After 1917, the SU industrialized and grew more rapidly than those advanced capitalist nations had over the many decades of their initial industrialization in the 18th and 19th centuries.
In WW II , the SU was able to unexpectedly fend off powerful Germany, in part because of this rapid economic growth. But during the war Germany caused: 20 million deaths, twice as many as that homeless, untold millions wounded; 70,000 villages, 98,000 collective farms, 1,710 towns and fifteen large cities destroyed; 31, 850 factories, 65,000 kilometers of railroad track, 56,000 miles of highway, 90,000 bridges, 3,000 oil wells demolished, seven million horses, twenty million hogs, 27 million sheep and goats, 17 million cattle, 110 million poultry wiped out; 40,000 hospitals, 84,000 schools, 43,000 public libraries, 44, 000 theaters, and 427 museums razed to the ground . (From _The Unbroken Record: Soviet Treaty Compliance_ by Daniel Rosenberg; 1985).
Yet after that destruction, unprecedented in human history, was inflicted by the unplanned economic system on the planned economic system, the Soviet economy grew fast enough to standoff all of the capitalist world, including the U.S. which was not touched by the war, for 40 years. For a number of years the USSR was the world's leading producer of steel. It's economy was the second largest in the world to the U.S., n'est-ce pas ? Bigger than all the other capitalist countries that it had been smaller than in 1917.
What I am getting at is that the planned economy of the Soviet Union was an enormous counterexample to the writer you quoted, a counter example of growing economically, when one takes account
the factors I describe above. In other words, when one considers where they started from and how fast they closed the gap with much larger economies. And then they were slapped way down again and grew back rapidly.
The other European Socialist countries grew economically after WW II also. China grow rapidly after its revolution as well.
How is it you say there is no example of significant growth in planned economies ? It is not at all demonstrated by history that all real world examples of planned economies have experienced more stagnation than unplanned economies. That seemed to be what you were saying Kornai claims.
Charles Brown
Detroit
>>> Brad De Long <delong at econ.Berkeley.EDU> 11/27 6:42 PM >>>
In the 1940s Paul Sweezy (and many others) expected the end of World War II to be followed by rapid economic growth by whatever countries wound up in the socialist camp and renewed depression elsewhere--and that within a generation it would be very clear that living standards were higher, the social provision of necessities more complete, and technology and industry more advanced in socialist than in non-socialist economies. Nikita Khrushchev still believed this in the second half of the 1950s--that "we [the socialists] will be present at your [the capitalists] funeral" because one system (the socialist) was rational and capable of supporting human progress and the other (the non-socialist) wasn't.
Looking at western Europe and eastern Europe--or at South Korea and North Korea, or at Vietnam and Cambodia on the one hand and Singapore, Malaysia, Thailand, and the Philippines on the other--the confident forecasts of Sweezy and Khrushchev just didn't come true.
Kornai's trying to figure out why not. That seems to me to be a laudable project...
______ I had asked:
>Wasn't the Soviet Union's economic
>growth faster than that of the unplanned
>economies of capitalism in their
>beginnings ? What about the successes
>of China in feeding and clothing so many people
>with a planned economy ? There was
>a clear economic improvement over
>its previously unplanned economy.
>
>Is Brad saying that unplanned economies
>"work well " ? Aren't there a huge number
>of counterexamples to this propostion ?
>What does he mean by work well ?
>Work well for whom ? Is he saying
>the invisible hand actually does exist ?
>
Brad DeLong
>Hi. My name is Sam Pawlett and am new to the list but have been lurking
>and unable to contribute due to lingering medical problems. I am a 26 yr
>old graduate in philosophy and economics from S.F.U. here in Vancouver.
>I studied Marxism and comparative economics with Mike Lebowitz whose
>fine work most of you are probably familiar with. Last time I spoke with
>Mike he was planning a book on Actually Existing Socialism, a kind of
>Reply to the Brus/Kornai Hayekian argument that any kind of planned
>socialism will inevitably lead to economic stagnation because of a lack
>of hard budget constraint and the absence of sufficient material
>incentives.
I don't think Janos Kornai would appreciate being lumped in with Hayek. Hayek, after all, said that a planned economy could not work. Kornai said that it was very unlikely to work well--and it is hard for me at least to see how Kornai's arguments could be refuted: there are no counterexamples...