Soviet and US Economy

Wojtek Sokolowski sokol at
Tue Jul 21 11:35:43 PDT 1998

At 09:52 AM 7/18/98 +0100, Jim heartfield wrote:

>'the USSR now produces 161 million tons of steel and 617 million tons of
>oil, not to speak of 744 million tons of coal and 712 thousand cubic
>meters of gas. These are enormous figures, outdistancing the United
>States. They are indeed curious in that the United States produces more
>consumer goods that the USSR. For instance the USSR produces only 1.3
>million cars as opposed to the ten million or so made in the United
>States, even though the latter now produces only half as much steel as
>the USSR. Again, US oil consumption is not very different from that of
>the USSR, even though the USSR does not need gasoline on the same vast

If memory serves, the main users of steel and gas was the construction projects, including housing of which there was a tremendous shortage, and rail transport. I would not call these waste, especially vis a vis cardboard suburban homes and individual automobiles.

Jeans, automobiles, suburban homes -- these are fetishes of conusmerism which the Soviet economy indeed failed to supply. But the demand for these fetishes is hardly a proof of economi inefficiency.

As to the super-exploitation of labor: they had what they called the law of socialist development stipulating that increase in productivity must be larger than increases in real wages. Sounds like sound business practice to me. On the other hand, they labor policy (full employment) did create a disincentive to technological improvement. Since the marginal cost of labor was zero (all available labor was already on the firm's payroll), it was cheaper to increase output by through labor intentensive precesses that through technological innovation (that often required imported, and thus extremely costly, components or technologies).

As to the question of technical efficiency raised by Barkley Rosses: bottlenecks were created at the systemic rather than firm-lever (the so-called problem of cooperation). Failures to achive the planned objectives resulted form the failure to receive sub-components or materials, rather form the firm's inefficiency. That, in turn, was a result of the vast grey economy (distribution of resources through other than the plan venues).



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