Recent Visiting Fellow Uses Hoover Archives to Revisit the Field of Comparative Economic Systems and the Problem of Assessing Soviet Economies

Tuesday, March 21, 2017

By Paul Dragos Aligica

 

 

The grand social experiment of implementing a socialist economy in Russia and Eastern Europe has led to the emergence of a new academic field of huge political relevance: Comparative Economic Systems. The beginning of the Cold War was decisive in institutionalizing the new discipline. The Soviet challenge was ultimately an economic performance challenge. Both sides understood very well that their military and geopolitical capabilities were a direct function of the economic performance of their economic systems. The analysis provided by Comparative Economic Systems scholars, as well as their skills –including foreign languages, statistics and judgmental assessment- gained an acute strategic relevance. Through joint efforts, the political, intelligence and academic communities started to build up the infrastructure and intellectual capital of the new discipline. For the next 40 years, the field of Comparative Economic Systems has evolved in strong connection to the economic and geopolitical evolutions in the Soviet system.  Unsurprisingly, when Communism collapsed in 1989, the field had to go through a major redefinition. Questions were raised regarding its very relevance and survival.

 

 

Yet, recent developments have demonstrated that far from being settled, the debate regarding alternative economic systems and the methods of their comparative analysis, continues to challenge the scholars and the decision makers in the new, post-Soviet era. The latest financial and economic crises have relaunched the themes that have always been at the core of Comparative Economic Systems.  The interest in alternatives to Capitalism continues to be very strong.  The stock of knowledge and the lessons and insights created by Comparative Economic Systems are as relevant as ever. To assess the desirability and feasibility of new economic systems, one needs to be familiar with what previous generations of scholars have contributed in that respect.

My archival work at the Hoover Institution was dedicated precisely to this objective. As such, it had three dimensions: First: background research for putting together a volume of key readings defining the development of the field. Organized thematically, (Part 1: Theoretical Frameworks and Approaches; Part 2: Problems of Measurement and Assessment; Part 3: Cases, Systems, and Interpretations), the volume will be a research instrument for all those wanting to get a first-hand introduction to the field and its evolution, through the works of the field’s most relevant scholars.

Second: investigations on the quantitative assessment of the structure and performance of Soviet economies. From the very beginning Comparative Economic Systems research pivoted on one major question: How efficient was communist planning compared with the Western market system? To answer, the challenges were first of all of a methodological or measurement nature: To quantitatively compare systems that were dissimilar in structures, valuation mechanisms and processes new methods and approaches had to be invented. In addition, another set of problems was looming large: the lack of transparency and the distortions in the data, deliberately induced by the Soviet regime. The effort, ingenuity and determination of Comparative Economic Systems scholars in overcoming these challenges is one of the most interesting pages in the history of modern social sciences.

An important part of my archival research was focused on the one of the key participants in these technical debates regarding the estimates of the performance of the Soviet economy: Warren Nutter. In the early 1950s, Nutter took a closer look at the “preliminary and imperfect” measures of Soviet industrial growth (indexes of Soviet industrial production that were constructed at the National Bureau of Economic Research), computing production of industrial materials, finished industrial products, and all kinds of industrial products. His findings challenged the conclusion of many researchers of the time and an emerging conventional wisdom: “The record to date, wrote Nutter, shows that the rate of industrial growth in the Soviet economy has probably not exceeded, on an over-all and sustained basis, the rate in the American economy over comparable periods”.  Nutter’s work has become central to an entire line of research that questioned the purported performance and efficiency of the Soviet Economy, as reflected in official evaluations, both East and West.

Third: investigations on the data gathering and qualitative assessment of the performance of the economies behind the Iron Curtain. Comparative Economic Systems scholars had to build their evaluations from more than mere official statistics. In this respect my investigation was focused on the archives related to the specific case of the Romanian economy and its Sovietization, between 1948 and 1960. Three sets of archival sources were explored: the Romanian National Committee Records (the political organization of the anti-Communist exile); The Constantin Visoianu Records (President of the Romanian National Committee); The Brutus Coste Records (secretary general of the Assembly of Captive European Nations); and the Sabin Manuila Records (demographer, politician and statistician, a key figure of the Romanian exile working at the interface with the American authorities and academic community). These sources contained multiple reports, studies, correspondence, memoranda, minutes of meetings, all reflecting a methodical effort to gauge the quality of life, work conditions, climate of opinion, household budgets and consumption, economic sentiments, personal satisfaction etc. in the newly instituted socialist system. The ways this type of information was gathered, synthesized and reported to be latter used as an input to the Comparative Economic Systems scholars and researchers, aggregated in larger regional and systemic comparative assessments, offers an in-depth understanding of a crucial dimension of the complex task of Comparative Economic Systems analysis.

The Hoover Archives resources relevant for Comparative Economic Systems research are remarkable and they offer indeed a testimony of the effort, ingenuity and determination of Comparative Economic Systems scholars in overcoming the formidable challenges of assessing the large and unprecedented social experiment taking place behind the Iron Curtain. The insights they have produced, their experience, the methods and techniques they have devised, represent a captivating page of intellectual history and continue to be of ongoing intellectual and practical relevance, even as Communism has disintegrated.

 

Paul Dragos Aligica is a senior research fellow and senior fellow at the F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University.