Magazine article Monthly Review

Problems of the Soviet Economy - Alleged and Real

Magazine article Monthly Review

Problems of the Soviet Economy - Alleged and Real

Article excerpt


The following brief article by Hans Blumenfled was received shortly before his death in January (see our note in the Notes froM the Editors in the March of MR).--The Editors

Since Gorbachev has started to talk about stagnation in the Soviet Union, the Western mass media has more than ever presented the Soviet enconomy as a complete failure.

There are indeed serious economic problems in the Soviet Union. However, before discussing these problems, some fallacious statements should be corrected.

(1) "Stagnation" is relative. The increase in National Income has averaged 3 to 4 percent during the past decade-- much less than in the preceding ones. In those earlier years, the rate was boosted by two temporary factors, now exhausted: postwar reconstruction and the transfer of the majority of the labour force form agriculture to industry and services.

During this same last decade, the enocomy of the United States has certainly grown at an even lower rate, considering that the growth of the GNP has been due exclusively to services, which are excluded from the more realistic Soviet yardstick defined as National Income. Yet the U.S. growth rate is called "recovery" rather than stagnation.

The difficulties of the Soviet economy are said to be the result of bureaucracy and centralization. Bureaucracy exist in every large organization, but I doubt that a U.S. Steel plant could have made as many important decisions independent of "headquarters" as did the Kirov Steel Works in Makeyevka, for which I worked in the 1930s. Two recent immigrants to Canada from the "East" complained to me, independently of each other, that bureaucracy here was even worse than at home.

(2)_ The fact that the Soviet Union imports grain, while Tsarist Russia exported it, is taken as proof of the complete failure of the farmers' cooperatives (koldhose). Several facts as worth recalling. (a) Tsarist Russia collapsed because it could not feed the cities during the First World War. At that time, the Germans occupied only a relatively small part of the country. In the Second World War the territories overrun by the invaders had accounted for 40 percent of all agricultrual production; yet the cities were fed. (b) Other countries experiencing rapid industrualization have also been transformed from exporters to importers of agricultural products: England in the late eighteenth and Germany in the late nineteenth centuries. (c) It takes far more the labour (directed and in "capital" form) to produce a ton grain under the climate and soil conditions of the USSR than it takes to produce enough oil, gold, etc., to buy a ton aborad. The Soviet Union would be foolish not to use its "relative advantage."

(3) It is claimed that an acre of the farmer's private plot produces far more than an acre of kolkhos land. The typical kolkhos is engaged in mixed farming. The collective fields and pastures produces the fodder; the farmer's family feeds it to its livestock. The livestock transforms most of it into meat and dairy products, the balance into excrement. The excrement is composted into dung, on which the farmer's family grow vegetable and fruits. Thus, all the products the farm family sells are in fact refined forms of the biomass produced on the kolkhos acres. …

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