The world prestige of Soviet Russia as a great industrial power reached a peak in the late 1950's that carried over into the early 1960's. In the West, and in the United States especially, it became the fashion, not without a touch of hysteria, to speak of the coming supremacy of Soviet economy and military potential. The myth, that communism offers the shortest road to viable industrialization gained new credence.

      For years official Soviet production figures had been accepted and publicized by influential quarters abroad not only uncritically, at face value, but with deliberate emphasis on positive aspects of the data. Scholarly studies questioning the veracity of Moscow claims and exposing weak sectors covered by juggled statistics were brushed aside as "dog-in-the-manger" type barking. The dominant opinion seemed determined to paint a picture of a dynamic Russia inexorably catching up with a static America.

      The launching of the Sputnik in the fall of 1957, followed by other Soviet "firsts" in space, seemed to justify the bias that had eagerly magnified Soviet economic prowess. Western self-confidence was shaken. At the same time the jitters in the United States over an alleged "missile gap" in Russia's favor added to the sense of capitalist decline and doom.

       The mood of the moment in America, at the more pessimistic end of the opinion spectrum, was mirrored by Walter Lippmann's declaration that "as compared with our great rival and adversary, we are at this time in a decline" which, he thought, called for nothing less than "a reappraisal in depth of our cultural values and of our policies." (153) Central to this state of mind in the West was a claimed annual growth of the GNP (Gross National Product) in the USSR, from 1955 to 1960, sharply above the American growth rate. It appeared to support Khrushchev's flamboyant boasts that the Soviet economy, or at least its industry, was narrowing the distance between the two giants and must in due course overtake the most advanced capitalist nation.

      Two close students of the Soviet economy, both eminent economists, Professor G. Warren Nutter in America and Dr. Colin Clark" in England, for years challenged the accuracy of Moscow's figures on growth. "Both of us," Dr. Clark wrote in 1962, "reached the conclusion that the true rate of growth of productivity in the Soviet Union was in fact lower than in the United States; therefore, far from overtaking the United States, the Soviet Union was indeed falling gradually further behind." But few would listen.

      Then, around 1961-1962, deflation of the myth of exceptional Soviet tempos of growth set in. When the Kremlin, with unconcealed alarm, began admitting a sharply slowed-down rate, and openly considering economic reforms with free-market overtones, world opinion shifted. A number of other reputable economists, including Dr. Naum lasny and Dr. Abram Bergson, published books in which—though by different analytical roads—-they reached substantially the same conclusions as Nutter and Clark. "

      After 1960, the Soviet Russian rate of growth began to decline. On this, there is no disagreement among the experts, inside or outside the country, although there are considerable differences in estimates of the precise degree of the drop. Gradually, and in some cases reluctantly, authoritative opinion, both official and private, edged away from the former exaggerations toward a more sober view of the Soviet economy.

      According to an evaluation by the economic staff of the CIA, made public at the beginning of 1964, overall Soviet growth in the preceding two years was less than 2.5 percent annually, well below that of the United States. (154) Estimates from other sources credited the USSR with higher percentages; all of them attested, however, that the country had ceased to be a world pacemaker, its growth rate having been exceeded in those years by every major nation.

      From the vantage point of Moscow statisticians the picture looked better than in Western analyses, but even there the direction was plainly downward—from a claimed growth rate of 11 per cent in 1959 to 7.5 per cent in 1964, the lowest level since World War II. Referring to these figures, Dr. Boris Meissner, in the quarterly Modern Age (Winter, 1966-1967), wrote: "The actual growth was-approximately 5 per cent, a rate lower than that of the United States or of the German Federal Republic . . . . Light industry fell from 8 per cent to 2 per cent."

      A study made for the Joint Economic Committee of the U.S. Congress, released in mid-1966, showed that the Soviet GNP, as compared with that of the United States in the same years, rose from 32.1 per cent in 1950, to 44.2 per cent in 1958—an impressive narrowing of the gap by 15 per cent annually. Then the Soviet pace began to slow down, to 46.7 per cent in 1964, an average "gap-narrowing" by only 0.4 per cent a year. An updating of the figures for 1965 placed the Soviet GNP at 44.7 per cent of the American—no longer a reduction, but a widening of the gap by 2 -per cent.

      The pace in 1966 and early 1967—in Moscow figures which may or may not survive objective analysis—again showed conspicuous increases. The claimed expansion for the first six months of 1967 was 10.6 per cent from the corresponding half, year in 1966; by coincidence the percentage is exactly the same as in the United States for the same months.

      At best, however, the gross Soviet product stands at about 45 per cent of the American—in absolute values, 333 billion "dollars as "against 739 billion in the United States: an immense gulf between the "second industrial nation in the world" and the first. If the gross economy totals are measured on a per capita basis, production per inhabitant, the USSR drops back to filth place, behind the United States, France, Germany and the United "Kingdom. (155).

      The showing for the Soviet Union is a lot worse when calculations are made for national income per inhabitant. The Soviets' own figures then put the country in eighth place. Adjusting those figures to dollar values, on the basis of the official Soviet exchange rate, it slides down to thirteenth position. In a number of individual consumption indices significant for industrial expansion—coal, petroleum, gas, and electricity—the USSR in 1966 ranked tenth, the American superiority being almost threefold. Even in the postwar years of most rapid growth, 1950-1958, the rate of accretion was matched or exceeded by a lot of countries, among them Japan, Germany, Austria, Greece, Turkey, and even Israel, Jamaica, Burma, Venezuela, and Rhodesia. The postwar Japanese rate of growth was 12 per cent.

      Allowing for variations in methods of statistical reckoning, the fact beyond doubt, which is all that concerns us here, is that the claimed dramatic tempo of growth which scared the West has been reversed to an admitted sluggishness that alarms the Kremlin.

      The high percentages of increase in the postwar years, moreover, have been more generally recognized as a phenomenon to be expected after a destructive war. They were related to the natural impetus of recovery in a badly shattered economy and did not reflect the true Soviet capacities. It was the same phenomenon operative in other war-torn countries, such as Germany, France, and Japan.

      These three nations, it may be objected, received large injections of American capital. But the score is more than balanced by the Soviet seizure of reparations, authorized and unauthorized—twenty billion dollars in 1960 values, at a conservative estimate—in Central and Eastern Europe, Finland,. Italy, and Manchuria. This "foreign aid," in addition, accrued to the Soviet Union mostly in processed forms, ready for use: mountains of industrial goods, machines, entire production units, among them Germany's most advanced precision equipment and research installations. The famous Zeiss factory, for example, was transferred in toto to Soviet Russia—not only the plant and its contents, 'down-to the stores of sand, but also all the workers and managers who could be located and kidnapped.(156)

      The famous "missile gap," it was discovered, was pure war-of-nerves fiction. It did not and never had existed. And the United States, once it tackled the job, quickly-matched and eventually surpassed the Soviet space spectaculars. The USSR had orbited a satellite earlier, it became apparent, not because of technological superiority, but because of a political decision geared to propaganda objectives.

      Russia has been chary with information on the subject. It is believed that its own scientists and its huge contingent of German specialists made some vital engineering developments, related, in the first place, to greater engine thrust. But they discovered no new breakthrough principles not known to the West, merely applying the common stock of space knowledge a few years sooner. Some of this knowledge had been acquired by the Soviets through long years of massive espionage in the United States, Canada, and Great Britain. Subsequent American achievements leave little room for doubt that, had the United States started as early as the USSR, it could have had a Sputnik in orbit at about the same time.

      (The truth is that an authoritarian state, answerable to no one but itself, can obtain striking results by a "crash program" on limited goals. It can commandeer the best brains, materials, and manpower for the favored target and back it with unlimited financing. This is the kind of thing other nations, temporarily near-authoritarian in wartime, have also done: witness the American "Manhattan Project" that netted the first atomic bombs. Sputniks and other such special projects are no more proof of overall economic superiority than were the Great Pyramids of Ancient Egypt.

       The most telling blow to the legend of Soviet Russia's impending victory over the United States in the economic race was delivered by another major crisis in agriculture. (157) It recalled the world to the elementary but somehow neglected reality that heavy industry is only one facet of a nation's progress; that its farming, the living conditions of its people, reserves of raw materials, quality levels, and other factors cannot be disregarded without falsifying the picture.

      In October, 1961, Khrushchev announced that very soon his country "will occupy such a position in the international grain market that the imperialist gentlemen will begin to feel how our agriculture is expanding." Instead, less than two years later, he was importuning those imperialist gentlemen to sell him their capitalist grain, and depleting the Soviet gold reserves to pay for it. Canada, Australia, and the United States, from their surpluses, did sell enough to prevent hunger and possibly a famine. Despite a bumper crop in 1966, the USSR is committed to huge purchases of cereals at least through 1961. It is compelled by more open discontent to give the people a better diet. Specialists on the international food market believe that Russia, once a major exporter, will for a long time to come figure as a grain-importing nation.

      Under Khrushchev's successors, the Kremlin has retreated from his more exaggerated pretensions. Their current Five-Year Plan (1966-1970), unveiled in April 1966, is more moderate and more candid about mounting difficulties. The targets set by Khrushchev for 1970 have been trimmed down as much as 68 per cent in a number of sectors; some of the consumer goals for 1970 are the same as those prescribed for 1965, and even lower. This time, the familiar incantations about overtaking and outdistancing the United States were conspicuously missing.

      In Prospects for Soviet Society, soon to be published by the Council on Foreign Relations, the keynote contribution is by Professor Cyril E. Black of Princeton. Titled "Soviet Society: A Comparative View," it provides a wholesome corrective on runaway enthusiasm about Soviet achievements. Professor Black widens the focus of analysis to take in all indices of national life, not only production and consumption, but also wages, social services, and all other measurable elements, and related the composite findings to the rest of the world. (158)

       The overall picture is thus startlingly unlike the one based on gross product alone. And Professor Black adds that "other countries at a similar or more advanced level have achieved an equivalent or better record of development at a significantly lower cost in human lives and hardship."

• The Bogus Miracles

      Short-term fluctuations in world opinion on the Soviet economy, however, are less significant than its permanent characteristics. Russia since 1917 has been transformed into a powerful industrial nation. Industrialization, it has been demonstrated can be achieved by an authoritarian state. The real issues are those of effectiveness, as compared with industrialization by conventional processes: its relative cost in material, political and human values; its ability to absorb rapid change in technology; the kind of society it provides for the population.

      Living conditions in all other industrial societies have kept pace with industrial expansion. (159) Not so in the USSR, where consumption per person in its fiftieth year is less than 30 per cent of what it is in the United States and also sharply lower than in any major European nation or Japan. Overall production, that is, continues to rise at a fast rate while individual consumption and well being remain stagnant

      The usual pattern in free-market economies in this century has been an increase in agricultural productivity greater than that of the economy as a whole; in the USSR the reverse has been the case. Communist-type industrialization, it is thus quite clear, takes place at the expense of the consumer and agriculture. It can force the rate of industrial growth by heavy "inputs," in the economists' term, of capital and manpower, but only by holding down wages, and farm prices at murderously low levels over several generations.

      "The example of Russia and later China," Ernest Conine wrote in the Harvard Business Review (May-June, 1965), "offers convincing proof that a backward country can industrialize with impressive speed, if it will force its citizens to do what no people have ever done voluntarily: endure grinding poverty and regimentation in order to maintain a high investment rate."

      Other industrial societies have been built without penalizing the people as outrageously as in the Soviet Union. The only merit claimed for the communist alternative therefore appears to be its speed of development: the belief that it is a "short-cut" to industrialization. But that, too, does not stand up in the tests of historical comparisons. Other nations have industrialized as fast or faster, without excruciating communist methods.

      Feudal Japan, to cite the most obvious example, reached first rank more swiftly than the USSR, beginning in the 1890's and from a less promising base than Lenin inherited, in a country with more, limited population, and natural wealth than Russia had. But the most significant comparison is provided by the very United States which the Kremlin hopes, with diminishing confidence, to catch up with.

      It is scarcely significant to compare current tempos of expansion in Russia and the United States. (160) A nation already full-grown neither needs nor can absorb the tempos of growth of a nation in a relatively early stage of industrialization; in fact, excessive growth in an advanced country—an "over-heated" economy—is sometimes considered dangerous. For a fair comparison of the two economic systems, the Soviet period should be matched against an equivalent period in American development.

      The Bolsheviks took over an economy roughly equivalent to that of the United States in 1875. To discount the stagnant Russian years of war and revolution, we may date the Soviets' "1875" as 1928, when the 1913 Russian level was reached again. The USSR from l928 to 1966 would thus correspond to the United States from 1875 to 1913. A number of eminent Western economists, notably Professor Nutter, have shown in statistical graphs, that overall American industrial expansion in those thirty-eight years was as large as, and in many departments larger than, in the USSR. And, what is most important, the American economy grew in ordered freedom, at high levels of living and without the terror that marked the Soviet growth.

      While the Soviet tempo of industrialization' and construction has been impressive, it is thus not remotely the "miracle" being acclaimed. The average annual growth rate in its most productive periods, say 1950 to 1958, as Professor Black points out, has been "exceeded over long periods" by the United States and Australia in the nineteenth century, and by Japan in the twentieth. The rate of growth both in absolute and per capita figures has been higher in South Africa, Japan, and other countries.

      Russia would assuredly have developed as fast, or faster, under any system. Besides, the Soviets had the enormous advantage of access to the accumulated technological wealth and experience of the West. The USSR in 1928 did not, like the United States in 1875, start technologically from scratch.

      "What made it possible to establish gigantic factories of the most modern types in the space of a few years" in the Soviet Union, Leon Trotsky pointed out in 1937, was, among other things, "the existence in the West of a high capitalist technique." (161) In a sense, Soviet industrialization has been parasitic, drawing on the colossal progress in the most advanced countries. In 1944, Stalin told an American guest, Eric Johnston, that "about two-thirds of all the large industrial enterprises in the USSR had been built with U.S. material or technical assistance."

      The Soviet economy "works" after its fashion. As Professor Milton Friedman of the University of Chicago wrote in this connection, "A horse-and-buggy Works as a means of transportation, but it is far less efficient than an automobile . . . . If one goes back to the nineteenth century," he continued, "what were the great success stories of economic development? Britain, the United States, Western Europe, and Japan. Each of these succeeded in achieving a dramatic increase in economic output and equally in the standard of life of its ordinary citizens. In none of them was there anything approaching a controlled society.

• Failures in Quality

      Whatever the tempos and the gross bulk of Soviet industrialization, the crucial question is indeed how effectively the resultant economy "works" as compared with noncommunist economies. A large industry that limps and falters may be less desirable than a smaller one that walks steadily and meets the needs of the people. How efficient is it, in terms of the quality and durability of its product; the output by one man in an hour; the ability to absorb the latest techniques and tools?

      Answers to such questions can be dredged from the general technical Soviet press, which is carefully monitored and analyzed by many Western experts. They have also been coming more copiously- and more candidly from Soviet sources in connection with their current discussion of "economic reforms." These are not exercises in theory, but have been forced upon the regime by breakdowns, dwindling resources, alarming declines in quality, lack of communications between the state as manufacturer and the state as consumer. The story the answers tell is one of shoddy goods, low output per worker, high mortality of machinery and plant, startling lack of balance between different branches of the economy, bureaucratic resistance to change.(162)

      The picture of Soviet industrialization painted by propaganda is based entirely on quantity. It begins to fall apart as soon as one examines quality, in the end-product and in the labor that goes into it. It takes two to three Soviet workers, and in isolated cases as many as eight, to-match the production of one worker in the United States or Western Europe or Japan. Soviet manufactured goods, with negligible exceptions, cannot meet Western competition except in the poorest countries. "Many countries, including socialist countries, do not want to buy our finished products because of their poor quality," a prominent Soviet economist, Abel G. Aganbegyan, has stated. Nations receiving Soviet products under foreign-aid agreements have repeatedly rejected them as unusable.

      A detailed study of the Soviet quality factor was made for a U.S. Congressional committee in 1964 by Joseph A. Gwyer of the U.S. Library of Congress, one of the most respected American specialists on Soviet economy. Based almost entirely on published Soviet sources, it leaves little margin for doubt that inferior goods are endemic under communism and that the production totals in Kremlin statistics should therefore be heavily discounted. Mr. Gwyer writes at one point:

      A few highlights should suffice to show the general condition—one doesn't have to eat a whole potful of soup to know that it is putrid.

      Soviet statistics indicate that they are producing more machine tools than the United States—as is to be expected, American industry having reached a saturation point on such equipment. But Moscow's figures do not reveal what can be learned from its press, namely, "how many failed to operate either at the end of the assembly line or weeks later, after costly and labor-consuming installation at the place of consignment." Repairs on existing machine tools occupy 3.5 times as many workers as are engaged in manufacturing new units. One-third of machine tools in operation are kept busy on repair work. Electrical motors, during their first year of life, spend 30 to 40 percent of total working time undergoing repairs. In any given time, 30 to 40 per cent of all vehicles are idle, awaiting repairs or spare parts, Every Soviet tractor, Mr. Gwyer shows, undergoes repairs each year at a cost of one-third or more of the original costs; total expenditures on spare parts for farm tractors in a typical year, 1962, exceed the outlay for new procurement that year.

      More up-to-the-minute Moscow reports confirm that these conditions have gotten worse in the last four or five years. The Kommunist (1967, No. 2) complains that the repair industry now "occupies almost two and a half million workers and over a million metal cutting lathes, which is equal to 40 per cent of the machine tools in the country and more than there are in the basic plants of the metal industry. And the lathes used in repair services are of more recent vintage than those used in the machine-building industry."

      Consider the automotive industry, so basic that it is almost the test of the vitality of a modern industrial society. Its output in the Soviet Union in 1967 is at the rate reached by Americans in 1910. The introduction of the industry in the USSR began in the 1930s with the purchase of a complete Ford factory from Detroit, installed, equipped, and for some years run by Americans. (164)

      Thirty years later, the current Five-Year Plan sets annual output of 800,000 cars, trucks, and buses as its goal for 1970— and may actually reach 460,000 that year, according to a U.S. intelligence study. But the USSR admits that it is unable, after thirty years in the business and in possession of heavy industry second only to the American, to equip a modern automobile plant!

       Instead Moscow has turned to Fiat in Italy (the United States probably providing three-fourths of the machinery and financing) to design and build giants with an ultimate capacity of several hundred thousand-cars a year and is negotiating with motor companies in Japan and France for the balance. If and when a high figure is reached in 1970, communists will acclaim yet another Soviet "achievement" though nearly all of it will be Soviet only is the sense that it is on Russian soil and paid for with more sacrifices by the Russian peoples.

      The same condition holds true for other Soviet industries. The introduction of plastics, synthetic fibers and other products of the new chemistry has been made possible to a large extent by equipment and whole factories bought in foreign countries. One of the main justifications for the punishing rate and costs of industrialization was the attainment of independence from the outside world. Actually the USSR is almost as dependent on the West as it was during the war, when American tools and weapons to the tune of nine billion dollars (and two billion more in foodstuffs) probably prevented a Soviet industrial bogdown or defeat.

      The Soviets have dropped behind the world parade in the-new industrial techniques. They need synthetics and plastics in the petro-chemical field; lightweight, high-strength metals; improved electronic computers; advanced miniaturization and automation equipment. Were the great Western producers to deny these and other essentials to Moscow, along with the scientific information for their use, the whole myth" of a great self-sustained Soviet industrial power would collapse.

      The Kremlin should thank its stars (and perhaps does) that its prophesied "doom" of capitalism has not come true. (165) There is nothing essential the Soviets have that the West needs—no inventions, machines, techniques—but the USSR is in dire need of practically everything in these categories that the West possesses.

• The Plague of Shortages

      Back in 1932, Molotov, annoyed by complaints about living conditions, said: "It is necessary to oppose vigorously the idea that socialism means production for use." Marx must have turned once more in his grave. But the Molotov brand of socialism lived up to his prescription. Scarcity is the special mark of Soviet life. Scores of observers have remarked (and it is true notwithstanding) that a Woolworth store or an American mail-order catalog, by dramatizing the abundance, diversity, and cheapness of goods under other systems, could cancel out decades of Soviet propaganda.

      Pharmacies in Moscow, for a long time, dispensed medicines in bottles without stoppers, and essential medicines are themselves chronically in short supply. The citizen must often wait a year for lenses for eyeglasses. For months at a time, often for years, such staples as razor blades, safety pins, paper and paper products (including toilet tissues), kitchenware, sheets and pillows, electric bulbs of desired wattage, cannot be found, even in Moscow and Leningrad. When missing items finally appear, they are quickly snapped up and another hiatus follows. Though they risk severe punishment, youngsters constantly waylay foreign tourists, begging to buy a shirt or a pair of pants, fountain pens or watches, at almost any price in rubles.

       An American journalist, John Scott, attending a concert in the magnificent new Palace of Congresses on the Kremlin grounds, asked why there were no programs. Because of a paper shortage, he was informed. His comment, in a report to his editors: "What an anomaly! A theater which makes Lincoln Center seem modest, a performance unmatched anywhere—in a country of huge forests—and no paper for programs." (I am reminded of the magazine Nashe Dostizheniye—Our Achievements—started in the early thirties and abruptly discontinued. (166) The reason, Muscovites said with a discreet wink, was the lack of paper.)

      When available, consumer goods tend to be, if anything, lower in quality than large industrial items. Famished as they may be for nearly everything from footwear to television sets, more and more consumers are in open revolt against extremes of shoddiness. As a result, warehouses are increasingly loaded with unwanted goods. The public clamors, for example, for shoes, whatever the price. Yet the Soviet economic press reveals that 1.5 billion rubles in shoes are stacked up, unsalable, because they are too heavy and ugly.

      A startling statement on the dimensions of this inventory of unsalable goods has come from an unimpeachable Soviet source. The journal, Voprosy Ekonomiki (1963, No. 1) reported: "Poor quality of products, commodities not in demand by the population, still appear in stores . . . . Commodity stocks in the country are growing rapidly. During the period 1959-1961 their rate of growth was almost three times greater than the increase in retail trade turnover. These stocks have now reached an enormous sum—almost 27 billion rubles."

      The best way to judge how an advanced economy "works," Gwyer points out, is by evaluating "the quality and reliability of the goods this technological society manufactures. . . . Judging from information coming from the Soviet Union, the Soviets are very unhappy with the quality of their own goods. Soviet industry employs more than one million inspectors. Despite all possible efforts to limit the output of defectives, the losses directly attributable to the output of defectives are constantly growing."

      If private industry had to operate under such conditions, it would quickly go into bankruptcy. In a totalitarian state, the losses are taken out of the stomachs and the hides of the population.

      "Subject only to minor fluctuations," Colin Clark has written, "the United States, ever since the 1890's, has maintained a steady rate of growth of real product per man-hour of 2.3 per cent per year." (167) This is about one-third higher than the Soviet man-hour growth rate, which has also been surpassed in varying degrees in nearly all other free-economy nations. Kosygin, at a Party Plenum in September 1965, conceded that "the rate of growth in labor productivity in industry . . . has slowed down somewhat in recent years." This despite more machinery and increased capital investments. In the same years, labor productivity was rising steadily in most West European countries. In 1966, Soviet productivity showed some improvement, but not enough to affect the overall picture.

      Probably the most telltale example of economic dis-equilibrium is to be found in Soviet transportation—in its primitive road system, for example. The USSR, with an area about two and a half times as large, has a road network only 5 per cent of the American network. Of this total, only about one-quarter is hard-surfaced, as against nearly three-quarters in the United States. "In spring and autumn, when the Soviet Union's unpaved roads turn into puddles of slush," Dr. Albert Feller said in a bulletin of the Institute for Study of the USSR, "thousands and thousands of vehicles are brought to a stop." Vast areas of the country are inaccessible for the duration. This is the second largest industrial country in the world.

      One of the chronic bottlenecks is an acute lack of engineers and technicians, notwithstanding the great numbers turned out by Soviet schools. One reason is that a large part of this personnel is siphoned off by the bureaucracy for purely administrative and inspection chores. Another is that trained technicians serve as foremen and supervisors, because the country still does not possess enough skilled practical men for such jobs. Some years ago, Pravda complained that in the fishing industry there was one "technical man" for every 1.8 workers; at a metal plant there was one engineer to five workers. These of course, were horrible examples—presumably there would not be enough people to go around if the condition prevailed everywhere—but they point up another acute industrial problem.

      The judgment of the communist leaders themselves, in dealing with deficiencies they are eager to correct, is as harsh as that of foreign students. (168) Kosygin and Brezhnev, like Khrushchev before them, have attacked the backwardness of their economic functionaries in the introduction of new machines and new methods. In late 1965, Kosygin pointed to examples, of available technical progress being ignored and asserted that "mechanization and automation are being put into effect far too slowly." Because of delays, he charged, "the installed equipment becomes obsolete even before it is put into operation." Some of these delays, he said, run to four years and more in the chemical industry, in iron and steel and an array of other branches.

       More than a hundred thousand construction projects, some of them initiated five to ten years ago, stand unfinished. This means not only serious obsolescence before completion but immense capital outlays frozen unproductively. A Moscow dispatch to the New York Times, based on published Soviet information as of early 1967, reported that "about 30 billion rubles are presently tied up in construction projects throughout the Soviet Union." It quoted disclosures by an Izvestia staff economist, Otto Latsis, that the building of a metallurgical plant in western Siberia was dragged out for eight years; that new mining complexes in the Rostov region were put into operation five to ten years behind schedule.

      Adjustment to technological advances is not easy under any system. Obviously it becomes infinitely more difficult under conditions where the incentives of personal profit and commercial competition are almost totally absent

• Truths That Will Out

      The harm worked by defects in a national economy are not merely cumulative, not a matter of simple addition. They multiply geometrically, each failure breeding new and larger failures. It is this process that finally compelled the Soviet dictatorship to seek correctives. Its economists and other specialists have not merely been allowed but encouraged to examine and criticize the functioning of the economy—but not the state monopoly, national planning, or socialism as such. (169)

      Within these limitations, they have made, in the last few years, truly startling revelations. Taken together, the picture they present is blacker than any painted by the most critical foreign economists writing on the subject.

      Consider, for example, the lecture given at a seminar in the Moscow University in the summer of 1965. The lecturer was the eminent Soviet-Armenian scholar Professor Abel G. Aganbegyan, then head of an Institute of Economic-Mathematical Studies in Siberia and, at thirty-three, one of the youngest corresponding-members of the Soviet Academy of Science. What he said has not been published in the USSR; conceivably he meant it to be "off the record." But a text was soon being circulated in manuscript throughout the country and a few copies reached the outside world. A translation in full was run by the Italian socialist journal Bandiera Rossa (Red Banner) in July 1965. Excerpts, some garbled, have seen print in many other countries.

      Professor Aganbegyan's description of the economy was so gloomy that its dissemination abroad apparently distressed the powers that be. His was the familiar dilemma of scholars in a police state when their candor exceeds their political prudence. Whether on his own or under official orders, the young professor eventually granted an interview to Theodore Shabad, a correspondent of the New York Times, published under a Novosibirsk dateline on November 21, 1965. But it did nothing to discredit the document, if that was his intention.

      The scientist implied that some of his words had been misinterpreted and tried to whittle down the measure of his personal responsibility for some statements. They reflected, he said, "generally recognized truths about the economy. ... I never expressed them as my personal opinions." Understandably, he stressed that he was not "a rebel against existing institutions who viewed the Soviet culture in a pessimistic light." Perhaps, he said, he had expressed himself in "too sweeping" terms.

      However, he did not explicitly disown the text published abroad, as he could have done, or declare it a falsification. In substance his interview therefore confirmed the authenticity of the document. (170) What follows are some highlights from the lecture, as published in Bandiera Rossa; if they represent "generally recognized truths" rather than his personal opinions, their significance is that much greater:

      The academician's references to growing unemployment —ranging from 8 to 30 per cent in urban areas—have amazed those who follow such things. One of the standard boasts of the USSR, as of Nazi Germany in its time, has been that it abolished unemployment. A Dictionary of Political Economy published in Moscow in 1964 still says: "The socialist economy liquidates unemployment, finally and forever." Because of this premise of socialist planning, the Soviet state provided for no employment agencies, no labor exchanges, no unemployment insurance. Whether the professor's estimates are accurate or not, the existence of the problem is conceded by the authorities. Erudite papers on the subject have appeared in the technical press, and it was on the agenda of the last Party Congress.

      Vermont Royster, editor of the Wall Street Journal, traveled eight thousand miles in the USSR in 1962, studying its economy against his rich background of economic expertise. (173) "The Soviet Union is a feudal society," he wrote on his return. "In the true sense of the word, and measured against any of the advanced nations of the West, it is a backward country, whether the test be industry, agriculture, technology, labor skills, or the standard of living of the people. ... It has an economic system . . . which 'works' but which does so mainly by brute force and awkwardness and therefore by its inefficiencies constitutes a drag on the nation's progress." The country is advanced, he conceded, compared to India, Burma, or many parts of Latin America, "but compared with the great industrial nations of the West, the only honest word is 'backward.'"

      The communist "short-cut" to industrialization leads into a morass of disequilibrium, waste, and want. Sheer growth in heavy industry, having been made a political fetish, has operated to distort natural development by creating wild disproportions between industry and agriculture, between heavy and light industry, between production and transportation, between production and consumption, between quantity and quality.

      The profound crisis in Soviet agriculture is too conspicuous to be disputed by anyone. The crisis in industry is amply mirrored in the fumbling attempts somehow to build a few free-market methods into the elephantine and inflexible state monopoly. The Kremlin no longer denies that the gap between its own and the American economies is widening. There is a crisis, acknowledged and openly bewailed, in the productivity of labor. Depletion of gold reserves is evident, among other things, in the restoration about three years ago of Stalin's notorious valuta shops, where food and other deficit goods can be bought only with foreign currency. The Soviet ruble, its value arbitrarily set at $ 1.11, is still not convertible into foreign exchanges—its export and import strictly forbidden—and still grotesquely irrelevant to real purchasing power; a black market in money flourishes as always under such conditions.

      There we have in capsule form the reality of Soviet industrialization, so imposing when reported only in quantitative totals garnished with exclamation marks. (174) Unquestionably the USSR has emerged among the leading industrial nations, but it is structurally the weakest among them, the only one muscle-bound by dogma and deprived of the vitamins of individual ambition and ingenuity. Professor Abram Bergson remarked sagely in a 1964 book, "If socialism were an especially productive system, one might think that by now this fact would have been manifest."

       An American official described as "a government authority on Soviet affairs," was quoted by the U.S. News World Report (March 13, 1967) as follows:

      The statistics presented in this chapter may be contradictory at points, or even marginally in error. In reading the Russian and non-Russian literature on the Soviet economy, one confronts wide differences in the findings. The student in this area must be a combination of puzzle expert and economic detective to reach any conclusions he can credit with confidence. But the variations, though important to specialists, are not particularly relevant for this book. Our concern here is with the larger picture, with the society as a whole, which obviously is not affected by a few percentages of leeway in one direction or another.

      Whatever its size and tempo—and this is the crux of the matter—industrialization is not an end in itself. Unless it enriches life, attends to the basic needs of the people, sustains a more just and moral society, it is a sad failure no matter what the statistics may show. (175)

      In Soviet Russia industry has expanded but life in fundamental terms has diminished. The vaunted "short cut" to industrial supremacy is neither short nor logical nor supported by the historic experience of mankind. Where it has had its largest and most thorough test, it has led a great nation and a great people into quagmires of want, confusion, and relentless exploitation.