User:Ultramarine/sandbox Economics

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[edit] Economic growth

Advocates of central economic planning claim that it has in certain instances produced dramatic advances, including rapid industrialization of the Soviet Union, especially during the 1930s. Another example is the development of the pharmaceutical industry in Cuba. They argue that from 1928 to 1985, the economy of the Soviet Union grew by a factor of 10, and GNP per capita grew more than fivefold.^[4] The Soviet economy started out at roughly 25% the size of the economy of the United States. By 1955, it climbed to 40%. In 1965 the Soviet economy reached 50% of the contemporary US economy, and in 1977 it passed the 60% threshold.^[5] For the first half of the Cold War, most economists were asking when, not if, the Soviet economy would overtake the US economy.^[6] Starting in the 1970s, however, and particularly during the 1980s, growth rates slowed down in the Soviet Union and throughout the Communist world. The reasons for this downturn are still a matter of debate among economists. Some argue that they had reached the limit of the extensive growth model they were pursuing, and the downturn was at least in part caused by their refusal or inability to switch to intensive growth.^[7]

However, new research shows that the Soviet figures were largely fabricated, especially those from the Stalin era. Growth was impressive in 1950s and 1960s but later declined and according to some estimates became negative in the late eighties.^[8][9] Before the collectivization, Russia had been the "breadbasket of Europe," supplying 40% of the world’s wheat exports in the bumper years 1909 and 1910. The Soviet Union became a net importer of grain, unable to produce enough food to feed its own population.^[10]

China and Vietnam achieved much higher rates of growth after introducing capitalist economic reforms and the higher growth rates was accompanied by declining poverty.^[11][12] The Communist states do not compare favorable when looking at divided nations with similar culture before the Communist takeovers: North Korea vs. South Korea; China vs. Hong Kong and Taiwan; and East Germany vs. West Germany. East vs. West German productivity was around 90% in 1936^[13] and around 60-65% in 1954.^[14] When compared to the EU, the East German productivity declined from 67% in 1950 to 50% before the unification in 1989. All the Eastern European nations had productivity far below the EU average.^[15] Unlike the slow transition in China and Vietnam, the abrupt end to central planning was followed by a depression in many of the states of the former Soviet Union and Eastern Europe. As of 2003, all of them have positive economic growth and almost all have a higher GDP/capita than before the transition.^[16]

The Communist states used their energy inefficiently, getting much less economic growth from the same amount of energy than the Western nations and the Third World. However, it can be argued that there was little need for energy efficiency since the Soviet Union was a net exporter of oil and gas and China has large coal reserves.

[edit] Living standards

Supporters of the Communist states note the social and cultural programs, sometimes administered by labor organizations. They included in theory guaranteed employment, subsidized food and clothing, free health care, free child care, and free education. Early advances in the status of women were also notable, especially in Islamic areas of the Soviet Union.^[17] They point out to the claimed high levels of literacy enjoyed by Eastern Europeans (in comparison, for instance, with Southern Europe), Cubans or Chinese.

However, again the Communist parts of the divided nations do not compare favorably. Millions died in famines in Communist China and North Korea.^[18][19] East Germans were shorter than West Germans and this difference increased with time, probably due to differences in factors such as nutrition and medical services.^[20] Life satisfaction increased in East Germany after the reunification.^[21] The Soviet education system was full of propaganda and of low quality. The Soviet Union spent far less on health care than the Western nations and in the 1970s and 1980s the quality was deteriorating. The pension and welfare programs failed to provide adequate protection.^[22]

In the Soviet Union in 1989 there was rationing of meat and sugar. The average intake of red meat for a Soviet citizen was half of what it had been for a subject of the Czar in 1913. Blacks in apartheid South Africa owned more cars per capita. The only area of consumption in which the Soviets excelled was the ingestion of hard liquor. Two-thirds of the households had no hot water, and a third had no running water at all. According to the government paper, Izvestia, a typical working class family of four was forced to live for 8 years in a single 8x8 foot room, before marginally better accommodation became available. The housing shortage was so acute that at all times 17% of Soviet families had to be physically separated for want of adequate space. A third of the hospitals had no running water and the bribery of doctors and nurses to get decent medical attention and even amenities like blankets in Soviet hospitals was not only common, but routine. Only 15 percent of Soviet youth were able to attend institutions of higher learning compared to 34 percent in the U.S. The average welfare mother in the United States received more income in a month, than the average Soviet worker could earn in a year.^[23]

After 1965, life expectancy began to plateau or even decreased, especially for males, in the Soviet Union and Eastern Europe while it continued to increase in Western Europe. This divergence between two parts of Europe went on during three decades leading to a profound gap in the mid 90s. The life expectancy sharply declined after the change to market economy in several of the states of the former Soviet Union but may now have started to increase in the Baltic states. In several Eastern European nations life expectancy started to increase immediately after the fall of Communism. The previous decline for males continued for a time in some, like Romania, before starting to increase.^[24]

Milovan Djilas, once one of the most powerful leaders in Communist Yugoslavia, in his book New Class argued that a new powerful class of party bureaucrats emerged which exploited the rest of the population. In the Soviet Union this group was known as the Nomenklatura.

Cuba is often cited as a successful example by communists. However, Cuba was one of most developed nations in Latin America before Castro. Other Latin American nations have seen greater increases in literacy than Cuba. Calories per person have declined in Cuba while it has increased in most other Latin American nations. Cubans eat less cereals and meat than before Castro.^[25] On the other hand, there is a United States embargo against Cuba.

Supporters argue that most Communist states chose to concentrate their economic resources on heavy industry and defense while largely neglecting consumer goods. As a result, standards of living in the majority of Communist states were consistently below those experienced in the industrialized West, even when their economic strength was comparable or higher.

[edit] References

1. ^  Ofer, Gur. Soviet Economic Growth: 1928-1985, RAND/UCLA Center for the Study of Soviet International Behavior, 1988. ISBN 0833008943. page 15.
2. ^  Ofer, Gur. Soviet Economic Growth: 1928-1985, RAND/UCLA Center for the Study of Soviet International Behavior, 1988. ISBN 0833008943. page 18#^  Elizabeth Brainerd (2002). "Reassessing the Standard of Living in the Soviet Union". Centre for Economic Policy Research. 
3. ^  Ofer, Gur. Soviet Economic Growth: 1928-1985, RAND/UCLA Center for the Study of Soviet International Behavior, 1988. ISBN 0833008943. Introduction.
4. ^  Ofer, Gur. Soviet Economic Growth: 1928-1985, RAND/UCLA Center for the Study of Soviet International Behavior, 1988. ISBN 0833008943. Summary.
5. ^  Ofer, Gur. Soviet Economic Growth: 1928-1985, RAND/UCLA Center for the Study of Soviet International Behavior, 1988. ISBN 0833008943. Summary.
6. ^  Ofer, Gur. Soviet Economic Growth: 1928-1985, RAND/UCLA Center for the Study of Soviet International Behavior, 1988. ISBN 0833008943. Summary.
7. ^  Elizabeth Brainerd (2002). "Reassessing the Standard of Living in the Soviet Union". Centre for Economic Policy Research. 
8. ^ Steele, Charles N (2002). "The Soviet Experiment: Lessons for Development". in Morris, J.(ed.), Sustainable Development. Promoting Progress or Perpetuating Poverty? (London, Profile Book.
9. ^ Brainerd, Elizabeth (2002). "Reassessing The standard of living in the Soviet Union: an analysis using archival and anthropometric data". Abram Bergson Memorial Conference, Harvard University, Davis Center, November 23–24.
10. ^  Horowitz, David (2000). The Politics of Bad Faith. Touchstone Books. ISBN 0684850230. 
11. ^  Wand, Xiaolu, and Lian Meng (2001). "A Reevaluation of China's Economic Growth". China Economic Review 12(4): 338–346. 
12. ^  Dollar, David (2002). "Reform, growth, and poverty in Vietnam, Volume 1".

Policy, Research working paper series ; no. WPS 2837. . Development Research Group, World Bank

1. ^  Sleifer, Japp (1999). "Separated Unity: The East and West German Industrial Sector in 1936". Research Memorandum GD-46. . Groningen Growth and Development Centre
2. ^  Sleifer, Japp (2002). "A Benchmark Comparison of East and West German Industrial Labour Productivity in 1954". Research Memorandum GD-57. . Groningen Growth and Development Centre
3. ^  Ark, Bart van (1999). "Economic Growth and Labour Productivity In Europe: Half a Century of East-West Comparisons". Research Memorandum GD-41. . Groningen Growth and Development Centre
4. ^  2004. World Development Indicators 2004 online. Development Data Group, The World Bank. From the World Resources Institute. Retrieved on October 7, 2005.
5. ^  Massell, Gregory J. (1974). The Surrogate Proletariat: Moslem Women and Revolutionary Strategies in Soviet Central Asia, 1919-1929. Princeton University Press. ISBN 069107562X. 
6. ^  Bibliography: Chang, 2005
7. ^  Bibliography: Natsios, 2002
8. ^  Komlos, John, and Peter Kriwy (2001). "The Biological Standard of Living in the Two Germanies". Working Paper Series No. 560. . Center for Economic Studies and Ifo Institute for Economic Research
9. ^  Frijters, Paul, John P. Haisken-DeNew, and Michael A. Shields (2004). "Money Does Matter! Evidence from Increasing Real Income and Life Satisfaction in East Germany Following Reunification". American Economic Review 94: 730–740. 
10. ^  A Country Study: Soviet Union (Former). Chapter 6 - Education, Health, and Welfare. The Library of Congress. Country Studies. Retrieved on October 4, 2005.
11. ^  Horowitz, 2000.
12. ^  Meslé, France (2002). "Mortality in Eastern Europe and the former Soviet Union long-term trends and recent upturns". Paper presented at IUSSP/MPIDR Workshop "Determinants of Diverging Trends in Mortality" Rostock, June 19-21 2002. . Institut national d’études démographiques, Paris
13. ^  Zenith and Eclipse: A Comparative Look at Socio-Economic Conditions in Pre-Castro and Present Day Cuba. Released by the Bureau of Inter-American Affairs, February 9, 1998. Revised June 2002. Retrieved on October 2, 2005.