A faithful reader passes along the snapshot of a high school world history textbook that notes the “fantastic economic results” of Stalin’s management of the Soviet economy back in the glory days of the successive Five Year plans. No wonder people fall for Elizabeth Warren.
Here’s the text in case you can’t make out the photo:
These forceful means of making the Soviet Union a modern industrial nation took a great toll on people’s personal lives. Many families and marriages broke up.
Yeah, a widespread system of Gulags, mass executions, deliberate starvation, and purges of your intelligentsia are often quite hard on marriages. To continue:
Stalin’s grim methods, however, also produced fantastic economic results. Although most targets of the first Five-Year Plan fell short, the Soviets made impressive gains. A second plan, launched in 1933, proved equally successful. From 1928 to 1937, industrial production increased more than 25 percent.
I suppose we shouldn’t be too hard on the textbook’s authors, Roger Beck and Linda Black, for merely following some the dimmest bulbs of liberal economics. Daron Acemoglu and James Robinson’s fabulous book Why Nations Fail: The Origins of Power, Prosperity, and Poverty remind us:
Indeed, the most widely used economics textbook in economics, written by Nobel Prize-winner Paul Samuelson, repeatedly predicted the coming economic dominance of the Soviet Union. In the 1961 edition, Samuelson predicted that Soviet national income would overtake that of the United States possibly by 1984, but probably by 1997. In the 1980 edition there was little change in the analysis, though the two dates were delayed to 2002 and 2012.
Acemoglu and Robinson go on to explain exactly why the Soviet Union realized these industrial production gains, and also why they were one-off changes that couldn’t be sustained:
But in some instances the productivity of labor and capital may be so much higher in one sector or activity, such as heavy industry in the Soviet Union, that even a top-down process under extractive institutions that allocates resources toward that sector can generate growth. . . [O]nce all the very inefficiently used resources had been reallocated to industry, there were few economic gains left to be had by fiat. Then the Soviet system hit a roadblock, with a lack of innovation and poor economic incentives preventing any further progress.
Between 1928 and 1960, Acemoglu and Robinson estimate, Soviet national income grew at 6 percent a year. Even these figures can be doubted. Two Soviet economists, Grigory Khanin and V. Selyunin, argued in 1987 that the Soviet economy peaked and began its decline in the early 1960s. The real long-term growth rate of the Soviet Union from the 1920s to the 1980s had been no better than 3.3 percent a year; the official statistics claimed 7.9 percent growth rate. Regardless of the real rate of growth, Acemoglu and Robinson conclude that “This quick economic growth was not created by technological change, but by reallocating labor and by capital accumulation through the creation of new tools and factories. . . [But] growth first slowed down and then totally collapsed.”
Acemoglu and Robinson further pointed out that one prominent group of Western Sovietologists predicted in 1980 that the Soviet economy would continue to grow at a 3.15 percent annual rate through the year 2000. The projection “does not portray a Soviet economy on the verge of collapse.” Another leading Sovietologist, Seweryn Bialer of Columbia University, wrote in Foreign Affairs that “The Soviet Union is not now nor will it be during the next decade in the throes of a true systemic crisis, for it boasts enormous unused reserves of political and social stability that suffice to endure the deepest difficulties.”
That last sentence kinda sounds like a description of the American Left: enormous unused reserves of nonsense that enable it to endure the deepest political difficulties. Meanwhile, get the Acemoglu and Robinson book if you want a sound treatment of economic growth and development.