STUDIES IN ECONOMICS AND RUSSIA

STUDIES IN ECONOMICS AND RUSSIA

Also by Alec Nove AN ECONOMIC HISTORY OF THE USSR ECONOMICS OF FEASIBLE SOCIALISM EFFICIENCY CRITERIA FOR NATIONALIZED INDUSTRIES GLASNOST IN ACTION SOCIALISM, ECONOMICS AND DEVELOPMENT STALINISM AND AFTER THE SOVIET ECONOMIC SYSTEM WAS STALIN REALLY NECESSARY

Studies in Econotnics and Russia Alec Nove Professor Emeritus University of Glasgow M MACMILLAN

ISBN 978-1-349-10993-7 ISBN 978-1-349-10991-3 (ebook) DOI 10.1007/978-1-349-10991-3 Alec Nove 1990 Softcover reprint of the hardcover 1st edition 1990 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 33-4 Alfred Place, London WC1E 7DP. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. First published 1990 Published by MACMILLAN ACADEMIC AND PROFESSIONAL LTD Houndmills, Basingstoke, Hampshire RG21 2XS and London Companies and representatives throughout the world British Library Cataloguing in Publication Data Nove, Alec, 1915- Studies in economics and Russia. 1. Eastern Europe & Soviet Union. Economic policies I. Title 330.947

Contents Preface Vl PART I HISTORY OF ECONOMIC IDEAS 1 1 Three Early Russian Economists 3 2 M. I. Tugan-Baranovsky (1865-1919) 24 PART II ECONOMIC HISTORY 41 3 War Communism 43 4 Lenin and the New Economic Policy 50 5 Trotsky, Markets and East European Reforms 71 6 The End of NEP 80 7 The Soviet Peasantry in the Second World War 90 8 Industry under Khrushchev 104 9 Russian Modernization 114 PART III ECONOMICS: EAST AND WEST 127 10 Planning 129 11 Markets? Yes but... 144 12 Friedman, Markets and Planning: A Comment 153 13 The Fragmentationist Disease 164 14 Marxism and 'Really Existing Socialism' 171 15 Planning and Markets 222 16 'Feasible Socialism' Revisited 232 17 Soviet Reforms and Western Neoclassical Economics 244 PART IV CONTEMPORARY USSR 263 18 Has Soviet Growth Ceased? 265 19 Labour Incentives in Soviet Kolkhozy 290 20 Soviet Agriculture 302 21 The Contribution of Imported Technology to Soviet Growth 312 22 The Defence Burden: Some General Observations 325 23 Is Within-system Reform Possible? 340 24 Soviet Economic Reform: Progress and Frustrations 355 Index 367

Preface This collection reflects the rather wide range of my interests, from the history of Russian economic thought to the contemporary Soviet scene, as well as questions relating to socialism and the role and limitations of markets. Major changes are taking place in the Soviet Union and in a number of other communist-ruled countries, changes which involve decisive strengthening of market forces and abandonment of the attempt to plan everything from above. However the reformers are frequently unaware of how a real market functions in real capitalist countries, and indeed I have had three articles published in the Soviet Union in 1988 in which I tried to draw attention to 'market' problems, some of which beset (for example) Mrs Thatcher's Britain today. These are also the subject of some of the papers in the present collection. I would particularly draw to the reader's attention my critique of what I call 'fragmentationism', a disease that has actually become worse since I wrote the paper on the subject: to the disruption of urban transportation, the hospitals and school systems, electricity generation, London and the Post Office has now to be added the ambulance service. All this seems to link up with an ideological blind spot peculiar to Britain: the whole is seen as no more than the sum of its parts, and therefore any network can apparently be costlessly broken up. Conservative governments and municipalities in other countries behave quite differently. Whenever it is relevant I have added a short introduction to the papers here published, if some recent events have rendered their contents significantly out of date. To cite just one example, the paper entitled 'Has Soviet Growth Ceased?' was written at a time when official Soviet publications were claiming a growth rate of around 3 per cent; now it is accepted that these have been years of stagnation, with growth close to zero. (I do not suggest that this is because Soviet statisticians had read my paper!) There should be something here to interest a wide variety of readers, those who are concerned with political economy in its broadest sense. Here and there the reader will find the same argument repeated. For example a brief critique of the psychological oversimplifications of so-called public choice theory occurs even three times. This seems to me excusable, as this occurs in the body of the argument in vi

Preface vii somewhat different contexts. Also inevitably some judgements have been overtaken by events. Thus in an analysis dated 1985 I did not anticipate the very great sharpening of the nationalities issues which occurred four or five years later. It may still be of interest to see how this critical observer viewed the situation at the beginning of Gorbachev's rule, so I did not 'update' the text. ALEC NOVE