exports, is offset by its weakness in wheat, which it imports, and so on.

In Europe the work of the United Nations Economic Commission for Europe makes possible a more advanced sort of comparison, although its accuracy is probably very low. In 1948, 14.5 percent of Europe's[xiii] industrial production took place in the satellite countries: East Germany, Poland, Rumania, Bulgaria, Czechoslovakia, Hungary. In the third quarter of 1951 the percentage was 21.5. The indices of production in that quarter (taking 1948 as 100) stood as follows: free countries 124.2, Jugoslavia 127, satellites 154.3. Depressing as these figures are, they become very much more so when we reflect that the satellites had no Marshall Plan to help them, but onerous trade treaties with U.S.S.R. to hinder them. Moreover, the absolute production volume of free Europe has actually declined since the fourth quarter of 1951, so that a rate of growth based upon more recent figures would be much lower. However, taking the figures as they stand the volume of satellite industrial production will equal that which will obtain in free Europe in about 1976. The law of diminishing returns will doubtless retard growth in both camps, and thus retard the rate at which free Europe is overhauled, though it will of course still leave a margin in favor of the satellites. Perhaps, then, we may give ourselves eight years' grace and postpone the year in which the satellites draw abreast of free Europe until 1984.

It may be asked if Czechoslovakia, the only advanced and industrialized country yet overrun by Communism, shows a lower rate of growth than other satellites. The answer is no. Her index of production reads thus:

1948 = 100 1949 = 115 1950 = 135 1951 = 156

Or exactly the average progress for a satellite. There is thus no consolation here, and no confirmation of the doctrine that Communism is unable to take over and work an advanced country. It is true that the standard of living is being steadily reduced to the Soviet level in this and other satellites. But this is no proof of inefficiency: it is an act of policy. In the long run, and if progress continues at this rate, it will certainly be reversed.

Caution must, however, be exercised. Years of expert study tell us with some precision which Soviet statistics are false and why, though we cannot reliably express that falsity in exact quantities. But the satellites have been neglected: we know only that the figures have an upward trend. We have here an extremely urgent field of study.

III

It is thus likely that even assuming full employment in most capitalist countries most of the time, the Soviet economy in particular, and Communist economies in general, will grow more quickly. Why is this, and what advantages have they?

The first is unquestionably that they save more of their national income. The pitfalls here are of course innumerable, and I quote, as usual, the best estimates without discussion. Of net national product at "factor cost"[xiv] the U.S.S.R. saved about 33 percent in 1937, 38 percent in 1940, and about the same in 1948. These figures much exceed those of Great Britain: 18 percent in 1948, and 21 percent in 1951. Nor does the United States make a better showing, with, for instance, 20 percent in 1950. In all three countries armaments are counted among the objects upon which savings are spent--indeed, it is not possible to draw the line statistically between armaments and other investments. All figures, again, are swelled to an unknown extent by the inclusion of a few items that are really current replacement of worn-out capital already existing. In the two free countries, moreover, the total is largely so-called "ice-cream" investment: investment, that is, in plants making consumption goods and, above all, in houses. In the U.S.S.R. the investment is largely in plants making basic materials or investment goods. For our purposes, then, the comparison should perhaps be still more unfavorable to the free countries.

It is difficult to overemphasize the advantage to Communism of its high rate of saving. We all know it well enough, yet somehow the knowledge is not consistently incorporated into a general view. In one issue, for instance, of the Economist (December 20, 1952) it is possible to pick out separate passages like these:

A democratic government is a poor saver. . . . An authoritarian government on the Eastern model, willing to exact large forced savings and itself taking responsibilty for most of the objects of investment, can save what it chooses. But in a liberal society, saving depends on self-help. It is the British people as individuals and as shareholders in enterprises, who must save. . . .

China's transformation will take place under the star of Communism and total rule. If the Soviet analogy holds good, the people will be battered into economic growth. India, in choosing the way of liberal democracy, has renounced the weapons by which spectacular progress can be achieved. Left to its own poverty, it cannot win the race to economic strength in which, in the eyes of all Asia, it is now engaged against China.

Truisms, of course. But do we draw their consequences? Sophisticated people have long been accustomed to say that freedom is more efficient than tyranny, because being subject to free criticism it makes fewer mistakes in the long run and extracts more coöperation from the citizenry. In the days before telephones and typewriters, when no state could control the economy, this was probably true. But one wonders whether these developments, which have added effective economic controls and forced saving to the armory of tyranny, may not have tipped the balance.

Another Soviet advantage is that in the U.S.S.R. there is no consumers' sovereignty; and none of that extreme preoccupation with the correct allocation of scarce resources between competing purposes. These two influences are a brake upon the volume of production. For why do we suspend and distort the price mechanism in time of war if it is not because we are in a hurry? The Soviet economy is always in a hurry and it is enabled to be so by its neglect of the consumer and the more delicate problems of rational choice. Obviously this detracts from the standard of living. Not merely its high rate of saving but its very organization prevents the Soviet economy from satisfying the consumer out of any given quantity of resources. But if this quantity expands more quickly there must one day be a higher standard of living too, however ill-distributed the resources are. There is, again, no investment risk for the Soviet manager to bear, and he would not hesitate to invest even if he were allowed to. He simply carries out the planner's orders to invest, and hereby yet another brake upon production is removed.

Then there are few restrictive labor practices and no strikes, and enterprises scarcely have trade secrets from each other, for all these things are criminal sabotage. There is hardly any respect for vested interests, whether it be of localities in their special products, or of producers in their methods of organization and work, or of any group or individual in its status and income. The tax structure encourages work at every point: income tax is low and does not fall more heavily on extra work than on basic earnings, while indirect taxes are almost as heavy on necessities as on luxuries. The single Soviet goal is over-fulfilment of the plan, never mind at what cost in distortion of the economy or general inconvenience; let alone the cost in lives and freedom.

Thus the Soviet economy is not a kind one, nor are its social services indifferently offered to all. The high pensions and the sanatoria are for the strong, the hardworking and the loyal. Underneath there are no everlasting arms to catch the inefficient, the idle, the apolitical, the unfortunate, or even those who happen to be displaced from good positions by shifts of economic policy. There are three types of economy in the modern world: laissez-faire, welfare and unfair. In the first, progress is gradual, as the profit motive and the free supply of savings dictate. In the second, progress is usually inhibited lest someone get hurt in the short run. In the third, progress is a Moloch to which all present values are sacrificed. The Unfair State is a formidable competitor.

In comparing the Western economy with the U.S.S.R. we have too often been lulled by past Soviet failures. The first Five Year Plan was ruined by its crass neglect and political persecution of technicians, and by the colossal catastrophe of collectivization. The third Five Year Plan was stopped by the war; the fourth Five Year Plan has naturally been very successful, for it was a mere reconstruction plan and reconstruction is always easy. It is probable, again, that the Russian standard of living today is no higher than in 1928 when Soviet planning began, and certainly there are fewer head of livestock. The prewar period saw an almost uncontrolled inflation of the ruble, and Soviet statistics were not only mendacious but mislead the Soviet planners themselves.

But all these things are due to special historical circumstances; we cannot count on the continued gross inefficiency of Soviet statistics and planning. We certainly cannot count on such catastrophic mistakes as collectivization and the great purges of 1936-8. Take, for instance, the suggestion of the Politburo member Khrushchov that small collective farms be forcibly amalgamated into very much bigger ones--the so-called agro-towns. The proposal involved the gratuitous removal of the houses in small villages to one central village--a movement to be carried out by the peasants themselves, without pay, in the winter months. In the projected agro-town there would be fewer or no private plots to cultivate on the side: an essential source of income and self-respect for the Soviet peasant. These measures would have met with as much resistance and would have damaged the agricultural economy as greatly as did the original collectivization itself. But the scheme was defeated; farms were amalgamated within reason, but no houses were moved or private plots diminished. All such follies are likely to be defeated in the future. The very falsity of the statistics, too, has lulled us. Thus Mr. D. McCord Wright says in his "Capitalism" (p. 99) that "the available Russian statistics do not, I believe, furnish a reliable basis of comparison" of rates of growth, and probably most Western economists have left it at that. This is as if we had refused to study the communiqués of the German High Command during the late war.

True, there are other Soviet follies. The régime is evidently willing to sacrifice scientific truth to Marxist dogma. Mendelian biology assigns man but little power over heredity and must yield to the more Marxian version of Lysenko, which has no discoverable basis of fact. In the long run this must do some damage to agriculture, and it will probably be quietly dropped. Soviet economic planners may not use the mathematics of probability, for of course in a planned society there are no such uncertainties. Physicists and physical chemists must eschew the quantum theory. In such an atmosphere free inquiry can hardly flourish; the researcher's initiative is cramped if at any moment he must account to a policeman for his activities. It is of extraordinary significance that Russian research, once so full of inventive genius, has contributed so little to pure or applied science since 1928. It is the Fuchses, not the Lysenkos, who will make the greatest contribution to Soviet science, and this must impose a technical lag upon Soviet development. Moreover, so long as techniques in Russia were grossly behind the tried and accessible techniques of the West, Russian progress could hardly help being quick. Even were her scientists free, she would progress more slowly now she has caught up.

But these are small consolations. Quantity makes up for quality, and ruthlessness for sophistication. The weakness of Soviet science can be exaggerated; bad theory does not render good practice impossible, even when a scientist believes in it, like Lysenko himself. Still less will that vast majority of Soviet scientists, who pay mere lip service to the dogma, be prevented from all useful practical achievement. There appears to be no reason why the satellites could not out-produce Western Europe, and the U.S.S.R. will almost certainly do so. But it is probable, happily for the West, that the U.S.S.R. will not out-produce the United States in the foreseeable future. Mr. Harry Schwartz estimates that it would be very difficult for Russia to achieve by 1980 the American output per person of 1948; still more to catch up with the United States if American progress continues even at its present slow rate. However, the absolute level of American production, even allowing for its further growth, may well be attained by the Soviet Union before 50 years have passed. We must also bear China in mind; by analogy with other Communist countries she is quite likely to overtake the whole of the rest of Asia in 50 or 100 years.

We shall then certainly have to deal with a rich totalitarian society, its faults more moral and political than economic. Economically not more strong than the rest of the world, the Communist bloc will nevertheless be almost as strong. The standard of living will not, of course, be so high, since tertiary industries (entertainment, passenger transport, etc.) will continue to be neglected, and consumers' capital (e.g. houses and furniture) will not be built up for a very long time, even though the current rate of output be high. But economic power is not the same thing as the standard of living. It may perhaps be defined as the ability to save and invest, plus the absolute quantity of primary and secondary output (i.e. extractive and manufacturing industry), plus the ratio of this output to the population. In economic power at least, Communism will grow faster than we do.

IV

There is no evidence at all for the theory that Communism will sober down or become more moral as it becomes richer. In a democratic society the free electorate may become more moral, or at any rate more sober, as it is enriched; indeed, the Communists have a phrase for this--the bourgeosification of the proletariat. But the Communist bloc is run by the men in the Kremlin and not by the electorate, so in this case the question is what will those men do with the new wealth? Hitherto (1929-52) the Kremlin has become steadily more aggressive and unpleasant as its economic power has increased; and we have no reason for not prolonging this trend too. If Malenkov is more peaceful than Stalin it is not because he represents a richer country but because he has changed the tactics. It is the purest wishful thinking to suppose that, like liberalism or Socialism, Communism will kill itself by its own success, by achieving its professed aims. For the aims of Communism are quite boundless: a new man on a new earth--the whole earth. Hic ego nec metas rerum nec tempora pono: imperium sine fine dedi.

We may prophesy at least a few purposes to which the Kremlin will put its wealth. It will make truthful propaganda among the free but backward nations about the rate of its economic progress. It may also make a serious bid to capture the world markets by dumping, for if the Soviet Union can save it can also have an export surplus. This will make no small impression upon Asians, Africans and Latin Americans. It can even run a genuine Marshall Plan of its own, and infiltrate the poor free countries with technicians and managers. The non-American world has cause to know what influence that brings. It is all very well for the North Atlantic Treaty Powers to say that they are not materialists, that freedom matters more than economic progress. This is certainly true for those who have bread in their stomachs, but it does not convince the brash young materialism of starving Asia. Her reaction to Communist progress will be quite different from that of the more mature and sophisticated, even more idealistic, civilization in Western Europe.

The position is thus roughly as follows. A man is running against us but we are not running against him. We are merely out for our usual constitutional. We have a large but uncertain handicap. His trainer has put out a stream of mendacious publicity, from the exaggerations of which one certain fact emerges: the man is going faster than we are. If the race is an infinite marathon it is thus logically inevitable that we shall lose, no matter how great our handicap. This is not, incidentally, an arms race alone, though arms are certainly included, nor, on the other hand, is the prize a certain standard of living. It is a race in saving and productivity--a very boring event for which the welfare states and laissez-faire states of the West enter their names unwillingly. But the Soviet state is incapable of boredom. This is not the place to say exactly what ought to be done, even if the writer presumed to know. Preventive war is immoral, a revolution or appeasement next to impossible. Too great hopes should not be set on trouble in the Kremlin over the successorship. The solution for the problem raised here lies without doubt in the economic field. We must raise our own production, and keep the gap between us and them as great as it now is. Otherwise time is on their side.

[i] For industrial production cf. N. Jasny, "The Soviet Economy During the Plan Era." Stanford: Stanford University Press, 1951, p. 22; gross industrial output in 1926-27 rubles, severely corrected, includes mining, excludes building. Also D. Hodgman, privately communicated; based on Soviet physical production data only, with 1934 weights. (The full, revised index appears in "Soviet Economic Growth," Abram Bergson, Editor. Evanston: Row-Peterson, 1953.)

For industrial labor cf. "Workers and Employees in the National Economy," 1934-41, from the official Soviet employment data and the 1941 captured plan: includes mining, excludes building. It is known that in 1928-32 the increase in this figure is largely a matter of definition, also that it is never fully comprehensive. But there is no reason why its growth after 1932 should not accurately reflect the growth of the total industrial labor force. Cf. Bergson, Review of Economic Statistics, November 1947. Also see census data, as adjusted by F. Lorimer, "Population of the Soviet Union." New York: Columbia University Press, p. 100: includes handicrafts, trade, credit, transport, mining.

For agriculture: cf. N. Jasny, "The Socialized Agriculture of the U.S.S.R.," p. 676 (net output, including farmers' consumption); F. Lorimer, op. cit., p. 138, 153, 158 and 159.

[ii] See the symposium in Land Economics (Wisconsin), November 1949.

[iii] Cf. N. Jasny, Quarterly Journal of Economics, 1952, p. 64-67.

[iv] Population rose by 9,500,000 in the four years ending 1951: Malenkov, Pravda, October 6, 1952.

[v] Hodgman, ibid.

[vi] "Workers and Employees in the National Economy," taking 35,000,000 as the number at the end of 1948.

[vii] Population estimates from Lorimer (op. cit.) and Malenkov; crop evaluations are "biological," not "barn:" about 20 percent should be deducted to ensure comparability with other countries; figure for Soviet grain harvest for 1952 is average 1950-52 (Planovoe Khozyaistvo, 2/1951 and 1/1952). Figures for Soviet cattle, hogs, sheep and goats 1940 from Schwartz (op. cit.); for 1950 from Posev (Frankfurt), February 8, 1953, quoting official figures. References are to the expanded territory of 1940. See also "U.N. Economic Survey of Europe Since the War." New York: United Nations, 1953.

[viii] Schulz and Wiles, Oxford Institute of Statistics Bulletin, September 1952.

[ix] This is but a rough and impressionistic survey. Cf. United Nations, "National and Per Capita Incomes in 70 Countries--1949" (Statistical Papers, series E, no. 1).

[x] Crop years 1949-50 and 1951-52 averaged.

[xi] I have put the average barn crop, 1950-52, at 100,000,000 metric tons.

[xii] Calendar year 1951 only: the figure shows a pronounced upward trend due presumably to larger plantings each year.

[xiii] United Nations, Economic Bulletin for Europe, II/1952, p. 81 (1948 weights). "Europe" includes Turkey, U.K. and Eire, but excludes Switzerland which publishes no index of industrial production. "Free" countries include West Berlin, Finland and Spain.

[xiv] I have used this concept because the excess of retail over wholesale prices in the Soviet Union is vastly greater than in free countries owing to the huge turnover tax levied. Consequently, a ruble spent on armaments or investment goes much further than one spent on consumption goods; for guns and bricks bear very little turnover tax. Even a ruble given to a secret police officer probably buys more consumption goods than one given to an industrial worker, as he has his privileged shop. The distorting effect of turnover taxes must, therefore, be removed by taking all items at "factor cost." Sources for Soviet figures are: Baran, Review of Economic Statistics, November 1947, p. 230-1. (I have assumed the average rate of turnover tax on investment, rearmament and police expenditures to be 5 percent.) Bergson, Quarterley Journal of Economics, 1950, p. 218, 220. (I have made the same assumption about turnover tax as for Baran.) The evidence for 1948 is in N. Jasny, "The Soviet Economy during the Plan Era," p. 85.

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