Did Communism Help Russia and China Modernize and Become Major Powers Again?

royal744

Ad Honoris
Jul 2013
10,983
San Antonio, Tx
which the Germans had some concept of exterminating and certainly went a long way toward achieving
but for the small detail of soviet industrialization
as for the Soviet being a pariah state many people through the world looked upon them as as the light on the hill
dumb bastards of course , but hope spring eternal
Turned out the light was a wax candle sputtering down the last quarter inch of wax.
 
Jul 2019
164
Pale Blue Dot - Moonshine Quadrant
I meant literal malinvestment because it is an investment based upon incorrect/unavailable economic information. I do know they turned their economy into an (i guess the best way to explain it) accounting of things with statistics/quotas. These quotas became inflated for fear of retaliation/execution by those assigned to govern them so I guess in a very bizarre sense these indicators became something like interest rates(?) for the Soviet economy. The Soviet economy is really a complex weave because they utilized foreign pricing systems, yet had their own central bank, and utilized economic data based upon production quantities.
Thanks

Interest rate distortion are one of my hobby horses. But since interest rates to arbitrate between capital investment and consumer goods your point about quotas trying to function something like interest rates makes sense.

I just had never conceived of command economy quotas in that way.
 
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mariusj

Ad Honorem
Aug 2015
2,057
Los Angeles
The most charitable interpretation of events is that communism rebuilt the Russian and Chinese economies after first running them into the ground.
While we could say that the Chinese Economy was stable after the 50s in the takeover, one does have to qustion the idea that it was run to the ground during the GLF or the CR.


You may say that there were opportunities lost, but to suggest it was running them to the ground would imply that there would be a dip. Yet looknig at this there were 4 yrs of contraction, one of which is below 1%,.

So this comment is really without merit.
 
Jan 2013
1,122
Toronto, Canada
While we could say that the Chinese Economy was stable after the 50s in the takeover, one does have to qustion the idea that it was run to the ground during the GLF or the CR.


You may say that there were opportunities lost, but to suggest it was running them to the ground would imply that there would be a dip. Yet looknig at this there were 4 yrs of contraction, one of which is below 1%,.

So this comment is really without merit.
One of those years of contraction was -27.3%. If that isn't running your economy into the ground, what is?

Plus, if those are the official numbers, how much worse do you think the real numbers were?
 

mariusj

Ad Honorem
Aug 2015
2,057
Los Angeles
One of those years of contraction was -27.3%. If that isn't running your economy into the ground, what is?

Plus, if those are the official numbers, how much worse do you think the real numbers were?
So what is the cut off? Is a one yr -27.3% during famine (with large human elements) running your economy to the ground, how about a few yrs of depression? Is that running your economy to the ground?

And I never understood this conspiracy about cooking up historic numbers. What's the point of cooking up a historic number to make yourself look good if it's going to be abysmal?
 
Dec 2017
371
Florida
So what is the cut off? Is a one yr -27.3% during famine (with large human elements) running your economy to the ground, how about a few yrs of depression? Is that running your economy to the ground?

And I never understood this conspiracy about cooking up historic numbers. What's the point of cooking up a historic number to make yourself look good if it's going to be abysmal?
Depends on what you mean by depression, is it an economic downturn or is it a depreciation in consumer prices? If it is the former, then yes, it is running your economy into the ground.

The point of cooking up numbers doesn't seem very relevant to us today but think about the factory manager who is told that if he doesn't increase productivity by let's say 5% then they will find someone who can, meaning:

A. He loses his job and the ability to feed his family/himself.
B. He gets sent to prison or a "reeducation camp"
C. Ends up in a ditch with a new hole in his body
D. Ends up in a ditch with his family and they have new holes in their bodies.

This isn't being dramatic or hyperbolic. There are cases where people are tried and executed because they were "working against the state" or "committing treason" because they did not meet their quota. Who wouldn't lie to make themselves look good in an environment where looking bad could get you and/or your family sent to prison or killed.
 

mariusj

Ad Honorem
Aug 2015
2,057
Los Angeles
Depends on what you mean by depression, is it an economic downturn or is it a depreciation in consumer prices? If it is the former, then yes, it is running your economy into the ground.

The point of cooking up numbers doesn't seem very relevant to us today but think about the factory manager who is told that if he doesn't increase productivity by let's say 5% then they will find someone who can, meaning:

A. He loses his job and the ability to feed his family/himself.
B. He gets sent to prison or a "reeducation camp"
C. Ends up in a ditch with a new hole in his body
D. Ends up in a ditch with his family and they have new holes in their bodies.

This isn't being dramatic or hyperbolic. There are cases where people are tried and executed because they were "working against the state" or "committing treason" because they did not meet their quota. Who wouldn't lie to make themselves look good in an environment where looking bad could get you and/or your family sent to prison or killed.
There is only one definition of depression in economics I am aware of. A depreciation in consumer prices is probably better termed as deflation as contrasting in the increase of consumer prices that is inflation.

Then, more specifically, you are addressing the issue of cooking numbers, whereas I specifically stated

"What's the point of cooking up a historic number to make yourself look good if it's going to be abysmal?"

Now, in your argument, you are saying if people disobey stated number they end up in a ditch, then I must ask, what happen when someone reported that -27%?

So please, if you want to address something at least seriously look through the comment.
 
Nov 2019
350
United States
There is only one definition of depression in economics I am aware of. A depreciation in consumer prices is probably better termed as deflation as contrasting in the increase of consumer prices that is inflation.

Then, more specifically, you are addressing the issue of cooking numbers, whereas I specifically stated

"What's the point of cooking up a historic number to make yourself look good if it's going to be abysmal?"

Now, in your argument, you are saying if people disobey stated number they end up in a ditch, then I must ask, what happen when someone reported that -27%?

So please, if you want to address something at least seriously look through the comment.
Just to add some quality analytical detail to this conversation I am attaching a CIA report on their study of the Soviet Economy during the era of 1951 to the fall of the Soviet Union, and their determinations on cause and effects within the Soviet economy. Very interesting document, here is an excerpt:

CIA's productivity analysis took a major step forward in 1954 in Long-Run Soviet Economic Growth. At a time when production-function analysis was in its infancy in the West, the paper developed measures of combined factor productivity--the efficiency with which labor, capital stock, and land were used--for the Soviet Union. Especially noteworthy was the paper's treatment of labor quality, economies of scale, and the possibility of diminishing returns to increases in the Soviet capital stock. Factor-productivity analysis became the backbone of CIA's analysis of Soviet economic trends. Thus, Trends in Factor Productivity in Soviet Industry, 1951-63 (November 1964) found that more than half of the growth in industrial output from 1950 to 1963 was due to the "employment of additional labor and capital" and the remainder to an increase in factor productivity--output per unit of labor and capital combined. From 1961 to 1963, however, the rate of growth of factor productivity fell to about 2 percent per year compared with nearly 5 percent per year from 1954 to 1960. The paper's analysis suggested that the decline was not a short-run phenomenon "but is also, in part, a trend that is likely to persist over the near future." Estimates of factor-productivity growth in the several branches of industry showed substantial variations but broadly similar trends. The paper put forward several possible causes of the slowdown in factor-productivity growth: the immediate postwar recovery as a nonrecurring event; the rapid increase in defense spending and its claim on scarce science and engineering resources; the effect of declining rates of growth in investment on the average age of capital stock; and a lessoning of the pressures on Soviet managers to maintain output that prevailed during the reduction in the work week from 1956 to 1959.

CIA's Trends in Factor Productivity paper concluded that because the USSR could not continue to increase inputs to industry at past rates, the slowdown in industrial growth could not be halted unless the efficiency with which resources were used could be improved. The prospects for raising factor-productivity growth through administrative measures or partial economic reforms were central to subsequent macroeconomic analyses of the Soviet economy. The paper on agriculture cited above reached a similar conclusion--that factor-productivity growth in agriculture had slowed abruptly in the early 1960s and that future growth in farm output depended on a reversal of this trend.

A 1970 CIA paper offered an even more pessimistic view of the Soviet economic future. The Cobb-Douglas production functions used in earlier reports had a particular form: a given percentage increase in labor or capital resulted in a specified constant increase in output. Thus a one percent increase in labor might increase output by 0.75 percent and a 1-percent increase in capital might increase output by 0.25 percent. The paper, Investment and Growth in the USSR (March 1970), investigated a different production function, one in which the returns to capital declined as the ratio of capital to labor increased. This 1970 paper concluded that this type of function, when fitted statistically to Soviet postwar experience, indicated that returns to new investment were "strongly diminishing." Thus a change in leadership priorities favoring a higher rate of capital formation would "not insure even a continuation of present rates of economic growth." In any event, controversy in CIA and in the academic community over the appropriate form of a production function for the Soviet economy and Soviet industry proved inconclusive. CIA's production function analysis continued to be based on the more familiar and simpler Cobb-Douglas form.

Miss-allocation of resources, common problem with command economies, was a prime cause of their more detailed research.

 
Nov 2019
350
United States
And this slowed Soviet modernization how exactly?

Remember the Nazis banned Jewish physics, but still did very well with technological development during the war. Their only failing was industrial capacity and resources.
Boolean Algebra is of course the backbone on which computer software and hardware design is based. It made the Soviet Union a backward nation in the development of computers.