Soviet Economy: Industry

Figure 1.-- .

One of the achievements the Soviet Union considered most important was the conversion of largely agricultural Tsarist Russia into the heavily industrialized Soviet Union. Like much of Soviet histrography, this is only partly true. It is true thtat under Soviet rule, especially Stalinist Five Year Plans, there was a huge expansion of havy inustry. What Soviet propganda excludes is that indistry was growing very rapidly during the final years of the Tsarist industry. And unlike Soviet industry, Tsarist industry was both profitable and productive, meaning that the value of industrial output was worth more hn the vlue of the inputs. Tsarist trade policy favored domestic production, but did not pursue autarky an prohibit foreign imports. The Soviet Union both before and after World War II did not produce a single product that could be sold in quntity in Wesrn markets. The Soviet Union is the only major industrial power that did not produce a songle product that Western consumers could identify. The only quality products recogbizable to the West are military products like the T-34 tank or AK-47 automatic rifle. Consumer products were a very different matter. A British reader writes, "I recall a Soviet made portable VHF short wave radio which was given a high rating in the consumer magazine Which. It was rated the best. I bought one and it gave many years of good service. I picked up stations from all over the world. The year was 1971." We have also read about a Soviet camera. We did not mean to suggest that the Soviets exported nothing. But rather no significant manufactured products exported in substantial quantities. But my guess is not one Briton in a hundred thousand could name the company involved. Yet almost anyone can off the top of their heads name American, British, French, German, Italian, Japanese, Korean, and other companies producing important producrs. We do not know the name of the Soviet companies exporting to Britain. We would be willing to wager that it no longer exists. Our guess is that the Soviets were selling these products for less than the cost of production which is why the sales never became significant and the companies involved no longer exist. This may sound strangethat the cost of inputs exceeded the value of the manufactured product. It was, however, the core reason the Soviet Union imploded. Notice hat Soviet mnufacturing concers (unles producing military wepons) largely dusappeared and factories shit own aftr the Siviet Union collapsed. They Soviets exported a few products beccause they needed foreign exchange so badly to buy agicultural products are foreign hig-tech products. We believe that any oroduct that could be sold in the West was not widely available to the Soviet people themselves. Not that no one had them, but for the better products our British reader describes, only a fraction of the Soviet people who wanted them could get theirvhands on one. We have our doubts that the NKVD/KGB wanted large numbers of people to listen to foreign radio broadcasts. And in Easten Europe they were actively trying to block foreign radio broacasts. Not only were many Soviet products worth less than the cost of inputs, but they were not inovative. They may have been wll ngineered, but the technology was basically well established. New products with advanced technology such as transistors, VCRs, computers, compact discs, video camera all came from the West. And today modern Russia has an economy based on exporting oil like an Arab shiekdom. Russia does not export a single no-military product of any importance.

Created: 9:45 PM 2/4/2013
Last updated: 9:45 PM 2/4/2013