~fpereiro

Here are the notes I took while reading Naum Jasny’s Soviet Industrialization (1928-1952). This book was referenced by Stephen Kotkin’s Magnetic Mountain: Stalinism as a Civilization as a definitive guide to Soviet economic history during Stalinism.

The book is packed with detail and is not an easy read. But it stands as a great work of analysis of Soviet economy from the twenties to the fifties. Its conclusions are depressing, but also illuminating.

The notes are taken from the beginning to the end of the book and they closely follow the text.

Economy recovered by 1927 from civil war through NEP (since 1921).
Industrialization drive started on Dec 1927 congress. It lasted until Stalin’s death in 1953, although tempered at the end (1949 onwards) by Molotov.
Economy grew 200% from 28 to 52. Personal consumption only grew 33%. Armed forces by 2500%, state funds as a whole by 700%, investment by 550%, education & health by 450%.
Industrialization drive became defense drive only after 1934. It eventually surpassed the industrialization drive itself.
Menshevik planners were leading lights – Groman should be credited with linear analysis, not Leontief.
The industrialization drive was considered by the bolsheviks as a “second revolution”.
The plan succeeded by massively reducing, then only sparingly letting grow, personal consumption. Same goes for heavy industry (industry A) vs light industry (industry B).
Later (p6) Jasny says that 1928 to 1950, the economy grew 400-480% from 1928 to 1950. Producer goods industry grew 880%. Consumer goods by industry only by 100%. Industry as a whole grew 675%. Construction increased 680%. Farm output grew 50% only.
Per capita income declined by 25% for wage earners and 40% for peasants in the entire period. In some years it may have been as low as 50% of the 1928 values.
By the end of the period, military spending was almost equal to total net investment.
Productivity increases were 100% in industry, 400% in railway transportation, 35% in agriculture.
Main periods: 28-29 (warming up), 30-32 (all out drive), 33-35 (three good years), 36-40 (purge), 40-45 (war), 45-52 (stalin has everything his way).
Agricultural sector already very low consumption. In cities, higher. So if more urban pop, cannot sustain!
Implied: no wedge in countryside, either let it alone or go to war with it
Kondratiev was a narodnik! (are narodniks a form of land semi anarchists?)
Goelro as a thing mainly for propaganda, from Lenin’s perspective.
Guy from goelro as perhaps first long term planner. Jasny speaks about that plan being the least important (against short term or perhaps operative plans) and praises by contrast against Groman.
Two big cycles of inflation deflation, 20 27 and 28 47
What new wealth did the soviet people get in 30s? Edu and medicine? Perhaps some better housing?
Peasants not incentivized to produce more after reaching pre war level.
Extinguishing curve: use of capacity runs out. Warming up is going crazy over goals. Gosplan had two variants and the optimum one was forced into them, then made law
Combination of equilibrium (maintained by Gosplan itself and the Groman group) and crazy targets (politically brought from above) for industry made the whole thing crazy.”Such large disproportions do not occur in the economy without severe penalty.” on railways relative disinvestment compared to that of heavy industry/producers goods.
Crazy drop in output per month in 1928-1932 (all out).
The two stops: March 21 (war communism -> NEP); January 33 (all out -> three good years).
Only thing not to go down during 32 was electric power.
Famine as the result of coercion and disorganization, not genocide (wikipedia). At least 3m Ukranians, and up to 40% of kazakhs (which became a minority in their own country). Chilling.
(also wikipedia) Passports introduce Dec 32 to stop travel between republics because of hunger. In place until 74. Kolkhoz power over passports. Soviet serfdom!
33: Productivity fall of at least 20%
End of bacchanalian planning but not of dictatorial pressure. A retreat. Lenin acknowledged defeat, Stalin declared a victory.
Peasants accepted kolkohozy out of necessity.
33 is slow recovery. The good years are 34036, stopped by the purges in 37. Fast industrial growth, moderate agriculture growth, high but tolerable investment, still no strong defence investment, consumption rose very slowly and mostly on 36, productivity rose, big plants were finished.
2nd FYP and onwards mostly for propaganda.
Three good years: much more adequate planning, most targets on point (some in the FYP too). Some inflation. agricultural output probably declined in 36 because of weather, figures not published for 36.
Control figures for 34-36 worked quite well, completely independent from the FYP. Actual instruments of planning.
Very large variations in investment, also construction (construction is the main part of investment).
No such thing as smooth planned Soviet development. Marches and stops.
Three good years: agriculture almost flat, industry up 75%, steel 140%.
Productivity in industry and construction went up sharply.
End of rationed goods in 35 (jan for grain, oct for almost everything else).
Food prices about quadrupled in terms of purchasing power!
Non-food consumer prices increased too, but probably less.
In 1937, urban real wages were 60 (1928: 100). They could have been 50 in 1932, the bottom. As for farmers income, the numbers were similar.
In 1928, peasant income was 60% of urban income.
In 1932/1933, they might have been the same, which means that despite situations of starvation, the overall peasantry might be more or less in the same position than in 1928. But it may well be that it wasn’t.
Consumption increased very little in 34-36, for both peasants and urban dwellers. The economy grew at about 13% a year, or 45% for the period, with almost all the growth going to investment.
35 was the best year.
Purge years: in economic effect, 37-40. In actual purges, 37-38.
Purges: economy grinds to a halt after 37; 37 was still a good year because of momentum and a bountiful harvest.
Observation by Wheatcroft: Stalin executed (by signed orders), Hitler murdered (by not signing anything).
purge years only showed progress on electric power, coal, non-ferrous metals and armaments. Not steel, which only grew 12% in four years (and only 1.5% in the last two years). Building materials went down.
Agriculture expansion practically ceased after 1937.
All quality factors (utilization, capacity, productivity, costs) either stagnated or declined.
Inflation took place.
Standard explanation: “war preparations”. But this is contradicted by stagnated steel.
For Jasny, the cause is clear: purges, not mobilization or armaments, caused the stagnation. Purges also affected agriculture more than expected because by now it was organized on kolkhozes.
Jasny guesses that it wasn’t the numerical impact of the purges, but rather the demoralization and disorganization, that caused its economic effects.
Investment continued being large, but reduced.
Investment split among many projects and reduced utilization were intermediate causes.
Consumption increased (as a proportion of the economy) during the period, certainly in 37 and 38.
Purges start with Malenkov trials in sep 36. Effect on economy took a while, and 37 harvest was very good.
Jasny suspects that industrial increase reported in the second half is 40 could be exaggerated.
On 39, production of consumer goods increased, but producer goods stagnated.
No plans released for 38, 39 or 40! Only in 41 was a plan published (but kept confidential). 3rd FYP (of that time) contained no year to year figures!
From 37 to 40: cement (and almost all construction materials) declined; electricity and coal grew by 30%; iron and steel barely increased (< 3%). Industry as a whole grew by less than 10%.
Consumption declined about 15%, peasant consumption more than 20%.
Further attacks on kolkhozniki.
Stagnation of steel (both in usage and capacity expansion) in time of war preparations stands as a major failure.
Significant quality declines.
Productivity maintained rather than decreasing as in the all out dr ive. Still, pales in comparison with the three “good” years.
Workers in industry increased by 8% in the period, same as the industrial growth estimated by Western analysts in that period.
40 had consumption little above starvation levels.
40 is used as starting point, according to Jasny, very unfairly to show a rosier picture of the overall consumption progress of the decade.
Price estimation change by Jasny: flat in 37 and 38, 10% up in 39 and 25% in 40.
There seems to be a desire from the leadership to increase consumption to justify the purges, but it stopped being possible on the face of lack of increase of productivity plus massive stockpiling for the armed forces (in 39 & 40).
Jasny estimates for kolkhoz markets, changes 38, 39, 40: quantities: +5% -5% -15%. Prices: +30% +30% +60%.
Strong erosion of consumption towards the end. War preparations and disorganization.
Strong divergence between official trade prices and kolkhoz market prices, the latter being much higher (60%).
“Thus the Soviet state declared war on the kolkhozniki’s private enterprise and on the kolkhoz trade, although it supplied the urban population with no milk and the non-farm population with perhaps 35 kg of potatoes and 13 eggs per capita per year…”
NEP was 7 years (or 9, if we count the warming up period). Three good years (respite from all-out, as NEP was respite from war communism, although Jasny doesn’t use that term) were only three.
Post-war (Stalin has everything his way, shehw) is a recovery period like three good years; done on the base of the almost starvation previous level of consumption; and geared towards relatively few things, mostly steel.
Collectivization of agriculture doesn’t seem to have economic advantages, so it must be done by force.
Investment increased every year after the war until Stalin’s death. Real wages were lower in 48 than in 39. Heavy industry investment was 150% more in 49 than in 40! Neglect of education & health.
Renewed attack on peasant economy after the war.
Similarity between capitalist business cycles and Soviet economic developments (deteriorations and changes of policies).
Agriculture at a critical state at the end of the period (52), requiring reforms.
Great growth of steel and construction.
Slowdown in 56 and 57, too many investment projects. But ones take 4-5 years. Soviet pop 200m in 56, after many years of silence
Pop loss 41 to 47: from about 200m to 180m
“The country was scarcely alive when victory came.” Starvation regions until end of 47
No demobilisation!
Why miracoulous recovery? Ultra low consumption/deprivation, capacity post purge and in nee east industry, materials and prisoner labor from east europe
Estimate: 2m German prisoners of war working (represent up to 10% of hired labor in material production).
Some of them held until 55/56, the Soviets used them for a decade.
Higher average of productivity and qualification.
Guess: used only in investment activities.
Planning still chaotic, according to Jasny, not in structure but because of the orders from above.
4 & 5 FYP quite chaotic and still not representative. Annual plans quite better than before the war, but not published except for the 47 one.
Malenkov (54-56) wanted to increase consumption, but then in 56 the tide turned again towards industrialization.
Planning still quite inconsistent and chaotic in the first few years after Stalin.
Start of deflation or price stability in 47.
Two big categories of workers: industrial workers and kolkhozniki.
Consumer prices in official trade rose 3x from 40 to 47.
Producer prices also rose but less.
Kolkhoz market prices went up almost 14 times from 40 to 43, then down (417 with 100 as 40, at the end of 47). The peak of 43 was a bad harvest coupled by great disorganization.
Rise in industry subsidies.
Big jump in 49 on producers goods (30-80%), dictated.
Retail price index (100 is 1940): 45: 215, 47: 328, 55: 138.
Popular products (vegetable oil, brown bread, beer, vodka) were kept expensive. Jasny speaks of discrimination against the poor and the peasants.
1955 indexes (1940 is 100): cotton fabrics 176, footwear 163, hard liquor 264.
Kolkhoz market prices stayed more or less the same between 45 and 47; big gap with official trade prices. Official trade prices bumped up in 47, gap reduced.
With derationing and a good crop in 47, most of the gap in prices is closed and prices fall.
From 50 to 55, kolkhoz and official prices parted ways. Official prices declined rapidly, kolkhoz became stable or rose slightly.
It seems that in 40, the kolkhoz trade food prices were 85% higher than the official, whereas in 50 they were only 4% larger.
The difference in prices for food between both markets rises again for kolkhoz until a peak of 60% in 54-55, then down to 44% in 58.
For Jasny, kolkhoz prices should be lower than official; the fact that they are higher means to him very disorganized conditions.
Prices in rubles concealed, but still reconstructable. In 55, average full day’s pay (24 rubles) would buy a kilo of meat in a kolkhoz market. Vegetables, over 5 rubles per kilo and, for fruit, over 12 rubles per kilo.
Eating places prices low relative to prices of food in markets. Despite this, apparently they were not popular, despite that women also worked full-time jobs. Jasny gives two reasons: bad quality of the food, and desire for privacy.
Producer goods, after the sharp rise of 49, went down in the next 5 years and sharply in 50. Machinery became very cheap respect to other goods in the economy, with respect to 1928. “[T]he fact that the increase of its prices from 1928 to 1955 wasa relatively small is of immense importance. An agricultural country with a particularly weak macinery industry operating at very high costs was transformed in a short spce of time into an industrial country with a particularly strong machinery industry operating at very low costs.”
Also low relative cost of machinery makes military appropriations very powerful. Compare budget of 28 at 0.8 billion rubles with 100 billion rubles in 1955.
The prices of non-machinery producer goods remained 20% higher in 1955 than in 1948.
Transport prices (railways) went down by 29% from 49 to 56. Better productivity by worker and better utilization of equipment of materials. most categories started to yield profits or break even, except for transport of coke.
Construction prices (materials + transport of materials/machinery + labor): with 40 as 100, in 49 it is 178 and then goes down to 131 in 56. Jasny doubts these numbers (from 50 onwards) as being too low. Making them low inflates the amount of real investment.
Jasny estimates that with 26/27 being 100, construction prices were 585 in 49 and 431 in 56.
Transport costs went up during the 40s but not so much as construction costs.
Nominal wages rose a lot during ww2, but mainly for essential workers (heavy industry, construction, transport).
In 46, bread supplement of 110 rubles/mo for workers earning leass than 300 rubles per month. No supplement for those over 900 rubles/mo. Prices were also raised. This measure benefited those earning the less.
Nominal wage 46 about 75% higher than 40 nominal wage.
Success in stabilizing nominal wages. Enabler of the cuts to consumer goods done in 49 and later.
With increasing productivity, standards had to be raised to keep wages stable – wages are paid by piece work (depending on individual output).
In 55, 21% of the cost of production costs were labor. Interesting to consider where the rest came from: materials, transport & construction? So, the cost of labor on the downstream and upstream? I’m thinking of Marx.
Jasny states that the Soviet price system is chaot ic. He states that he got agreement on this from Soviet academics in the 50s. Inconsistent pricing between groups of goods, depending on their region as well, and even multiple prices for the same good in the same region.
After Stalin years, prices finally are recognized to have to cover costs.
Prices post-Stalin are set mostly by taking average cost. But this creates the issue of what to do with producers over or under the average.
Soviets were trying to get rid of treasury subsidies by 1936 but couldn’t do it.
No charge of interest for capital for allocating investment, because of Marxian taboo.
As capital wasn’t treated as scarce, producers goods and transport were de facto subsidized or stimulated; this also generated further development on the East, “with its long distances”.
Agriculture received low, almost nominal prices. Effective elimination of agricultural prices distortion lasted for 30 years, until in mid 58 at one stroke it was removed.
Consumer goods much more taxed than producers goods (and construction had no sales tax). In 56, consumer goods in industry were 39% but yielded 46% of the taxable profits of industry.
From 28 to 58, consumer goods became 5x more expensive relative to producer goods! The main driver was increasing relative productivity in heavy industry; but sales taxes, differences in profits and interest-free capital also played their part.
In 58, MTS (machine-tractor station, entities that rented machinery to kolkhozy) were abolished, single prices were established for farm products and allowance to kolkhozy to decide on what machinery they wanted to buy.
Overall, a very disorganized price system also within categories and sub-categories.
If rent on capital is taboo, marginal utility (to ascertain consumer demand) is even more taboo for the Soviets. Marginal costs are treated more benevolently, and there is discussion (in late 50s) of allowing lower-higher prices to producers depending on the natural efficiency of the land or location. According to Jasny, all discussion on differential costs and profits is very recent.
Comparison with Yugoslavia market/socialist approach and Poland more socialistic but somewhat market oriented price setting.
Wage discrimination against white collar and light industry workers (well-paid ones were (relatively) construction, heavy industry & transport). Still people wanted to be white collar workers and there were more applicants than vacancies.
Use of recruited/mandatory labor of young to supplement workers in light industry and agriculture.
Workers in light industry only exceeded pre-war level in 1950.
Reorganization of wages in the end of 50s and into 60-65, to reduce stratification of wages; minimum wage introduced in 57. Long-term idea is to increase lower wages and keep already higher wages there with few reductions.
Official estimate of increase of investment from 40 to 50: 110%. Jasny estimated 68.5% increase. Strumilin (official statistician from the URSS) estimated an increase of 45% in constant prices.
45 and 46 were very bad years, in 46 there were almost starvation conditions. Implied in Strumilin’s data is a decline of investment of 27.3% from 40 to 46. Poor crops in 46.
Raises: 9% in 47, ~20-22% in 48, 49 & 50 each.
Building materials categories increased fro 36% to up to 125% (cement 81%) from 40 to 50. Machinery increased 113%. Strange things in the statistics (construction is claimed to rise much less than the actual increases in building materials).
Investment raises slow down but still significant afterwards: 12% in 51 and 11% in 52.
Significantly larger share of the state on the national income in 52 than in 36.
“The most important feature of the Staling Has Everything His Way period ws the immense concentration of heavy industry.”
In the 30s, heavy industry had 1/3 of total investment; by 46-50 it was 40% and even more in 51 and 52.
Light industry neglected in investment in post war period. Trade and procurements really squeezed. Agriculture investment (as % of investment) static, even slightly larger than in 40; but still not enough. Even more so with housing, which shows only a small improvement against 40 (where according to Jasny the situation was already “extremely poor”); but how does the per capita stock be the same than in 40, before the war, by 46-50? Jasny states that housing was watered down a very great deal in the statistics.
Slowdown in industrial growth in 56-58 given by accumulation of excessive number of projects in construction (which started not later than 51). Super dictatorship and lack of discipline in the planning of investment and its execution.
Absence on data on ongoing constructions. Jasny estimates it by seeing what’s the change in construction vs the change in machinery, since machinery is installed after construction happens. Equipment went up by 50% more than construction in 46-50; then a great change occurred: construction went from 54.7 brub in 50 to 72.6 brub in 52, whereas construction remained almost static from 30.9 to 31.9 brub. The ratios went from 60-34 to 64-28.
Conclusions: underestimate of investment costs in postwar years relative to 40; high level of investment post-war relative to that of 40 must be considered as greatly exaggerated. Immense growth in investment during postwar years seems to be the case.
Turnabout after 53 condemning bad conditions for agriculture.
Agriculture situation was dismal in post-war period: combination of previous policy + war. By 49 pre-war level still wasn’t reached, although it was getting there.
Agriculture in decay, not growing at all.
Potatoes/vegetables yields were about half of those of 1928! In some territories in the northwest, yield was lower than a century before.
Socialized agriculture having perhaps half the yield of private agriculture.
Agriculture lost a lot of labor because of: deaths of able-bodied persons in ww2 (agriculture had a larger share than average too) no demobilization (also disproportionately large proportion of peasants mobilized); alo mobilized villagers that didn’t return to the village after the warj; and demand for labor in heavy industry.
Non-farm labor force grew from 24.7m in 45 to 35.8m in 50. But growth of working population in those was not large because the generation born 30-34 (more precisely, 32-34) had a reduced birth rate.
Decline of kolkhozniki. Numbers are hard to glean. With figures released in 60, kolkhozniki number in 50 was the same as in 40 and it declined b 2.6m in 55 (25-26m est).
Implicit in these numbers, it looks that around the end of Stalin’s period there were more non-farm labourers than farm labourers.
Another earlier source states that farm labor (kolkhozniki & individual peasants) went from 36.3m in 50 to 32.4m in 55.
Poor mechanization (because of lack of priority) of agriculture: only 650k tractors at end of 53. Most of the agriculture in the 50s still done by hand.
Implicit order of “agriculture last”. Fulfillments of machinery for agriculture were done towards the two last years (instead of the first three years) of the 4th FYP.
Increase in paid prices for technical crops like cotton, which showed marked growth. Not so with grain and staple foods.
In agriculture as in industry, base prices that were too low and exaggerated premiums for going over the quota distorted supply. Most farms could not make the quota and hence couldn’t provide for themselves properly, which set in a vicious circle.
Nominal prices of obligatorily delivered grain was nominally unchanged until 54/55; the prices went from inadequate (pre-ww2) to token, in the context of inflation.
Improvements to agricultural prices started after Stalin.
The money incomes (in real terms) for collective farms grew from 10.1b in 40 to 10.8b in 50. But cotton farms could have easily trebled it. Ag ricultural costs went up more than incomes.
Sown acreages went down in RSFSR between 40 and 56. In other places it went up, but almost certainly because of the enlarged boundaries.
Sown acreages in millions of hectares (40|50|53|56):
- All crops ussr : 4.5 5.9 5.5 5.7
- All crops rsfsr: 2.5 2.6 2.3 2.3
- Potatoes & vegetables ussr : 3.1 3.6 3.4 3.7
- Potatoes & vegetables rsfsr: 1.9 2.0 1.7 1.8
Khruschev’s plan in 1950: increase the size of kolkhoz even further (amalgamation, the first wave o which happened in the late 20’s and early 30’s) and single population centers for each amalgamated kolkhoz, which implied resettlement of millions of peasants. Agro-cities or agro-towns was the original name, then switched to kolkhoz settlement.
Number of kolkhozy: 236k (40), 260k (49, more collectivization), 121k (50), 83k (56), 68k (58). Small kolkhozy were below 500 hectares (18%), very large ones were over 5000 ha (6%), the rest between 500 and 5000.
Reduction of the private plots of peasants (which before was 0.5ha). Private acreage of kolkhozniki: 5.9mha (50), 5.7mha (54) 5.8mha (55).
Trudoden was less than a ruble per day in the 50s; situation bad for kolkhozniki; however Jasny states that it might have been not much worse than earlier anyway. “The fact that mergers continued to take place in later years, after the idea of basing industrial expansion on extreme exploitation of the farm population had been modified, seems to indicate that such Leviathan-like organizations fit in well with the Soviet kind of socialism and communism.”
Larger kolkhozy became unmanageable after the merger (like in the 30’s with super-alrge state farms). A reorganization followed to do subdivisions that worked de-facto.
“Soviet agriculture emerged as having been largely based on the labor of women, ill-fed andill-clothed: a labor force immensely disgruntled by the small distributions from the kolkhozy for the compulsory work, by compulsory purchases of livestock from them at requisition prices, by enormous taxation in money of the output from their private tiny enterprises (in addition to taxation in kind), and by the huge sales taxes on what little the peasants bought in the co-operative stores.”
Oct 52, Stalin introduces a commodity exchange to replace free market exchanges: the state buys the agricultural products in exchange for consumer goods.
Great campaign announced to increasewcreate forest walls to prevent wind erotion; also to double irrigated land. The silence following the declarations (in 50) makes it look like the plans were not successful. Jasny states that the only part of the plan (the Great Stalin Constructions of Communism) that was fulfilled were the hydro plants in Kuibyshev and Stalingrad.
Large disclosures of the dismal situation of agriculture by Khruschev and Malenkov. “Agriculture was in a deplorable state in the whole of the USSR, when the collective leadership replaced Stalin early in 53.” “After fulfilling all their obligations, many a kolkhoz had nothing, or as good as nothing, to distribute among its kolkhozniki. The kolkhozniki, whether they had run away or not, did not work at all, or did not work properly and the following ear the kolkhoz frequently was in even poorer shape.”
Declines on agriculture during the war: grain 40%, potatoes 8.5%, vegetables 21%, cotton 48%, sugar beet 73%, animals 43%, milk 50%, wool 39%.
Jasny doubts the official estimate that by 50 the agricultural production was 95% of the prewar level. Jasny estimates that it was only reached in 53.
Missing data on agriculture in general during the war and immediately after, particularly acreages in 46-49. Whatever data can be inferred from other data (like livestock numbers), it all points to a snail-like recovery.
“Thus at the end of the Stalin Has Everything His Way period farm output was at about the 40 level. With the 46 farm production having been in any case not much above 60 per cent of that in 40 and the increase in 49 having been small, a jump of almost 50 per cent in only two years, 47 and 48, is implied.”
War ended in 45. In 46 recovery didn’t get under way woing to the slow demobilization from the armed forces and the drought. Then back to normal to prewar years slowly, almost done by 49.
Grain: 80.9mtons (49-53 yearly average), 82.5mtons in 53. Yield in 49-53 was about 7.7/7.8 quintals per hectare (very low).
Vegetables: 13.7mtons (40), 9.3mtons (50), 11.4 (53)
Potatoes: 47.9mtons (40), 75.7mtons (49-53), 88.6mtons (50), 72.6 (53)
Fruit was the most backwards branch of Soviet agriculture.
Only significant improvements in 53 compared to before the war were sugar beets and seed cotton. 53 cotton crop exceeded that of 40 by 50%.
“Whatever increases in output of certain technical crops in a comparable territory have taken place since the last prewar years and until 1953, they were unlikely to have offset the declines in the output of grain, potatoes, vegetables, flax, and certainly some other crops.”
20% less cows in 53 than in 40. Output of animal products in 53 comparable to that of 40.
In 59 Lisenkov admitted that acreages, yields and harvests of grain in 49-53 were at the level of 10-14, although the grain requirements have grown substantially since then.
According to Jasny, the numbers for 10-14 showed by Soviets were manipulated, so there was an actual decline. Yield in cotton and beets did not grow much, the outputs growing mainly because of the growth in acreage.
Precipitous declines post-war on the yield of flax, linseed and potatoes, among other items.
“While the picture of decay in agriculture in the last Stalin years is clear, this very interesting question is difficult to answer: Did the decay go so far as to cause the farm output actually to have a declining trend, or did it permit some slight growth?” Apparently the former.
“The new official series for gross agricultural production indicates that the enlarged territory produced in 1952, the last Stalin ear, 15 per cent more than the smaller territory produced in 1928. With consideration of the changes in boundaries this estimate implies no increase in output whatever or even a small decline over the period…”
Food production by urban population was very significant: 44 kg of potatoes (net) per capita in 54; 11kg of vegetables; 27 liters of milk; and 5kg of meat. Almost as much as the official retail trade in 50!
Causes of low kolkhoz productivity: lack of machinery, fertilizer and labor, low prices paid or agricultural products.
Kolkhoz output declined from 40 to 53.
State farms (sovkhozy) had a steep drop in productivity (50% from 40 to 45) and then recovered, although it’s not clear how much. They did go beyond their pre-war productivity. But at very high costs – for Jasny, these costs were the reason that kolkhozy were not converted to sovkhozy, which ideologically would have made perfect sense.
State procurements for everything except technical crops (and within these not even flax, which suffered a strong drop) went down or stayed at the same level in 53 than in 40.
Industry grew very fast after the war, according to Stalin’s wishes. Investment was very high, even with a starving population and a low natality rate. Pre-war industrial output regained in 48.
“It has been established that the Soviet economy, with its high investment quota and low personal incomes, is geared to rapid expansions rates, if those in power do not embark on such growth-retarding actions as the violent All-out Drive of the early 1930’s or the Purge Era of the late 1930’s.”
Producers goods grew much faster than consumer goods; already by the end of the war they were 2x compared to consumer goods. From 46 to 49 producers goods grew faster than consumers’ goods. Then they grew both at the same rate, but consumers’ goods were very small to start with.
From 46-50, no new developments, just recovery and expansion of whatever existed. Main exception was development of oil industry in Eastern Russia, given a decline of Baku’s fields.
Jasny estimates that industrial output in 45 was 70% of that of 40. Industrial output in 50 was 73% higher than that of 40 according to official figures; for Jasny, it’s closer to 40%.
Jasny estimated rates of industrial growth: -9% (46, because of switch back to non-war economy), 18% (47), 26% (48), 23% (49), 30% (50)
“Such a large rate of growth as 18 per cent in 1947 in the face of starvation was certainly a great “achievement”.”
Why such fast industrial recovery: it was the priority to the exclusion of everything else; help from satellites; and work from German prisoners. Yet another factor was the low utilization rate of industrial plants in 40 owing to the purges.
First year of industrial slowdown is 52. Official rates are 16% in 51 and 12% in 52; for Jasny the figures are lower but still represent high growth nonetheless.
Stalin ordered a massive expansion of steel during the middle of famine (Feb 46).
“Consumers’ goods never regained a substantial part of the loss in the share of industrial output they sustained during World War II. A certain improvement occurred from 1948 to 1950 (from 26% of the total output in 1948 to 27.1% in 1950) (…) but half of this increase was lost in the next two years.”
Consumer goods in 50 was barely at the prewar level. Total industry went up by 40% in that period and producers’ goods up by 60%.
In 40-50: steel grew 49% (a massive feat given that the Donbass, the main metallurgic center of the Soviet Union, was destroyed during the war); cement grew 78% (the first time the Soviets were able to truly raise the level of cement production to acceptable levels, breaking previous bottlenecks). Machinery by about 100-120%. But Jasny doubts that increase in machinery because of steel going up only 49% and an implication that worker productivity should have gone up by at least 69% during a period of war conditions and starvation/near-starvation. Jasny has no doubts about the growth in output of building materials.
Sugar output in 45 was 3.8% of that of 38!
The eastward shift of industry started in Tsarist times and continued after the Revolution, but not so pronounced until ww2. “It was, of course, much easier to expand industrial output in areas where industry had been established for a long time than to start it anew sonewhere else (…)”. Occupation of the West and South speeded up the move considerably. “Almost exclusively, goods which were indispensable to the war effort were involved in the move, though.” The move was largely confined to the eastern part of European Russia (the Volga region and the Urals), but not Asiatic Russia.
Official statistics: with 40 as index, in 50: total industrial output 173, in the Volga area 263, Urals 292, 313 in western Siberia. In the South (Ukraine and Moldavia) it was only 116.
In 50-55, the industry in the East developed at the same speed as industry as a whole. Volga grew by 99%, Urals by 77% and western Siberia by 79%.
“The most interesting feature of the eastern shift was the development of eastern steel production in competition with that of the Donbass in the Ukraine.” Donbass’ disadvantage is high cost of coking coal. Its advantage is the excellent iron ore in Krivoi Rog, not far to the west of the Donets Basin. But Donbass was never a cheap prducer of steel.
In eastern USSR, there is good coking coal in the Kuzbass (Kemerovo, western Siberia) which is much cheaper than the one from Donbass.
Note: until the 2014 war, the Donbass was the most densely populated of all the regions of Ukraine after Kiev (wikipedia).
Another note: donbass is a coal basin. At the beginning of the 20th century, half the population was Ukranian, but the cities were mostly Russian, with new immigrants coming to work in industry. The repopulation after the war further tilted the balance towards Russian, but much more linguistically than ethnically. So the Donbass cities, even after Ukranian move to the city, remained culturally Russian. It was a core part of the Russian industry. Donetsk was founded by an English entrepreneur at the turn of the century.
Note: as of 2014, Kuzbass generates 60% of Russian coal.
As of the late 50s there was no trunk line between Kuzbass and Urals (Urals-Kuzbass Combine).
Donbass pre-war produced 66% of pig iron. 22% was produced in the western end of the Urals, the rest being produced by the Kuzbass/Urals combine.
The war destroyed the Donbass. By 45, Ukraine’s production of pig iron was 1/6 of prewar, and its decline was not offset by the growth in the East. Growth happened in the Urals, but growth in Western Siberia was less than 10%.
Output pig iron in mtons (13|28|40|45|50|55):
- Urals: 0.9 0.7 2.7 5.1 7.2 11.9
- Western Siberia: 0.0 0.1 1.5 1.6 1.9 2.4
- Ukraine: 2.9 2.4 9.6 1.6 9.2 16.6
- Total: 4.2 3.3 14.9 8.8 19.2 33.3
“All other attempts to break the dominant role of the Donbass in steel output either gave almost negligible results or were absurd. Eastern Siberia (…) produced only about 1.5% (…) of total Soviet steel in 1955.”
The metallurgical plants started in the Caucasus and the Northwest are small and operate at about double the cost of established production centers.
Big move of petroleum production from Baku to Volga & Urals, which in 50 provided 60% of crude. In 55, 69.6% of crude was produced in Russia (9.3% in North Caucasus, 23.1% in Urals and 34.1% in Volga) and only 21.6% in Azerbaijan (Azerbaijan had 71.5% of the share in 40). Total production in mtons were 10.3 (13) 31.1 (40) and 70.8 (55).
Efforts to restore prewar Baku output had limited success. But investment in the Volga/Urals gave meteoric results.
“Where special conditions were not present, the old established industrial areas were retaining their dominance.” For example, cotton production in the area around Moscow.
“The domination of the old established production areas, even those with great disadvantages so far as raw materials are concerned, remained strongly pronounced also in machinery production. Even Leningrad (…) retained a large share in this output.”
“The giant turbines for installation in electric power plants, of which the Soviets are very proud, seem to come from Leningrad.”
“As in industry, the postwar recovery of transportation consisted almost exclusively of restoration and further expansion of what had already existed before World War I.”
Little development of new means of transportation (truck air, pipeline) and only few new railroad built.
Freight traffic recovered 40 level in 48 (26% growth just in 48). Also 48 was high point of industrial and construction recovery, but not for agriculture and trade. Growth slows down towards 52 and 53.
Rail transport grew almost as much as total reight traffic, so that its share of all traffic declined from 85.1% in 40 to 84.5% in 53. River freight’s share declined from 7.4% in 40 to 6.3% in 53 (river was always a high cost competitor). Truck’s share only amounted to 3.3% in 53. Pipelines for oil and gas were scarcely develop, Jasny argues, not because of lack of funds, but because of deep freeze in initiative.
Passenger traffic was over 40 level in 46, but down in 50 (perhaps because demobilization had already happened). By 52 it was 15% above 40. Train’s share in passenger traffic went from 92.2% in 40 to 87.2% in 53. Bus grew to 7.8% of total in 53 (two times larger than in 40). The air was 11 times larger in 53 than 40, but it still only amounted to 1.5% of total.
Only 4 thousand km added to railways in 45-50 and 1.7k in 51-52. Increase in transportation was achieved through higher density. Freight traffic by rail was 4.3mtons in 40, 5.2mtons in 50 and 6.7mtons in 52.
Turnabout of freight cars (measured in days) as measure of efficie ncy of system. 7.4 in 40, 10.8 in 45, then for each following year: 10.1, 9.6, 8.7, 8.1, 67.0, 7.5, 7.1, 6.9. Slow increase in efficiency.
Output per man lagged behind total output recovery. Jasny states this was because of slow recovery of agriculturef and personal consumption. Agriculture was possibly the only sector where the prewar output per man had not been restored by 50. Productivity in railways was (40 equals 100): 66.9 (45), 97.3 (49), 110, 119, 124 (50|51|52). Slow recovery in 46 and 47, then big leap forward between 48 and 51.
Official increase in productivity in industry from 40 to 50 is 37%. Jasny casts serious doubt on the number, because of exaggerations, particularly regarding the “unchangeable 1926/27 prices”.
Jasny estimates that if industry output grew by 40% and wage earners in industry by 29%, then productivity increased by less than 10%.
In construction, if investment increased by 59% and labor by 64%, then productivity decreased. The official number is an increase of 23%. Jasny also questions the 59% claimed official growth.
In agriculture, by 50 the prewar productivity was almost reached, and then surpassed by 10-15% in 1953. Jasny casts doubt but feels it’s not far from the mark; the 50-53 increase is a combination of a reduction of the number of farmers, improved deliveries of farm machinery and low overall productivity. Sovkhozi performed worse than kolkhozi.
Retail trade showed strong productivity increases. Jasny attributes them to an already low productivity in 40 (the reference year) and a reduction of the number of stores, plus the fact that vodka grew as a category and selling it was simple enough.
Official trade recovered to 40 level in 50.
Kolkhoz trade surpassed official rate in 45; the situation reversed in 47. Parallel growth in 47-50. After 50, official trade grew, kolkhoz trade stagnated.
Again, 40 was not a normal pre-war year, as the Soviets say, but a year of low consumption and stockpiling for the army.
Kolkhoz trade turnover in 40 revised from 41.2b to 29.1b rubles (official figures).
Official trade at current prices went from 175.1b in 40 to 359.6b in 50 (105% growth). Constant prices growth is claimed to be 10%. Jasny doubts it because of the way that trade was calculated for the Baltics and other new territories. He suspects official trade was the same in 50 as in 40, in real terms, within the same boundaries.
Population grew 6% from 39 to 50 within the 39 boundaries; urban population grew by 30%. From this Jasny deduces a decline in the per capita purchase in both urban and rural areas – I believe the hidden assumption is that with rural population, a lot of the consumption is not registered, so if the total trade is more or less the same, but the population is more urban, then there’s less hidden consumption, so if registered consumption stayed the same, it follows that total consumption declined.
Prices of tobacco and liquor sharply raised during world war II. Official trade in 42, in real terms, could have been 30% of that of 40.
Official trade, 40 is 100: 45: 41, 46: 53, 47: 62, 48: 70, 49: 85. The situation was grim. Great increase in death rate, similar decline in the birth rate and a strongly declining overall population change rate. “There is a great suspicion that only the ruthless dictatorship (along with the proverbial patience of the Russian people) could have kept the Soviet Union in the war under these extremely adverse conditions.” Decline of population continued at least until the 1947 crop or the December 1947 derationing.
Starvation conditions in 46 and near-starvation conditions in 48, as indicated by state trade figures.
Sales taxes went from 50.8% in 40 to a high of 67.8% in 48 and then decline and then decline to 40.6% in 56. “The exorbitant share of the sales taxes in retail turnover of about two-thirds of the turnover was maintained through 1948, supporting the conclusion that improvement in well-being did not start seriously before 1949.” Sales taxes went below the 40 level only after Stalin’s death.
Individual commodities in official trade had a poor showing in 50, compared to the already low level of 40. 10% less bread sold in 50 than in 40. Milk related products were 6% less and eggs 18%. Butter grew 60%, Jasny ascribes this to the high butter production of the new territories, particularly the Baltics, which were not included in 40.
“Sales of vodka during World War II and later would have permitted an interesting study of demand elasticity for strong liquor under conditions of starvation. But the data provided are inadequate for such an examination.” Vodka was merged with all other beverages (including non-alcoholic, but not coffee/tea). Estimated decline of vodka sales (from 40 to 50) to be around 33-50%.
Volume of sales of non-food goods in official trade increased 40% (official number); Jasny ascribes it to the low sales of goods in 40 because of stockpiling, plus the already low baseline in 40 (“How comfortable it is to start from near zero.”).
Eating places went up as a proportion of total trade from 13% in 40 to a peak of 25% during the war, coming down again to its pre-war level after derationing. Vodka/beverages made up a growing percentage of its turnover: growth in current prices 40-50 was 119% total, but 384% for beverages (and only 62% for other). The share of beverages went from 17.6% in 40 to 36.5% in 50 and 34% in 55. (other is food proper and tobacco products). Price of food went up 184% in the same period (40-50), so eating places had a real decline.
“The large decline in sales of food in eating places was clearly the outcome of a changed relationship between the prices in official and kolkhoz trade. (…) In 1940 the prices in kolkhoz trade were not far from double those in official trade and the consumers naturally crowded the eating places where food was more accessible than in official trade proper. In 1950 the prices in both types of trade were about the same and the consumers turned away their noses from the tasteless and generally unappetizing food in state and co-operative eating places.”
Total retail sales in rural areas at constant prices in 45 may have been only 33% of the 1940 sales (which were lower than in 39). Subsequent growth was also slower than in urban areas in 45-50, 108% vs 131%.
In 52, sales in rural areas were 24.6% of total official retail trade. “Of course, most rural dwellers were themselves producing foodstuffs and a large number of them were also receiving small amounts of it in kind from their kolkhozy.” Rural dwellers bought things in urban areas as well. But in 52, 66% of the population was still rural.
“Altogether, bad as the situation of the urban population was in the last Stalin years, the data concerning official trade reveal an even more disastrous situation for the rural areas.”
Numbers for kolkhoz trade, especially during the war, are inconsistent among sources and also hard to believe.
Jasny states that, as hard to believe as it may be, it seems that kolkhoz trade hardly increased from 45 to 47.
Jasny, with some trouble, interprets that in 47 kolkhoz trade was 86.2%0 of that of 40, which was a substantial increase over the level of 47.
The overall picture: a precipitous decline in turnover after the start of the war, a low of about 25% of 40 in 42 (with reduced territory) with prices 7x of those of 40; then in 43, prices double again. By 45, the volume of sales were 60% those of 40, the prices going down from the 43 level by 55% (close to 6x that of 40). Stagnation until the end of 47. In 48, increase in volume and prices went to 33% of that of 47, which would be about 2x those of 40.
For 50, Jasny estimates the same price level as in 40 and 15% more volume than in 40.
Overall level of sales was extremely low, measuring the actual consumption in weight/volume of each food commodity per capita
Personal incomes were “exceptionally bad” in 45. The situation wa s almost the same than that of the war years; but there’s much less evidence for incomes in the war years.
Jasny estimates a real personal income in 45 of 50% of that of 40 and 25% of that of 28, for the urban population. This number might actually be higher, because some services (including housing) did not significantly change from 40. An exact calculation is impossible.
Income only was allowed to grow after investment and the output of producers’ goods were considerably above the prewar level. Slight improvement in 46, more improvement in 47 (particularly the second half). Derationing in December 47, but at high prices.
When improvement came, it was mostly for wage earners. Real wages rose rapidly from March 1949; the 38 level was barely exceeded by 53.
Peasant income was relatively better than urban one, but its recovery was slower. By 50 or 51, there was a significant disproportion between urban and rural incomes.
Massive hiding of information by the Soviet government on incomes during 40-52, even to the late 50s. “Discussion of the private economy of the kolkhoz peasants is apparently prohibited in the USSR. Such discussion is completely absent, in any case.”
In 52, kolkhozniki received 47.5b rubles; for 80m kolkhozniki, that was about 600 rubles per capita, which was very little. The average per capita earning of wage/salary earners in 52 was 3800 rubles.
Very sparse and inconsistent official data published for incomes during 40-53.
“The important reason for emphasizing the indices in terms of 1940 has already been mentioned. Hardly anybody realized for a long time how bad the situation was for the population in 1940.”
Official number: real wages in 53 24% higher than in 40. The figure was revised downwards (Jasny states that the 53 figures were hard to believe, bordering on the absurd, even more so for peasant incomes) in 58 to close to 200 of that of 40.
Jasny approximations for wage/salary earners in terms of 40: 48:98, 49:109, 50:125, 51:139, 52:149, 53:165.
In 45, nominal wages were 25% larger than in 40; rationed food was more expensive by less than that, but rations were to small to prevent starvation. Kolkhoz trade had 10x prices compared to official trade prices in 40.
“The tragic living conditions in 45 are adequately revealed by the output and trade data. Farm production was (…) 40 per cent, or more, below that in 1940, in the face of the great need for farm products for the armed forces. (…) According to official estimates, the grain crops in 1945 and 1946 were 44 and 43 per cent, respectively, below that in 1940.”
In 45, sugar production was 21.5% of that of 40, butter 51.8%, vegetable oil 36.6%, vodka/hard liquor 47.1%, cigarettes 24.9%. Only the catch of fish was relatively favorable, 80.1% of that of 40.
Moderate declines in cattle, cows, sheep and goats (12.7, 17.9 and 23.6%). Hogs went down by 61.6% and industrial output of meat was reduced by 55.8%.
The trade data are as unfavorable as the output data. Official trade in 45 was 41% (in constant prices) that of 40. “Total purchases of food were little more than half of those in 1940.”
“On the basis of the above data, real incomes of the urban population appear to have been in 1945 not very much more than half of those of as poor a year as 1940.”
Peasant conditions seem impossible to estimate with precision. The money made by them on the high prices of the kolkhoz trade was very hard to convert into purchases. “Most of the paper money had indeed remained unspent until 90 per cent of it was voided by the monetary “reform” of December 16, 1947.”
For Jasny, the question is “how much did the peasants get to eat in 1945 from their own production and the distributions of the kolkhozy minus their sales in kolkhoz trade?”. His answer, “not much”, given the low crop output, huge armed forces still mobilized and maintained with fairly adequate rations, and some food for the non-farm population.
Jasny considers probable that the farm population had a better (“less disastrous”) food supplies than that of the non-farm population. Estimates of mortality in that year for urban and rural population would throw light on this, but those numbers are unavailable, also for the population as a whole.
“The situation of the population remained very grave until the realization of the 1947 crop. The 1946 harvest was poor.”
On the 47 crop: “the realization of the crop o this year may be considered the transition point from the disastrous near-war conditions to a still very precarious situation, but one which at least excluded a greater mortality than birth rate. Output of industrial consumers’ goods increased by 21 per cent in 1947 (…), the increases having probably occurred mainly in the second half of 1947 after the new harvest had provided the raw materials for the processing.”
Rises in official trade from first quarter of 47 to first quarter of 48: 72% bread, 52% groats/macaroni, 170% sugar, 44% cotton/silk. “An increase in sales of bread by 72 per cent in one year describes, of course, a very tragic situation at the time from which the increase is counted (…).”
Claimed official increase in real wage from 47 to 48 is 100%.
Jasny’s estimates that real wage for 48 is 87% of that of 40, and perhaps of 65% for 47. A harder to make estimation yields about 50% in 45 of the 40 level. “The level of real wages in 1948 was still so low that it was possible to raise it very strongly in subsequent years without hampering the drastic rate of the growth of industry. The improvement was effected in the first place by the rapid cut in the prices of consumers’ goods.”
Real wages grew by 33% in each of 49 and 50, then 16% in each of 51 and 52. After all the great increases in 48-52, in 52, the real wage was only 66% of that of 28. “The decline in real wages from 1928 to 1952 would have been even much greater than calculated above if the much greater labor productivity in 1952 had been considered.”
The changes in composition of labor also should have led to a rise in the average wage. But the decline would be smaller (since 1928) if calculation is made per capita rather than by wage earner.
Social wage: all expenses of the state on education, medical help, social insurance, pensions, help to mothers with many children or single mothers. In 28 it amounted to 11/12% of total wages paid (social+paid-out). In 52, the comparable number was 20%. Per capita total wage (paid-out + social) was about 75% of that of 28.
“The great role that the low pay of the labor force had in the Great Industrial Drive was emphasized repeatedly. The wage level was indeed so low in the last days of Stalin that the possibility of improving it represented an important reserve for the rulers who followed him.”
Cutting of agricultural prices as framed as gains to the population, which ignores the welfare of the farm population.
“In Krasnodar oblast, the richest agricultural area in the USSR, the 1951-53 distributions of grain, depending on the district, amounted to 2.01-2.83 kilograms per trudoden.” In Zaporozhie, the richest oblast agriculturally in the Ukraine, distributions wre 2.06-2.34. In Moscow, the average was 0.74 kilos of grain in 1952.
“There is no doubt that at the end of Stalin’s reign, the average distribution of grain was at least measurably, and possibly substantially smaller than the 1.6 kilograms distributed in 1936, the worst prewar year in this respect.” Average distribution per trudoden in 50-52 was probably not larger than one kilogram. “The secret would not have been guarded so carefully had the situation not been very bad.”
From a publication on the gains done in 40-56, it can be inferred that in 52, consumption by the kolkhozniki was (compared to 40): clothes consumption was 26% lower, knitted goods 10% decline, furniture/household 4% increase, cultural goods 103% increase. Overall non-food consumption in 52 for kolkhozniki was lower than in 40.
“The estimates of peasants’ real incomes in 1948, 1950 and 1952 (…) are guesses, amde on the assumption that there was a certain improvement in these incomes between 1948 and 1952, the main item causing the improvemnt having been the fact that the peasnts profited from the reductions in the prices of consumers’ goods in official trade.”
Estimated increase of peasant eal income from 48 5o 52: 20%. Official number is 50%. It’s reasonable to expect their income in 52 to be smaller than in 40. Compared to 28, peasant income should be around 60% or even lower. Difference between 28 adn 52 would have been “modreately smaller” if the svings made by peasants in 28 had been excluded (in 52, peasant savings were “negligible”). “Personal consumption by the peasants as such in 1952 was therefore not as disatrously below that of 1928 as is indicated b the calculated index.”
In 52, real paid-out wage was 70% of that of 28. On a per capita basis, the number is 75%.
In 28, peasant incomes were about 60% of those of wage earners in 28. “This great disparity, not unreasonable for a backward agricultural country but unsuitable for an industrial country, should have been reduced over the years. Rather than this, it widened considerably, and this development ultimately brought the situation to near catastrophic dimensions which could not have been tolerated for long. The rather drastic reforms introduced after Stalin’s death were overdue.”
On the alleged official doubling of real incomes from 47 to 48, Jasny concludes:
1/50 of all wage earners (<1m) may have had their real wages about doubled in 1948.
1/2, the most precarious group, had negligible to small improvements in their real wages. “The lowest wage group definitely lost.”
The remaining 24/50 of the hired-labor group had average gains in real wages of 25-30%, with a range of 10-70%.
“A considerable deterioration of peasant incomes from 1947 to 1948 is also part of this picture.”
By 40, national income in constant prices had not been matched by 48. This even taking into account the enlarged territory.
Personal incomes in 48 are estimated to be below the “miserable” 40 level to a greater extent than national income. This also taking into account the enlarged educational and health expenditures as part of the personal incomes.
Investment in 48 was at the 40 level. Investment in 40 was at best that of 37 and below that of 36. Still, a recovery of investment in 48 to the 40 level is significant, “the first year after the end of the starvation of World War II and of the alost equally bad early postwar years.”
“The Soviet Union never disarmed properly after World War II.” Cutbacks in 46 and 47; after a small reduction in 48, military spending in 48 dropped to the level of 40, a year of feverish war preparations.
Growth in national income from 48 to 50 estimated at 33% and 48 to 52 estimated at 66%! Growth 51 to 52, estimated at 25%!
Increase of personal incomes in 48-52 by about 62%, with wage and salary earners making up the bulk of personal incomes.
If increase in total personal incomes is too exaggerated, Jasny states that this could have only happened by exaggerating real peasant incomes. But this increase is estimated at only about 20%, which doesn’t seem far fetched especially given the decline in prices from the goods they were buying from the official trade, “and also possibly from an increase in their own output.”
Expenditure on education and health did not increase greatly in 48-52, but their value in real terms grew considerably, together with the rise in real wages. Same goes for expenditure on administration.
Military expenditure increased in 48-52 but less fast than personal incomes. The prices charged for armaments internally are not known for this period. But the price development for civilian machinery is a good proxy.
Great jump in military funds from 50 to 52 (31% in current prices when prices were actually going down), as preparations for the Korean War.
Machinery output grew by 64% from 48 to 50. The next to years showed an increase of a further 34%, with a total increase of 114% in 49-52. But because state investment in equipment grew 600% in 4-50 but only 3% in 50-52, the “entire large increase in output of machinery must have consisted of armaments during the Korean War, according to the official data.”
The component of national income from allocation that grew the most in 48-52, was net investment, estimated at 83% at constant prices.
Annual rates of national income of 14% in 49 and 50, and 12% in 51 and 52.
Railway traffic statistics as “the most reliable official Soviet statistical data and therefore as a good check on other data of which one cannot be so certain.”, according to Jasny. Growth year-to-year of freight traffic by all carriers in ton kilometers: 17.3% in 49, 12.7% in 50, 12% in 51, 9.9% in 52. 62.8% for 48-52. “A moderately smaller rate of growth in national income would seem more consistent with the growth shown by freight traffic.”
“An annual growth of 13 per cent in 1949 and 1950, on the average, and of 10 per cent or somewhat more, in 1951 and again in 1952, also on average, seem reasonably certain.”
Jasny’s estimates of high growth were not believed by most authors at the time they were first published, in the mid 50s.
No calculation of national income was made for 1945. “it is unlikely to have been larger than two-thirds of that in 1940 and may well have been measurably smaller than this in a comparable territory.”
In 52, national income was 50% of that of 40 and 100% of that of 45. Per capita was even larger, because within the 40 territory, population was 8% smaller. “All in all a favorable picture, except for the price of this growth: the greatly disorganized agriculture and the very low level of incomes of wage and salary earners, and especially those of the peasants, at the end of the successful period.”
“It is left to the reader to appraise this price as compared with the attainments.”
Soviet economy still very Stalinist in 1960. Stalin “succeeded in putting economic thought, economic initiative, in such a state of deep freeze that defrosting has been a very slow process.” Only in February 56 changes started to happen, the big changes not starting until the end of that year: more realistic planning, decentralization of industry, abolition of multiple prices paid by the state to the kolkhozy, changes in the composition of producer fuels and away from hydro power, small steps towards reducing the enormous stratification of wages.
“The chief exceptions (the reversal in far policies and a change in expenditures of the armed forces), which both occurred right after Stalin’s death, had special weighty reasons for this.”
In December 1956 the slow defrosting in policy is replaced by actual defrosting.
Overhaul to the chaotic Stalinist price system. There still lie fundamental problems: no charge for use of invested capital and lack of proper rewards for land use and quasi-rents.
“Measures to insure rational selection among investment possibilities have made better progress, but this issue is also far from settled. (…) The reason why this problem was not settled ten or even twen ty years ago, was the deep freeze of all thought, of all initiative, under Stalin.”
In 58, shift to fuel-burning power plants, because of the much smaller cost and time of building them.
Only dynamic aspect of Stalin’s time: space conquest, although most advances were made after Stalin. “And it is certainly a great exception.”
“The principal change since Stalin’s death is in the attitude toward agriculture. The Stalin period was largely based on severe exploitation of agriculture and the peasants. The harmful effect of these policies was so great and a reversal so badly needed that it might have occurred even under Stalin had he lived a few years longer.”
Decisive change regarding agriculture happened in 58 and after. The main problem is high stratification of wages and particularly the very low wages paid to peasants.
Other improvements to industry happened in the late 50s and could have happened much earlier if not for the freeze: intensification of chemical industry, shift from coal to petroleum & gas. 58 was a year of feverish changes.
While expenditure in armed forces is a secret, Jasny assumes its share of the national income declined substantially from 52 to 58. “The change in policy toward the armed forces, which, like the change in farm policy, occurred right after Stalin’s death, permitted an improvement in peasant incomes, without sacrificing the rate of growth of investment and also with full retention of the great rate of over-all economic growth.”
“So much for differences. But the similarities are vital too.” Continued exploitation of the peasants; “the exploitation of wage and salary earners differed from it only in degree. An industrialized country with personal incomes far below the level of a backward, heavily overpopulated agricultural country – this is the unique phenomenon observed in Stalin’s day. Socialism is the name believed appropriate for this arrangement.”
“It was the drastic exploitation of the whole population that permitted the immense investments, the messy state of prices, misinvestments and, last but not least, the very large expenditures on the armed forces.” Real wages only regained 28 level in 58! Peasants’ per capita real incomes were still below that level in 58.
“As under Stalin, so under Khrushchev, severe exploitation of the population remains the foundation of the great progress that the Soviet economy is displaying.”
By 21-22 war communism collapsed in a great famine. By then, most political leaders opposing the government were exiled. But “most of those interested in the economy, however, remained in the USSR.”
The Narodniki/neo-Narodniki concentrated on agricultural research, under the leadership of N. D. Kondratiev.
The Mensheviks played a considerable role in theory and “great influence in practical economics”.
In the Russia of the NEP “almost all large-scale industry was in the hands of the state, and so was all banking and foreign trade, and almost all wholesale trade.”
The Mensheviks dominated planning and the Gosplan. The leading light was V. G. Groman. Milestones of Soviet planning: The Control Figures of the National Economy of the USSR for 25-26, 26-27 and 27-28.
V. A. Bazarov, a follower of A. A. Bogdanov, was Groman’s closest collaborator.
In 28, Groman was dropped from Gosplan and Kondratiev was deprived from his Institute.
Menshevik economists were not killed, only removed from their positions, until the 1931 Menshevik trial. “But a whole generation of the intelligentia disappeared without a trace, and the country was deprived of the opportunity to profit from their talents and their experience.”
“In the late twenties, planning of the national economy implemented through compulsion replaced planning by methods which, with certain exceptionswould have been acceptable in democratic countries. (…) the Gosplan and other state economic agencies were cleared not only of those opposed to the new methods, but also of those not fully enthusiastic about them.”
Groman arrested and broken before the Menshevik trial in March 1931. Kondratiev as star witness for the prosecution. “the decisive factor in Groman’s surrender may have been the hopelessness of seeing planning, his cherished child, being put to use for the oppression of the whole Russian people, and especially of the hundred million peasants, for aims, exactly the reverse of what he wanted it to serve.”
“The idea of linear programming, with input-output analysis as its important component, attracts considerable attention now. The idea of input-output analysis of course dates back to Quesnay, but its rebirth in recent times and its practical application go back to Groman under the designation “balance of national economy.”” This was first displayed in Balance of National Economy of the USSR of 1923-24, published in 1926. Leontiev discussed it in a journal. According to Jasny, “unjustified claims of authorship of the idea have been made. (…) The West also is misled on this point.”
Figures 28|32|37|40|48|50|52|55:
- Farm population (m): 120 100 92 90 87 87 85 87
- Non-farm population (m): 31.3 52 74 85 88 94 101 113
- Real income per capita farm population, 28 is 100: 100 53 81 60 50 55 60 75
- Real income per capita non-farm population, 28 is 100: 100 51 64 58 50 67 78 89

Notes on Jasny – Soviet Industrialization (1928-1952)