Magazine article Monthly Review

Comments on "Perestroika and the Future of Socialism." (Economic Conditions in the Soviet Union; Includes Editor's Response)

Magazine article Monthly Review

Comments on "Perestroika and the Future of Socialism." (Economic Conditions in the Soviet Union; Includes Editor's Response)

Article excerpt

COMMENTS ON "PERESTROIKA AND THE FUTURE OF SOCIALISM"

The recent two-part article on "Perestroika and the Future of Socialism" (MR, March and April 1990) has some questionable remarks on Soviet development. According to MR, "the growth rate began to decline rather precipitously from one five-year-plan to the next throughout the 1960s, 1970s, and the first half of the 1980s." While growth declined precipitously during Plan VII (1961-1965), it rose slightly in the following Plan VIII. The Plan VII period was adversely affected by the echo effects of the baby bust during the Second World War, while the growth rate in Plan VIII benefitted from the postwar baby boom. The sharp decline in Plan VII was also related to the drastic increase in military spending by Khrushchev in response to his confrontation with Kennedy in Vienna and the loss of the advantage of secrecy as our "spies in the sky" forced upon the USSR real increases in military spending.

According to MR, "the declining rate of growth in employment is hardly a full explanation of the downward trend in the national income growth rate that began in the late 1950s. Theoretically, an increase in labor productivity could have made up for a lag in labor inputs." This reminds me of a similar Soviet retort to my (L.T.) 1959 prediction (in testimony before Congress) that the Soviet growth rate would slow down as a result of the Second World War baby bust. Increases in labor productivity are themselves the result of the availability of new labor inputs since capital per worker, which is the principal explanation for increased labor productivity, is a function of the new labor inputs.

Crude death rates are poor measures of health. What is needed is age-adjusted death rates. Despite having a much longer life expectancy, the German Democratic Republis's crude death rate is higher than that of the USSR because it has an older population. The increase in Soviet infant mortality is partly due to statistical weighting problems or changes in the structure of where the births take place. It is entirely possible for theinfant mortality rates to fall in all of the republics (as they did in most of the European republics after 1974) and for the aggregate infant mortality rate for the USSR to rise. Infant mortality rates and fertility rates are both still much higher in the Central Asian Republics than in the European parts of the USSR. Although both have fallen from earlier days, the statistical result is that each year a higher percentage of births occur in the republics with higher infant mortality rates.

On the subject of markets, MR claims that "in planned societies of the Soviet type, on the other hand, only the first of these functions (distribution to consumers) is entrusted to the market (again with modifications), while the other two are for the most part discharged by executive organs of the state (presumably guided by the planners)." The "other two" include deciding how much individuals and groups get paid for their labor. While the Soviets, following dogmatic Marxism, maintained that there were no "labor markets" under socialism, this is nonsense since wages were used to get workers to go down into coal mines, into Siberia and the Arctic, etc. The very high labor mobility rates since the Second World War indicate that there has been a seller's market for labor--something very different from the buyer's market under capitalism--but a "market" nevertheless. We don't that our labor market during the Second World War was a market, even though it differed greatly from the typical buyer's market. The fact that the Soviet Union followed an incomes policy from the end of the Second World War until quite recently whereby money wages increased less than labor productivity may limit market forces but it doesn't mean that there are no labor markets operating in the USSR. …

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