Soviet Communism: Economic Weaknesses--Innovation

Figure 1.--The Soviet began the Space Race with the launch of Sputnik (1957). For much of the ensuing comptition, the Soviets led the United States in the high profile achievements. And while they did not get to the moon first, along with military programs they they had important achievements in many scientific technnologies. Soviet authirities were emsenly proud of their high tech achievements. You see that in both domestic and international propaganda. All kinds of promotions occurred in schools like this kindergarten in 1966. What you do not see is any economic impact from all the research and development spending that the Soviers were doing. This was in sharp contrast to the West where transistors, microwaves, CDs, VDRs, Walkmans, xerox copy machines, computers, the internet, I-phones and much else revolutionized the economy--not only in America, but that of America's allies as well. Can you think of one Soviet high-tech product that you have purchased or ever wanted to purchase? Or one Soviet enterprise that produced a product that you wanted to purchase? (Or for that matter Russia today where the Soviet legacy continues.)

Military spending in the West eventually benefitted the larger economy. The same was true of the space effort. Scientific innovations in the West eventually found their way into the consumer economy. All kinds of new products and hole new industries developed. We see transistors, microwave ovens, computers, VCRs, CDs, the internet, digital cameras, and much more. The closed Soviet system and concern with security made this much more unlikely. Thus an important potential source of innovation did not operate in same way in the Soviet Union. Depending on the technology, it did not occur at all or much more slowly. This was one factor in Soviet consumer products falling so far behind those made in Japan and the West. Another factor is that Soviet managers were not incouraged to innovate. There are always the chance that innovations would fail. The results during the Soviet era could be arrest anf the Gulag or even execution. With De-Stalinzation the penalties were not as draconian, but the dynamics of a conservative beaureaucracy still did not incourage innovation. A reader writes, "The other week I heard the story of the modernisation of television production. State of the art manufacture had been bought from Germany to make black and white television recievers! This was at a time the world was investing in colour TV manufacture." One has to wonder why a nation competing in the Space Race with America would need to have the Germans establish a television manufacturing company. Also notable is that a country buying technology raher than developing it internally is always the developmental curve. It is not that the experyise did not exist. The Soviet Space achievemenhts showed that there were competent scientists in the Soviet Uniion. In fact during the Cold, the Soviets has more scientists and technicians than the United States. Remember Google founder Serge Brin, born in 1973 to two Soviet scientists. They faced anti-Semitism and couldn't pursue their careers to the fullest potential. The Soviets produced Brin, but it was America that has the system that allowed him to play a key role in founding Google and impacting the world economy.

Created: 9:01 AM 11/7/2019
Last updated: 9:01 AM 11/7/2019