Growing Poverty: The Hidden History of Stalin\'s Industrialization

Professor Bryan Caplan of the Department of Economics at George Mason University writes about Stalin's "industrialization" campaign which would be better described as "miltarization". He maintains a website at which he hosts an online Museum of Communism and blogs at EconLog.

On Sunday mornings Squealer... would read out to them lists of figures proving that the production of every class of foodstuff had increased by two hundred per cent, three hundred per cent, or five hundred per cent, as the case might be. The animals saw no reason to disbelieve him, especially as they could no longer remember very clearly what conditions had been like before the Rebellion. All the same, there were days when they felt that they would sooner have had less figures and more food.

-- George Orwell, Animal Farm

During the 1930's, the world looked at Soviet economic growth with awe. Official Soviet statistics declared that an economic miracle was underway. Western economists sometimes "adjusted" the figures to make them less incredible, but almost no one denied that Stalin was swiftly industrializing Russia. The Soviet victory in World War II cemented Stalin's reputation as an economic mastermind: If the economic statistics were fake, how did he beat the Germans?

This whole line of reasoning assumes that Soviet industrialization was basically like Western industrialization, only faster. In fact, the two were different as night and day.

In the capitalist West, industrialization was a byproduct of rising agricultural productivity. As output per farmer increased, fewer farmers were needed to feed the population.

Under communism, in contrast, industrialization accompanied falling agricultural productivity. Almost all Russians were still family farmers in 1928. Stalin seized their land, launching a deadly famine that killed about 7 million. Agricultural collectivization slashed total food production, but the government drastically increased quotas to feed industrial workers and pay for exports. As Robert Conquest explains, collectivizing agriculture was the opposite of progress:

[A]gricultural production had been drastically reduced, and the peasants driven off by the millions to death and exile, with those who stayed reduced, in their own view, to serfs. But the State now controlled grain production, however reduced in quantity. And collective farming had prevailed.

Stalin's idea of "economic growth," in other words, was shifting production from agriculture to other sectors - and mangling the former in the process. Genius it was not. If official statistics had properly counted agricultural output, Stalin's policies would have correctly been seen as a catastrophe.

So how did the Stalin win the war? The answer is that Soviet "industrialization" is a misnomer anyway. What happened in the Soviet Union during the 1930s was not "industrialization," but "militarization" - an arms build-up greater than any other in the world, including Nazi Germany's. As historian Martin Malia explains:

Contrary to the declared goals of the regime, it was the opposite of a system of production to create abundance for the eventual satisfaction of the needs of the population; it was a system of general squeeze of the population to produce capital goods for the creation of industrial power, in order to produce ever more capital goods with which to produce still further industrial might, and ultimately to produce armaments.

The only amazing thing about Stalin's victory in World War II is that he spent every spare kopek on the military and still took four years to win. Perhaps his soldiers would have fought better if they weren't fighting for the man who murdered so many of their friends and family.

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Whether you agree with his

Whether you agree with his thesis or not, Stephen Cohen's classic biography of Bukharin goes into a lot of detail on the subject of Stalin's structural changes in the Soviet economy. Though a little dated, I still it is one of the best written accounts of the nuts and bolts of what occurred.


By 1942 the USSR was starting to outstrip Germany's wartime production. Part of this was due to the German state's unwillingness to induce wartime economic measures (e.g., rationing, etc.). They were scared that this would bring back memories of the hardship of WWI and would undermine the German resolve at it had been undermined in WWI.

Catching my eye: morning A

Catching my eye: morning A through Z
Here's what's caught my eye this morning: Recombinomics comments that the pandemic may have already begun. It's following the pattern of the 1918 flu pandemic pretty closely. Hat tip: Avian Flu Blog Nouriel Roubini analyzes five diffferent view of t...

One should also ask how much

One should also ask how much how much better the Soviet military would have fought had Stalin not nearly wiped out its experienced officer class during the purges of the 30's
See my note (link above) on Lend Lease. The Soviet Union was significantly sustained by American products. US taxpayers were coerced to pay for all these freebies to Stalin.

In addition to almost 15,000 aircraft, most fighters or bombers, Russia received over 400,000 motor vehicles, many being medium or heavy military trucks. American-built trucks and other vehicles made up 60 percent of the Soviet’s total vehicle fleet by 1945. In addition, America supplied 2,000 locomotives 11,000 freight cars and 540,000 tons of rail for Soviet railroads.

May Day Mourning Jonathan

May Day Mourning
Jonathan Wilde at Catallarchy has orchestrated a moving and edifying May Day blog extravangaza on the dark history of communism....

I recently read a Heinlein

I recently read a Heinlein article on his trip to the Soviet Union in the mid-1970s, and he had brought up something interesting, namely that the population figures for the cities seemed to be widely inflated. He based his calculations on observed population density, and after returning to the States, asked a military planner what he though. The military type thought a minute, and came up with the same answer, this time based on infrastructure (as in, With this many roads, rail lines, and water routes, this city could hold no more than this many people before it began to break down due to lack of food & facilities.)

In other words, the population figures for the Soviet Union, based on observation of a few cities, could have been inflated by up to two or three times the actual amount. Those increased numbers were, no doubt, directly tied to inflated production numbers, and it makes me wonder when a correction was made after the fall of the USSR, and if so, how it was implemented.