25.04.2024 Schockindustrialisierung#

Ch. 5: Soviet Industrialization#

before Stalin

  • indsustries organized in trusts

  • pofit maximizing

  • price mechanism

after 1928

  • 5 year plan

  • output maximizing

  • centralized prices

effects

  • no more cost control

  • soft budget constraint

  • target rarely met

  • labor ineffiency

    • only focus on marginal product of next worker

    • not marginal cost

  • target adjusted in view of performance

    • inefficient build up of reserves

Sectors#

Capital accumuliation trough

  • exporting grain (limited)

  • heavy industry prioritazition

    • underinvestment in housing etc

    • rapid acceleration of physical capital

Human Capital

  • before: low literacy, few higher ed.

  • studys then showd ROI on education

  • after 1928: universal ed, fast human capital accumulation

Agriculture

  • (forced) collectivization

  • extermination of kulak class (exile, expropriation)

  • income divided according to days worked

  • unpopular! silent protests

    • => nationalization

  • 1930s: mechanization

Industrialization

  • growth = 5.3% p.y

  • urban boom, rural suffering

  • farm output: 3x (28-1940)

  • iron output: 4x

  • consumer goods: 0.8x

    • due to bad collectivization of agricutlure (=input)

    • takes time

Urbanization:

  • city pop. growth: 2x (1928-1940)

  • demand side: higher wages

  • supply side: less work due to mechaniztaion in rural

  • forced labor supply in gulags

  • amenities not rise with pop

Ch. 8: Caused of Rapid Industrialization#

quantitative analysis with Simulation Model

Inputs: Agriculture, Labor, Capital

Sectors: producer goods, consumer goods, agriculture

Purchasers: State, urban Households, peasants

2024-04-25_16-23-28

Simulation#

  • Capital = compounded from last year - consumption

  • labor supply = demographic model

  • 1928-1940

3 Model Trajecotires

  • Collectivized (actual)

    • obligatory deliveries

    • turnover tax

    • antipeasant

  • NEP forward simulation

    • no collect.

    • market relationship urban-rural

  • capitalist

    • hard budget constraint

    • unemployment

Results#

img

Collectivized

  • highest value added at end of period

  • lower consumptio in middle, but higher afterward

    • spillover of growht from producer goods

  • hindered by 2.WW buildup of military , cost on investment

  • higher migration = more efficient

NEP

  • lower investment rates

  • but also no livestock deaths due to collectivization

  • general = lower value added comp. to coll.

  • but onyl slightly less GDp

    • due to more efficient agriculture

Capitalism

  • 25% unemployment

  • probably large informal sector

  • worse performance overall

General

  • Agriculture Collectivization: small economic gains, large human misery!

  • structural unemployment = solved by soft budget constraint + high targets (keynesianismus)

  • NEP would have sufficed

  • export oriented strategy was not needed (grain etc.)

investment strategy + soft budget constraint => Soviet growth

Question: Financial Crisis in NEP / Capitalism Model?