Post‐war Russian economic growth: not a riddle—a reply

Abstract

Click to increase image sizeClick to decrease image size Notes He alleges that I misrepresent Soviet growth potential by suggesting it should be less than America's instead of the higher rates displayed by some market economies like Spain, Greece and Ireland closer to the USSR's stage of development. Had he adopted his preferred standard which increases the plausibility of high‐end Soviet growth rates, the USSR's collapse would be all the more inexplicable. Axioms are statements accepted as true as the basis for argument or inference. They are supposed to be stronger than assumptions because of their self‐evidency, but are only so if appearances are not deceptive. Bergson did not actually publish the requisite growth series until Bergson (1961 Bergson Abram The Real National Income of Soviet Russia since 1928 (Cambridge, MA, Harvard University Press, 1961) [Google Scholar]), and therefore necessarily based his conclusions on official data and the analyses of others like Jasny (1951 Jasny Naum The Soviet Economy During the Plan Era (Stanford, Stanford UP, 1951) [Google Scholar]), Gerschenkron (1953 Gerschenkron Alexander ‘Notes on the Rate of Soviet Industrial Growth’ (‘Notes sur le taux de croissance actuel de l'industrie sovietique’) October–December 1953 reprinted in Alexander Gerschenkron Economic Backwardness in Historical Perspective (Cambridge, Harvard UP, 1962) pp. 254–269 [Google Scholar]) and Hodgman (1954 Hodgman Donald Soviet Industrial Production, 1928–1951 (Cambridge, MA, Harvard UP, 1954) [Google Scholar]). Gerschenkron (1947 Gerschenkron Alexander ‘The Soviet Indices of Industrial Production’ Review of Economic Statistics November 1947 [Crossref] , [Google Scholar], 1953 Gerschenkron Alexander ‘Notes on the Rate of Soviet Industrial Growth’ (‘Notes sur le taux de croissance actuel de l'industrie sovietique’) October–December 1953 reprinted in Alexander Gerschenkron Economic Backwardness in Historical Perspective (Cambridge, Harvard UP, 1962) pp. 254–269 [Google Scholar] and 1955 Gerschenkron Alexander ‘A Dollar Index of Output, 1927/28 to 1937’ Review of Economics and Statistics May 1955 reprinted in Gerschenkron, Economic Backwardness in Historical Perspective pp. 235–253 [Google Scholar]) reached the same conclusion but was more sceptical about all aspects of Soviet data, including their meaningfulness. Bergson's leap of faith, drawing strong conclusions from incomplete evidence, repeated his tenacious earlier defence of the reliability and usability of Soviet statistics on equally inconclusive grounds. Bergson had indeed prejudged matters in 1953 because the requisite growth series were not computed until 1961. Bergson's tenacity on this point stems from his perception that the comparative merit of his estimates of Soviet national income turned on adjusted factor costing. ‘… I in fact made it a major concern to explore the problem posed by the divergencies of Soviet ruble prices from “scarcity values” and because of such divergencies I was led to reject the usual expedient in national income measurement, which is simply to value goods and services produced in terms of prices actually prevailing in the country in question. Instead I applied an “adjusted ruble” standard of valuation, attempting to correct ruble prices for major distortions. In the calculation of a complex aggregate, such as national income, valuation in terms of some standard is, of course, unavoidable’ (Bergson, 1966 Bergson Abram ‘Socialist Calculation: A Further Word’ in Abram Bergson Essays in Normative Economics (Cambridge MA, Belknap divison of Harvard University Press, 1966a) pp. 237–42 [Google Scholar]b). This assessment is wrong in two respects. First, the elimination of retail turnover taxes is standard SNA practice. Second, substituting capital charges for official profit does not transform Soviet fiat prices into measures of enterprise marginal rates of transformation.