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Late Soviet planning mistakes

Soviet cogitations: 216
Defected to the U.S.S.R.: 27 Jul 2013, 05:04
Ideology: Other Leftist
Post 02 Dec 2013, 05:22
In his book Farm to Factory, A Reinterpretation of the Soviet Industrial Revolution, economic historian Robert C. Allen discusses some of what he considers to be the bad decisions made by late Soviet planners. For example, he lists the follow mistakes:

1.The decision to retool existing plants which were older and smaller instead of building new “green field” plants which could have been larger and thus taken advantage of scale economies. The large cost of retooling old plants did not produce much in terms of gains in productivity or efficiency.

2.Resource depletion in the European portion of the USSR was followed by costly resource extraction projects in Siberia. Instead of concentrating on self-sufficiency in natural resources, the USSR should have imported resources when it was cheaper than extracting native reserves in remote places like Siberia.

3.Redirection of too many R&D resources to the military.

Allen suggests that the attempt to pursue self-sufficiency, bad investment decisions, and the burden of the Cold War really hampered the Soviet economy in the 1970s onward. I mention Allen’s arguments because he is actually much more positive about the Soviet economic project than most economists, so I don’t see his work as ideologically suspicious.

That being said, what do comrades here think of Allen’s assertions? I no longer have Allen’s book with me, as my copy was on loan from the local library, but I do not recall him mentioning the failure of the Soviet planners to adopt computer technology which I often see crop up among socialists as perhaps the biggest mistake of the Soviet leadership. Is this a major oversight on Allen’s part?
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Soviet cogitations: 4433
Defected to the U.S.S.R.: 07 Oct 2004, 22:04
Ideology: Marxism-Leninism
Resident Soviet
Post 30 Jan 2014, 19:56
Interesting analysis. I can agree with the military R&D angle, or more concretely with the idea that unlike the West, the Soviets weren't as quick to systemically reorient military innovations to peaceful consumer purposes, atomic technology excepted. I definitely agree with you that the failure to mention the computerization of planning issue is potentially a serious oversight, though it does naturally carry with it its own idealistic/ideological biases. There is material out there (Paul Cockshott's work comes to mind) showing in more detail the potential benefits to the planning mechanism of mass computerization, somewhat reducing the 'ideological' element, but given that it hasn't actually been historically attempted (the Chilean Cybersyn experiment excepted), there remains an aura of idealism about it.

With regard to resource self-sufficiency, perhaps there was something lost by turning to internal sources rather than using foreign ones, but it was part of the country's defensive posture, honed after decades of hostility from the capitalist world. Many of these costly-to-start projects are now making billions of dollars for post-Soviet Russia's billionaires, and are effectively propping up the government and the economy.

As for retooling of old plants, I don't have the statistics in front of me, as Mr. Allen did, so its probable that he's right. Still, casual observations and reading has told me that if anything, the USSR suffered from gargantuanism in its industrial planning, with the creation of kilometers long industrial enterprises employing thousands of people and producing all the 'product x' for the entire country. I have read that from the transport perspective, this had the potential to create tremendous logistical nightmares. Hence for me the idea that the country didn't have enough green field plants is definitely a new one.

Overall it's always positive to have new perspectives on Soviet economic problems, especially when they aren't based on the ridiculous starting premise that socialism is unfeasible. Thanks for the mention of Mr. Allen's work!
"The thing about capitalism is that it sounds awful on paper and is horrendous in practice. Communism sounds wonderful on paper and when it was put into practice it was done pretty well for what they had to work with." -MiG
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