The Rise and Fall of the The Soviet Economy: An Economic History of the USSR from 1945

292 Pages·2003·12.72 MB·English

by  Philip Hanson

THE RISE AND FALL OF THE SOVIET ECONOMY
An Economic History ef the USSR.from 1945
The Postwar World
General Editors: A.J. Nicholls and Martin S. Alexander
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The Rise and Fall of the Soviet Economy: An Economic History of the
USSR from 1945
Philip Hanson
THE RISE AND FALL OF
THE SOVIET ECONOMY
AN ECONOMIC HISTORY
OF THE USSR FROM 1945
PHILIP HANSON
R
O Routledge
U
T
LE
DG Taylor&Francis Group
E
LONDON AND NEW YORK
First published 2003 by Pearson J· :duealion I .imiled
Published 2014 by Routledge
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ISI3N 13: 978-0-582-29958-0 (pbk)
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Typeset in 11/ l 3pt Baskerville by Graphicraft Limited, Hong Kong
CONTENTS
List ef Tables ....................................................................................................................... vii
List ef Figures ....................................................................................................................... ix
Acknowledgements ................................................................................................................... x
Editorial Foreword ................................................................................................................ xi
Introduction ............................................................................................................................. 1
1. The Starting Point: the Stalinist Economic System and
the Aftermath of War ............................................................................................. 9
The inheritance from the 1930s: the Soviet economic planning system ...................... 9
The aftermath of war ................................................................................................... 21
Post-war recovery: the Fourth Five-Year Plan, 1946-50 ........................................... 25
Priorities and the defence sector .................................................................................. 30
Agriculture .................................................................................................................... 34
Economic organisation and policy more generally .................................................... .40
Living conditions and the first stirrings of acquisitive dissent ..................................... 43
Economic relations with the outside world ................................................................. 45
2. Khrushchev: Hope Rewarded, 1953-60 ...................................................... 48
Policy-making and power ............................................................................................. 50
Khrushchev's initiatives ................................................................................................ 51
Agriculture .................................................................................................................... 52
The Sovnarkhoz reform .................................................................................................. 58
Foreign trade, aid and technology transfer ................................................................. 60
Wages and the welfare of workers ............................................................................... 63
Economic debate .......................................................................................................... 67
3. Khrushchev: Things Fall Apart, 1960-64 ................................................... 70
Policies: 'catching up' and the seven-year plan ........................................................... 71
Agriculture .................................................................................................................... 74
Foreign trade and external relations ............................................................................ 80
Incomes and consumption ........................................................................................... 87
Economic debate .......................................................................................................... 91
Khrushchev and the economy in retrospect ............................................................... 96
4. A New Start: Brezhnev, 1964-73 ................................................................... 98
Early days ................................................................................................................... 100
The 1965 reform ........................................................................................................ 101
The improvement in growth ...................................................................................... 108
Agriculture .................................................................................................................. 112
Soviet citizens as consumers ....................................................................................... 114
THE RISE AND FALL OF THE SOVIET ECONOMY
Foreign trade and payments ...................................................................................... 119
Economic debate ........................................................................................................ 124
Conclusion .................................................................................................................. 125
5. The 'Era of Stagnation': 1973-82 ................................................................ 128
The growth slowdown ................................................................................................ 132
Policies and reforms ................................................................................................... 140
Agriculture .................................................................................................................. 149
Foreign economic relations ........................................................................................ 154
The late Brezhnev era in retrospect .......................................................................... 162
6. Three Funerals and a Coronation: November 1982 to
March 1985 ............................................................................................................ 164
Economic discussion ................................................................................................... 165
Policies ........................................................................................................................ 169
Outcomes .................................................................................................................... 174
7. Gorbachev and Catastroika ............................................................................. 177
Acceleration, discipline and the alcohol campaign, 1985-86 .................................. 178
Forward to reform, 1987-89 ..................................................................................... 192
8. The End-game, 1989-91 .................................................................................. 218
Accelerating political change ..................................................................................... 218
Economic policies ....................................................................................................... 222
Breaking up a single economic space ........................................................................ 235
Economic outcomes; Western assistance ................................................................... 236
Public opinion ............................................................................................................. 238
9. The Soviet Economy in Retrospect .............................................................. 240
Soviet post-war economic performance in comparative perspective ........................ 241
Why did growth slow down? ..................................................................................... 248
The final output collapse ............................................................................................ 253
Annex: Measuring changes in productivity ............................................................... 254
Bibliography ........................................................................................................................ 256
Index .................................................................................................................................... 269
Vl
LIST OF TABLES
1.1 USSR post-Second World War economic recovery 26
1.2 USSR net agricultural production per head of population,
1940 and 1950-53 39
1.3 Soviet real incomes and consumption levels, 1937-55 44
2.1 Soviet net farm output per head of population and
agricultural value added, 1950-53 and 1955-58 55
2.2 Soviet state and state-assisted housing construction, 1946-65 64
3.1 The abandoned Sixth Five-Year Plan, 1956-60 71
3.2 Soviet foreign trade volume, 1955-65 81
3.3 The political-geographical composition of Soviet
merchandise trade in 1960 82
3.4 Soviet hard-currency trade and external finances,
1960-64 84
3.5 Soviet personal incomes, consumption and repressed
inflation, 1960-64 88
4.1 Soviet growth in the late Khrushchev and early Brezhnev
periods: alternative estimates 109
4.2 Estimates of Soviet total factor productivity (TFP) growth,
1960-70 110
4.3 Soviet agricultural output, inputs and factor productivity 113
4.4 Some indicators of Soviet consumption, 1965-7 3 115
4.5 Soviet consumption levels: selected comparative indicators,
1968-73 116
4.6 Partially repressed inflation: state and Kolkhoz market
food trade, 1965, 1970, 1975 118
4.7 Soviet measures of Soviet net material product as a
percentage of US, selected years, 1963-85 126
5.lA 'Stagnation': the slowdown in Soviet growth in the 1970s
and early 1980s 133
5.lB Components in the slowdown between 1964-73 and
1973-85 133
5.2 The Soviet economy in 1976-82: a growth accounting
exercise 136
THE RISE AND FALL OF THE SOVIET ECONOMY
5.3 Soviet output and output per head of population,
selected farm products, 1977-82 152
6.1 The Soviet economy in 1982-85: selected indicators 174
7.1 A schematic illustration of Soviet resource-allocation
options for 1986-90 182
7.2 Soviet medium-term plans, 1981-90 184
7.3 External and internal prices for selected Soviet products,
1987 201
7.4 Individual labour activity, joint ventures and cooperatives:
the state of play in 1990 209
7.5 Soviet economic developments, 1985-89 inclusive 210
8.1 Selected Soviet economic indicators, 1990-91 236
9.1 Soviet and US per capita GDP compared, selected years,
1946-91 243
9.2 Soviet and US per capita GDP: growth rates for selected
periods, 1950-91 243
9.3 Selected countries: rates of divergence from and
convergence to the per capita GDP level of the US over
the period 1950-92 245
9.4 World and selected countries and groups of countries:
years of life expectancy in 1960-65 and 1985-90 247
9.5 A growth accounting exercise for the USSR, 1950-90 249
Vlll
LIST OF FIGURES
Figure I. l Soviet GNP: average annual growth rates, 1945-91 5
Figure 1.1 The Soviet planning system as a layered hierarchy 11
Figure 1.2 The Soviet Union and the development of nuclear
weapons 33
Figure 3.1 Soviet agriculture: value added, 1950-80 75
Figure 9.1 Soviet GNP, 1940-92 242
Figure 9.2 Catching up and overtaking: USSR and US per
capita GDP, 1946-92 244
Figure 9.3 Russia/USSR per capita GDP as a percentage of US,
selected years, 1913-98 244