What's the reason for slow growth of former socialist economies?

[UnknownPerson]

Why did the former socialist economies grow slowly on average, even if they had some periods of intensive growth? Economies ranging from centrally planned to socialist market economies seem to be growing slower than after the transition:
http://upload.wikimedia.org/wikipedia/commons/1/11/Soviet_Union_GDP.gif

http://upload.wikimedia.org/wikipedia/commons/1/11/Eastern_bloc_economies_GDP_1990.jpg

[Apoi_Viitor]

First I will point out that it's dishonest that the USSR model starts at 1970 and not earlier, since that's basically the point when the economy started to slow down...

Also, according to this essay, if you look at the growth of the Soviet Union as a whole, it was much more efficient than Western Capitalist Models.

http://charleskenny.blogs.com/weblog/files/russ6.pdf

Finally, I think a lot of the discrepancy in economic growth could probably be explained by the general economic boost of the 90's, because just look at this graph of Ireland.

http://markhumphrys.com/Bitmaps/gdp.ireland.gif

[Rafiq]

Those models don't reflect living standards, though. Also, is that growth in GDP? Those do not apply in socialist nations.

The only reason for Russia's 'growth' is because Putin nationalized a bunch of shit. And it still sucks.

[Jose Gracchus]

No, its because oil prices have gone back up. Russia has been scraping by on raw material exports for thirty years or more now.

[UnknownPerson]

Those models don't reflect living standards, though. Also, is that growth in GDP? Those do not apply in socialist nations.

The only reason for Russia's 'growth' is because Putin nationalized a bunch of shit. And it still sucks.

Was the working class (by the Marxist definitions) better off in these socialist economies than it is now?


No, its because oil prices have gone back up. Russia has been scraping by on raw material exports for thirty years or more now.

What about other socialist economies (some of which weren't aligned), which ranged from centrally planned to market socialist?


What's the most efficient socialist economy type out there?

[Sperm-Doll Setsuna]

Was the working class (by the Marxist definitions) better off in these socialist economies than it is now?


Even in those most worse off, the general population had either similar or better living standards (depending on what happened afterwards; in Russia the situation for pensioned people and the working class in general is dramatically worse, and in countries more favoured by the post-fall economic climate - i.e. those more heavily subsidised by the West, the living standards are more varied and some segments have seen advances and others regression).

There were several problems with the economy of many of those countries, including fragmented planning (Gosplan only set prices of 200.000 goods out of 24 million produced; each ministry had its own responsibilities and often were not adequately coördinated with other ministries, so on so forth), however to compare it directly with a capitalist economy in terms of GDP growth (which frankly is a terrible measure of anything but the expansion of capital in a nation-) is unfair and frankly not very productive.

Part of the problem as regards the Soviet Union was that the low oil prices during the late 70's and early 80's decreased the avaliability of hard currency and decreased the buying power of the state on the capitalist market, as well as problems with the haphazard and patchwork economic model that had evolved throughout the years; but this, it must be recognised, is firstly not a judgement as regards economic planning or socialism vs. capitalism (it is obvious that capitalism would be superior at producing capitalist growth, as that is what it strives for) because economic planning is very wide and constitutes a lot more than the Soviet model thereof, which even so was not a static monolith.


What about other socialist economies (some of which weren't aligned), which ranged from centrally planned to market socialist?


What's the most efficient socialist economy type out there?

Most faced problems of various nature, some similar to those of the Soviet Union, some more dysfunctional (Poland), and others faced problems relating to both this and getting cheap loans from the West (Romania) and some faced other problems with employment and Western loans combined (Yugoslavia). The most well-functioning of the economies was probably Bulgaria, which faced little in the way of shortages and faced remarkably steady economic progress.

[Revolutionary_Change]

Was the working class (by the Marxist definitions) better off in these socialist economies than it is now?


yes, following the privatization of the soviet union poverty exploded in the FSU as social programs were cut, workers laid off, real wages decreased, and wealth shifted from public hands to private.

by 1998 more than 80% of russian farms had gone bankrupt, 70,000 state factories closed. (Tavernise,"Farms as business in Russia" NYT Nov 2001)

In 1989 2 million Russians lived in poverty(<$4/day) by 1996 this number had expanded to 72million with roughly 37million of those living in "desperate poverty"
(New Rich, New Poor, New Russia: Winners and losers on the russian road to Capitalism, pg47)

[∞]

Two words... Central Planning.

[UnknownPerson]

Two words... Central Planning.

What about Yugoslavia, which relied on worker self-management Titoist socialism?

[Sperm-Doll Setsuna]

What about Yugoslavia, which relied on worker self-management Titoist socialism?

Cooperatives on a market are indistinguishable from other forms of private capitalist enterprises, not to mention the "workers self-management" was as much of a farce as in the SSSR.

Which relates to one of the most serious problems of the Soviet economy: the lack of proper reporting from workers at the enterprises, born from disenfranchisement and excessive focus of the information flow in one direction.

[UnknownPerson]

Cooperatives on a market are indistinguishable from other forms of private capitalist enterprises, not to mention the "workers self-management" was as much of a farce as in the SSSR.

Which relates to one of the most serious problems of the Soviet economy: the lack of proper reporting from workers at the enterprises, born from disenfranchisement and excessive focus of the information flow in one direction.

Wasn't the profit paid back as wages to the workers?

[Sperm-Doll Setsuna]

Wasn't the profit paid back as wages to the workers?

Irrelevant. Profit as profit. This creates systemic inequalities (because the product of the labour is sold on a market and are valued in an ordinary capitalist fashion) and even more blatantly than the Soviet system attempts to recreate literally the facilities and functions of 'regular' capitalism under what purports to be something different.

(Yugoslavia was also the only of the "Socialist" countries to have a stock exchange).

[UnknownPerson]

Irrelevant. Profit as profit. This creates systemic inequalities (because the product of the labour is sold on a market and are valued in an ordinary capitalist fashion) and even more blatantly than the Soviet system attempts to recreate literally the facilities and functions of 'regular' capitalism under what purports to be something different.

(Yugoslavia was also the only of the "Socialist" countries to have a stock exchange).

Can't it still be classified as being socialist if the workers get the profit back as wages and get a full product of their labor? The problem of surplus value (arguably the main problem of capitalism) becomes technically eliminated here.

[punisa]

(Yugoslavia was also the only of the "Socialist" countries to have a stock exchange).

And it also had many 5 star hotels with luxurious casinos where westerns would leave fortunes each summer, so what?
What you are reluctant to disclose is the fact that Yugoslavia had the highest living standard among the socialist camp.

When it comes to bashing Yugoslavia people tend to dig up stuff from the late 80s when Tito was already dead. The government that took power after his death quickly embraced IMF loans and radical changes in the economy which resulted in unemployment and such.

Yugoslav self management was a successful mix of free market and socialism.
Tito as a founder of NAM (non aligned movement) made sure that Yugoslav state companies had a huge world market. For example the construction companies built many projects in Libya, Iraq and other African and ME countries.

Theory can be judged, but so can all other failed socialist experiments in the 20th century.
As for the living standard, it will never be reached again in these areas.
Profits were shared among the workers and surplus profit created huge extras for everyone.
Also there for a strict policy which was called something like 1 to 5 - which meant that the highest paying employee (let's say general director) could only have salary 5 times larger then of the lowest payed employee.
Compare that to nowadays where some directors have 1000 times larger pay checks.

Also, unlike the people behind the iron curtain - Yugoslavs were free to travel around the world without limitations.

[Nox]

You have to remember that a high GDP doesn't mean a high GDP for everyone, most of that money is now in the hands of the rich.

[Rafiq]

Was the working class (by the Marxist definitions) better off in these socialist economies than it is now?


For the most part, yes.

The workers were better off in the fSU, Romania, Yugoslavia, etc

But capitalism has done a better job for smaller countries like Lithuania, and other countries like Poland and Hungary.

[UnknownPerson]

For the most part, yes.

The workers were better off in the fSU, Romania, Yugoslavia, etc

But capitalism has done a better job for smaller countries like Lithuania, and other countries like Poland and Hungary.

How to make socialist centrally planned economies grow faster?
Do you think doing planning by starting all the calculations from the economic outputs and calculating all the inputs that are needed for the output to avoid all the waste going to make the centrally planned economies grow faster?

Or is a market with 95-100% worker-owned and self-management industries the only optimal choice (it would still be a market because workers would operate the factories for profit but get the products of their labor by paying the profit back to themselves)?



You have to remember that a high GDP doesn't mean a high GDP for everyone, most of that money is now in the hands of the rich.

Exactly. I think it's more accurate to say "people who live off the products of other peoples' labor (without these people having any priority needs of course - we must distribute our labor to the disabled and those who are otherwise unable to work) by receiving all or a part of the surplus value" or simply parasites than simply the rich.

[Jose Gracchus]

Can't it still be classified as being socialist if the workers get the profit back as wages and get a full product of their labor? The problem of surplus value (arguably the main problem of capitalism) becomes technically eliminated here.

Not according to Marx, who, uh, came up with the idea. To Marx a cooperative competing to sell commodities on the market for profit simply has the associated laborers as their own capitalist. Capital is a social relation, not some specific dudes wearing tophats who take your shit.

[Sperm-Doll Setsuna]

For the most part, yes.

The workers were better off in the fSU, Romania, Yugoslavia, etc

But capitalism has done a better job for smaller countries like Lithuania, and other countries like Poland and Hungary.

Lithuania has basically had a significant part of its population emigrate to the west, and its economy has seen very shaky development with high growth interrupted by periods of instability and enormous negative economic growth, and today boasts a remarkably high unemployment rate. The Baltics were the part of the Soviet Union with the most developed economy and the highest living standards.

Hungary actually did not face so serious problems and I do not think the situation there can be thought of as better, particularly not for the working class.

Poland's situation today is also not all that good, though it benefits from its more central European location and heavy support from the EU.

The country to do the best after the fall is probably Czechoslovakia.


How to make socialist centrally planned economies grow faster?


Why do you keep going on about this? Planning is used by capitalism, too, on enterprise/company basis. It can be organised in many ways.

It's worth noting that - since you are so passionate about raw GDP/GNP growth - that North Korea following World War 2 had a growth rate of 49% in one year and it then experienced a growth rate of between 10-22% for several years during the reconstruction after the Korean War. The Soviet Union had growth rates of on average 11% during the 30's until it begun to slow down by the mid 60's (1962 growth was 5.5%). China did during the short-lived industrialisation plans of the mid-late 50's have an average annual growth of 10-12%.

[x359594]

One burden that the Eastern Bloc countries faced was that they served as neo-colonies of the USSR.

[Rafiq]

^ which is probably why Tito's Yugoslavia was much more successful.

[UnknownPerson]

^ which is probably why Tito's Yugoslavia was much more successful.

It's very likely because of that, as well as due to the fact that the Eastern Bloc and the Soviet Union were under a relatively extensive embargo due to the Cold war.

[Sperm-Doll Setsuna]

One burden that the Eastern Bloc countries faced was that they served as neo-colonies of the USSR.

Aside from the immediate post-war period, the Soviet Union eventually ended up more or less propping up the economies of the other Eastern bloc countries which eventually begun fomenting currents of economic nationalism in the SSSR that arose in the late 1980's.