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TRB #4 Chapter One Part 2: Soviet Industrial Development: A Study In Contradition

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trotskyRA

I think that as many people will read this, they will be asking: “Socialism failed in the Soviet Union, how did that happen?” My problems with the question as it is formulated are, for the moment, beside the point. The approach Trotsky takes is to ask: “What exactly is the social, economic, and political nature of the Soviet Union, how did it get there, and where is it going?” I hope and believe the answer to the first question will be contained in the answer to the second.

In the previous post, I made mention of the law of combined development, and how, in many ways, Russia had leapfrogged the advanced capitalist countries. Here, I want to emphasize “in many ways.” At the time of the October Revolution, Russia was still mostly an agrarian country. Unlike the advanced Western countries, where farming produced enough to support a massive industrial proletariat, the number of people working in industry was tiny. That is one of the contradictions of Soviet society: a backward level of development, but extremely advanced levels within many industries. Over-all, the word is “uneven” is accurate, although not nearly strong enough.

As a Marxist, Trotsky takes as a starting point an objective assessment of the country as it was at the time of his writing (1936); unless we see what actually is as regards material conditions, aside from our wishes or prejudices, we have no basis for understanding. Marxists believe that the most basic function of society is to provide the necessities of life to the people of that society, and that, therefore, the most important determining factor is the productivity of labor—in other words, before we even ask how things are distributed, we must ask: to what degree is this society able to produce enough to meet the needs of the people? The question “what is enough” is actually significant at a certain point: those who observe that poverty today is generally better than poverty a thousand years ago are not wrong; “enough” is a question that is determined socially. But whatever definition we use, the ability of the society to produce is the issue, and, in the last analysis, that raises the question: how much can an individual make in a given time? Productivity of labor, in turn, is determined by several factors, including the level of infrastructure (roads, railroads, telephone lines, &c &c), the level of development of the productive forces (farm equipment, factories, tools), and technique—the skill with which workers are able to use all of the above.

Trotsky therefore begins with various metrics to measure what we might call the successes and failures of the Soviet economy, or, more precisely, where the economy currently (1936) stands. These metrics include things like miles of railroad, agricultural production per acre, production of steel, coal, &c &c. He is looking at this from two perspectives: one, compared to the pre-revolutionary condition of Russia, and two, compared to the major capitalist countries.

The first of these shows a resounding triumph; the second shows the reverse.

In order to understand the scope of what was accomplished, it is worth reviewing a few things. Russia entered World War I as the weakest of the major powers in terms of level of industrialization, and in both industrial and military technique. For anyone inclined to view the details, Trotsky presents them in chapters one and two of his History of the Russian Revolution.

Following the revolution came civil war, supported financially and militarily by the major imperialist powers. Between 1918 and 1923, armies from the following countries invaded the Soviet Union: Germany, Britain, Italy, Greece, the United States, Australia, China, Austria, Czechoslovakia*, Japan, and France. The loss of life—especially among the most dedicated, class-conscious workers—and the destruction of infrastructure and production capacity were staggering. It is hardly an exaggeration to say that Russia emerged from this war utterly exhausted and with industry and infrastructure barely able to support itself. This map should give a general idea of the scope of the war.

There is dialectical relationship between industry and agriculture: improved agricultural technique requires support from industry, and at the same time produces sufficient surplus to support the industrial workers. In a capitalist country, this balance is anarchic, determined by the market, and in general results in massive debt for the farmer and his gradual conquest by agribusiness. But what happens when this relationship is confronted by the massive destruction of railroads and roads, as well as the factories that produce the machinery agriculture requires?

That is what Russia faced. On the other hand, it had two factors in its favor: socialized property relations (ie, State ownership of production), and the confidence of the working class and the poorest peasants. The advantage of State ownership was tremendous: it permitted decisions on production to be based on the over-all requirements of society, rather than personal profit, as well as directing the fruits of that production to where they were be most needed. The result of this was tremendous; it permitted advances on a level never before (or since) seen in history.

Let’s get specific and discuss what this produced by 1936. There are a lot of data in this chapter, but I’ll cut out what I can, because what’s important is to get the general idea, and because I’m addressing these posts mostly to those who are choosing to read along as we go. And the general idea is a deep, profound contradiction.

As I said above, the single most important metric in a society for the purpose of showing its potential to meet the wants of its citizens is the productivity of labor, and in this, the Soviet Union lagged far behind the western powers, both because of the undeveloped character of industry, and the lack of technique of the average Soviet worker. “In the best metal foundry, according to the acknowledgment of its director, the output of iron and steel per individual worker is a third as much as the average output of American foundries. A comparison of average figures in both countries would probably give a ratio of 1 to 5, or worse.”

That refers to basic, heavy industry–required by other industries. But the quality of goods produced gets worse from there. “A unique law of Soviet industry may be formulated thus: commodities are as a general rule worse the nearer they stand to the mass consumer.”

Quality is always an issue where poor technique meets underdeveloped infrastructure. He speaks of the abysmal quality of automobiles, as well as the poor condition of roads and railroads. The tractors—so vital in raising the level of agriculture—spend more time being repaired than they do working (literally). This is even more pronounced if we look at the results as they reach the worker or the poor peasant: there has been, up until this point, little or no improvement in his day-to-day condition, and this improvement is the foundation on which the promise of socialism rests.

And yet, there is the other side of the coin: Every capitalist country in the world saw either stagnation or decline of industrial capacity when comparing its state from the end of WWI to that in 1936. The exceptions were Germany and Japan, in which increased “industrial capacity” meant arming for war. Japan, which in addition to arming itself was busily plundering its neighbors, saw the biggest increase: 30%. During this time, the Soviet Union’s increase in industry was 250%! No country, before or since, has shown anywhere near that level of industrialization in that short a time. Those who believe it was simply making up for her impoverishment are invited to look at Turkey, India, China, and Greece, which were also impoverished, and remained that way until built up by investment of foreign capital—which, in essence, bought those countries.

“In 1920, when the first plan of electrification was drawn up, there were ten district power stations in the country with a total power production of 253,000 Kilowatts. In 1935, there were already ninety-five of these stations with a total power of 4,345,000 kilowatts. In 1925, the Soviet Union stood eleventh in the production of electroenergy; in 1935, it was second only to Germany and the United States.”

For now, I think the point is clear enough: “With the bourgeois economists we have no longer anything to quarrel over. Socialism has demonstrated its right to victory, not on the pages of Das Kapital, but in an economic arena embracing one-sixth of the earth’s surface—not in the language of dialectics, but in the language of iron, cement, and electricity . . . thanks solely to a proletarian revolution, a backward country has achieved in less than twenty years successes unexampled in history.” I can only add that in the 80 years since the book was written, that remains the case.

I spoke above of a deep and profound contradiction. There were, in the Soviet Union, many, but this is the one I was speaking of above all: between the unprecedented advancement of industrial and agricultural development on the one hand, and the way the Soviet Union lagged behind the advanced capitalist countries on the other. As we study the development of the Soviet Union in order to understand how it arrived where it is, we must keep that contradiction firmly in mind.

 

 

*To be precise, Czechoslovakia didn’t invade—troops were already there at the time of the insurrection, and spent their time trying to leave. But they, in effect, took the side of the imperialists, so I include them on the list for that reason.

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skzb

Author: skzb

I play the drum.

55 Comments

  1. Sometimes people will tell me, “Capitalism is good, it’s crony capitalism that is bad”. Well, any group activity is vulnerable to cronyism, including communism, religions, and the PTA. But if people can look beyond the problems of cronyism to see benefits of capitalism, they should be able to also look at the problems beyond it. Same thing with other things they like. And see the good things that come from things they don’t like (the other guy’s religion, the other guy’s economic system).

  2. The fault I find in Trotsky’s world view is not simply in terminology, but far more deeply, it is in the nature of what the terminology implies, categorizes, and groups therein. Those “groupings” determine causality and color one’s ability to apprehend causality. The manner in which we language a “thing” determines how we perceive and understand what that things is, namely, it’s true nature. When you say, “socialism,” as an I.T. (Information Technology) Systems Engineer by trade, I look at things in terms of IT terminology and how to define a system in terms of its topology as an information or resource provider. Socialism is effectively a “centralized” systemic topology. Conversely, capitalism is effectively a “di-centralized” systemic topology. And in the IT systems architecture world, each of these topologies has inherent strengths and weaknesses. Now, while I find your/Trotsky’s singular case study of the USSR interesting and of merit, I don’t find it particularly compelling as a case study to prove that socialism is superior to capitalism, much less, do I find that it provides the necessary depth of understanding of the inherent flaws, mainly because in the IT systems world, we must look at 5 to 10 implementations of a topology to fairly analyze a given topology’s inherent flaws. Questions arise, like, “Was the failure of a given topology due to the nature of that topology being inherently flawed, or was it due to a flawed implementation of that topology?” Of course, the very nature of this work, TRB and your analysis herein, is an exercise in attempting to answer that very question, and while I applaud that effort, and while I am reading and studying each and every one of your posts on this, (admittedly, this is solely because I am a passionate fan of your fiction), I don’t think the scope of this analysis (aka, your/Trotsky’s “sample set”) is sufficient for a true analysis. By comparison, while in the world of politics, nations, or governments, one has maybe 1, 2 or at best, maybe 4 or 5 real life examples of how a given systemic topology might rise and fall and/or propagate (over the course of the “cradle-to-grave” of that topology’s existence) in the IT systems world, we have quite literally hundreds and thousands.

    How many so called “socialist” or “capitalist” nations has this planet seen be born, live, thrive, and then perish? Barely one. You see, I just don’t think there is enough “input sample data” if one looks solely on this arena for a fair analysis of that topology. This assumes of course that the versions of the “socialist” topology and “capitalist” topology were optimal or authentic implementations of said topology. And that is not only an assumption one cannot make, that very question is the heart of what a systems analyst must determine when looking at numerous implementations of a topology. Was the demise of a given topology due to the systemic nature of that topology or was it due to certain individuals/forces within that implementation, or further, was it due to a flawed “model/blueprint” of what a healthy/efficient “socialist” topology or “capitalist” topology is or should be?

    Enough of the theoretical, let’s consider the practical.

    I had an International Affairs professor in college from Bangladesh who was working on his Ph’D in socialist systemic topologies in third world nations. I mention his cultural background and academic focus mainly to give you a sense of his intellectual perspective. Fatefully, as a side note, the class semester occurred during the unprecedented collapse of the USSR and the renowned destruction of the Berlin wall. In any case, the main point he made during that class that struck me as rather profound, as an anecdotal foot note on the rise of the USSR, from what was an agricultural feudal nation, to one of the two dominant industrial world powers, was the following:

    Socialism is great for taking an industrial nation from 0% productivity to 60% productivity for a given product, say, like creating “6 million shoes” … because the centralized autocratic governing power can simply dictate to the people, “build these factories there, allocate those resources, and manufacture 6 million shoes.” However, socialism is terrible at taking an industrial nation from 60% productivity to 80% to 90% productivity for a given product, like shoes, and it is also terrible at quality control or differentiation, like say, if you want 50% of those shoes to be left foot and 50% of those shoes to be right foot, and forget about any really sophisticated differentiation with respect to size or shape of quality or usage.

    In other words, socialism (aka, centralized topology) has not and does not foster innovation or differentiation or optimization, which is a metric that was lost on Trotsky, given his somewhat primitive understanding of the technological advancements of industry and its stages of growth, which really were in its infancy during his lifetime. This is why the following statement, which you’ve quoted, is not a compelling proof to me, though I believe it is to you:

    >> For now, I think the point is clear enough: “With the bourgeois economists we have no longer anything to quarrel over. Socialism has demonstrated its right to victory, not on the pages of Das Kapital, but in an economic arena embracing one-sixth of the earth’s surface—not in the language of dialectics, but in the language of iron, cement, and electricity . . . thanks solely to a proletarian revolution, a backward country has achieved in less than twenty years successes unexampled in history.” I can only add that in the 80 years since the book was written, that remains the case. <<

    In closing, let me be clear, while I most certainly often self-identify as a capitalist, in reality, as an IT Systems Engineer/Architect, I believe in a hybrid topology, wherein we utilize both centralized and de-centralized/distributed topology combined or order for this nation/planet to have an optimal efficient thriving humanity.

    For example: I support Bernie Sanders’ “single-payer” topology for health care, but let’s be clear, that is a centralized topology for Health Care Insurance, NOT for the Medical Care itself, and that distinction is a profound one…. ie: “socialized insurance” but not “socialized medicine” because medicine/medical care itself benefits from innovation which the centralized topology does not foster.

    http://www.pnhp.org/facts/single-payer-faq#socialized

  3. “Those “groupings” determine causality and color one’s ability to apprehend causality. The manner in which we language a “thing” determines how we perceive and understand what that things is, namely, it’s true nature.”

    Yes. For example, your binary division of “centralized” versus “uncentralized” strongly colors your view of causality.

    It looks to me like in the USSR there was a perception of centralized authority. The central guys could say “increase steel production by 60%” and expect it to happen. They would pass their orders down to people who would decide how many steel mills to build and where to build them etc. Others would actually design and build and operate the steel mills. It was decentralized operation, lots of people making individual decisions within their scope. But they got the authority to make those decisions relayed from a central source.

    A local manager could make his own choices about any part of his operation that didn’t look “political”. He was responsible for results, and if he failed he might suffer severe consequences. But no one would delve into the details of how he did it, provided he did things in a politically correct way. So in a way they had a highly decentralized system.

    Compare that to, say, McDonalds. You have a franchise, and they send you to a school to teach you every detail of running your business. Each of your employees gets video tapes and manuals to tell him every part of his job. None of your employees deserves very high pay because they don’t need to use their judgement — if they are up on their training they already know what to do and if they are not trained then they need training. It doesn’t get much more centralized than that, even though as a franchisee you officially have ownership and responsibility apart from the McDonalds organization.

    “However, socialism is terrible at taking an industrial nation from 60% productivity to 80% to 90% productivity for a given product, like shoes, and it is also terrible at quality control or differentiation, like say, if you want 50% of those shoes to be left foot and 50% of those shoes to be right foot, and forget about any really sophisticated differentiation with respect to size or shape of quality or usage.”

    It looks to me like in the USSR, consumer products were almost an afterthought. There was no mechanism for consumers to report which shoes they thought were superior, through official channels. When you reward quantity of production, then quantity is what you get. And in the early days, that’s what was most important. Producing and distributing food for 60 million citizens was better than food for only 50 million.

    Once they had enough, there was nothing to keep them from rewarding quality, except for tradition. I expect a lot of that did go on informally. Superior goods were produced and channeled into black markets where their value was weighed. It didn’t have to be like that.

    There are similar problems in the USA in industries where quantity is rewarded. Water works provide sufficient safe water, with sufficient chlorine or peroxide to kill most pathogens. Tap water has such a bad reputation that a large fraction of customers buy bottled water or use their own filters. They mostly don’t test that the expensive water is better than tap water, but they assume it is.

    We produce such large quantities of standardized GMO corn that we must search for innovative uses for it. Feed it to cows who don’t digest it well. Ferment it into ethanol and contaminate gasoline with it. Etc. Nobody particularly likes it or thinks it’s good, but a giant fraction of our food is made of it.

    We produce railroad cars of standard grains of various sorts. The commodities options market is built around standard lots in standard sizes. So each railroad car is tested, and when a car has grain that tests too high, it is contaminated with just enough bad low-quality grain to bring the quality down to standard. It seems to me that it would be cheaper to just publish the tests and let people bid on grain with known quality, so if they wanted extra-high quality they could bid what it was worth to them. But the sales system is built on standard lots so we pay extra to standardize them.

    It isn’t about centralized or de-centralized topologies. It’s about subtler details of how the systems are designed.

  4. skzb

    Thank you for your thoughts, Arthur. I’m going to try to get past this: ‘The manner in which we language a “thing”’ as best I can, but someone using “language” as a verb in the context of discussing the importance of the meaning of words makes me leery.

    And as I go on, I discover this is not accidental. The references to “topology” and such twisted locutions as “or this nation/planet to have an optimal efficient thriving humanity.” feels like the language of post-modernism: designed to obscure rather than reveal.

    My intention is neither to mock you nor to dismiss you; but to express the difficulty I’m having in understanding you. To be blunt, I’m having trouble making sense of your comment.

    ” Those “groupings” determine causality and color one’s ability to apprehend causality. ”

    I do not understand what this means, unless “groupings” is a reference to cognitive categorization, and you left the word “perceived” out before the first mention of causality, in which case I would assume it is a reference to one’s prejudices coloring one’s analysis, If so, then I would say that as an abstract generalization, your observation has value; but if you are using it to refute a particular argument, you ought then to go on and, well, refute the argument. Unless I’m completely misinterpreting you.

    One bit I can pull from your comment is that you appear to be arguing that the experience of the Soviet Union is insufficient to determine the viability of socialism. If so, well, okay. But as it is and remains the only example of a proletarian revolution, it seems worthwhile to study it. And we also have, against the one example, the counter-example of every other nation on Earth throughout human history. That is, the level of increase in industry of the Soviet Union during the period in question drastically outstrips in other before or since, save those that were paid for by other nations, in which, in essence, the advanced country extended itself to the colonial country. I explain this by socialized property relations. How do you explain it?

    I think I caught your meaning here (although I cannot for the life of me figure out what a “centralized topology” means): “In other words, socialism (aka, centralized topology) has not and does not foster innovation or differentiation or optimization, which is a metric that was lost on Trotsky, given his somewhat primitive understanding of the technological advancements of industry and its stages of growth, which really were in its infancy during his lifetime. ”

    At first glance, this seems to be a valid point. But it takes “innovation” utterly out of its social context. Innovation is a product of a given society, at a given time, under given levels of technology. As the Soviet economy was not yet even caught up to that of the advanced capitalist countries, to ask innovation from there makes as much sense as demanding innovation in computer technology from a society still using the abacus.

    I did understand (I think) your remark about Bernie Sanders, and I decline to enter into a discussion, here, of my opinion of Sanders’ role in the current political situation; but as regards health care, I will say that health insurance is unnecessary, whereas health *care* is, in my opinion, a basic human right.

    Again, thanks for taking the time and trouble to respond.

  5. There are a lot of interesting points going on here. Yes, Russia was truly in a horrible position. That they survived intact is an accomplishment. But it locked in their thinking as survivalist past the point where that was appropriate.

    The OP seems to say that agriculture and industry are in conflict for resources. I don’t know that this is really true. Maybe for the amount of iron, but not for labor.

    Arthur is correct in that the words and concepts we use to describe things limit our ability to analyze that thing. The tendency being to put things in boxes. This is a human problem and we see it all the time, particularly in politics.

    People want to be creative, regardless of where they are. But you need a certain standard of living and flexibility to be able to survive while being creative. If the system does not support or allow creativity, it is not going to happen much. In the US, a lot of salesmanship (“fairy dust”) is pretending to be creativity. At the same time, the opportunities for real creativity are becoming more limited in some ways. Mainly because the costs of technical innovation have become very high.

  6. skzb

    “The OP seems to say that agriculture and industry are in conflict for resources”

    If I implied that, I misstated. While there may be an element of that (you cannot build a tractor and a punch press machine at the same time and in the same place), what is more significant is that they depend on each other. You need a certain level of agriculture to produce enough surplus to feed factory workers, and, in turn, you need a certain amount of machinery to take full advantage of the soil.

  7. I will respond to J Thomas first, and then Steven, and then David Hajicek.

    TO: J Thomas:

    >> Yes. For example, your binary division of “centralized” versus “uncentralized” strongly colors your view of causality.

    Well, yes it does. I agree. This was my point. Although I would not say that I, personally solely look at this subject from a binary standpoint, hence I said that I believe in a hybrid approach. Although your point is well taken. As an IT Systems Engineer/Architect, or what some refer to as a “systems thinker,” this is how I look at things. I look at things in terms of mathematical systems and set theory. The words “capitalism” and “socialism” have emotionally charged reactions in people, which makes them hard to discuss or see clearly, I believe. I think there are merits to both “systems,” hence I said that I believe in a hybrid approach which combines both, and by using a terminology (framework) that is familiar to me in the systems architecture world, I find that I am able to detach from the emotional discussion and look at the subject more clearly, or at the very least, apply lessons or examples from my 30+ years of education/professional work to maybe formulate a vision of how an optimal or healthy planet might best function to serve the needs of humanity.

    In confession, other than that single class in college, I have not studied this topic, either formally or informally, and have probably learned more about socialism from reading Steven’s musings than any other source. I only learned the name Trotsky from seeing a reference to him by Steven on a website about 8 years ago, which prompted me to look Trotsky up and read a little. Fact is, I have learned more about this topic in the last few weeks than ever before and am a little humbled to even comment, hence I waited to after several posts before commenting. I am following these postings and all the comments with great interest in order to learn and understand.

    Now, to your comment here:
    > >> It looks to me like in the USSR there was a perception of centralized authority. The central guys could say “increase steel production by 60%” and expect it to happen. They would pass their orders down to people who would decide how many steel mills to build and where to build them etc. Others would actually design and build and operate the steel mills. It was decentralized operation, lots of people making individual decisions within their scope. But they got the authority to make those decisions relayed from a central source.

    A local manager could make his own choices about any part of his operation that didn’t look “political”. He was responsible for results, and if he failed he might suffer severe consequences. But no one would delve into the details of how he did it, provided he did things in a politically correct way. So in a way they had a highly decentralized system. <<

    First question: Are you sure that a local manager could make their own choices? How much choice?

    I see the differences in distinctions that you and I are making. Yes, there is a distributed nature to the chain of command at different levels in the hierarchy in the production of said product, however the chain of command is still centralized and flows outward from that centralized location. That is how I see it from “systems engineering” viewpoint. In other words, just because there are components of a decision making process that occur at varying levels outside of that centralized command, does not change the systemic topology to me. Why? Because if someone outside of that command center were to change direction and decide NOT to make 6 million shoes, they would still need to get approval from that center. Also, if they needed additional resource allocations then they were allotted, they would need to get approval from the central command. Or if they wanted to change production location or drastically change methodology, they would need to get approval from the central command. The lack of complete 100% freedom is a factor in people’s motivation, inspiration, and innovation. This is why I find the assertion that “socialism” (as a systemic topology) does not support 80% to 90% efficiency of production to be accurate. Mind you, I did not make that assertion, my professor in college made that assertion, but I do believe it is true.

    Shoes is an example that has merit, I believe, because while it is a luxury item in many instances, sure, but in essence it is really a consumable commodity necessary for public for survival. People need something for their feet to be protected. If you have a population of 3 million people you need 6 million shoes. But, do you really need exactly 6 million? Or do you need more? And how often do you need to replenish? And also, what kind of differentiation of the product is needed? Left foot and right foot and differing sizes are but the simplest of distinctions. For cold weather, you need a different type of shoe, different materials, different soles, different insulation. etc. A better quality shoe will last longer. A poor quality shoe or the wrong size could hurt your foot and cause physical harm. etc…

    It is a simple product at first glance, but in reality, it is not. I have found that is always the case when it comes to actual “rubber hits the road” real life examples. Or, the devils in the details, as they say. Trotsky may have been a brilliant social scientist or political theorist, but I don’t believe he knew much about manufacturing, technology, production, supply chain management, business process reengineering or operation efficiency issues. My degree and work for 30+ years is in this field. I am happy to be proven wrong and I am reading and studying Steven’s series here with an open mind, but the metrics of what the USSR accomplished in those early days, at an admittedly superficial glance, do not suggest to me that Trotsky does.

    The centralized head of state can say, “Make 6 million shoes!” or “Make shoes for 3 million people.” but the reality of what it takes to deliver on that “centralized directive” is a far more complicated than at first glance. And, in a non-industrialized nation, going from zero production of shoes to supporting shoes for 3 million people might be impressive, but that is hardly the mark of optimal operational efficiency. Having worked in the electrical energy generation sector for several decades, I I could speak at length about how this and these same issues also apply there, but I prefer shoes as an example because it is simpler and more tangible. Just because someone in some centralized position of power says “Make 6 million shoes!” does not mean that sufficient direction was given to the lower ranking individuals to make the correct number of shoes or the right quality, etc. You see, when you say that it was “decentralized in the operation,” it is not clear to me that the necessary freedom to make the critical “operational design” or “resource allocation” decisions inherent to production at the distributed locations which foster optimal efficiency or innovation. And in energy generation, just because they are producing electricity, doesn’t mean they are not poisoning the planet in the process. Which, oh by the way, THEY ARE! But to be clear, it’s not that the socialists or the capitalists are not both equally at fault in this domain, so I don’t mean to be pointing fingers in that manner, I am simply making the point that the simplistic metric of saying that “they are delivering 6 million shoes” or that “they are providing electricity to 3 million homes” is NOT the sole metric that matters, not if we want a planet where humanity can actually live.

    Now, having said that, and speaking of this issue of “climate change” and care for the planet, in a centralized (“socialized”) topology, if the central command made a unilateral decision to move away from fossil fuels, for example, that change would happen far quicker than in a decentralized (“capitalistic”) topology because the entrenched market powers of capitalism would not want their profits diminished because they had a vested interest in fossil fuel. So yeah, BOTH systems have strengths and weaknesses. I admit this. However, on the other hand, the innovation necessary for more efficient sustainable energy generation might be more readily developed by decentralized (“capitalistic”) topology…. MAYBE???

    Note: I am not saying which is right or wrong or optimal. I am merely attempting to frame the topic in a terminology of a “systems topology” to look at it from the standpoint of “which topology provides which operational functionality most efficiently or readily?” Bearing in mind that, again, I believe in a hybrid approach that combines both. Unfortunately, due to emotional charge associated with “capitalism” and “socialism” I think people have difficulty looking at the topic in this manner. It is, however, how I look at it.

    A very good friend of mine, whom I have known for about 5 years, is an “anarchist,” which I only found out about 1 year ago. Now, I must confess that other than the fact that the word “anarchist” contains the word “anarchy” I really have no knowledge of the social political dialectic associated with this ideology. In any case, when I had this one fateful discussion with him, about 1 year ago, about what the concept “anarchist” meant, I (not surprisingly) framed the discussion in terminology of the systemic topology that it represented to me, and in doing so, I illustrated to him, using a flow chart, why I find the “anarchist” topology flawed. This infuriated him to no end. I was quite surprised.

  8. TO: Steven:

    You wrote:
    “Thank you for your thoughts, Arthur. I’m going to try to get past this: ‘The manner in which we language a “thing”’ as best I can, but someone using “language” as a verb in the context of discussing the importance of the meaning of words makes me leery.

    Thank you Steven for time and thoughts. Please know that I have more respect for you than you can imagine, and while my writing style might be foreign to you, your writing style, being my favorite author, is home and familiar to me. Your books have gotten me through some of the most painful days of my life, most notably, during the dark days of caring for my father who had dementia, and in the months after his passing, 22 months ago. In any case, please forgive my poetic license, which I have picked up over the years. And, for the purposes of this discussion, please take it as a given that I view you as my teacher in this topic, and I your student. I honestly did not know the meaning of the word “proletariat” before looking it up today, though if someone used it in public I would have politely nodded my head and figured it had something to do with Marxism and communism, but I was not exactly sure which was which …. who was a “proletariat” and who was a “bourgeois” … those are simply words I have never personally used or studied. And, if I were not such a huge fan of your writing, I would never be paying attention here. So, if you want to sway and inform the uninformed, consider me a willing audience. You are one of the few who actually could, but I do have strong opinions, but not emotionally charged political ones, there are more residing in the technical “in the box” opinions about how computers and technology infrastructures work.

    You wrote:
    “And as I go on, I discover this is not accidental. The references to “topology” and such twisted locutions as “or this nation/planet to have an optimal efficient thriving humanity.” feels like the language of post-modernism: designed to obscure rather than reveal.”

    I am not sure if my writing or thought-process is post-modern, but if you say it is, it probably is. I can’t say that I know exactly what “post-modern” is, to be honest. As noted, I am not well versed in this field of discourse. I tend to have two hats when writing. One is very logical, as a mathematician systems engineer who has worked in the corporate IT sector for 20-30 years. The other is very free form poetic, somewhat mystical in nature, or so I am told. I am well versed in ancient Martial Art lore and proverbs and this colors my writing. My brother was philosophy major, I avoided those topics. In any case, I am not trying to make things more obscure, I am trying to make things more clear. But if I have failed in that, I will endeavor to amend my approach in the future.

    To this comment:
    “One bit I can pull from your comment is that you appear to be arguing that the experience of the Soviet Union is insufficient to determine the viability of socialism. If so, well, okay.”

    Yes, that was my point, but not entirely. I was merely saying that since it being but only one example, it is not sufficient to FULLY analyze the viability of said topology, not that (a) it was not worthy of analysis, and not that (b) the results of such analysis was not informative. I meant it as merely a cautionary qualifier on what can accurately be determined from such a limited sample set, this is all.

    If I may repeat my question:

    Was the demise of a given topology due to (a) the systemic nature of that topology or was it due to (b) certain individuals or forces within that implementation of said topology, or further, (c) was it due to a flawed “model/blueprint” of what a healthy/efficient “socialist” topology or “capitalist” topology is or should be?

    You wrote:
    “But as it is and remains the only example of a proletarian revolution, it seems worthwhile to study it. And we also have, against the one example, the counter-example of every other nation on Earth throughout human history. That is, the level of increase in industry of the Soviet Union during the period in question drastically outstrips in other before or since, save those that were paid for by other nations, in which, in essence, the advanced country extended itself to the colonial country. I explain this by socialized property relations. How do you explain it? ”

    Agreed. It does seem worthwhile to study it. I am avidly following your postings on this with the firm belief that I will learn something of value, even if I may critique or question or challenge the systemic conclusions, I am most certainly learning an historic perspective. Your observations with regards to building on a non-existent infrastructure are accurate, and as noted, in a centralized topology (“socialism”) growing a production from 0% to 60% is most efficient, especially if one is merely adopting technological innovations that have already been perfected, but new development/innovation, and moving up 80% to 90% efficiency requires a decentralized topology. Again, I believe, each has its own strengths and weaknesses. We could similarly discuss Japan, which though is “capitalism” yes, but with their keiretsu national model, has more of a “centralized” topology, and their “economic miracle” delivered massive industrialization that is worthy of praise, but again, after they reached maybe 70% to 80% efficiency, by largely copying the USA’s innovation through the 1990’s, how much have they really paved the way since then? In a sense, they were “decentralized” because the center of their industry in the world market was originated in the USA, but after that process played its course, their dominance in industry waned. Such that, today, in terms of their leading the world in innovation, not so much, which, I believe, was or is due to their somewhat autocratic culture which does not breed a freedom of thought or creativity necessary for innovation.

    To Thomas’ point above, I don’t mean to be “binary” in speaking of centralized or decentralized, because I believe there are elements of both in all (“governmental”) governing systems, and further, each provides a strength and a weakness, which really is my main point. Because, when people speak about “socialism” or “capitalism” it seems to me that their framework actually is “binary” in nature. It is as if people believe that they are mutually exclusive, or that they have to be mutually exclusive.

    There is more I could say or maybe ask about what exactly does a “proletarian revolution” mean, functionally speaking (in as far as how I look at things in terms of a topology), but I am hungry and need to head out shortly to get some food. Furthermore, to be fair (to myself), I think my questions should wait until after I read your next few posts because they might be answered in subsequent chapters, or at the very least, hopefully, I will be able to articulate my questions clearer. In all candor, I have been a little intimidated by the discussion, not just because of you being my favorite author, but also, because I’ve never studied the topic and have more questions than concrete thoughts or opinions, which is why I waited till the 4th post to comment, and why I framed my response in terminology that I am familiar with.

  9. skzb

    Arthur: “Was the demise of a given topology due to (a) the systemic nature of that topology or was it due to (b) certain individuals or forces within that implementation of said topology, or further, (c) was it due to a flawed “model/blueprint” of what a healthy/efficient “socialist” topology or “capitalist” topology is or should be?”

    My biggest problem is that I can’t figure out how you’re using “topology”. The word refers to geometrical properties, and since we aren’t talking about geometrical properties of anything, I assume it is in some measure metaphorical; but I can’t figure out metaphorical for what. I found a secondary definition that had to do with how pieces of something are arranged, but in discussing the economic and political underpinnings of a society, I can’t make that make senses either.

    Just as capitalist revolution (the English Civil War, the American Revolution, the Great French Revolution, &c) refer to overturning the state control by the King and putting state power into the hands of the capitalist class, so a proletarian revolution refers to overturning control of the capitalist state and putting state power into the hands of the working class.

  10. Trotsky writes: “Hence it is clear that in the transitional economy, as also under capitalism, the sole authentic money is that based upon gold.” I don’t believe this can stand up under close scrutiny. While large gold reserves simplify foreign trade, foreign currency (or currencies) are an easy substitute for gold. And today gold is almost of zero importance to economic production, international trade or finance.

    And when he writes, “Theoretically there cannot be the slightest doubt that if the Soviet economy had possessed a gold ruble, the result of the five-year plan would be incomparably more favorable than they are now.” It is difficult to see how this would have significantly increased productivity – or had any real effect at all. Honest accounting does not require a gold standard. Dishonest accounting will find ways to cook the books even with a gold standard.

    Obviously we have had 3/4 of a century of increasing international trade to reflect upon – data and knowledge that were not available to Trotsky, But in the 1930’s it was possible to recognize that gold could also be a straitjacket. Keynes realized this. Mises did not. Apparently Trotsky didn’t either.

    Yet he did realize that, “The ruble will become the most stable valuta only from that moment when the Soviet productivity of labor exceeds that of the rest of the world,” This is indeed all that really matters vis a vis currency value. If your economy is strong, your currency will be also.

    Trotsky ends Chapter 4 with his sharpest criticism: “In the struggle to achieve European and American standards, the classic methods of exploitation, such as piecework payment, are applied in such naked and crude forms as would not be permitted even by reformist trade unions in bourgeois countries.” As in Chapter 3 pointing out the contradiction of reality and theory.

  11. skzb

    Kevin: You’re getting ahead of me. 🙂 But I’ll keep your comments about gold in mind when I get to the next chapter.

  12. > My biggest problem is that I can’t figure out how you’re using “topology”.

    Think that comes from network theory, via mathematics. For example, a ‘star’ topology has a single central node and everything is linked to that, or linked to something that is linked to that. It is a hierarchy with a single top, even if the top is usually drawn n the center. That’s a reasonable analogy with a command, or war, economy,.Someone says ‘build me some ships’ and someone says ‘build this ship here’ and someone says ‘attach the propeller’ and someone says ‘pull that cable’ and suddenly you are turning out ships faster than U-boats can sink them.

    The difference with most other types of economies is that they have cross-links that don’t go through the center (e.g. prices, gifts, obligations, contracts, …).

  13. Like 1soru1 said. You draw a map of something, and you care what’s connected to what, but you don’t really care about the distances and directions, but only about the connections.

    It’s important for things like decisions. You want to make good decisions but you never have all the information. If you get information direction from a whole lot of sources you’ll get information overload and you won’t be able to process it all or even decide which of it is important. If you get it filtered through other people who decide how to boil it down and give you just what you need, they might accidentally filter out the wrong stuff. Or on purpose. If somebody wants to influence your choices they can try to tell you the things that will get you to decide their way. Or when they don’t have direct access, influence the people who censor your information.

    One alternative is to divide up the responsibility. Get different people to concentrate on learning about different parts of the problem, and then come together and decide by committee. This has a bad reputation.

    Another approach is to decentralize even more. Instead of actually deciding anything, split up the choice among hundreds of people who will not have any consensus, so the choice never gets made but is sort of half-made. Do everything at once, sort of halfway. Then you can never make a truly disastrous decision because some of the deciders didn’t do it that way.

    Ideally, set up the system so you never have to decide anything complicated. When all your choices are simple choices that don’t take much information, then you can do pretty well. But it isn’t easy to set up a system like that.

    The approach which has worked out best is to arrange that things don’t change very fast. If next quarter things will be pretty much like this quarter, and next year things will be pretty much like this year, then you can make small changes to respond to them and nothing too terrible will happen as a result.

    So, like, you can have thousands of businessmen deciding how much to produce, and they can figure the economy might improve 3% next year. They each choose to produce 3% more, and if they’re right then the economy improves 3% and they’re ready for it. If they’re wrong and they’ve overproduced by 3% or 6% it’s bad but not a terrible disaster. They don’t have to be all that smart to get by.

    That approach won’t let you grow faster than 3%/year. Its big advantage is that it’s reasonably safe when it works. But when some shock happens to the system, nobody knows what to do. They’re used to nice simple choices. So for example the oil shocks of the 1970’s. Suddenly there was an oil shortage. Capitalist theory said that markets were supposed to allocate the oil so that everybody got the right amount to keep the economy going. But the markets did not have any recent experience handling this sort of thing, and the entities that could afford to pay the most for oil were not the ones the economy needed to have the most oil. Production stuttered. We produced way too much of some things and way too little of others. Before the markets could figure out how to allocate scarce oil, the shock was over and things gradually settled back to normal.

    Any sudden reaction to climate change would be a shock. Climate change itself will probably be a shock, unless it changes gradually enough. Somehow we have built an economic system that can’t handle more than a few percent change in a year, of anything important.

  14. What 1soru1 said. When you care about the connections between things, you can draw a map where the distances and locations aren’t important, only which things are directly connected to which other things. That’s topology.

  15. SKZB – “I can only add that in the 80 years since the book was written, that remains the case.”

    You may wish to review some GDP data.

    Historical for the Soviet Union:

    http://www.voxeu.org/article/russia-s-national-income-war-and-revolution-1913-1928

    And for instance South Korea:

    http://www.newgeography.com/content/002060-the-evolving-urban-form-seoul

    (To convert the South Korea graph to the same 1990 dollars as the USSR graph reduce the 2010 dollars by a third.)

    If one looks at the pre-revolution trend, then the USSR did not resume that level of GDP until 1930ish. It did not consistently exceed the pre-revolution trendline until after WWII.

    South Korea’s growth from 1980 on is quite impressive.

  16. skzb

    A very quick google of “foreign capital investments in South Korea” indicates that a considerable portion of South Korea’s economy is foreign owned, and that it received a lot of assistance from the IMF etcetera. What saw in my brief search was not conclusive and I know nothing beyond what I just looked at; do you think my conclusion is incorrect?

  17. SKZB – I don’t have any numbers on the amount of foreign investment in the early USSR. I’m sure it was quite small, though hard to decipher if that was totally by design or not. There were mechanisms for foreign companies to invest in the USSR, I just don’t know if the USSR was actively seeking joint partnerships in the 1920s and 30s or how many actually existed.

    What I found informative from the graphs was not just the comparison of the USSR & S.Korea, but the pre-revolution trend in GDP growth vs that afterwards. GDP growth never rose consistently above the pre-revolution trend until after WWII. I would not have guessed this.

  18. skzb

    ” I don’t have any numbers on the amount of foreign investment in the early USSR”

    Zero. Foreign capital was expropriated. This, somehow, discouraged further investment.

  19. “GDP growth never rose consistently above the pre-revolution trend until after WWII.”

    Traditionally this was thought not to be true. Perhaps the old numbers were faked, and somebody figured out how to extract better numbers from the garbage?

    Here is a brief explanation of GDP growth. I read it from an unorthodox Russian economist whose name I don’t remember.

    Let’s suppose that each national economy tends to grow at some fixed rate. When for some reason it slows down, after the slowdown it tends to speed up until it gets to the point it would have had without the slowdown, and then goes back to the normal rate. Occasionally it may overshoot and then go back to the normal rate. Without this assumption, “normal rate of economic growth” doesn’t mean much.

    Here’s a simple explanation why that might be true. Suppose that economic growth is mostly because of new technology. And suppose that new technology mostly comes from incremental improvement. Designers create a new model, and from what they learn testing it they create a better new model, etc. Then the rate of improvement would tend to be constant because they go right on making new models and testing them even when sales are down. When sales go up, the tractors and electroforming machines etc have improved as much as they would have if sales had been high all along, so efficiency and production etc go up fast for awhile. This is of course oversimplified, but remember that it’s an explanation for an oversimplified claim….

    The author looked at GDP numbers for a lot of nations and found they tended to fit his model. Each nation had an average rate of GDP growth, and tended to grow at that rate for awhile with occasional deviations which were corrected. On a log graph you could draw the growth as a straight line, with deviations that returned to the line.

    The graph in your link kind of fits that. A straight line fits suspiciously well from about 1950 to 1979, you hardly ever see that good a fit in economic data. Extend it backward and it fits the number for 1928 or 1929. (The dots on the graph don’t match up with the years at the bottom, some sort of printing error.) That would give us a little bit of a lag from 1928 to 1931, exceptionally fast growth from 1931 to 1937, slowing down a bit going into WWII, recovery from WWII, and rock-steady growth to 1979. Then the growth might have slowed a bit but it’s hard to be sure from 6 points, and after that the collapse.

    For the Czar years, we get a recession starting around 1907 lasting through 1910. Starting in 1911 the economy improved until it surpassed the 1907 GDP in 1917. This is due to brand new data which shows that the Russian economy was not hit hard by WWI at all. Do you believe that?

    If you draw a straight line from 1885 to 1917, you’re close to the best fit, and it isn’t all that good. If you ignore everything after 1907 you get a much better fit for what’s left. There was a great big recession starting in 1888, the bottom was 1892, they were back to trend by 1896. This line is not nearly as steep as the USSR one, but steeper than the worse line that uses all the data. By their graph, the 1888 recession hit them worse than WWII, and the 1908 one was about 2/3 as bad but they mostly recovered during WWI. When the USSR collapsed, the documented result was about 2/3 as bad as the estimated effect of the troubles during and after the revolution, and it lasted longer. It damaged their GDP about 3 times as much as WWII.

    I question the data, but still the graph they published does not support their conclusions.

    The paper was published by Vox, which is intended to influence policy in western europe and the USA.

    —————-
    Most Vox columns are commissioned directly by the Editor-in-Chief, but Vox does post a few unsolicited columns.

    Professional economists who are interested in writing a “research-based policy analysis and commentary” should send a few lines describing the possible column and its research basis to: Submissions@VoxEU.org.
    —————-

    I question their motives and methods. Vox published this paper because it said what they wanted to hear.

  20. SKZB – Following the 1923 Law on Concessions there was foreign investment in the USSR for a period lasting until at least 1932. Some of these ‘concessions’ allowed foreign investors to also import skilled and unskilled labor.

    Despite these concessions, it is unlikely foreign investment had a significant effect on the economy – though I’ve never seen a complete listing of them.

    “Joint Venture Law in the Soviet Union: The 1920s and the 1980s” by Adam J. Albin, is a short paper that reviews some of this history.

  21. Henry Ford is widely believed to have built an automobile plant in the USSR for the Russians, and he sent a collection of mechanics etc there to train Russian workers. Alexander Dolgun’s father was one of them. He went in 1933 on a one-year contract. He agreed to a second year provided they pay for his family to come with him. After the second year they said they needed him and didn’t let him leave.

    http://www.history.com/this-day-in-history/ford-signs-agreement-with-soviet-union

  22. SKZB – You may also wish to read Antony C.Sutton “Western technology and Soviet economic development, 1917 to 1930” Hoover Institution on War, Revolution and Peace. 1968

    https://archive.org/details/Sutton–Western-Technology-1917-1930

    I don’t recommend downloading the ‘full-text’ version. The formatting is atrocious.

  23. skzb

    Thanks for the rec.

  24. In Chapter 42 of My Life Trotsky writes, ” I organized a body of American experts, later augmented by German experts, to safeguard the power station from defective estimates, and tried to relate my new work not only to current economic requirements but also to the fundamental problems of socialism.”

    Trotsky served as Chairman of the Concessions Committee for a couple of years, yet I can find no mention of these concessions in Revolution Betrayed and the quote above is the only significant mention of concessions in My Life. I find the omission of concessions in Chapter 38 of My Life (while discussing the ‘disease’ affecting 60% of the locomotives) particularly interesting in light of Sutton’s figures on the same subject.

  25. skzb

    What does “concessions” mean in this context?

  26. Concessions were the various attempts to encourage private enterprise and to attract foreign investment and technology. Lenin believed these would be necessary until the Soviet economy was on firm ground.

    Sutton lays out the details of the Soviet economy during the 1917 – 1930 period and pretty clearly shows that foreign corporations basically rebuilt most sectors of the economy. While it is clear that this was part of Lenin’s plan, it seems rather odd that Trotsky gives it almost zero coverage.

    It would seem a rather vapid socialist victory if it was in fact due to hiring capitalists to do the work.

  27. SKZB – Here’s an example of one concession. International Barnsdall Corporation and the Baku oil fields.

    In 1900 Russia was the world’s largest producer and exporter of crude oil. To maintain this production nearly 50,000 feet of drilling per month was required. By 1913 the monthly footage had fallen to 37.000 feet/month. By 1921 it was *400* feet/month. Maintenance and repair was virtually non-existent and as much water was being produced from wells as oil.

    In 1921 Barnsdall signed its first concession contract. Barnsdall would eventually bring in engineers, crews and equipment. In its first month Barnsdall drilled 15,000 feet.

    This was not simply a matter of bringing in technically competent people to do the drilling; in 1913 almost all of Russia’s drilling was done by the percussion method. Not one American style rotary drill was in country. By 1923 35% of the drilling was done by rotary drills and by 1928 over 80% was done with rotary drills and percussion accounted for less than 3%.

    The substitution of rotary drilling for percussion methods increased the speed of drilling by ten-fold and reduced costs by half.

    Barnsdall received cost plus 5% for all the equipment they brought in and 15% of all crude oil produced as their fee.

    Now, similar stories can be told in many other sectors of the economy – trains, electricity, automobiles, chemicals, steel, etc. I’m not sure how anyone could view this period as a triumph of socialism. As I pointed out earlier, what we see is a resumption of the previous growth trend. And the recovery to the previous trend was done by foreign capitalist corporations working for profit.

  28. “As I pointed out earlier, what we see is a resumption of the previous growth trend.”

    Do you have any evidence for the idea that it was the same growth rate as the previous trend? Perhaps a credible link?

  29. J Thomas – The article referenced earlier shows you the data. The authors list their sources:

    Table 1. Sources for Russia’s national income, 1885-1990

    Period Coverage Source
    1885 to 1913 Annual Gregory (1982)
    1913 Benchmark Falkus (1968)
    1913 and 1928 Benchmarks Gregory (1990)
    1928 to 1960, selected years Benchmarks Bergson (1961)
    1928 to 1940; 1946 to 1962 Annual Moorsteen and Powell (1966)
    1940 to 1945 Annual Harrison (1996)
    1950 to 1980 Annual CIA (1982)
    1950 to 1987 Annual CIA (1990)
    1960 to 1990 Annual Ponomarenko (2002)

    Now, if you have what you think is a better source, please reference it.

    I’m not sure what your problem is with CEPR, but the authors of the article I referenced were Mark Harrison and Andrei Markevich. They were among the first economists to leverage the opening of former Soviet archives. They have led international projects that reinvented the quantitative economics of the two world wars and contributed significantly to historical Soviet studies. In 2012, they shared the Russian National Prize for Applied Economics, which was awarded in recognition of their research.

    Now, their research compared to your wild ramblings isn’t even a real choice. I’ll take their research every time.

  30. SKZB – in your Chapter 2 post you write, “The first of these need not be justified as the facts and figures are there, as I mentioned in the previous post.”

    As I’ve tried to make you aware, the bare numbers do not tell the whole story. There are actually three things we should consider:

    1) As Sutton writes, “It is accepted that a significant factor in the economic growth of those countries undergoing rapid development during the twentieth century is the ‘advantage of coming late.’ Advanced industrial and agricultural technology can be effectively transferred, reducing the latecomer’s investment in research and development.” The Soviet Union was very late to the industrial revolution.

    2)And per BF Massell, who studied US productivity growth from 1919 – 1955 (in ‘Capital Formation and Technological Change in United States Manufacturing‘) we learn that technological change accounts for 90% of productivity growth and capital formation only 10%.

    3)The United States, Germany, the UK and several other countries engaged in dozens of concession contracts with the Soviets that effectively transferred technology to the Soviet Union during the 1920 to 1935 period. In many cases building the plants, supplying the equipment, engineers, and skilled workers.

    Once that technological transfer occurred there was an immediate surge, but then the growth rate in GDP settled in at the same rate as evidenced before the civil war.

  31. skzb

    Point 1, of course, is exactly what I was covering in the discussion of the law of combined development. It remains to explain, as I said then, why this had a different effect on Russia than China, India, &c &c &c

    I don’t see the relevance of point 2

    Point 3: Interesting. I’ll have to look into that. I’ve never heard of that happening (foreign investment during the immediate post-revolutionary period) in any significant level in the 45 years I’ve been studying this, which makes me curious–especially investment and manpower from the people who’d just finished military invasion and financing a civil war. Curious.

  32. “Now, if you have what you think is a better source, please reference it.”

    Look at the graph that they printed. It does not show what they say it shows. It shows GDP growth in czarist russia rather slower than later growth.

    They might be right that Czarist russia suffered a giant GDP drop in 1905 and during WWI reached its highest level ever. That goes against what everybody believed, but everybody’s been wrong before.

    But mostly their conclusions do not follow from their own graph. Who are you going to believe, them or your lying eyes?

  33. J Thomas – Take the period from 1885 to 1913. Determine the trend. Extend that trend to 1950. My point was that up until 1950 the economy (as measured by GDP per capita) remained below that line until after WWII. As for “That goes against what everybody believed, but everybody’s been wrong before.” I’m sorry, you’ll have to provide references. Otherwise I have no idea what you’re talking about. The sources referenced on GDP are the best that I know of – if you have others cite them.

    SKZB – the relevance of point 2 is that it was the transfer of technology (from the west) that allowed Soviet productivity growth during the 1920s and 30s and technological change is far more important than capital formation. The Sutton work I referenced goes into great detail on just about every sector of the economy and how it was western corporations that provided the knowledge, equipment and sometimes labor to rebuild the Soviet economy in the aftermath of the civil war.

    It’s really not surprising that neither the Soviets nor the west openly wanted to talk about the role of western corporations in rebuilding the Soviet economy. For the Soviets it diminished their accomplishments and for the west it was an admission that *profit* was all corporations cared about. And for many of the companies involved it was a poor investment decision – once the Soviets got the knowledge, equipment, and training they needed they kicked the foreign companies out.

  34. J Thomas:”They might be right that Czarist russia suffered a giant GDP drop in 1905..”

    I have struggled with poor eyesight my entire life, but unless you have very poor vision the graph doesn’t show this – nor do I know what the relevance would be if it did.

    The graph shows the bottom of large troughs in 1892, 1910, and 1922. 1905 shows a decline – GDP/cap fell from 1376 to 1288 – but hardly a giant drop. Given the mass political and social unrest from the Revolution of 1905 is this surprising?

  35. “That goes against what everybody believed, but everybody’s been wrong before.” ‘I’m sorry, you’ll have to provide references. Otherwise I have no idea what you’re talking about.’

    Their graph shows Russian per capita GDP at its highest ever level during WWI. The text says:
    —–
    During the war nearly all the major European economies declined; Britain was the exception. The main reason was that the strains of mobilisation began to pull them apart, with the industrialised cities going in one direction and the countryside going in the other way. In that context, we find that Russia’s economic performance was better than has been thought. Our study shows that until the year of the 1917, Revolution Russia’s economy was declining, but by no more than any other continental power.
    ….
    Because we have shown that the level of the Russian economy in 1917 was higher than previously thought, we find that the subsequent collapse was correspondingly deeper.
    —-

    Here is their paper where they quote these unexpected results:
    https://www2.warwick.ac.uk/fac/soc/economics/staff/mharrison/public/jeh2011_postprint.pdf

    —-
    According to previous estimates, Russia’s economic performance in the
    Great War up to 1917 was far below that of most other continental countries that entered the war. On our figures, Russia’s shortfall disappears.
    ….
    The average GDP decline for the continental powers was 23%, while Russia’s GDP was distinctly above the average, falling by only 18%.
    ….
    The year-on-year pattern of change in real national income per head is revealing in various ways. As Figure 1 suggests, our results give Russia fuller credit for the military mobilization of 1914 through 1916 than previous estimates, and revise the pessimistic view of Russia’s Great War that is well established in the literature. The economy held up through 1915, which was blessed by a good grain harvest. By 1916 it was in decline, but was still less than 10 percent below the peacetime benchmark of 1913.
    ….
    We have seen that the economic decline up to 1917 was not more severe in Russia than elsewhere. In short, we will probably not be able to explain why Russia was the first to descend into revolution and civil war without reference to historical factors that were unique to that country and period.
    —-

    It turns out that they revised the wartime GDP figures by counting a whole lot of military services as GDP that nobody had ever counted before. They figured that urban areas did so much work taking care of the military that they couldn’t make much to trade to rural areas for food. So farmers traded less food, and eventually grew less food. It didn’t help that men and horses were conscripted into the army, which at its peak absorbed 10% of GDP.

    This all makes sense. So look at the graph, do you see an 18% decline after 1913 and before the revolution?

    Do you doubt that the consensus was different from their claims, when they themselves say the consensus was different?

    And yet it makes little difference. They say the Russian economy was doing better than anyone thought, and therefore the drop afterward was steeper. Despite the improved economy, there was still not enough food, and harder work for less reward, enough to cause a revolution. The military spending which they count as GDP was piled on top of the partly-failed concessions after 1905. They could be right and everybody else wrong, but what does it matter?

  36. “J Thomas:”They might be right that Czarist russia suffered a giant GDP drop in 1905.”

    ‘I have struggled with poor eyesight my entire life, but unless you have very poor vision the graph doesn’t show this – nor do I know what the relevance would be if it did.’

    I’m looking at the graph. This is a log scale, so similar drops represent similar percentage declines. Look at the drop that starts in 1905 with the bottom in 1910. Compare it to the drop for WWII. It’s about the same size!

    If this graph is right, the depression that bottoms in 1910 hurt the russian economy as much as WWII did! The WWII where something like 10% of the population died, where pretty much all of Russia west of the Don river got subject to scorched earth defense before the Germans rolled over it, that WWII.

    What would cause such a thing? My immediate thought is that the 1905 revolt and the reforms after it might have had some effect, but I don’t really know. I never hear much about 1905 because the Revolution was so much more noteworthy….

    Does it start to look relevant in that context? I started out doubting that it would be that big compared to WWII. I thought it made the graph less plausible. But it could be true, and that would be a jarring fact worth considerable investigation when I find the time.

  37. “I’ve never heard of that happening (foreign investment during the immediate post-revolutionary period) in any significant level in the 40 years I’ve been studying this”

    https://archive.org/details/Sutton–Western-Technology-1917-1930

    If you look at the Sutton report that Kevin provided, you’ll see that it is a revisionist account. Sutton claims that before him, pretty much everybody agreed that it was not a significant level.

    Before around 1928, it was considered somewhat shameful to assist the Soviets and so companies that did it did not publicize their actions much. But just about the time that this started to relax, the Soviets decided on a weird interpretation of industrial espionage and worked hard to keep info from getting to the west. So the records were scattered and incomplete. Some foreign governments tried to track investment in Russia by their national companies, and sometimes they only heard about it from the press, basicly by rumor. Sutton did not have access to secret Soviet data and assembled whatever scraps of information or disinformation he could find, judging their reliability by some standard of his own. No doubt he was rather liberal about that since his intention was to show that everybody else was wrong.

    He found evidence of hundreds examples before 1928 when the Russian data became secret. The US press thought that more and bigger examples came after 1928 when Ford announced that it was a good idea and other big companies followed him.

    Sutton gives the impression that the usual sequence of events was that a foreign company would negotiate with the russian government to build one or more factories and produce stuff, they would send foreign technicians and managers to do the expert work, along with foreign machinery. They would get a percentage of the sales and maybe other sweeteners. Then when they tried it, they ran into various obstacles. The electricity was unreliable, the employees were unreliable, transportation was unreliable, raw materials etc were of dubious quality. They ran into permitting problems, all the traditional problems of investing in the third world. It would be easy to think that the Soviet government was trying to sabotage them. In a few years they would pull out with big losses, and would not publicize what happened because others would laugh at them for being so stupid. They left behind factories and trained workers. The Russians would copy the parts and build more factories and train more workers. Toward the end of the NEP the Soviets preferred to just buy factories etc rather than make agreements about future profits.

    The importance of Kevin’s point 2 is that if most of development depends more on learning better ways to do things than on actual capital, then access to new technology was the key. The Soviets got access to western technology and applied it, which gave them a big temporary jump. Western investment in the USSR would be important out of proportion to its size, because it brought new technology which could be copied. If the claim is that there was nothing special about the Soviets, the important thing was that the western economy built the Soviet economy while the Soviets interfered and slowed them down, these would be important steps toward that claim.

    These could be correct without leading to that claim also. If technology is the biggest deal for development, then technology transfer is a key part of development. You need some capital too, but capital without the most modern technology winds up being mostly wasted. If you set up to make stuff inefficiently, you need trade barriers or you can’t compete with imports, much less get foreign exchange.

  38. J Thomas – “Their graph shows Russian per capita GDP at its highest ever level during WWI.”

    What??? The highest GDP/cap. between 1914 and 1918 is under 1600. Every year after 1930 is higher and In 1987 GDP/cap. goes over 6400. Perhaps you meant highest level up to that point; but that shouldn’t be surprising. And it did drop in the last couple years of the war.

    “I’m looking at the graph. This is a log scale, so similar drops represent similar percentage declines. Look at the drop that starts in 1905 with the bottom in 1910. Compare it to the drop for WWII. It’s about the same size!”

    As for WWII, the US GDP/cap. nearly *doubled* from 1939 to 1945. This was directly a result of intense military production. That the Soviets ended the war pretty much where they started despite their equally intense military production is a result of the damage they suffered during the war (as opposed to the US). I.e., wars can be great engines of economic growth – as long as you fight them somewhere else. A priori we’d expect the Soviet economy to greatly expand given the dramatic increase in military production. Obviously, unlike the US, this has to be discounted by the amount of damage suffered. But again, we’re simply dealing with your opinion – not disagreement over researched numbers. That your opinion is at odds with the facts is not a reason to discount facts.

    BTW, the drop does not begin in 1905. 1906 and 1907 are higher than 1905. So the Revolution of 1905 had an effect that was quickly undone. There are many reasons for brief drops in GDP per capita – some global in nature others local. The US (for instance) saw a 2% drop in GDP during this same period (from 1907 to 1910).

  39. “Their graph shows Russian per capita GDP at its highest ever level during WWI.”

    Of course, I meant up until then.

    As for WWII, the US GDP/cap. nearly *doubled

    “As for WWII, the US GDP/cap. nearly *doubled* from 1939 to 1945. This was directly a result of intense military production.”

    Yes, and coming out of the Great Depression. We had a big backlog of R&D available to use. Meanwhile, if I read this graph right, while we were suffering the Depression the USSR was having their fastest growth ever, and slowed down in the last couple of years before the war. There are some data points missing during the war, and it looks like they reached their low in 1946. It took 2 years after that to get back to about where they had been before the war, and they didn’t reach where we would have expected them to be without the war until about 1950.

    I can imagine that the war might have had so little effect on them. Particularly since this is per capita GDP, so if their population went down by about 10% then it counts as even-steven when it’s about 10% less.

    But however you want to look at it, what was it that happened in 1907 (it looked like 1905 on the graph) that hit the Czar’s economy as hard as WWII, that they made up some during the war but which they never fully recovered from?

    And what was it that hurt them in 1888 that they didn’t recover from until 1896, that hit them considerably harder than WWII?

  40. JT – http://i.bullfax.com/imgs/67cd67dfc566b07ebce004c07bd443cf2749e9ef.jpg

    What caused all these 19th century booms and busts in the US? As I stated earlier, some are global in nature some are local. If you’re interested in the specific causes of particular periods you’ll have to research them. The reasons are rarely singular.

  41. Kevin, somehow I’m not stating my point clearly. Maybe because I’m npt arguing about whether capitalism or communism is better?

    So OK, here’s WWII. Everybody’s heard how bad that was for Russia. The entire western part of the country was lost, scorched-earth defense, crops destroyed in the fields, food destroyed in the warehouses, many millions of refugees left to walk across the front lines, partisans stuck behind the german lines did cannibalism, they raided german convoys for food, eating any german soldiers left behind, what with one thing and another maybe 10% of the population died, the army lost 12 million casualties when it never had more than about 6 million men at a time. In living memory they had two depressions that hurt the Czar’s economy worse than that.

    On the other hand here are the Revolutions and their aftermath, it was so bad they didn’t keep records about how bad it was. It was so bad that maybe 10% of the population died, like WWII that way. Truly awful. It took 30+ years for the economy to recover.

    Why was WWII just a little blip?

    I tried to ask this before, and you basicly said, well, wars are no big deal, for WWII the USA just cranked up the economy to run twice as fast, no problem. The Russians lost a lot of stuff but they came out of it about even, if they cranked up the economy to twice as fast and half of it was destroyed that’s about what you’d expect.

    To me this sounds completely crazy. If the USA could just crank up the economy to twice as fast any time they wanted to, why not do it in 1933? And if you believe the numbers, the Russian economy had already been growing at a fantastic rate before WWII. If they could just crank it up to twiice as fast, why hadn’t *they* already done that?

    If you believe the numbers, the USSR did not have a single depression or recession after 1950, not until a few years before they collapsed. Capitalist economies continually get out of balance, they have booms and busts, the USSR did not have any of that but just ran on a completely even keel for 31 years. I don’t believe those numbers. I believe they’re bogus. But if you did….

    You can say that the real world is what it is, and it isn’t what Jet imagines it is, so it doesn’t matter what I think. OK, that’s fair. But I want to understand how !WWII! turned into just a little blip in GDP, no worse than two previoud recessions under the Czars that get no publicity. If that’s for real, you and I probably both need to understand it.

    Also we should figure out what was different about after the Revolution. What made it so much worse, when the death rate was not so much worse? That one doesn’t look as hard, I can easily come up with hand-waving explanations for that one.

  42. skzb

    Kevin: Okay, I’ve spent the last three days trying to get up to speed on concessions. My conclusions are as follows:

    Regarding the graph, the term “previously existing estimates” is too vague to be useful (whose estimates, made when, according to what criteria). If we look at the red line, it exactly matches what I’ve been saying.

    We clearly agree on many points. That is, the most important impact of concessions—by far—was technological rather than capital—this is entirely in line with the law of combined development. In other words, Trotsky spends a great deal of time on the importance of coming late to the party in order to use the existing technology, a process well under way before the revolution. The exact mechanism of it (foreign investment, engineers visiting the advanced countries, the study of technical journals, and so on) is not important in understanding the effect of a centralized planning on the economy; merely that it happened.

    The only hard statistics I’ve found for concessions are here: https://www.marxists.org/history/ussr/government/1928/sufds/ch14.htm where it states that foreign investment was less than 1% of total investment.

    I can also add that the very fact that Trotsky was chairman of this commission indicates it’s lack of importance—at least in the eyes of Stalin. This was 1925-27, when Trotsky was already “on the outs” and the bureaucracy was trying to shunt him off to where (in Stalin’s opinion) he could “do no harm.” This is also the period when he was commissar of art and culture.

    To state my argument as clearly as possible, we have three cases:

    1. The advanced capitalist countries, which were growing (in terms of productivity of labor, reflected imperfectly in GNP and other statistics) slowly, due to their advanced position and the inability to implement new technology until they first invented it, while simultaneously being slowed down by market anarchy.

    2. The colonial countries, such as India, China, Turkey, some of the African countries, and so on, in which there was either (essentially) no development of industry, or there was rapid development of industry that was overwhelmingly owned by foreign capital.

    3. The Soviet Union, where there was rapid, unprecedented development of industry that was not foreign owned.

    My argument, in other words, remains as I stated it originally: the 250% growth in the metrics of industry is inexplicable without looking at central planning and public ownership of the productive forces.

    Thank you for directing my attention to this; it’s been fascinating.

  43. SKZB “it states that foreign investment was less than 1% of total investment.”

    My point is that investment dollars are often a poor or misleading statistic. Investment dollars are not necessarily transformative – technology transfer is. Any poor, impoverished country that receives foreign technology transfer will accelerate productivity and GDP greatly. This is not dependent on the form the State takes -Capitalist, Socialist, Authoritarian, etc – as I showed with South Korea. My criticism is not that the Soviets used foreign technology; I consider that just common sense. It’s the claim that only socialism could accomplish the large growth in GDP.

    It is also well to remember that countries that are recovering from war damage will also greatly accelerate if they are rebuilt.

    Austria 290% GDP growth 1945 – 1955
    Italy 240% GDP growth 1945 – 1955
    Germany 280% GDP growth 1946 – 1956

    I’m not sure that public ownership of the productive forces played much of a role in these periods of growth.

    Over reasonable time-scales, technology transfer is a one-time adjustment. After the initial infusion of technology productivity growth returns to standard models of education, capital outlays, R&D, and replacement of obsolescent equipment . This is where the real work begins – building a society that can continually move forward, meet the everyday needs of the people, while maintaining a desirable quality of life.

  44. SKZB – “The only hard statistics I’ve found for concessions are here:”

    Sorry, but I’ve referred to Sutton several times already. On page 9 he lists a table of concessions for the 1920 to 1930 period. This shows 464 concessions during this timeframe. It shows 330 Type I & II concessions and 134 Type III concessions. The table is admittedly incomplete as it shows data not available for Type I (pure concessions) and Type II (joint ventures) after 1926. Type III concessions are technical assistance contracts. The total number of concessions over this decade is probably closer to 500.

    This is not necessarily inconsistent with the source you cite. The SUIB data speaks only of concessions in operation at the time (June 1, 1928). It does not speak to the total over the period – which is what Sutton shows.

    In Appendix B Sutton lists several hundred companies that had concession contracts with the Soviets (by Type).

  45. skzb

    I think it reasonable—in fact, if we’re to look at the issue, required—to see the difference between an advanced capitalist country (England, France, Germany, the USA, and possibly Japan), and relatively backward countries. The distinction between backward and advanced, though admitting of gradations, is real.

    The significance of the 1% figure is as follows: From the beginning of WWI to 1936 no country except the Soviet Union has gone from backward to advanced without the major portion of its industry being owned by capitalists from one or more of the advanced countries. I explain this by the socialized property relations. How do you explain it?

  46. SKZB – I consider it an interesting historical fact, but nothing more. We could as easily say that never in the last 125 years has any country seen spectacular economic growth (say 200% GDP/cap. in a decade) without the assistance of foreign capitalists – except the USA (1933,34,35 – 1943,44,45).

    What is common to both the USSR circa 1920 and the USA circa 1933 is both were coming off of economic low points and both had vast unexploited natural resources.

    Countries that lack coal deposits cannot have a 5-year plan to increase coal production.
    Countries that lack oilfields cannot have a 5-year plan to increase oil output.
    Countries that lack mineral wealth cannot have a 5-year plan to increase the mining of minerals.
    Etc., etc.

    Sartre reportedly asked of revolutionary Cuba, “Is building on sugar better than building on sand?’ Well, if all you have are sand and sugar you better maximize both. Most countries are not as fortunate as were the USSR and the USA. They cannot meet all their resource needs internally. Using either country as an example or template for others fails to recognize this inherent limitation.

  47. skzb

    The comparison with the USA fails because the USA was already an advanced capitalist country (by the standards of Britain, Germany, &c) before that happened—it didn’t have to *develop* that technology, just re-implement it.

    The point about resources asks to explain why the resource rich areas of China and India didn’t go through this experience.

    “I consider it an interesting historical fact, but nothing more.”

    Okay. I trust you won’t mind if the rest of us continue giving it significance?

  48. SKZB -“The comparison with the USA fails because the USA was already an advanced capitalist country”

    This should have made it *more* difficult for the USA. The appropriate analysis then is that if you’re coming off an economic disaster (true for both the USA and USSR) and you have unexploited resources, then you can see extraordinary economic growth. This holds not only for the USSR (circa 1920) or the USA (circa 1933), but for the aforementioned Austria, Italy, and Germany (circa 1945-46). There is no need to refer to the form of the State or the ownership of the means of production to explain these periods of growth.

    China has recently seen explosive growth – GDP quintupled from 2003 to 2013. India’s has tripled over the same timeframe. Again, it is difficult to attribute growth in either China or India over the past decade to the form of State. In fact, one of the leading reasons for China’s growth is increased privatization of production. Another is the large transfer of labor from agricultural to non-agricultural enterprises.

  49. skzb

    Easier or difficult isn’t the point, it already had achieved the status of advanced industrialization, which is exactly the point I was making.

    China and India both achieved industrialization from foreign investment, Japan in the former, Britain in the latter.

    ETA: It just hit me that you’re concentrating on the GDP growth, I’m mostly focusing on the over-all change from “backward” to “industrialized,” so we’re talking somewhat at cross purposes; sorry it took me so long to figure that out, I guess I’m a bit brain-burned.

  50. SKZB – yes, that difference had struck me too, but the argument is in the growth of industry and the economy. Isn’t this Trotsky’s point when he says, “not in the language of dialectics, but in the language of iron, cement, and electricity”? The best measure we have of this is GDP (actually GDP/capita). Russia was not as backward as you (or I) might have imagined. Pre-civil war Russia built both automobiles and airplanes (of original design??). Obviously the dozens (hundreds?) of manufacturing plants that continued operation throughout the period of conflict – or were put into preservation – already existed.

    As I mentioned in a previous comment; it led the world in crude oil exports in 1900.

    That much of the country was still rural and the industrialization localized to just a handful of cities is a bit beside the point. Many of the concessions were to run or overhaul existing plants.

    The idea that I chafe against is that this economic expansion could only happen under a socialist regime. No, the world has seen similar if not greater economic expansions under various forms of State. That the Soviet expansion occurred when it did, how it did, and the specific shape of the economy is due to decisions made by the victors of the revolution. That economic expansion could not have occurred, or wouldn’t have occurred at all given a different form of State I find difficult to justify.

    South Korea did not have it’s first concrete building until 1920. Oxcarts were still common on the streets of Seoul in the 1960s (1970s??). If the Soviets came late to the game of industrialization, then South Korea didn’t even realize there was a game to be played. The first South Korean-built car left the assembly line in 1975. In the 40 years since, GDP per capita has tripled and then tripled again.

    The USSR after WWI, the US after the Great Depression, Austria, Italy and Germany after WWII, South Korea fin the last four decades, China in the last twenty years — that these economic expansions have happened under various forms of State should tell us that the form of State is not a determining factor. The form of State is important in many other ways, but not a decisive component to rapid economic growth.

  51. “The comparison with the USA fails because the USA was already an advanced capitalist country (by the standards of Britain, Germany, &c) before that happened—it didn’t have to *develop* that technology, just re-implement it.”

    You’re talking about the recovery from the Depression, and then during WWII?

    If we agree that development is 90% improved technology and 10% capital, the USA has a great big pile of unused new technology to exploit. All through the Depression people were creating new technology that was not getting used much. That technology was waiting when they did choose to expand.

    In just the same way, there was new technology available one way or another for Russia.

    The differences I see are that first, the USA had a lot of decaying infrastructure already created which could still be used. This surely made a difference. But there wasn’t as much as you might think. I remember my old uncle telling me how excited he was to vote for Herbert Hoover. Hoover was an engineer and wanted to actually build stuff, and he proposed that the USA should have a paved road all the way from east to west — which did not exist at the time.

    Second, the USA had a certain number of workers who were already trained in obsolete technologies, who could be retrained easier than Russian peasants. There’s a lot of background knowledge involved in working in a factory that takes awhile for newbies to pick up. Things that seem obvious but that have to be trained into habit, things like, if somebody is working above you, go somewhere else. If safety shielding has been temporarily removed from a piece of machinery, do not turn on or use that machine until it has been replaced. Precise timing is vital, always be on time and with time to spare. It takes time for people to get those instinctively, and until they do they cause accidents and delays.

    Third, the USA had a business-friendly environment. Trotsky repeatedly mentions examples where people made choices that looked good at the time, and later they were punished for them. Of course there were consequences for mistakes in the USA too, but people usually didn’t expect to go to prison or be executed for honest mistakes. It might have made a difference in their willingness to quickly make decisions and revise them as needed. When you have to constantly think about how you will justify your choices to a court or court-martial or to secret police etc it might lead you to often choose the most defensible choice rather than the one that actually looks like it has the best chance of success.

    I don’t know how much that sort of thing really mattered. The fundamental things driving development were the same. There were opportunities to make stuff, using new technology, and there was a strong expectation that production would be rewarded.

    “The point about resources asks to explain why the resource rich areas of China and India didn’t go through this experience.”

    India was somewhat controlled by Britain, and somewhat controlled by a patchwork of governments that could barely hold onto power. The British introduced technology as fast as it suited them. I think they were still thinking as mercantilists — they wanted colonies to supply raw materials for their factories at home, and provide markets for their manufactured goods. An industrialist could make a fortune building factories in India and selling his products there plus exporting them, but what good did that do England?

    China was developing some, in precisely the places that Japan took. No coincidence there! They were plagued by an imperial government that could barely hold on until finally it let go, and then they had a bunch of warlords squabbling with each other. If any of those who had abundant natural resources had thought to attract capital and lots of new technology, I don’t know what would have happened. I guess if they were close enough, the Japanese would have invaded them too….

  52. “The Soviet Union, where there was rapid, unprecedented development of industry that was not foreign owned.”

    “My argument, in other words, remains as I stated it originally: the 250% growth in the metrics of industry is inexplicable without looking at central planning and public ownership of the productive forces.”

    Somehow you have to balance between making stuff for immediate consumption versus making capital goods that will pay off later. I’m real unclear how that balance ought to be set. The USSR put a big emphasis on building new factories etc. But Trotsky points out they weren’t making enough stuff to give to farmers in exchange for their crops. So the farmers didn’t sell, and they had to go out and take the food like traditional robber barons. As the farmers started to organize and get politically active, the government labelled the leaders “kulaks” and declared war on them, eventually forcing the farmers into collective farms where they could be controlled. And food production went down even more.

    If they could have put more emphasis on things that paid off quicker, maybe they could have paid the farmers enough to avoid that crisis.

    Or maybe not. Maybe they would have grown slower if they put more effort into consumer goods. Maybe they just didn’t have enough running already to produce enough consumer goods, even if they made that a primary goal.

    Say you put a giant effort into building steel mills etc. And the result is that in 5 years you have a lot of steel. But until then it gives you nothing to sell, only expenses. Within 5 years you could have a revolt on your hands that has to be put down. But on the other hand, when WWII threatens you’ll have a lot of steel to use to build tanks.

    I read a claim that Russia suffered terribly under the Mongols, and for eight centuries their biggest priority has been to keep it from happening again. They do whatever it takes to stop each new invasion, and maybe seeing a bunch of working tanks made up for not having enough food. Or maybe the tanks could be used for crowd control….

    I have the idea that central planning could work much better than no planning or planning by random uncoordinated capitalists. But it looks like that particular time, it failed badly.

  53. J Thomas, your comment and a number of things in the OP series seems to indicate that there was conflict between the”workers” and the farmers who were treated as inferior. If this was supposed to be a true socialist society, shouldn’t all have been treated equally and have an equal voice? I wonder what the history was that created this conflict.

  54. David, Trotsky explains this at some length in Chapter 2. We can discuss possible sources of bias in his claims, and what it might really have been like that his bias left him reporting the way he did. I’m not sure we’re in a position to arrive at anything close to truth that way, but it might clarify what we need to be uncertain about.

    From what I’ve seen so far, it’s like during the war years they didn’t have attention for agriculture because they had to win the war. And then they got off on an industrialization kick and they still didn’t have any time for agriculture. Trotsky told them they had to do something about it and they ignored him.

    This is all reminding me a lot of high school. Trotsky is the smart nerd, and Stalin is the captain of the football team. It’s like the cultural revolution and they’ve thrown out the principal and the SGA is running the school. The nerd tells them what they need to do to run the school and everybody yawns. It’s all so boring and there’s so much of it. The football captain tells them they need to keep slugging forward, if they can make 10 yards on each play every time they’ll win. It will take sacrifice and dedication, but victory is in sight!

    The nerd points out that in fact he’s right. “Yeah, but you have an unfair advantage. You’re smart and you’re a grind. We don’t need you, with sacrifice and dedication we will win!”

    Then over a period of time the football captain notices that whenever somebody doesn’t want to make the sacrifices that victory demands, they try to line up an alternative side with the nerd. So he points out that the nerd is anti-SGA and the SGA agrees to expel him from the school. And while he’s walking home from his last day at school some members of the football team corner him. It isn’t pretty.

    It really sounds like that to me. Trotsky is the guy who told the truth and they didn’t pay any attention, and now he’s saying I Told You So before they kill him.

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