Stalin, the economic whizz-kid?

The usual story about the dreadful era under Stalin is that it was an economic disaster, that collectivisation led to massive famines and economic hardship. I have addressed the recovery of Stalin as an innovative and dynamic war leader a little earlier – a recovery brought about by war historians rather than political analysts or even Marxists, who shy away from the man with the moustache like Australians from a visit of the English queen.

But let us look another interesting piece of information: a graph tracing the percentage of world GDP, along with population.

What’s interesting about this graph is not that it comes from a source not particulalry favourable to our man – the Financial Times. It takes little effort to notice the peak under Stalin – 10% of global GDP, second only to the USA. Those war historians have wondered why the USSR was able to recover so quickly after Hitler’s devastating invasion. Perhaps an answer lies here, in the deep reorganisation of industry and agriculture known as collectivisation. It also makes it perfectly clear that 1991 was catastrophic for Russia’s economy, a situation from which it has not recovered, for now it produces a little over 2% of global GDP.

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9 thoughts on “Stalin, the economic whizz-kid?

  1. While I agree with your general conclusions, the chart from the FT leaves a something to be desired.

    GDP the UK Treasury first used GDP figures to plan the budget in 1941. Maddison has made heroic efforts to construct figures for the whole world going back to 1900 but they can’t be regarded as absolutely objective if for no other reason than that GDP was designed to help run market economies. They don’t make a lot of sense in economies where most economic activity isn’t mediated by the market.

    Estimates of Soviet GDP are especially controversial. To the best of my knowledge there are no agreed figures, so that making a precise calculation about the size of the arms burden, for example, is virtually impossible.

    Accordingly, I can’t see how it would be possible to say much about the USSR’s share of world GDP.

    There is also the question of the changes in borders. The Russian Empire and the Soviet Union never covered the same area, especially between 1922 and 1940. There was an even big difference between the size of the Soviet Union and that of the Russian Federation.

    Glad the have you back on-line.

    I hope you enjoyed your break.

  2. As I’m sure your know, “But let your communication be, Yea, yea; Nay, nay: for whatsoever is more than these cometh of evil”, so I rather giving the game away by making some qualifications.

    I think that it is accepted that In a number of primary industrial products (e.g. pig iron, steel, cement, oil) the Soviet Union eventually overtook the United States to become the world’s largest producer. I’ve never looked at the proportion of world production.

    From the 1960s (?) onward the trend in developed capitalist countries was for
    an increasing proportion of GDP to be in the service sector. Looking at the composition of GDP from the point of view spending, rather than production, there was, at about the same time, inexorable rise in government spending as a proportion of GDP.

    Both these developments have eroded the usefulness of GDP and GDP per capita is a measure of well-being, economic development, or anything much apart from the size of the market.

    For economists, the nice thing about primary industrial products is that they are traded and therefore there are world prices one can use to value total production.

    Generally speaking, services can’t be traded in the same way and therefore their value is determined within a national economy. Even so, under capitalism, the price of services will be set through competitive markets. However, these days a great many services are provided by the state. Despite the best efforts of politicians, civil servants and their economic advisers such services are not sold: they are provided directly. As someone employed in education, you will be aware that, even when they are ‘sold’ the price of these services in not determined by any real market.

    In the case of education the value of the service is determined by its cost. Since this is largely the wages and salaries the contribution education makes to national GDP is decided by what the government chooses to pay its teachers and lecturers. In the case of the Soviet Union, which had an inexpensive, though rather good education system, this meant that it was undervalued compared to the US where educators were better paid.

    Lenin said, somewhere or other, that all comparisons are odious. What he forgot to add is that they the also dashed difficult.

  3. I should add that the point of that graph was the broader question addressed in a report by Citibank of Russia as an alternative pole of capital accumulation with the return of Putin and re-creating its old trading community with ex-Soviet states. The argument is that Russia’s neither a serious rival to anyone, nor a threat, unless “a populist leader arises who appeals to nostalgia for the past and seeks somehow to recreate its perceived glories.”

    http://blogs.ft.com/beyond-brics/2011/10/24/russian-imperialism-should-we-worry/

    1. Ah! Now I see why they seemed to be ignoring the geographical niceties.

      This is a textbook case of the precept that “Every chart is designed to make a point”.

      How could I have been so stupid as to think that the FT would be so stupid.

      [Give the nature of this site I expect the answer would have to be:
      “Pride goeth before destruction, and an haughty spirit before a fall”.]

      Instead of the usual objective of trying to make the Soviet Union look bad, it was the ‘New Russia’ they were after.

      Even so, I would have thought a column chart would have been better.

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