Kornai and Hayek(?)

Tom Lehman TLEHMAN at lor.net
Sat Nov 28 17:31:10 PST 1998


Dear Doug and the LBOers,

This post has nothing to do with the gentlemen named in the subject.

I do think there is a myth, possibly perpetuated by the Bolsheviks themselves, concerning the backwardness of Russian industry prior to WWI.

I would recommend two books one fairly new and the other old. The new book would be Heather Hogan's Forging Revolution, Indiana University Press, a study of pre WWI industry in Russia. The other would be Shylpanikov's 1923 memoir of the Bolshevik's prior to the February 1917 revolution. Shylpanikov was a machinist and Lenin's man in St. Petersburg. He gives a real rank and file account of things among the Russian industrial workers. This is I realize anecdotal, but, it adds a little color and is a great place to start.

Certain other things come to mind, like the Trans Siberian Rail Road, no small economic accomplishment. The invention and use of arc welding in pre WWI Russia a key process in any type of metal fabrication. A technology that went from east to west.

Also I know there are some stats out there showing a rapid rise in Russian industry prior to WWI. The economy taken as a whole would be hard to gage considering the autocratic devine right of the Czar and his government; a country run for and accounted for by an oligarchy. How do you value somthing like the amber room or any of the other national treasures of Russia.

Sincerely, Tom L.

Charles Brown wrote:


> My understanding is that Russia's
> economy was very undeveloped
> compared to England, the U.S,
> France, Germany, etc. before
> 1917. I thought I once read
> Russia's economy was about
> 1/13th that of the U.S. before
> the 1917 revolution. Is there any
> dispute that Russia was economically
> backward compared to the most
> advanced countries in that period ?
>
> 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...



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