Soviet Union: Facts and Fictions (Part 1: The Economy)

This series (2, 3) is to discuss a popular greentext story that gets shared around numerous leftist circles, and to provide greater context behind many of the claims made.

The Somewhat Suspect Greentext

It may seem trivial to discuss at length a 4chan greentext post, but importantly, a number of sources have now been provided for these claims alongside the meme. This allows for deeper discussion and interrogation of the claims made.

The source for this claim is this graph, which shows that the Soviet economy was the 2nd fastest growing, beaten only by Japan, from 1928 to 1970 in terms of GDP per capita. As you can see, this data is pulled from the Madison Project.

GDP Growth 1928–1970

The USSR, notably, lasted from 1922 until 1991. Extending the graph begins to show a different story.

Below I have extended the graph to 1988. I have chosen that date as in that year the Soviet Union underwent major economic reform, allowing the creation of worker owned cooperatives that would operate independently from the state — the first major reform under perestroika. Extending to 1991, makes the USSR perform only worse

Small and recently disrupted economies generally grow faster than developed countries as they ‘catch up’. For example, following a major war countries may experience rapid growth as soldiers return home and restart their previously productive jobs. Looking at the period of the Soviet not marred by cycles of war, crisis and famine shows rather unremarkable growth.

Soviet Union marked in Red

Part of this early rapid growth is spurred by being able to take advantage of developed economies’ technology and capital. For example, in 1924 there were 1,000 tractors in the Soviet Union, but by 1934 there were over 200,000.

Transitioning from peasant and subsistence farming to mechanised farming produced remarkable growth, but was the growth sustainable long term?

This is a remarkable success for the USSR, but they did not do it alone:

This technology, however, did not spring from the Russian soil; it came almost entirely from the United States. Through the mid-thirties, most of the tractors in the Soviet Union were of American manufacture or copied from American designs. When copied, they were manufactured in plants designed, built, and operated under American guidance. And, in some cases, Americans guided the Russians in the use of tractors. The United States, in short, played a most significant role in bringing the tractor to the Soviet Union.

Once these ‘easy’ gains in growth were made, the Soviets would find themselves incapable of matching the economic growth of the United States and Western powers, as they entered into a period known as the Era of Stagnation.

The source for this is From Farm to Factory by Robert Allen. The link provided is to a summary of the book, and this summary includes the statement “By the 1950s, structural unemployment was eliminated and growth slowed down as capital accumulation ran into diminishing returns.” Please note that structural unemployment is different from zero unemployment. In From Farm to Factory, Allen explains how structural unemployment was very high in the 1930s as farm work became mechanised. This created a large surplus of rural labour, which was redeployed into industrial sectors through the command economy. By the 1950s, this process had largely completed and growth began to slow down. He is not referring to general unemployment.

Detailed unemployment information in the USSR is hard to come by, as (like many stats in the USSR) the USSR liked to play with numbers. The Soviet definition of unemployment included all those who were able-bodied but not in school or work. This included stay-at-home mum’s for example, making it rather useless for comparison with a more standard Western definition of those ‘looking for work but without work’. In 1990 Goskomstat, the State Committee for Statistics, released an official unemployment record using the ILO’s definition (akin to the West’s). This placed unemployment at two million.

Studies have been undertaken to examine unemployment in the Soviet Union, and unsurprisingly they find numbers of unemployment either not-out-of-line with Western unemployment figures, or significantly higher.

It must also be noted that reaching full employment was not necessarily a good thing for the workers. From the late 1930s to 1956, workers who wanted to quit their job without authorisation were subject to criminal penalties and imprisonment. You might not like your boss right now, but imagine how much worse it would be if you could be sent to prison for trying to quit! Some studies estimate between 8–22 million people were charged with unauthorised job changes (Stephenson, Crossing the Line, 78).

It can also be noted that even if employed, citizens of the USSR were not necessarily doing socially productive work. In 1981, the total time spent shopping and queuing in the USSR was estimated at 37 million hours a year, or roughly 190 hours per adult person, which is close to the amount of working time lost per year per capita due to unemployment in a country like Denmark. (Hans Aage, Soviet Wage Theory And Distribution Debates, 18)

Neither of the two sources (one, two) provided actually make this claim. As far as I can deduce, Farm to Factory also does not make this claim.

Studies have recorded contractions in the Soviet economy in 1933, 1941–42, 1945–46, 1979 and 1989–1991. Using the Madison Project dataset used above, we record multiple contractions in the economy in both GDP and GDP per capita terms.

Contractions in GDP per capita marked in red
Contractions in GDP marked in red

Sometimes I encounter sites with sources that are now dead links, so to maintain a record of the sources above here they are in full:

Smirnov, Sergey. Economic Fluctuations in Russia (from the late 1920s to 2015). Russian Journal of Economics 1:2 (June 2015) 130–153.

Siegelbaum, Lewis. “Anti-Parasite Law”, Soviet History <http://soviethistory.msu.edu/1961-2/anti-parasite-law/> accessed 28/09/2018.

Investopedia, Structural Unemployment, Investopedia <https://www.investopedia.com/terms/s/structuralunemployment.asp> accessed 28/09/2018.

Maddison Project Database 2018, <https://www.rug.nl/ggdc/historicaldevelopment/maddison/releases/maddison-project-database-2018> accessed 28/09/2018.

Wikipedia, Convergence, <https://en.wikipedia.org/wiki/Convergence_%28economics%29>

Dalrymple, Dana. “The American Tractor Comes to Soviet Agriculture: The Transfer of a Technology”. Technology and Culture 5:2 (Spring 1964) 191–214.

Malle, Silvana. “Employment Planning in the Soviet Union: Continuity and Change”. London: Palgrave Macmillan UK. 1990.

Porket, J.L. “Work, Employment and Unemployment in the Soviet Union.” London: Palgrave Macmillan UK. 1989.

I like history and thinking about freedom. I have a background in International Relations, Strategic Studies and I work for the Military Industrial Complex