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Reading: Robert C. Allen (2003): Farm to Factory: A Reinterpretation of the Soviet Industrial Revolution

Robert C. Allen (2003): Farm to Factory: A Reinterpretation of the Soviet Industrial Revolution (Princeton: Princeton University Press: 0691144311) <http://amzn.to/2kpLZd2>

The Big Question:

Was the Soviet Union an Asian economy, (like) a Latin American economy, a (central or western) European economy, or a settler-frontier economy?

  1. If it was an Asian economy, than it did well on economic growth--even though horribly (save in comparison to Maoist China, the Khmer Rouge, and the Korean Hereditary Dictatorship of the God-Kings Kim) in terms of societal well being.

  2. If it was a Latin American economy, it did OK in terms of economic growth--Allen says "good", but I think he overstates his case: "OK".

  3. If it was a (central or western) European economy, it did very badly--badly enough to prompt its bloodless overthrow.

  4. If it was a settler-frontier economy, its badness attains world-historical levels.

I reject Allen's conclusions, largely because of the regression-discontinuity study I did in the middle of the 1990s:

20140127 Econ 2 Intro to Microeconomics II key

The discontinuity between the countries on the left and the countries on the right is simply where Stalin's (or Mao's, or Giap's) armies stopped. The communist countries were, as of the moment that the Iron Curtain collapsed, missing 88% of their prosperity as measured by what seems and seemed to be the most natural yardstick.

Successes of the Soviet Union:

  1. By 1960, a roughly First World level of health, education, and other social indicators. However, followed by a relative decline.

  2. The victory in World War II--and the heavy-industrial and military production that made this possible. No market economy would ever have built a heavy industrial complex in Magnitogorsk. And all praise to comrade Alexei Kosygin for the most extraordinary industrial relocation effort in history. But Tukhachevsky would have done a lot better than Zhukov. And if the Ukrainians had not had to learn to be anti-Nazi things would have gone much better.

  3. Its relatively equal income distribution. Or was it a relatively equal income distribution?

  4. The attainment of military-strategic parity with the United States in the 1970s. But what do you have to believe about the world to see that as an achievement rather than as a mistaken waste of resources?

Allen's view of the "complete case for failure":

  1. The Soviet growth rate was not impressively high when seen in a world context....
  2. Even before 1917, the Russian economy had taken off on a trajectory of modern economic growth... that... the Bolshevik Revolution [then] derailed.... Soviet communism... did less well than Russian capitalism might have done.
  3. The increased output achieved under the Communists was limited to steel, machinery, and military equipment.... The welfare of the working class... would have been better served by... capitalism....
  4. The collectivization of agriculture... is a particularly vicious example....
  5. Soviet socialism was economically irrational... driven by ideology, bureaucratic infighting, and despotic caprice. Ignoring prices led to massive misallocation....
  6. The growth slowdown after 1970 showed the ultimate weakness of socialism: while it could function in a mediocre way to build... smokestack industries... it was incapable of the sustained technological advance required for the postindustrial age....

These claims make a formidable indictment, but all of them are contestable...

Allen's contestation:

The division between the rich countries and the poor countries has been exceptionally stable. Very few... have switched.... Japan... Taiwan and South Korea, Japan's former colonies... the southern cone of Latin America--Chile, Argentina, and Uruguay.... The Soviet Union grew rapidly in comparison to the other countries of the world. This stands out for... 1928-1970... and also obtains--less dramatically--... over... 1928-89...

Michael Ellman rebuts:

Michael Ellman: Soviet Industrialization: A Remarkable Success? <https://www.jstor.org/stable/pdf/1520423.pdf>: "From the standpoint of the middle of the first decade of the twenty-first century, Soviet growth as a whole was not very "remarkable"...

...Whereas the USSR only achieved middle-income status in 1989, several previously poor countries have now joined the First World (Japan, South Korea, Finland). Furthermore, the most populous developing country (China) has experienced more than two decades of fast growth. The Soviet growth spurts certainly compares well with average experience in Africa, Latin America, and India from 1928 to 1989, but the Soviet growth record as a whole is no longer very "re- markable" by world standards. Moreover, although much attention paid to national income statistics, no attempt is made to calculate a Human Development Index...

Outline of Book:

  1. Allen: the USSR did significantly better than countries like Argentina in the southern cone and India in South Asia.

  2. Contra Paul Gregory, pre-October growth was "a one-off resource boom with a veneer of some tariff-induced industrialization" that was incompatible with the socio-political system. Russia was headed for a Latin American or South Asian destiny without the Bolshevik Revolution. "In 1820 Russian income per head was 749 (1990 dollars).... By 1913... 1488 per ahead--but the West was a moving target, and, on a percentage basis, Russia was farther behind in 1913 than it had been in 1820. Nonetheless, a start had been made. But was it a satisfactory start?... No.... To Gerschenkron, Russian growth was a precarious achievement that depended crucially on state promotion and failed to create widespread prosperity..."

  3. Stalin's growth strategy made sense: you needed a Big Push a la Ragnar Nurkse or Paul Rosenstein-Rodan, and Grigorii Feldman showed that a bigger push in heavy industry was on the Turnpike. I, to the contrary, see defense as the imperative here.

  4. Land productivity was good by North American standards, and the commune served as a welfare mechanism for that part of the population that could not be productively employed. This is a super Arthur Lewis theory: it's not that unlimited amounts of labor are available by moving people out of occupations where their productivity is subsistence level--their productivity is less than subsistence level.

  5. How planning can coordinate a Big Push to replicate the industrial structure you know you want to have.

  6. Russia was saved from India's fate by a rapid demographic transition fueled primarily by the large scale emancipation of women. Ahem! One might say that the shortage economy plus low wages created a de facto one child policy--and one might point to the Ukraine terror-famine and excess World War II mortality--not just from scorched earth policies but on Seelow Heights...

  7. Urban per capita consumption in 1937 was above that in 1928, and rural per capita consumption in 1938-39 was no lower. Is this credible? Does it assume that the distribution system ran as well in the late 1930s without the NEPmen as it had in the late 1920s with the NEPmen?

  8. Rapid industrialization driven by Lewis-like resource mobilization.

  9. Financing industrialization: How much via indirectly taxing agriculture? How much via collecting the harvest at semi-gunpoint and paying very low prices?

  10. The post-Stalin slowdown was due to (a) the requirements of military spending and (b) "hare-brained schemes".

Allen on why Russia was not and could not be a (western or central) European economy:

[In Britain] the widespread ownership of private property and the establishment of representative government... was the basis of civil society independent of the state.... [In Russia] the "rule of law" was a tool by which the tsar and nobles exploited the peasants rather than an impartial empire defining the rules of the game.... Since the seventeenth century an independent "civil society" has been the impossible dream of Russian liberals. Tsarist Russia [thus] lacked the social, legal and economic institutions that theorists of economic growth have argued are prerequisites for capitalist development. Indeed, much of the rest of the world lacked--and still lacks--this as well.... Two responses are possible... create the missing prerequisites... create substitutes for the missing prerequisites.. Gerschenkron (1962).... Russia's path to industrial society was based on the state's creating policies and institutions to substitute for the prerequisites that characterized Western economies. At the end of the seventeen century, Russia was already falling behind.... In the absence of the communist revolution and the Five-Year Plans, Russia would have remained as backward as much of Latin America or, indeed, South Asia. That fate was avoided by Stalin's economic institutions...

Farm to Factory A Reinterpretation of the Soviet Industrial Revolution Robert C Allen Google Books

Farm to Factory A Reinterpretation of the Soviet Industrial Revolution Robert C Allen Google Books

Farm to Factory A Reinterpretation of the Soviet Industrial Revolution Robert C Allen Google Books

Farm to Factory A Reinterpretation of the Soviet Industrial Revolution Robert C Allen Google Books

Amazon com Farm to Factory A Reinterpretation of the Soviet Industrial Revolution The Princeton Economic History of the Western World 9780691144313 Robert C Allen Books