Matt Yglesias has an interesting reaction to my post on pro-Soviet economists:
If you look at the issue through an international relations lens, or
through a focus on US domestic politics, you’ll get a different
picture. The main political tendency inclined to overestimate Soviet
economy performance was Cold War hawks who spent much of the
sixties, all of the seventies, and some of the eighties warning that
America was at risk of becoming the “number two” country in the world.
A minority of the hawks, like Senator Scoop Jackson, also had left-wing
views about economic policy, but the majority were inclined to
right-wing views.
My first response is: In economics, optimism about the Soviet economy suggests that we should be more like the Soviets (i.e., use more central planning) – a left-wing position. But in international relations, optimism about the Soviet economy suggests that we should be more against the Soviets (i.e., increase military spending and aggressiveness) – a right-wing position. Is this right? Or am I missing something? Or is Matt wrong on the facts? Was the neocon position really, “The Soviet economy is big and strong,” or just “The Red Army is big and strong”?
READER COMMENTS
ziel
Jan 13 2010 at 7:07pm
I had this debate in the comments at MR recently. The only people on the left whom anyone could point to as predicting the Soviet Union’s economy would collapse were George Kennan and Pat Moynihan – Moynihan was of course famous for being an anti-Soviet liberal. No one could point to any conservatives who thought the Soviet Union had a strong economic system. Conservatives believed the Soviet Union had a powerful military – which it did. Over 2 million men under arms, huge numbers of tanks and artillery, and of course how many tens of thousands of nuclear warheads.
The history-rewriters like Yglesias want to re-interpret this concern about the size of Soviet military might into conservative admiration for the strength of its economy. Pure sophistry – and galling.
david
Jan 13 2010 at 7:13pm
You’re losing sight of the era mindset, which tended to assume (as you have earlier described of Galbraith) that capitalism and communism had largely similar growth capability, and that any differences stemmed from moral outlook and different priorities at the production frontier.
In essence, the hypothetical Soviets (as envisioned by 70s neoconservatives) could be suppressing the production of consumer goods and tossing all those resources towards investment. Or paying laborers in Not Being Shot rather than wages. Which would not exactly be an desirable policy to emulate, but might imply greater Soviet growth.
Boonton
Jan 13 2010 at 7:44pm
Brad de Long took this down in a very nice, very simple post that featured the production function! (sometimes math does make it better, even when talking to people who only took Bachelor level econ).
Long story short, Yglesias is 100% correct. The concern with the Soviet GDP was not that they were proving their system was better than the US, it was that their GDP would allow them to support a bigger, more dangerous military.
The error you are making is that you are forgetting trying to compute Soviet GDP’s took place in the context of the Cold War. GDP does not equal a more enjoyable economy to be in. An economy turning 100 million tons of steel into tanks may have the same GDP as an economy that turns 100 million tons into pickup trucks.
Patrick R. Sullivan
Jan 13 2010 at 7:49pm
Yglesias and his supporters are awfully short of specific examples, aren’t they? Or, is Paul Samuelson a neoconservative.
Also, in his comments section there are quite a few ignorant claims that Russia, pre-revolution, was ‘a nation of peasants’, without any scientific, cultural or industrial accomplishment at all.
So, how did they produce Dostoevski, Tolstoi, Chekov, Turgenev, Prokofiev, Rachmaninov, Scriabin….
Or produce the periodic table of the elements?
Rdonway
Jan 13 2010 at 8:52pm
Look at Richard Pipes’s books at the time: The USSR was a basket-case, but with 40% of its economy devoted to its military.
Josh Weil
Jan 13 2010 at 8:58pm
Bryan,
What’s your response to Delong’s post?
http://delong.typepad.com/sdj/2010/01/the-russians-were-coming.html
Levan Ramishvili
Jan 13 2010 at 10:13pm
http://www.frumforum.com/debating-the-soviet-economy
Debating the Soviet Economy
Hate to go all “Vas you der Charlie” on young Matt Yglesias, but this recent post on the debate over the size of the Soviet economy is completely wrong.
Completely.
In the 1970s and 1980s , it was Cold War hawks who argued that the Soviet economy was smaller than the conventional CIA generated estimate. From this smaller estimate, the hawks drew the following conclusions:
1) The Soviets were spending much more on weapons than conventionally estimated: maybe 1/3 of national output rather than the 1/8 guessed by the CIA. (The US was spending about 1/20 in the Reagan era.)
2) Because the Soviets were spending so much, they probably could not spend more. This implied that arms control was a waste of time. The US was trading something it COULD do (build more) for something the Soviets could not do (build more)
3) Spending 1/3 of national output on the military was unsustainable, obviously. Either their economy was teetering on the verge of collapse (the Richard Pipes view) or they were planning for a pre-emptive war (the Edward Luttwak view).
By contrast, the conventional estimate implied:
1) The Soviets could increase their arms spending, therefore arms control was worthwhile.
2) The Soviet economy did function more or less adequately, therefore the Soviet Union could expect to endure. Therefore like it or not the United States had to deal with it as a permanent fact of politics. Nor was there need to fear that the Soviets would launch an unprovoked war anytime.
3) The Soviet bloc was providing an acceptable standard of living to its people. (On the official estimate , GDP per capita in East Germany roughly equaled that in Britain. The hawks argued that East German incomes were equivalent to Mexican.) The Soviet regimes accordingly commanded something like assent from their people; dissidents were unrepresentative of public opinion generally.
Obviously, it was the conventional not the hawkish view that proved wrong. This experience permanently jaundiced many against the estimates of the CIA – and so to this limited and upside down extent, Yglesias is inadvertently correct that the debate prepared the ground for the later debate over Iraq’s nuclear capabillities, which this time we hawks got wrong.
Ilya Somin
Jan 14 2010 at 12:17am
The cold war hawks didn’t argue that the Soviet economy was highly productive. Rather, they argued that it produced a large and powerful military because its resources were overwhelmingly concentrated on military spending. When the USSR fell and Soviet data became available, it turned out to be the case that the CIA was badly mistaken in believing that the Soviets were only spending about 10-15% of their GDP on the military. The true figure was 40-50%.
Boonton
Jan 14 2010 at 6:22am
Levan,
Your cut and paste job from Frum’s site provides no support for the facts it alleges. Cold War hawks throughout the 60’s, 70’s and 80’s did not assert that the USSR had reached the max. output possible and could not produce anymore weapons.
On the contrary, continued Soviet expansion was taken as a given. It was even assumed that signs of fracturing in the Soviet bloc (Glosnost, the Sino-Soviet split) were either trivial or elaborate ruses designed to fool the west into thinking the USSR was less dangerous than it really was.
Hawks at the time included not simply critics of left wing Democrats and arms control but also of Nixon and Kissenger (Reagan got his start as a member of the wing of the GOP that rejected de tante). Even during the 80’s the hard right turned on Reagan himself declaring he had been duped by the USSR. Long term pessimism on the state of the west was a common theme in right wing circles.
This is all forgotten today as the conflict was recast as one of ‘dueling studies’ to see which economic system produced the most video games.
Boonton
Jan 14 2010 at 7:12am
BTW, a pretty good discussion of this was held in the comments on http://www.marginalrevolution.com/marginalrevolution/2010/01/soviet-growth-american-textbooks.html. If people want to continue it, I’d suggest reading the thread so we don’t have to reinvent the wheel.
y81
Jan 14 2010 at 9:19am
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