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Purges and Production: Soviet Economic Growth, 1928–1940

Published online by Cambridge University Press:  11 May 2010

Barbaba G. Katz
Barbaba G. Katz
Affiliation:
New York University
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Extract

Did preparations for the Second World War account for the precipitous drop in the growth rate of Soviet industrial production from 10–12 percent per annum in the period 1928–1937 to only 2–3 percent per annum in the period 1937–1940? According to some who study the Soviet economy the answer is “yes.” This view has been succinctly expressed by Stanley Cohn: “After 1937, the rising spectre of Hitler forced the Soviet leadership to shift resources into armaments on a massive scale. As a result, the growth rate fell drastically to 3.6 percent per year between 1937 and 1940.” Such a sequence of events, however, has never been empirically demonstrated. The purpose of this paper is to investigate formally the validity of this explanation, via aggregate production functions, particularly of the CES (constant elasticity of substitution) variety, as well as to explore an alternative hypothesis, espoused, among others, by Naum Jasny, Alec Nove and Warren Nutter. This hypothesis stresses a domestic factor as the major contributor to the disruption in industrial production: namely, the impact of Stalin's terror in the form of chaos-producing political purges.

Type
Articles
Information
The Journal of Economic History , Volume 35 , Issue 3 , September 1975 , pp. 567 - 590
Copyright
Copyright © The Economic History Association 1975

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References

1 For estimates of the rate of growth of industrial production see Kaplan, Norman and Moorsteen, Richard, “An Index of Soviet Industrial Output,” American Economic Review L:2 (June 1960), 307Google Scholar; Nutter, Warren G., The Growth of Industrial Production in the Soviet Union (Princeton, 1962)Google Scholar, Table 53 and Table 54, p. 198. The Nutter index is based on moving weights; that of Kaplan-Moorsteen on 1950 prices. Different weighting structures produce differing estimates of the rates of growth and give rise to the “index number problem" which is noted in the text.

2 Cohn, Stanley H., “The Soviet Economy: Performance and Growth,” in Treml, Vladimir, editor, The Development of the Soviet Economy (New York, 1968), p. 29Google Scholar. For alternative views which stress the impact of the purges rather than preparations for war in slowing the rate of growth of industrial production see, for example, Jasny, Naum, Soviet Industrialization 1928–1952 (Chicago, 1961)Google Scholar; Nove, Alec, An Economic History of the U.S.S.R. (Baltimore, 1969)Google Scholar; and Nutter, The Growth of Industrial Production.

3 See Nutter, The Growth of Industrial Production, Table 53; Hutchings, Raymond, Soviet Economic Development (New York, 1971), pp. 302, 303Google Scholar; and Powell, Raymond, “Industrial Production,” in Bergson, Abram and Kuznets, Simon, editors, Economic Trends in the Soviet Union (Cambridge, 1963), p. 178.Google Scholar

4 See Promyshlennost' SSSR (Moscow, 1957); Nutter, The Growth of Industrial Production, Series 102, 301, 305; Moorsteen, Richard and Powell, Raymond, The Soviet Capital Stock 1928–1962 (Homewood, Illinois, 1966), p. 622, 623Google Scholar; NBER, Statistical Abstract of Industrial Output in the Soviet Union 1913–55, Part I, Series 303; and Sotsialistischeskoe narodnoe khozyaistvo SSSR v 1933–1940 (Moscow, 1963), p. 247.

5 See Kravchenko, Victor, I Chose Freedom (New York, 1946), p. 335.Google Scholar

6 Nekrich, A. M., “June 22, 1941,” in Petrov, V., editor, Soviet Historians and the German Invasion (Columbia, S. C., 1968), p. 112.Google Scholar

7 Medvedev, Roy A., Let History Judge: The Origins and Consequences of Stalinism, translated by Taylor, Colleen (New York, 1972), p. 213.Google Scholar

8 A figure of 8 million is suggested by Conquest, Robert in The Great Terror: Stalin's Purge of the Thirties (Chicago, 1968), p. 317Google Scholar. A range between 7 and 12 million forced laborers is suggested by Dallin in Dallin, David J. and Nicolaevsky, Boris I., Forced Labor in Soviet Russia (New Haven, 1947), pp. 84–87Google Scholar. A lower estimate of 3.5 million in forced labor is hypothesized by Jasny, Naum, “Labor and Output in Soviet Concentration Camps,” Journal of Political Economy, LIX (October 1951), 416.Google Scholar

9 Using information about Communist Party membership and about yearly recruitment from Rigby, T. H., Communist Party Membership in the U.S.S.R. 1917–67 (Princeton, 1968)Google Scholar I have arrived at the figure of 246,000 people purged from the Party in 1937 and 1938. Unger, A. L. in “Stalin's Renewal of the Leading Stratum: A Note on the Great Purge,” Soviet Studies, XX (January 1969), 326Google Scholar arrives at the figure 279,000 for a slighuy longer period. Conquest, in Conquest, The Great Terror, p. 527, suggests that 7–9 to 1 ratio. Unfortunately no discussion of why this ratio was chosen is included in the text.

10 See Raymond A. Bauer, Arrest in the Soviet Union (under the joint auspices of the Russian Research Center, Harvard University and the Center for International Studies, MIT, and the Air Research and Development Command: Human Resources Research Institute, Maxwell Air Force Base, Montgomery, Alabama, January 1954). See also Nekrich “June 22, 1941,” pp. 112, 113, and Avtorhkanov, A. (pseud. Alexander Uralov), The Reign of Stalin (London, 1953), pp. 73, 75, 85, 88.Google Scholar

11 T. H. Rigby, personal correspondence, January 6, 1972 (Department of Political Science, The Research School of Social Sciences, The Australian National University, Canberra, Australia).

12 See Peter Rossi, as cited by Bauer, Arrest, p. 13. Bauer refers to a series of memoranda prepared by Rossi under Air Force Contract No. 33 (038)-12909 at the Russian Research Center, Harvard University. See also Rossi, and Inkeles, Alex, “Multidimensional Ratings of Occupations,” Sociometry, XX (September, 1957), 234–251.CrossRefGoogle Scholar

13 We have information on the turnover of railroad employees in key positions: only 24 percent of those holding important positions on November 13, 1938, had been holding them for at least one year. See Zheleznodorozhnoy transport v godoy industrializataii SSSR (1926–1941) (Moscow, 1970), p. 309.

14 The decline in investment in iron and steel was blamed, hi part, on imperfections in investment planning and organization. See Sotsialistischeskoe narodnoe khozyaistvo SSSR v 1933–1940, pp. 204, 205. The same 1960's Soviet source stated that shortages in iron ore and coke production were partly due to the adverse effects that “mass repressions” had on management: “Groundless mass repressions affected the standards of technical economic management.” Ibid., p. 213.

15 Of the total number of directors of firms engaged in heavy industry about 97 percent were Party members in the mid-thirties. See Granick, David, Management of the Industrial Firm in the USSR (New York, 1954), p. 40. Concerning responsibility and probability of arrest see Bauer, Arrest, p. 52.Google Scholar

16 See Goldfeld, S. M., Quandt, R. E. and Trotter, H. F., “Maximization by Quadratic Hill-Climbing,” Econometrica, XXXIV (July 1966), 541–55CrossRefGoogle Scholar; and Goldfeld, Quandt and Trotter, “Maximization by Improved Quadratic Hill-Climbing,” Princeton University, Econometric Research Program, Research Memorandum No. 95 (April 1968).

17 These are not unbiased estimates. A corrective factor, eσ2/2 where σ2 is the residual variance, must be applied to produce unbiased estimates. The value of eσ2/2 is .18 percent for LR and .07 percent for KR and has been ignored in calculations.

18 See Barbara G. Katz, Soviet Economic Growth: 1928–40, State University of New York at Stony Brook, Working Paper Number 121, July 1974.

19 Moore, Geoffrey, Production of Industrial Materials in World Wars I and II (New York: National Bureau of Economic Research, Occasional Paper 18, 1944).Google Scholar

20 Gerschenkron, Alexander, A Dollar Index of Soviet Machinery Output 1927–28 to 1937 (Santa Monica, California: RAND Corporation Report R-197, April 6, 1951)Google Scholar; Bergson, Abram, The Real National Income of Soviet Russia Since 1928 (Cambridge, Mass., 1961)Google Scholar, chapter xii; Bergson, “Reliability and Usability of Soviet Statistics: A Summary Appraisal,” The American Statistician, VII (June, July 1953), 13–16, and Grossman, Gregory, Soviet Statistics of Physical Output of Industrial Commodities (Princeton, 1960).Google Scholar

21 An amplified discussion of this point is included in the detailed appendix, available on request from the author.

22 Whalley, John, “Polish Postwar Economic Growth From the Viewpoint of Soviet Experience,” Soviet Studies, XXIV (March 1973), 533–549.CrossRefGoogle Scholar

23 Weitzman, Martin, “Soviet Postwar Economic Growth and Capital-Labor Substitution,” American Economic Review, LX (September 1970), 676–692.Google Scholar

24 I am indebted to Jere R. Behrman for this suggestion.

25 Khromov, P. A., Ekonomicheskoe Razvitie Rossii v XIX-XX Vekakh (Moscow, 1950).Google Scholar

26 See B. Katz, “Decreasing Returns to Scale and Soviet Growth: 1928–40,” unpublished manuscript.