The Soviet Union lags behind

The important advances in absolute terms did not exhaust the issue. In relative terms, although progress was made, the gap with the most developed capitalist countries remained, as the figures in table 6.2 show.

Nevertheless, if the USSR had maintained the average growth rate of 10 per cent, this gap could have easily been closed. Even if it had maintained a growth rate of 3 per cent per annum, by 1990 it would have attained the level of the EEC and Japan for 1980. This, in itself, would have been a remarkable success. It would undoubtedly have been sufficient to prevent the breakup of the USSR and the subsequent disaster which has befallen all the peoples of the former Soviet Union. All that would have been necessary was to reach at least the average rates of growth attained by the West at this time. Given the potential of the planned economy, this should have been easily possible. In fact, such a target is far below the real possibilities, as the period of the 1950s and 1960s graphically show. Yet, shamefully, criminally, the bureaucracy was incapable even of reaching this miserable target.

By the 1960s, growth rates had begun to decline, and with this the growth of living standards. In the period 1951-60, the growth of industrial production was more than 10 per cent and the average for the decade was around 12 per cent per year. But in 1963 and 1964, officially claimed industrial growth rates fell below 8 per cent, the lowest peacetime figures except 1933. It is no accident that in May 1961 the death penalty was introduced for a range of economic offences. Only in 1967 did industrial production increase by 10 per cent, while the average annual growth rate for the decade fell to 8.5 per cent.

The fall in Soviet economic growth was not due to the lack of new investment. In an article written in October 1966 by the Soviet economist V. Kudrov, he reveals the colossal investment that took place:

As regards overall investments, the USSR is close to the US level (roughly 90 per cent) and for the production investments and overall accumulation it has already achieved noticeable superiority. But since this superiority is observed in conditions where the national income is only 62 per cent of the US national income, a certain strain is felt in the Soviet economy. (World Marxist Review, October 1966. Quoted by R. Black, Stalinism in Britain, pp. 383-5.)

Despite the strains, this mighty investment still failed to bring about comparable increases in labour productivity.

He continues:

During the Seven-Year Plan over one million metal cutting machine tools, over 200 forge and die presses, and many automatic and continuous-flow lines were put into operation, but their productivity was, as a rule, rather low. By and large machine tools in the USSR are younger than in the USA in age … but older in design. As a result, the USSR is catching up with the USA more rapidly in volume of capital invested per worker than it is in actual productivity.

In the realm of agriculture things were much worse:

Agricultural production depends considerably on technical equipment and labour productivity. In this respect the Soviet Union is still considerably behind the United States. We have in the USSR 13.7 tractors per 1,000 hectares of cultivated land compared with 40.8 in the USA; for combine harvesters the figures are 3.9 and 15.7 respectively.

The impasse of the bureaucracy was graphically revealed by the figures of economic growth of the Soviet Union. Before the war, under the first Five-Year Plans, Russia had an annual growth rate of a staggering 20 per cent. Even by the 1950s and early 1960s, the growth rate was still around 10-11 per cent. This figure was still vastly superior to that of the other main capitalist powers. While it is true that Japan, on occasions, reached figures as high as 13 per cent, this was exceptional. The Soviet Union’s growth in the period under consideration was a consistent growth rate every year, uninterrupted by recessions. The main capitalist economies obtained at most 5-6 per cent (the rate of Britain, already in decline, was much lower), but not every year. Japan was able to achieve a higher rate largely because, under the American nuclear umbrella, it spent little on arms (1 per cent of its GNP), and was able to plough back most of its surplus in investment.

To all the other problems must be added the monstrous burden of arms expenditure. About 11-13 per cent of Soviet GDP went on arms, compared to about 8 per cent in the USA. Thus, a huge proportion of the wealth produced by the working class in both countries was wasted on what amounted to the production of scrap metal. This was also determined by the fact that the USSR was unable to extricate itself from the rest of the world and constitute itself as a self-contained, self-sufficient entity. In these figures, the bankruptcy of socialism in a single country are cruelly revealed.