Why Were American Econ Textbooks So Pro-Soviet?
When I was in Econ 1, we actually used the infamous 1989 Samuelson text – the one that said, “the Soviet economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and even thrive.” So I was delighted when my colleague David Levy and his co-author Sandra Peart decided to put Samuelson’s Sovietology under a microscope.
Back in 2006, they published some preliminary findings; now we can see Levy-Peart’s full story. Quick version: Samuelson habitually overestimated Soviet growth, edition after edition. Here’s a nice table summarizing the numbers relayed to millions of students over the decades:
Levy-Peart find that Samuelson was hardly alone. Successive editions of competing textbooks were also stubbornly high on the USSR:
What we find repeatedly is over-confidence in the potential for Soviet growth and an asymmetric response to past forecast errors. More than this, the textbooks report faster Soviet income growth combined with a constant ratio of Soviet-US income. This trust in the future and skepticism about the past was the basis of a standard Soviet-era joke: “Under Communism, the Poles are fond of saying, only the future is certain; the past is always changing.”
When Levy first presented this evidence, he gave it an anti-elitist spin. The problem, he said, was that we put too much trust in experts, and not enough in Soviet anecdotes. I demurred. The real problem, I said, was left-wing bias. Samuelson and other mainstream Keynesians were socialists at heart, so they bent over backwards to be “fair” to their ugly cousins behind the Iron Curtain.
In the latest draft, Levy-Peart try to distinguish between these competing hypotheses, and wind up standing by their original position. They create a 2×2 textbook matrix. Ideology (liberal vs. “neutral”) is on one axis; methodology (“thick model” vs. “thin model”) is on the other.
If I understand Levy-Peart correctly here (and I’m not sure I do), they link trust in experts to the thin model, and egalitarian respect for the man in the street to the thick model. In any case, they conclude that:
If the overstatement of Soviet growth was mainly driven by ideology we would expect Samuelson, Tarshis and Heilbroner to overstate Soviet growth more dramatically than McConnell and Bach. They did not. If the problem arose primarily because of the use of thin models, Samuelson and McConnell would overstate Soviet growth more dramatically that the other texts. This is what we have observed above.
They may have a case, but I’d like to see Levy-Peart expand their universe to include full-blown right-wingers. If you sampled all economists writing about the Soviet economy in, say, 1970, what would be the stronger predictor of negative assessments – ideology or elitism? I bet that in a decent multiple regression, ideology would crush elitism. Alas, I don’t know enough about the data even to specify a decent bet, but I’m more than open to one.
P.S. If you want to find one thinker who analyzed the Soviet economy using Production Possibility Frontier diagrams without becoming a Soviet dupe, see the article on “Communism” in The Concise Encyclopedia of Economics. 🙂
Dec 29 2009 at 12:01am
Yes, especially in the social sciences, ideology trumps just about everything. Its hard to understate its actual importance.
Dec 29 2009 at 12:16am
During the Cold War, Jerry Pournelle and Stefan Possony spent a lot of time staring at spy plane and spy satellite photos of the Soviet Union and comparing them to the infrastructure visible in photos of countries with verifiable per capita GDPs. Their conclusion was that the Soviet Union was “Bulgaria with ICBMs” — that it was a very, very poor country. The wrote a 1968 book called The Strategy of Technology arguing that the way to win the Cold War was to compete with them on a higher technological plane, which is, to a certain extent what happened.
Dec 29 2009 at 1:02am
Success of the Soviet economy meant plenty of very cushy jobs and triumphant prestige for both current and future economists ;]…
Dec 29 2009 at 2:53am
“Success of the Soviet economy meant plenty of very cushy jobs and triumphant prestige for”… the military-industrial complex.
Dec 29 2009 at 3:15am
I remember writing a comparative systems paper as an undergraduate in 1975 about Soviet growth rates. If I remember correctly, Soviet growth rates were decent until the late 1950s, but weakened considerably in the 1960s. Soviet growth was expected to be slightly higher given the neo-classical growth model, but the evidence just wasn’t there. My sense was that it was fair to doubt the Soviet model, but it was too early to make a definitive conclusion.
I did visit the Soviet Union in the late 1970s and concluded that the average Russian had a standard of living and freedom considerably below the US. No one there believed me when I told them that I lived in a five bedroom house. I was amazed at the lines they stood in to get basic foodstuff and clothes. I couldn’t stand how often they drank.
Didn’t Samuelson’s textbook also predict that the US and Soviet economies would converge? As I remember, Samuelson represented the conventional wisdom of the time.
Dec 29 2009 at 6:24am
This is great — a guy who, by his own admission, 1) has no familiarity with the actual data, and 2) to all appearances has no experience himself in working on data-poor (or data-dubious) economies, 3) looking at work some thirty years after the fact (by one of the great minds of the field), with the full benefit of hindsight, 4) shortly after the great mind has become unable to defend his own position, and attributing the fact that the work more or less fit in with conventional wisdom of the time, to anti-American ideological bias.
I think that’s an ideology — what I’d call chickens–tism.
Dec 29 2009 at 7:04am
how quickly we forget the ideology of the cold war.
western governments, especially the united states, made a very strong case to their own citizens that the soviet union was a threat and a competitor. that meant lying about the danger and lying about the relative economic position of the “enemy.”
if the western governments had come clean about what they knew — spy agencies certainly knew the truth — the american population would have felt far less threatened by the soviets, and would have resisted the military buildup of the 50s-80s.
(so now that the cold war is over, what is the government doing to scare you now?)
Dec 29 2009 at 8:42am
Is q saying that Samuelson was just a dupe of the US government?
The danger of the communists was corroborated by those who escaped. Economic strength is more difficult to estimate. The analysts at the CIA (and in other intelligence agencies) were mostly college educated. They provided their analysis based on the data that they were willing to believe. What they were willing to believe was often influenced by the conventional wisdom that they got in college, read in newspapers, and saw on television. Intelligence analysts are as biased and gullible as climate scientists, which is to say that they are as biased and gullible as the rest of us.
Dec 29 2009 at 10:36am
By the time Samuelson was in his umpteenth printing of his textbook, there were plenty of Soviet refugees and economists – some Soviet refugees themselves – who presented plenty of evidence to cast doubt on the rosy picture painted by Sovietologists. They simply chose to ignore – and in the case of Samuelson, justify – what was happening in the Soviet Union and that people literally risked life and limb to escape. The analysts at the CIA had at least one Soviet born and trained economist who could and did dispel any myths woven into their psyche by their poncy American, has-been hippy, college professors.
American intellectuals, particularly those in Universities, blew off anything immigrants had to say. We were told that communism is great and that we just don’t “get it”. This was authoritatively proclaimed to people who risked everything to leave by people who had never even been to the Soviet Union. I tend to agree with Bryan that this opinion was driven by ideology, for no amount of physical evidence could shift the opinions of these academics.
The Soviet Union had designs on world domination. The country created no wealth and it needed new victims to suck off. It was not the goal of the United States, but it was the goal of the Soviet Union and the USSR would, as usual, be willing to sacrifice as many millions of human lives as it took to accomplish what the party wanted. World domination is such an unrealistic goal for any country, but I think the arms race drove the USSR to an earlier death than it would otherwise have faced and it didn’t pursue its military goals with as much zeal as it otherwise would because it had to weigh the ability of the power of the United States and its allies to drive it back.
Dec 29 2009 at 11:33am
People had correctly predicted the outcome of communist economics since before the foundation of the USSR. If economics is supposedly an empirical science, surely the accuracy of ones’ predictions is precisely the basis on which to decide if an economist is truly a “great mind” or not? On this basis, most of the “great minds” of the 20th century were either incompetent or malicious.
Dec 29 2009 at 11:55am
I think American econ textbooks were pro-Soviet for the simple reason that the Soviet system was indisputably superior to the unforgiving ‘free market’ American system.
Make whatever claims about ‘economic growth’ or ‘relative poverty’ or ‘lack of freedom’ you want but the Soviet Union created a large-scale, modern nation state dedicated to providing everyone with a solid, equitable lifestyle. Everyone had access to food, clothing, shelter, health-care, education, meaningful work and other necessities of life. It was guaranteed right there in their constitution. That is still not the case in the US, though with the recent passage of the landmark Health Care Reform bills we have at least made the first tentative steps towards correcting one of those desperate problems.
The thing that economists need to realize is that life is not all about economics & money. Having a satisfying life planned for you with no uncertainty and no crucial needs left unfulfilled is necessary too. The Soviet Union went a good a way towards providing that.
Someday we will realize what a loss it was when the vile, venal capitalists of the West arranged its downfall. After all, no amount of material wealth provided in the willy-nilly, dog-eat-dog, all-against-all ‘free market’ will ever be able to match the simple pleasures of a life dedicated to the betterment of the community, guided by the best & brightest from their commanding perch in the government.
Dec 29 2009 at 11:58am
(so now that the cold war is over, what is the government doing to scare you now?)
I find much of what the media and politicians say about the magnitude of radical Islam threat laughable. They got nothing all their missions are suicide missions.
About the post look how many on the left today talk about the Cuban economy and its healthcare and education systems. I think that we know little about Cuba and so it should not be brought up in a debate about healthcare in the USA, but many a leftist will use Cuba as a positive model for healthcare.
Dec 29 2009 at 12:25pm
Blighter wins best Best Satirical Post of the Day!
Dec 29 2009 at 12:41pm
I think Blighter’s post is satirical, but it scares me that I can’t be sure of that.
Dec 29 2009 at 12:51pm
Yeah, blighter, you made me laugh out loud! Thank you!
Dec 29 2009 at 2:24pm
As should be the case with great satire, I wasn’t sure blighter was kidding until the last paragraph. Still, I’m only 99%.
Dec 29 2009 at 3:12pm
“But what spokesman of the present generation has anticipated the demise of socialism or the “triumph of capitalism”? Not a single writer in the Marxian tradition! Are there any in the left centrist group? None I can think of, including myself. As for the center itself—the Samuelsons, Solows, Glazers, Lipsets, Bells, and so on—I believe that many have expected capitalism to experience serious and mounting, if not fatal, problems and have anticipated some form of socialism to be the organizing force of the twenty-first century.
… Here is the part hard to swallow. It has been the Friedmans, Hayeks, von Miseses, e tutti quanti who have maintained that capitalism would flourish and that socialism would develop incurable ailments. Mises called socialism “impossible” because it has no means of establishing a rational pricing system; Hayek added additional reasons of a sociological kind (“the worst rise on top”). All three have regarded capitalism as the “natural” system of free men; all have maintained that left to its own devices capitalism would achieve material growth more successfully than any other system.” -Robert Heilbroner
Dec 29 2009 at 3:12pm
While I have sympathy for the Levy+Peart thesis, 5 data points are too few to draw reliable conclusions.
OTOH, the very fact that they did not include any “full-blown right-wingers” in their analysis leads me to think that there weren’t any, amongst authors of mainstream economics textbooks. If this is the case, then Levy+Peart are correct in saying that mainstream economists had more faith in central planning than was warranted by plain common sense.
Dec 29 2009 at 3:57pm
More from Heilbroner: “From [my samplings] I draw the following discomforting generalization: The farther to the right one looks, the more prescient has been the historical foresight; the farther to the left, the less so.”
As for Heilbroner’s admission that “capitalism would achieve material growth more successfully than any other system”, you find the basis for the latest internationalist critique of free markets: Material growth = global warming. The righteousness of poverty and squalor is confirmed by changing the terms of the indictment of capitalism.
Dec 29 2009 at 6:56pm
Thanks for the kind words, Crawdad, Steve Miller, guthrie & Zdeno.
Dec 30 2009 at 1:33pm
While you’re finessing your arguments, picture how it looks from a point of view of someone who lived 60s through 90s in the Soviet Union.
Because of my limited scope of English I am not even sure there are expletives in this language to depict adequately my opinion of Samuelsons of this world…
Jan 4 2010 at 8:33am
What seems strange to me, as someone educated in the naughts, is the opposite problem. It was only later in my undergraduate career (and now in grad school) that I realised how much the USSR had grown and how well it had done (relative to its starting position in 1917 and relative to contemporaneous Asian and African growth) in comparison to how badly I thought it had done consequent to high school history and some undergrad econ.
So maybe the education about its success and potential successes has been pendulum-like: yes people wrongly estimated how well the USSR might have done, but it also did better than a lot of non-“liberal”s said it would. Could my generation have been under-educated about the successes of the soviets (their role in WWII comes to mind as something I had to discover for myself and not from teachers)?
Jan 4 2010 at 10:00am
Well, Simon, I guess that just goes to show that “educators” always get it wrong.
Jan 4 2010 at 10:42am
“It was only later in my undergraduate career (and now in grad school) that I realised how much the USSR had grown and how well it had done (relative to its starting position in 1917 and relative to contemporaneous Asian and African growth) in comparison to how badly I thought it had done consequent to high school history and some undergrad econ.”
I wonder what the sources are for what you learned in your later academic career – what is this “growth” that the Soviet Union achieved? How did it do “well”?
Do these numbers that prove to you growth count consumption of demanded goods or do they count military GDP and consumption of low-quality planned goods that people were forced to consume with incomes from jobs the people were stuck in?
What caused this supposed prosperity? Was it the collectivization and nationalization of the 1930s? Was it the military buildup? Do these numbers take into account the executions, Gulags and famine the people faced?
Jan 4 2010 at 10:53am
The source of Samuelson’s data was the CIA (CIA factbook). The real criticism should be the woefull lack of true data about the Soviet economy until the late 70’s and early 80’s, and even then, not much of that was publicly available because it would have undercut the conservative argument that the Soviet superpower would have the resources to continue an arms race, and if you want to do an arms race, your opponent, at least in the public eyes, has to be be able to be credibly committed to it.
No, the “public” data from our government was all messed up. One of the Profs in my econ department worked at one time at an unnamed agency as an expert in Soviet economics as it related to energy resources. The public data — pff . The question you should ask is why public data was overstated.
By the way, conservatives were the one’s promoting the high public data to support the idea of the Soviets ability to engage in an arms race, when they knew (at least in government) that with the decline in oil prices, the Soviet world was crumbling.
Jan 5 2010 at 7:43am
If economics is supposedly an empirical science, surely the accuracy of ones’ predictions is precisely the basis on which to decide if an economist is truly a “great mind” or not?
By your standard, many famous hard scientists are not great minds. Einstein thought that there must be a flaw in quantum mechanices and that getting useful power from nuclear energy was impossible, Newton believed in alchemy. Linus Pauling was wrong about Vitamin C being a cure for everything.
Most people regard Einstein, Newton and Pauling as great minds however, which indicates that most people don’t think the accuracy of one’s predictions is precisely the right basis for deciding if a hard scientist is a great mind. So why should it be for an economic scientist?
Personally I think the “great mind” label is not dependent on getting every prediction right, but on having some insights into how the world works that explain a bunch of empirical evidence that couldn’t be explained before, and perhaps something about the leaps of intellect involved. I read a physicist who said that if Einstein hadn’t been born then someone would have developed the Special Theory of Relativity about the same time, but not the General Theory. An unprovable hypothesis, but I do get the feeling that there are just some insights by some minds that do create a sense of awe, and the producers of those insights do tend to be labelled “great minds” even if they make some false predictions. I hope this makes sense.
Jan 5 2010 at 1:59pm
Those people are regarded as great minds because when they were right, they were brilliantly right. And Newton was not a man of science as we see such a person today, Pauli was not in farma, Einstein was not into quantum, also even Pauli, who was, at one point said that he could not remember all the particles in the nucleus of an atom (at that time about 100).
As far as things go, the mainstream economists have very little to brag about in the XX century.
Jan 7 2010 at 7:17pm
The economic theories which failed to predict the outcome of U.S. and Soviet markets in the last century are the dominant theories taught in state-run universities in the United States and are unquestionably accepted by the school-boys currently in power in the United States government.
What that means is that the United States can now expect to enjoy the same fantastic economic progress as the Soviet empire experienced in the last century.
Jan 13 2010 at 6:34pm
“This is great — a guy who, by his own admission, 1) has no familiarity with the actual data, and 2) to all appearances has no experience himself in working on data-poor (or data-dubious) economies, 3) looking at work some thirty years after the fact (by one of the great minds of the field), with the full benefit of hindsight, 4) shortly after the great mind has become unable to defend his own position, and attributing the fact that the work more or less fit in with conventional wisdom of the time, to anti-American ideological bias.”
Well, a good test would be whether or not Bryan called the housing bubble a few years ago, and had at least a clue as to the fallout from it.
After all, that data was far, far, *far* more available and of better quality than data from the USSR, and the general nature of the US economy is far, far, *far* better known.
Bryan, would you like to point to some calls from 2005-06?
Jan 13 2010 at 6:45pm
BTW, Brad DeLong and Matthew Yglesias are having fun with this.
Tell me – the right-wingers who spent decades talking up the power of the USSR – were they actually Evul Librul double agents?
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