Notes

1. GOALS AND INSTRUMENTS OF ECONOMIC DEVELOPMENT

1. The speed of this race is further accelerated as the policy makers of the more developed countries deliberately aim at quickening the pace of growth of their economies. See E. S. Phelps, ed., The Goal of Economic Growth (New York: Norton, 1962), pp. vii ff.

2. See Vsesoiuznaia Kommunisticheskaia Partiia (Bol’sheoikov) ν rezoliutsiiakh i resheniiakh S’ezdov, Konferentsii i Plenumov Tsk (All-Union Communist Party [Bolsheviks], resolutions and decisions of Congresses, Conferences and Plenums of the Central Committee), Sixth Edition (Moscow: Gospolitizdat, 1941), Part I (1898-1924), p. 545

3. Ibid., Part II (1925-1939), p. 49. The XlVth Party Conference had affirmed in April of the same year that the triumph of socialism was possible in one country, but had added the qualification that a “final guarantee” against capitalist restoration depended “on the victory of socialism in some advanced countries at least” (p. 28).

4. Marxian economics is a “Stufernlehre”: its objective, as P. J. D. Wiles rightly points out, is to discover through what institutional stages (Stufen) the world economy is passing and to make “things go in the direction desired or predicted.” See P. J. D. Wiles, The Political Economy of Communism (Cambridge: Harvard University Press, 1963), pp. 47-48.

5. Vsesoiuznaia Kommunisticheskaia Partiia. . . resoliutsiiakh (All-Union Communist Party. . . resolutions), Part II, p. 125.

6. The 1928 Soviet income was estimated by Julius Wyler at $20.2 billion in 1940 dollar prices. We have converted the Wyler data to 1954 prices. See J. Wyler, “The National Income of Soviet Russia,” Social Research, December 1946; and “Die Schätzungen des sowjet-russichen Volkseinkommens,” Schweizerische Zeitschrift für Volkswirt-schaft und Statistik (1951), nos. 5 and 6.

7. The Soviet population reached 150.4 million in the mid-twenties; that of Brazil reached 58.4 million in the mid-fifties. The territories of the two countries covered 21.0 and 8.0 million sq. km.

8. Quoted by Leon Trotsky, The Real Situation in Russia, trans, by Max Eastman (New York: Harcourt, Brace, 1928), p. 23.

2. THE SOVIET ECONOMY AND ECONOMIC LAWS

1. Karl Marx, A Contribution to the Critique of Political Economy, trans, by N. I. Stone (Chicago: Kerr and Co., 1911), p. 11.

2. Ibid., pp. 11-12.

3. Paraphrasing Marshall, we could say that for Marx economic “laws” are exact statements of economic tendencies; Marshall’s, and modem, principles are only statements of probable tendencies. See Alfred Marshall, Principles of Economics (London: Macmillan, 1961), vol. 1, pp. 31 ff.

4. See A. Bogdanov, A Short Course of Economic Science, Second Edition (London: Dorrit Press, 1927), p. 14. Also G. V. Plekhanov, The Materialist Conception of History (London: Lawrence and Wis-hart, 1940), p. 28; and Marx, A Contribution to the Critique of Political Economy, pp. 265, 268-269, 272.

5. The recognition of the existence of a ‘law” (or an objective regularity), and conformity with it, is called in Russian zakonomemost’. “Determinism” is only a very approximate translation of the term.

6. Marx’s economic analysis leaves no room for subjective concepts concerning cost, price, or demand. For Marx, individual households or entrepreneurs can never be viewed as isolated atoms or as Robinson Crusoes, but only as parts of a given social system. Values and demand-supply relationships are determined by the mode of production and social labor relationships—or by the “productive relations” which this mode of production conditions. Modem value theory (or, in Soviet parlance, “bourgeois” economics) embraces two distinct types of analysis. The first deals with the individual behavior of entrepreneurs or households in terms of their own motivations; the second ascertains how interaction of these individual entities determines, independently of rational will, their demand-supply relationships. Cf. N. I. Bukharin, Ekonomika perekhodnogo perioda (Economics of the period of transition) (Moscow: Gosizdat, 1920), p. 126; and W. Leontief, “The Significance of Marxian Economics for Present Day Economic Theory,” American Economic Review, Supplement, XXVIII (1938), 1: 1-2. The Marxists view Marxian economics as resting on “objectivist-social” foundations, while “bourgeois” economics rests on subjectivist foundations.

This crucial difference between Marxist and non-Marxist approaches to economics should not be confused with the voluntarist-subjectivist versus determinist-objectivist argument concerning the importance and the limits of the “conscious” element in shaping up a socialist society. Under socialism man is thought to “more and more consciously make his own history,” since the “social causes set in motion by him will have in the main and in a constantly growing measure, the results intended by him.” F. Engels, “Socialism: Utopian and Scientific,” in A. P. Mendel, ed., Essential Works of Marxism (New York: Bantam, 1961), p. 80. The Soviet determinists emphasized in this connection the role of the economic milieu in which the party necessarily exercises its actions.

7. N. I. Bukharin and E. A. Preobrazhenskii, The ABC of Communism, trans, by Eden and Cedar Paul for the Communist Party of Great Britain (London: Unwin Bros., 1922).

8. Ibid., pp. 334-335. Presumably the authors refer specifically to money prices and not to planners’ use of ratios of equivalence between products for accounting purposes.

9. See N. I. Bukharin, Ekonomika perekhodnogo perioda (Economics of the period of transition), p. 125.

10. Ibid., p. 129. See also Paul M. Sweezy, The Theory of Capitalist Development: Principles of Marxian Political Economy (New York: Oxford University Press, 1942), pp. 52-53.

11. See I. Stepanov-Skvortsov, “Chto takoe politicheskaia ekon-omiia?” (What is political economy?) and “Premia po dokladu I. Step-anova-Skvortsova” (Discussion on the report of I. Stepanov-Skvortsov), Vestnik kommunisticheskoi akademii (Moscow: Komakadizdat, no. 11, 1925), p. 269.

Before the debate in the Communist Academy the economist V. G. Groman published, in connection with the discussion on planning, an article entitled “O nekotorykh zakonomemostiakh empiricheski obnar-uzhivaemykh v nashem narodnom khoziaistve” (On certain regularities empirically observable in our economy), Planovoe khoziaistvo (1925), l: 88-101. Groman stressed the existence of “a system, of empirical laws” operating within the Soviet economy, and he affirmed his desire to uncover the prevailing “economic static and dynamic regularities.” As we shall see in the discussion on planning, Groman’s position was severely attacked by those who stressed the importance of “conscious” factors in planning.

12. Stepanov-Svortsov, “Chto takoe politicheskaia ekonomiia?” (What is political economy?), p. 287.

13. Ibid., p. 302.

14. Ibid., pp. 296, 298, 315.

15. Ibid., p. 310.

16. See B. Borilin, “Lenin ob ‘Ekonomike perekhodnogo perioda’ “ (Lenin on the “Economics of the transition period”), Bol’shevik (October 1929), no. 20. Quoting Lenin’s marginal notes on Bukharin’s work—made nine years earlier—Borilin adds: “The limitation of political economy to the frame of commodity-capitalism which is given by com. Bukharin [and still by the majority of Marxists in the USSR] is, according to Lenin, erroneous and represents a step back on Engel’s opinion. Lenin believes that political economy must exist also under communism” (p. 30; emphasis supplied).

17. J. V. Stalin, Economic Problems of Socialism in the USSR (New York: International Publishers, 1952), p. 19. (Emphasis supplied.)

18. Ibid.

19. Ibid.

20. It is interesting to note that in vol. 51 (1945) of the Bol’shaia sovetskaia entsiklopediia (The great Soviet encyclopedia), First Edition, one reads under the entry “Skvortsov-Stepanov” that Skvortsov-Stepanov, though a good Bolshevik, was influenced by Bogdanov and displayed a “mechanist understanding of Marxism” (p. 283). The Second Edition of Bol’shaia, released in 1955, drops any reference to Skvortsov-Stepanov’s “mechanist understanding of Marxism.”

21. O. Lange, The Political Economy of Socialism, lecture on November 18, 1957 at the Institute of International Politics and Economics, in Belgrade (Warsaw: Polish Institute of International Affairs, 1957). PP-5-8. (Mimeographed.)

22. Ibid., p. 5.

23. See K. N. Shafiev, et al., eds., Politicheskaia ekonomiia sotsial-izma (Political economy of socialism) (Moscow: Sotsekgiz, 1960), pp. 179-180, 184.

24. Ibid., p. 118.

25. See N. Spulber, The Soviet Economy: Structure, Principles, Problems (New York: Norton, 1962), ch. 9.

26. For a discussion of this point see Wiles, The Political Economy of Communism, pp. 55-56.

27. See K. Marx, Capital, II (Moscow: Foreign Languages Publishing House, 1957), pp. 392 ff.

28. See Spulber, The Soviet Economy, pp. 131 ff.

29. G. A. Fel’dman, “K teorii tempov narodnogo dokhoda” (On the theory of growth rates of national income), Planovoe khoziaistvo (1928), 11: 146-171, and (1928) 12: 151-181.

30. See Evsey D. Domar, “A Soviet Model of Growth,” in Essays in the Theory of Economic Growth (New York: Oxford University Press, 1957), pp. 223 ff.

31. Ibid.

32. E. A. Preobrazhenskii, “Khoziaistvennoe ravnovesie v sisteme SSSR” (Economic equilibrium in the Soviet system), Vestnik Kommu-nisticheskoi Akademii (1927), 22: 19-71.

33. See notably R. S. Eckaus, “The Factor Proportions Problem in Underdeveloped Areas,” American Economic Review, September 1955, PP-539-565; A. O. Hirschman, “Investment Policies and ‘Dualism’ in Underdeveloped Countries,” American Economic Review, September 1957, pp. 550-570; Sayre P. Schatz, “Inflation in Underdeveloped Areas: A Theoretical Analysis,” ibid., pp. 571-593.

34. See for instance P. C. Mahalanobis, “Some Observations on the Process of Growth of National Income,” Sankhya, XII (1953); and “The Approach of Operational Research to Planning in India,” Sankhya, XVI (1955). For presentation of Professor Mahalanobis’ models— a two-sector model (sector one producing investment goods, sector two producing consumers’ goods only) and a four-sector model (derived from the former by subdividing consumer goods industries into [a] factory production of consumer goods, [b] consumer goods, including agricultural products, in small and household industries, and [c] services such as health and education)—as well as for analysis of the problems raised by the allocation of investment over these four sectors, see Jan Tinbergen and H. C. Boz, Mathematical Models of Economic Growth (New York: McGraw-Hill, 1962), pp. 77-80.

35. P. I. Popov, ed., Balans narodnogo khoziaistva Soiuza SSR 1923/24 goda (Balance of the national economy of the USSR for 1923/24), Trudy Tsentral’nogo Statisticheskogo Upravleniia (Transactions of the Central Statistical Administration), XXIX (Moscow: Central Statistical Administration, 1926).

36. S. G. Strumilin, “O kontrol’nykh tsifrakh Gosplana” (On the control figures of Gosplan), in S. G. Strumilin, ed., Ocherki sovetskoi ekonomike: Resursy i perspektivy (Essays in Soviet economics: Resources and perspectives) (Moscow-Leningrad: USSR Gosplan, 1928), p. 311.

37. The editorial “Put’ Sovetskoi Statistiki” (The road of Soviet statistics), Vestnik statistiki, XXV (1927), 1: 15.

38. V. G. Groman, “Balans narodnogo khoziaistva” (Balance of the national economy), Planovoe khoziaistvo (1926), 11: 62-80. Dr. Naum Jasny contends that the “idea of the balance of national economy (the USA input-output analysis) was first advanced in the U.S.S.R. (in the twentieth century)” and that this “idea was first brought up by V. G. Groman in early 1923 at the latest.” See Naum Jasny, Essays on the Soviet Economy (New York: Praeger, 1962), pp. 54, 161-162. Dr. Jasny seems to imply that a balance of the national economy is necessarily identical with input-output analysis and that Groman first advanced this idea. Actually, there were a number of economists both in Russia and abroad who suggested a variety of national balance schemes; but only Popov and Litoshenko constructed a flow table which prefigured an elementary input-output tabulation. And, as we have said, their methodology was rejected by Groman. For a review of some theories concerning a national economic balance see P. Hermberg, Volkswirtschaftliche Bilanzen (National Economic Balances) (Leipzig: Akademische Verlagsgesellschaft, 1927), which includes inter alia references to various German works dating into the late nineteenth century; and S. A. Fal’ker, “Iz istorii idei narodnokhoziaistvennogo bal-ansa” (From the history of the idea of a national economic balance), Planovoe khoziaistvo (1928), 10: 153-174. The merit of Popov and Litoshenko is not that they proposed the drawing of a balance, but that they constructed one which revealed all the concurrent input-output aspects of the activity of all the branches of the Soviet economy of the time. For this they owe hardly anything to their predecessors, particularly Groman. But of course it is still a long way from Popov’s descriptive pioneering attempt to modem input-output analysis, particularly the use of technical coefficients, the ability to express the structural interdependence of any economy, and the capacity to project all interrelations in a consistent way.

39. See W. Leontief, “Balans narodnogo khoziaistva SSSR” (The balance of the national economy of the USSR), Planovoe khoziaistvo (1925), 12: 254-258. Professor Leontief dealt in his review with Popov’s report to the Council for Labor and Defense, published in Ekon-omicheskaia zhizn (1925), no. 72.

40. R. E. Vaisberg, “Burzhuaznaia ideologiia v ekonomicheskoi literature” (Bourgeois ideology in economic literature), Planovoe khoziaistvo (1925), no. 11.

41. R. E. Vaisberg in “K postroeniiu general’nogo plana” (On the construction of the General Plan), “Doklad N. A. Kovalevskogo i premia po dokladu N. A. Kovalevskogo” (Report of N. A. Kovalevskii and discussion on the report), Planovoe khoziaistvo (1930), 3: 146.

42. See M. Barengol’ts, “Emkost’ promyshlennogo rynka v SSSR” (Capacity of the industrial market in the USSR), Planovoe khoziaistvo (1928), 7: 325-348. Nobody then took the next step, namely, that of relating the output of a sector to the demand of other sectors, and of revealing the “interdependence coefficients” of the economy.

43. R. Riabushkin, “Balansovye postroeniia v burzhuaznoi statis-tike” (Construction of balance sheets in bourgeois statistics), Vestnik statistiki (1956), no. 6: 50-59.

44. See Academician V. S. Nemchinov, Application of Statistical and Mathematical Methods in Soviet Planning, Report to the International Conference on Input-Output Analysis (Moscow: Academy of Sciences of the USSR, 1961), pp. 16-17.

3. STRATEGIES OF ECONOMIC DEVELOPMENT

1. But opinions at present are increasingly divided as to the need for a government policy expressly designed to alter the rate of growth of the economy as a whole. See E. S. Phelps, ed., The Goal of Economic Growth (New York: Norton, 1962).

2. See V. I. Lenin, The Development of Capitalism in Russia: The Process of the Formation of a Home Market for Large-scale Industry (1899) (Moscow: Foreign Languages Publishing House, 1956).

3. As Lenin put it, “the home market grows not so much on account of articles of consumption as of means of production.” Ibid., p. 31.

4. Ibid., pp. 31-32.

5. The contention that technological progress always implies an increase in the organic composition of capital is questionable. Technological progress may be achieved in a number of ways, including replacement of worn-out equipment, that is, at a zero rate of growth of sector I. For further comments see N. Spulber, The Soviet Economy: Structure, Principles, Problems (New York: Norton, 1962), pp. 211, 212.

6. See Maurice Dobb, Russian Economic Development Since the Revolution (New York: Dutton, 1928), p. 245.

7. The so-called Left Opposition (Moscow Opposition, Opposition of 1923, or Trotskyists) solidified in 1923 around Trotsky after a denunciation of his views by the ruling group of the party (Stalin, Zinoviev, and Bukharin) in the beginning of October of that year. In a collective letter addressed to the Central Committee of the party (and known since then as the “Declaration of the 46”) forty-six prominent Communists sided with Trotsky on a number of problems ranging from the role of industry to the fight against “bureaucratism.” Among the signatories were Piatakov, Preobrazhenskii, Serebriakov, Smirnov, Boguslavskii, Stukhov, Yakovleva, Kossior, Rafael, Maximovskii, Beloborodov, Alskii, Muralov, Rosengol’ts, Sosnovskii, Voronskii, Bosh, Drobnis, and Eltsin. In 1926 the group was joined by the so-called Leningrad Opposition, led by Zinoviev, Kamenev, Sokol’nikov, Krup-skaia, Slutskii, and others. The resultant fusion created the Opposition Bloc of Bolshevik-Leninists. See Leon Trotsky, The Third International After Lenin, trans, by John Wright (New York: Pioneer Publishers, 1957), PP-314-315

8. Cf. Vsesoiuznaia Kommunisticheskaia Partiia (Bol’shevikov) v rezoliutsiiakh i resheniiakh S’ezdov, Konferentsii i Plenumov Tsk (All-Union Communist Party [Bolsheviks], resolutions and decisions of Congresses, Conferences and Plenums of the Central Committee), Sixth Edition (Moscow: Gospolitizdat, 1941), Part I, p. 545. The policy was confirmed at the XIIIth Party Congress in May of the same year.

9. The Russians define as “recovery” period the period in which prewar levels of output, particularly in industry and agriculture, have been reached. By “reconstruction” they understand the expansion of productive capacity, a shift of the economy to a “higher technological plane,” and a change in pace of capital formation and in rates of growth of the main sectors of the economy.

10. L. Shanin, “Ekonomicheskaia priroda nashego bestovar’ia” (The economic nature of our commodity shortage), Ekonomicheskoe obo-zrenie (1926), 11: 25-39; and “Voprosy ekonomicheskogo kursa” (“Questions of the economic course”), Bol’shevik (1926), 2: 65-87.

11. N. I. Bukharin, Partiia i oppozitsionnyi blok (The party and the opposition bloc) (Leningrad: Priboi, 1926), p. 41.

12. N. I. Bukharin, La situation extérieure et intérieure de l’URSS (The foreign and domestic situation of the USSR), Report to the XVth Party Conference (Paris: Bureau d’Editions, 1927), p. 47.

In terms of the current discussions on underdevelopment, Bukharin raises implicitly the question of aggregate demand and that of the linkage between the emergence of new wants and expectations in the rural areas and the expenditure there of additional efforts to increase output. As A. Smithies puts it, “a programme that delays unduly the realization of these expectations may not be the most efficient in achieving the desired increases in output”— i.e., may not stimulate more work if additional goods are not obtainable, and may thus hinder the growth of industry. See A. Smithies, “Rising Expectations and Economic Development,” The Economic Journal, June 1961, p. 259.

13. Commenting on the decisions of the XVth All-Union Party Conference, the official History of the Communist Party of the Soviet Union records that “the Conference note that the hegemony of large-scale industry in the country’s economy had been strengthened, that its leading role in promoting the development of agriculture, including agricultural co-operation, had grown.” (Emphasis supplied.) Stress continued to be placed on the role of heavy industry as the lever for transforming agriculture. See B. N. Ponomaryov et al., History of the Communist Party of the Soviet Union (Moscow: Foreign Languages Publishing House, 1960), p. 410.

14. See E. A. Preobrazhenskii, Novato ekonomika (New economics), Second Edition (Moscow: Komakadizdat, 1926).

15. Some Western writers agree that a major economic change in an underdeveloped country—in Soviet parlance, its shifting to a higher technological plane—does require capital deepening and thus runs counter to “the dictates of the relative factor-supply situation.” H. J. Bruton, for instance, notes that “where the capital-labour ratio calls for labour-using, capital-saving innovations, modem technology calls for a series of innovations which are the exact opposite before the capital-saving innovations are possible.” (See H. J. Bruton, “Growth Models and Underdeveloped Economies,” The Journal of Political Economy, August, 1955, pp. 327-328.) While, however, Lenin (cf. above, note 5) and Preobrazhenskii assert that technological progress is always capital-using, the modem literature concedes at most that this may be typical for the initial phase during which an attempt is made by an underdeveloped country to reorganize its general economic system. Capital-using innovations are viewed in the context of the Western thesis as necessary before capital-saving innovations become possible.

16. The empilical assumptions implicit in Preobrazhenskii’s argument are questionable: it is not always true that small-scale production has a higher ratio of fixed capital to output than does large-scale, or a higher ratio of inventory to output. Currently the more usual assumptions—likewise empirically precarious—are the opposite.

17. R. S. Eckaus demonstrates in his analysis of factor proportions applied to two sectors that “disguised unemployment in the rural sector will increase if a large part of the capital available is systematically drawn into the capital-intensive and fixed-coefficient sector.” See “The Factor Proportions Problem in Underdeveloped Areas,” American Economic Review, September 1955, pp. 559-560.

18. See L. Trotsky, “Platform of the Opposition” (1927), published in English under the title The Real Situation in Russia, trans, by Max Eastman. (New York: Harcourt, Brace, 1928), pp. 63, 67.

19. See “Perspektivy khoziaistvennogo razvitiia SSSR: Kontrol’nye tsifry Gosplana” (Perspectives of the economic development of the USSR: Control figures of the State Planning Committee), Report of V. P. Miliutin at the Communist Academy, and Piatakov’s comments, Vestnik kommunisticheskoi akademii (1926), 17: 208 ff.

20. The level of savings is far from being the only growth-inhibiting factor. Many other growth-inhibiting elements—shortages of specific commodities, skills, organization, and foreign exchange—weigh heavily on the capacity for development of certain underdeveloped areas. Various modem writers therefore suggest that a narrow-minded preoccupation with the supply of savings leads only to a single-tracked emphasis on consumer austerity, while a strategy concerned with coping with specific scarcities offers better avenues for attacking the various dimensions of the problem of development. See John P. Lewis, Quiet Crisis in India: Economic Development and American Policy (Washington: Brookings Institution, 1962), pp. 35 ff.

21. See J. V. Stalin, “Industrialization and the Right Deviation in the C.P.S.U. (b)” (1928), Works, XI (Moscow: Foreign Languages Publishing House, 1954), p. 256.

22. See Z. S. Katsenelenbaum, Industrializatsiia khoziaistva i zadachi kredita v SSSR (Industrialization of the economy and the tasks of credit in the USSR) (Moscow-Leningrad: Gosizdat, 1928).

23. See the key document of the party’s XVth Congress, “O direk-tivakh po sostavleniiu piatiletnego plana narodnogo khoziaistva” (Directives on the drawing of the Five-Year Plan of the national economy) (December 1927), in Vsesoiuznaia Kommunisticheskaia Partiia. . . rezoliutsiiakh (All-Union Communist Party. . . resolutions), Part II, pp. 237 fF.

24. See Spulber, The Soviet Economy, pp. 36-37, 230.

25. See Gosplan SSSR, Kontrol’nye tsifry narodnogo khoziaistva na 1926/27 god (Control figures of the national economy for 1926/27) (Moscow: Planovoe khoziaistvo, 1926), pp. 170-171. The idea of the joint development of industry and agriculture at a differential pace, “on the U.S. model,” stressed by the party’s XVth Congress, was widely popularized at the time. See V. E. Motylev, Problema tempa razvitiia SSSR (The problem of the pace of development of the USSR) (Moscow: Komakadizdat, 1928), p. 103.

26. V. A. Bazarov, “Printsipy postroeniia perspektivnogo plana” (Principles of long-range planning), Planovoe khoziaistvo (1928), 2: 38-63.

27. See below, chapter five, “Principles and Procedures of Planning.”

28. For a number of reasons which I have summarized elsewhere, Communist China has followed since the mid-1950’s Bukharin’s rather than Preobrazhenskii’s approach. See my paper on “Contrasting Economic Patterns: Chinese and Soviet Development Strategies,” Soviet Studies, July 1963.

For the discussions on “balanced” versus “unbalanced” growth in the current literature on development see notably A. O. Hirschman, The Strategy of Economic Development (New Haven: Yale University Press, 1958), chs. 3 and 4, and P. Streeten, Economic Integration: Aspects and Problems (Leyden: Sythoff, 1961) ch. V.

29. The whole belt-tightening strategy of the Left obviously depended upon the political and social feasibility of “declaring war on the peasants” and of maintaining a regimen of rigorous authoritarian controls. Evidently this cannot be accomplished in a country committed to democratic processes. On the other hand, even in a Communist dictatorship the share of produce extracted from a very backward agriculture might not be sufficient to sustain a vast program of industrialization and urbanization. Unable sufficiently to expand the marketed share of grains, the Chinese adopted a different strategy: they organized a massive mobilization of rural manpower for capital construction both inside and outside agriculture. See my “Contrasting Economic Patterns: Chinese and Soviet Development Strategies,” Soviet Studies, July 1963.

30. See G. M. Krzhizhanovskii, “Oblastnye elektricheskie stantsii na torfe i ikh znachenie dlia tsentral’nogo promyshlennogo raiona Rossii” (Regional electric stations using peat and their importance for the central industrial region of Russia). This article, written in November 1915, is included in Izbranoe (Selected works) (Moscow: Gospoliti-zdat, 1957), pp. 9-20. See also pp. 50, 56.

31. See G. M. Krzhizhanovskii, “Piat’ let bor‘by za plan” (Five years of struggle for the plan), Planovoe khoziaistvo (1926), 3: 13.

32. See G. M. Krzhizhanovskii’s article, “Plan elektrifikatsii RSFSR” (The Plan of electrification of Russia), written in December 1920 and reprinted in Izbranoe (Selected works), pp. 65-189. Marvelous prospects were foreseen in the twenties from the massive use of electricity. Bazarov, for instance, declared that thanks to its fractionability and transportability, electricity would allow both the mechanization of handicrafts and the reduction of urban construction, a fact which would “relegate to the museums of the future socialist society . . . the barrack-type factory and their fitting social complement the skyscraper buildings. . . the most glaring manifestation of the cultural barbarity produced by the crude technology of the age of classical capitalism.” See also V. Bazarov, “Printsipy postoeniia perspektivnogo plana” (Principles of long-range planning), Planovoe khoziaistvo (1928), 2: 38-63. A young technician, I. Ivanov, stressed in a famous article highly praised by Krzhizhanovskii that electricity would serve as the basis for Communist technology in the same way that steam power had served as the foundation of early capitalist technology. The Communist virtues of electricity were supposed to stem from the fact that electricity “could be dispensed from a single automated central station, through a single mechanism, to a scattered system of working machines.” (See I. Ivanov, “Materialnyi bazis kommunisticheskogo obshchestva” (The material basis of communist society), Vestnik sotsialisticheskoi akad-emii, IV (1923), 169-185.

33. The plan was drawn by a State Commission for the Electrification of Russia (Gosudarstvennaia Komissiia po Elektrifikatsii Rossii, abbreviated as GOELRO).

4. EFFICIENCY AND THE RATE OF GROWTH

1. Cf. Resolution of the XIVth Party Congress, in Vesoiuznaia Kom-munisticheskaia Partiia (Bol’shevikov) v rezoliutsiiakh i resheniiakh S’ezdov, Konferentsii i Plenumov Tsk (All-Union Communist Party [Bol’sheviks], resolutions and decisions of Congresses, Conferences and Plenums of the Central Committee), Sixth Edition (Moscow: Gospolitizdat, 1941), Part II, pp. 49-50.

2. Ibid., p. 125.

3. V. A. Bazarov, “O metodologii postroeniia perspektivnykh planov” (On the methodology for drafting perspective plans), Plan-ovoe khoziaistvo (1926), 7: 7-21.

4. See V. A. Bazarov, “O ‘vostanovitel’nykh protsessakh’ voobshche i ob ‘emissionnykh vozmozhnostiakh’ v chastnosti” (On the recovery process” in general and on the “possibilities of currency emission” in particular), Ekonomicheskoe obozrenie (1925), 1: 11-29.

Colin Clark—a kind of latter-day Bazarovist—affirms that such a theory should be “a commonplace of economics though many prominent economists have in fact failed to see it.” “When a country is recovering from wars, invasions, and similar disasters,” adds Clark, “there will be a recovery period in which growth is rapid, followed by a period of gradually decelerating growth as productivity approaches that position on its normal trend which it might have been expected to reach had the war not occurred.” See C. Clark, The Real Productivity of Soviet Russia: A Critical Evaluation, Committee on the Judiciary, 87th Congress (Washington: Government Printing Office, 1961), p. 2.

5. See V. E. Motylev, Problema tempa razvitiia SSSR (The problem of the pace of development of the USSR) (Moscow: Komakadizdat, 1928), p. 116.

6. G. M. Krzhizhanovskii, ed., Kontrol’nye tsifry narodnogo khoziai-stva na 1928/29 god (Control figures of the national economy for 1928/29) (Moscow: USSR Gosplan, 1929), Introduction, pp. 11-19.

7. See A. Boiarskii, “O teorii zatukhaiushchego tempa razvitiia sovet-skogo khoziaistva” (On the theory of decelerating growth rates of the Soviet economy), Planovoe khoziaistvo (1930), 10-11: 158 ff.

8. G. A. Fel’dman, “O limitakh industrializatsii” (On the limits of industrialization), Planovoe khoziaistvo (1929), 2: 184 ff. It is interesting to note that in all his other papers Fel’dman points to the upper limits of industrialization, namely, the capacity of his sector u, the rate of growth in the efficiency of its utilization, its expansion, and its relation to the total capital of sector p. See above, pp. 40-42.

9. Zolotarev’s paper, published in Torgovo-promyshlennaia gazeta (December 7, 1929), is criticized by E. I. Kviring in “Problemy gen-eral’nogo plana” (Problems of the General Plan), Planovoe khoziaistvo (1930), 4: 5 ff.

10. See L. M. Sabsovich, “Gipoteza mashtabov produktsii osnovykh otraslei narodnogo khoziaistva SSSR v period general’nogo plana” (Hypothesis concerning the production scale of main branches of the USSR’s economy during the period of the General Plan), Planovoe khoziaistvo (1929), 1: 64. An expanded but simplified version of the same paper, prepared for mass distribution, was SSSR cherez 10 let(USSR in 10 years) (Moscow: Moskovskii Rabochii, 1930).

11. N. Kovalevskii, “K postroeniiu general’nogo plana” (On the construction of the General Plan), Planovoe khoziaistvo (1930), 3: 140.

12. Soviet planning continues to proceed from micro-economic decisions ( output targets for given industries ) to macro-economic calculations (the volume and the rate of growth of national income, and its distribution). The basic decisions concern, as we have already pointed out, intermediate ( so-called producers’ ) goods. See also below, ch. 5.

13. See Motylev, Problema tempa razvitiia SSSR (The problem of the pace of development of the USSR), pp. 107, 111, 125, 129. See also E. Zaleski, Planification de la croissance et fluctuations économiques en URSS) (Planning of growth and economic fluctuations in the USSR), vol. I (1918-32) (Paris: Sedes, 1962), pp. 71 ff.

14. On the shortcomings of Soviet statistical computations and on the distorted nature of the 1926/27 weights see Spulber, The Soviet Economy, pp. 142 ff.

15. L. Trotsky, Soviet Economy in Danger (New York: Pioneer Publishers, 1932), pp· 35 ff.

16. This point is interestingly elaborated for Communist China’s early economic planning by Yuan-li Wu, in association with Robert J. Barr and K. N. Chiang, in a draft report circulated by the authors, Potentialities and Projections of the Chinese Economy, 1958 and Beyond (mimeographed).

17. See Maurice Dobb, An Essay on Economic Growth and Planning (London: Routledge and Kegan Paul, 1960), pp. 66-75.

18. The repression against “bourgeois spets” (specialists)—engineers, managers, economists, planners—started in May 1928 with the trial of the engineers of Donbas. It reached its climax in 1930 during the trials of the Moscow industrial executives and of the Mensheviks. Two thousand persons were involved for alleged “sabotage” and complicity to “sabotage” in the trial of the industrial executives: prominent among the accused was I. Kalinnikov, a pioneer of Soviet long-term planning and a member of the presidium of Gosplan. The trial ended with five death sentences, later changed to prison terms. See Le Procès des industriels de Moscou, 25 novembre-8 décembre 1930, sténographie intégrale des débats (The trial of the Moscow industrial executives, November 25-December 8, 1930, stenographic report) (Paris: Valois, 1931). For the early role of Kalinnikov see S. G. Strumilin, “Pervye opyty perspektivnogo planirovaniia” (First experiences with perspective planning), Planovoe khoziaistvo (1930), 12: 299 ff., reprinted in S. G. Strumilin, Na planovom fronte (On the planning front) (Moscow: Gospolitizdat, 1958), pp. 274 ff.

The second big trial of 1930 indicted the Bureau of the so-called “Counter-Revolutionary Menshevik Organization.” The indictment alleged that the Mensheviks aimed at “the disorganization of the national economic life of the country, the destruction and undermining of socialist construction and particularly the retardation of the tempo of reconstruction.” In the twisted way typical of the Stalinist trials of the 1930’s, the former Menshevik Ginzburg was forced to state that his “two methods of sabotage” were the concomitant planning of “an exaggerated over-strained tempo of development or a reduced and very limited tempo.” See The Menshevik Trial, Text of the Indictment of the Counter-Revolutionary Menshevik Organization (New York: Workers Library Publishers, 1931?) pp. 11, 57, 58.

19. Cf. Resolution of the XIVth Party Congress, in Vsesoiuznaia Kommunisticheskaia Partiia . . . rezoliutsiiakh (All-Union Communist Party . . . resolutions), Part II, p. 238.

20. See above, pp. 43, 82-83.

21. Discussion on N. A. Kovalevskii, “K postroeniiu general’nogo plana” (On the construction of the General Plan), Planovoe khoziaistvo (1930), 3: 146.

22. Ibid., p. 149.

23. Ibid., pp. 155-156.

24. N. N. Shaposhnikov, “Ob osnovnykh printsipakh industrializatsii” (On the fundamental principles of industrialization), Ekonomicheskoe obozrenie (1929), 1: 42 ff.

25. R. Gol’dberg, “O metodakh ischisleniia effektivnosti kapital’nykh vlozhenii” (Methods of calculating the efficiency of capital investments), Puti industrializatsii (1929), 11: 10 ff.

26. S. Rozentul, “Formula effektivnosti kapital’nykh vlozhenii” (Formula of efficiency of capital investments), Planovoe khoziaistvo (1929), 6: 99-116.

27. See L. Iushkov, “Osnovnoi vopros planovoi metodologii: Metody planirovaniia kapital’nykh zatrat po linii maksimal’noi ikh effektivnosti” (The basic problem of planning methodology: The method of planning capital investment and of maximizing its effectiveness), Vestnik finansov (1928), 10: 26 ff.

28. la. Rozenfel’d, “Problema ischisleniia effektivnosti kapital’nykh vlozhenii v sovetskoi promyshlenosti” (Problem of calculating the effectiveness of capital investments in Soviet industry), Puti industrial-izatsii (1929), 20: 24 ff.

29. See G. Abezgauz, “Effektivnost’ vlozheniia kapitalov v sovet-skom khoziaistve i metody ee ischisleniia” (Effectiveness of capital investment in the Soviet economy and methods of its calculation), Puti industrializatsii (1928), 18: 24 ff.

30. M. Barun, “Ob effektivnosti kapital’nogo stroitel’stva promyshlenosti” (On effectiveness of capital construction in industry), Puti industrializatsii (1928), 3: 12-26.

31. L. Litoshenko, “Problema effektivnosti kapital’nykh vlozhenii” (The problem of effectiveness of capital investment), Vestnik finansov (1928), 1; 40-57 and 3: 20-40.

32. Krzhizhanovskii, ed., Kontrol’nye tsifry narodnogo khoziaistva na 1928/29 god (Control figures of the national economy for 1928/29), Introduction.

33. It is interesting to compare the following declaration of N. S. Khrushchev, made in 1959, with Sabsovich’s predictions made thirty years earlier: “To surpass the level in the United States means to exceed the highest indexes of capitalism. The fact that we are now setting ourselves this task shows how much our forces, our possibilities have grown. . . . Based on the pace of industrial development in the USSR and the United States, the Soviet Union will, as a result of the fulfillment of the [Seven-Year] Plan with regard to absolute output of certain most important kinds of production, surpass, and with regard to others approach, the present level of industrial production in the United States. By that time the output of most important agricultural produce both in absolute figures and in per capita production will surpass the present output in the United States. . . . Therefore, if we calculate on a per capita basis, we shall probably need, after the fulfillment of the Seven-Year Plan, about five more years to catch up with and outstrip the United States in industrial output. Thus, by that time, or perhaps even sooner, the Soviet Union will advance to first place in the world both in absolute volume of production and in per capita production.” Declaration of N. S. Khrushchev, XXth Party Congress, Pravda, January 28, 1959.

5. PRINCIPLES AND PROCEDURES OF PLANNING

1. All quotations are from F. Engels, “Socialism: Utopian and Scientific,” in A. P. Mendel, ed., Essential Works of Marxism (New York: Bantam, 1961), pp. 70, 71, 77, 88.

2. See F. Engels, “Critique du programme d’Erfurt,” in K. Marx and F. Engels, Critiques des programmes de Gotha et d’Erfurt (Criticisms of the programs of Gotha and Erfurt) (Paris: Editions Sociales, 1950). P-83; and V. I. Lenin, “State and Revolution,” in Mendel, Essential Works of Marxism, pp. 154-155.

3. See, for example, A. S. Gordon, Sistema planovykh organov SSSR (The system of planning organs of the USSR) (Moscow: Komakadiz-dat, 1929), passim.

4. Administrative management—i.e., executive leadership—involves, in a business corporation, planning and controlling the basic directions of its activities, its expansion, diversification, etc. Operational management involves the activities which result directly in salable products. Though overlapping, the two types of management and their respective functions tend to be differentiated in the great corporations.

5. Causality is assumed to contain an explanation of past events, a predictive element, and an interpretation of goal-directed phenomena (e.g., in biology, the development of the individual from the egg to the final stage of adult). In the discussion on Soviet planning, those who emphasized the role of objective regularities in economic change were called “geneticists” (from “genesis,” origin, evolution). Those who, on the contrary, emphasized the role of the planner’s purposive action were called “teleologists” (from “teleology,” goal-directed development).

6. See S. Sharov, “Tsel’ v plane i zadachi nashego khoziaistva” (The goal of the plan and the tasks of our economy), Planovoe khoziaistvo (1926), 7: 59-70.

7. S. G. Strumilin, “Perspektivnaia orientirovka na 1926/27-1930/-31” (Perspective guidelines for 1926/27-1930/31), Report to the Second Congress of Planning Agencies of the USSR, March 25, 1927, in S. G. Strumilin, Ocherki sovetskoi ekonomiki: Resursy i perspektivy (Essays in Soviet economics: Resources and perspectives) (Moscow: Gosplanizdat, 1928), pp. 427 ff.

8. M. Ragolskii, “O vreditel’skoi teorii planirovania Gromana-Ba-zarova” (On the Groman-Bazarov subversive theory of planning), Planovoe khoziaistvo (1930), 10-11: 94.

9. Ragolskii writes that “balances” are to be “planned actively. . . . Balance is not manna falling from heaven, but the result of class struggle, initiative, and labor heroism.” Ibid., p. 95.

10. See V. G. Groman, “O nekotorykh zakonomemostiakh . . . ” (On certain regularities . . . ), p. 89.

11. N. D. Kondrat’ev, “Kriticheskie zametki o plane razvitiia narod-nogo khoziaistva” (Critical remarks on the plan of development of the national economy), Planovoe khoziaistvo (1927), 4: 1-34.

12. V. A. Bazarov, “O metodologii postroeniia perspektivnykh planov” (On the methodology of drawing up perspective plans), Planovoe khoziaistvo (1926), 7: 10.

13. Ibid., 11 ff.

14. V. G. Groman, “Balans narodnogo khoziaistva” (Balance of the national economy), Planovoe khoziaistvo (1926), 11: 62 ff.

15. N. I. Bukharin, Zametki ekonomista k nachalu khoziaistvennogo goda (notes of an economist at the beginning of a new economic year) (Moscow-Leningrad: Gosizdat, 1928), p. 16.

16. S. G. Strumilin, “Perspektivnaia orientirovka na 1926/27-1930/-31” (Perspective guidelines for 1926/27-1930/31), pp. 423-424.

17. Ibid.

18. See S. G. Strumilin and G. M. Krzhizhanovskii, Introduction to Strumilin, ed., Perspektivy razvertyvaniia narodnogo khoziaistva SSSR na 1926/27-1930/31 (Perspectives of development of the national economy of the USSR for 1926/27-1930/31), Materialy tsentral’noi komissii po piatiletnemu planu (Materials of the Central Commission on the Five-Year Plan) (Moscow: 1927), pp. 15-22.

19. N. D. Kondrat’ev, “Kriticheskie zametki . . . ” (Critical remarks . . .),p. 9

20. G. A. Fel’dman, “K teorii tempov narodnogo dokhoda” (On the

theory of growth rates of national income), Planovoe khoziaistvo (1928), 12: 173.

21. N. A. Kovalevskii, “K postroeniiu general’nogo plana” (On the construction of the General Plan), with discussion, Planovoe khoziaistvo (1930), 3: 199-200.

22. See N. D. Kondrat’ev, “Kriticheskie zametki . . . (Critical remarks . . . ), pp. 5 ff.

23. N. I. Bukharin, Zametki ekonomista . . . (Notes of an economist . . .), P.38.

24. M. Birbraer, “K voprosy o metodologii postroeniia ‘perspektiv-nykh planov’ ” (On the methodological problem of constructing “perspective plans”), Ekonomicheskoe obozrenie (June 1927), p. 86. Fel’dman makes a similar remark in “K teorii tempov narodnogo dok-hoda” (On the theory of growth rates of national income), p. 173.

25. M. Barengol’ts, “Emkost’ promyshlennogo rynka v SSSR” (Capacity of the industrial market in the USSR), Planovoe khoziaistvo (1928) 7: 329.

26. For another type of experimentation with “chess board” balances see A. Boiarskii and L. Brand, “Problema statistiki tsen i tovaroo-borota” (The problem of statistics of prices and of trade turnover), Planovoe khoziaistvo (1930), 11: 239-277.

27. See above, pp. 40-44.

28. The type of baffling “unknown magnitudes” with which the Soviet planner had to deal and the ways in which he dealt with them are well illustrated by L. L. Lorwin and A. F. Hendricks in a study on Soviet planning in the 1930’s. The example refers to a tractor factory: “What would be the ratable capacity under Russian conditions of maintenance? What would be the spoilage due to faulty raw materials or poor labor? How effective would raw peasants be in handling machinery—one tenth? one quarter? one half? two thirds as efficient as the American standard? How long would it take to train them? How rapidly would the efficiency of the individual advance? What would the average labor efficiency be; in other words, what rate of labor turnover would occur? No one can answer such questions with precision; but the answers will be pitched higher, if it is believed that the cooperation of the workers can be counted upon.” See L. L. Lorwin and A. F. Hendricks, National Economic and Social Planning (Washington: National Planning Board, 1935), pp. 369-370 (mimeographed).

29. See above, p. 75; also p. 142, note 33.

30. A. S. Gordon, Sistema planovykh organov SSSR (The system of planning organs of the USSR), p. 26; also F. Pollock, Die planwirt-schaftlichen Versuche in der Sowjetunion 1917-1927 (Planning attempts in the Soviet Union 1917-1927) (Leipzig: C. L. Hirschfeld, 1929), PP-111-112.

31. S. G. Strumilin, “Pervye opyty perspektivnogo planirovaniia” (First experiences with perspective planning), Planovoe khoziaistvo (1930), no. 12; reprinted in S. G. Strumilin, Na planovom fronte (On the planning front) (Moscow; Gospolitizdat, 1958) pp. 274 ff. See also M. Markovich, “Itogi i perspektivy planovoi raboty” (Results and perspectives of planning work), Sotsialisticheskoe khoziaistvo, I (1924), 189 ff.

32. S. G. Strumilin, “Pervye opyty perspektivnogo planirovaniia” (First experiences with perspective planning), p. 274.

33. Osoboe soveshchanie po vosproizvodstvu osnovnogo kapitala, abbreviated to OSVOK.

34. These form the so-called “Piatakov Industrial Five-Year Plan.” See Materialy osobogo soveshchaniia po vosproizvodstvu osnovnogo kapitala pri Prezidiume VSNKh SSSR (Materials of the Special Council on the Reproduction of Fixed Capital at the Presidium of the Supreme Council of the National Economy of the USSR): Series I, “Pia-tiletie gipotezy po otrasliam promyshlennosti” (Five-Year hypotheses by branches of industry) (Moscow-Leningrad: 1926); Series II, “Materialy k kritike gipotez” (Materials on the critique of the hypotheses) (Moscow-Leningrad: 1926); Series III, “Perspektivy raz-vitiia promyshlennosti na 1925/26-1929/30 (Perspectives for the development of industry for 1925/26-1929/30) (Moscow-Leningrad: 1927)-

35. These “Materials” are sometimes designated as the “A. M. Ginzburg Five-Year Plan.”

36. C. Bobrowski, Formation du système soviétique de planification (Formation of the Soviet planning system) (Paris and The Hague: Mouton, 1956), pp. 51 ff.

6. SOVIET “CORPORATE” PROCESSES AND PROBLEMS

1. K. Marx and F. Engels, Critiques des programmes de Gotha et d’Erfurt (Criticisms of the programs of Gotha and of Erfurt) (Paris: Editions Sociales, 1950), p. 82.

2. Ibid., p. 83.

3. N. I. Bukharin and E. A. Preobrazhenskii, The ABC of Communism, trans, by Eden and Cedar Paul for the Communist Party of Great Britain (London: Unwin Bros., 1922), p. 70. See also V. V. Obolensky-Ossinsky, Social Economic Planning in the Union of Soviet Socialist Republics (The Hague: International Industrial Relations, 1931), P.27.

4. Gunnar Myrdal, “The Trend Toward Economic Planning,” Manchester School of Economic and Social Studies, XIX (January 1951), 1: 3

5. Ibid., p. 12.

6. Ibid., pp. 17 ff.

7. See E. S. Phelps, ed., The Goal of Economic Growth (New York: Norton, 1962), pp. vii ff., and Paul A. Samuelson, “Public Responsibility for Growth and Stability,” ibid., pp. 38-42.

8. Let us recall here how Preobrazhenskii connects monopoly capitalism, monopoly prices, and Soviet “primary socialist accumulation”: “Through the formation of monopoly prices . . . [monopoly capitalism] prepares the ground for the price policy of the period of primary socialist accumulation. The concentration of the whole of the big industry of the country in the hands of a single trust increases to an enormous extent the possibility of carrying out such a price policy on the basis of monopoly.” E. A. Preobrazhenskii, Novaia ekonomika (New economics), Second Edition (Moscow: Komakadizdat, 1926), p. 123.

9. See Melville C. Branch, The Corporate Planning Process (New York: American Management Association, 1962), p. 72.

10. Ibid., p. 196.

11. “Much remains to be accomplished,” writes Melville Branch, “in the development of a methodology of corporate planning. As yet there are few established procedures and techniques.” Ibid., p. 33.

12. Such commitments arise notably “through debt, product selection, manufacturing methods, sales contracts, distribution system, industrial location, labor policy, employment contracts, or organization structure.” Ibid., p. 109.

13. The fraction of the product invested, in real terms, has actually risen over time even if it has remained more or less constant in current prices.

14. See Edward A. Mason, Economic Planning in Underdeveloped Areas (New York: Fordham University Press), pp. 10 ff.

15. Dr. Jasny is correct when he assumes that Soviet planning methodology as practiced under Stalin was “largely developed before Stalin’s men took over in 1927.” But he is, I believe, in error when he assumes that crude balancing of resources and allocation around some priority branches is “basically the same thing” as input-output analysis. See Naum Jasny, Essays on the Soviet Economy (New York: Praeger, 1962), p. 161 and note 6, p. 162. This risks obscuring both the significance of present and impending changes in Soviet planning and the nature of the Sino-Soviet differences in this field.