blogospheroid: When you pick a metric of success, countries will game it by doing well on that metric, yet not achieving what is really meant by success. A good example would be the Soviet Union, whose leaders constantly made sure they did well by the metrics, yet were actually far from successful.
taw: Not true—the Soviet Union did about average by those metrics, so they had about average success.
You misread me. GDP is one of those really-hard-to-game high-correlation-with-everything-meaningful metrics, and Soviet Union did ok with other metrics like access to clean water, electricity etc.; life expectancy, child mortality, and pretty much everything else you can think of.
People’s claim that Soviet Union was a disaster as if it was a well established fact, while it was not. South America was a disaster. India was a disaster. Indonesia was a disaster. Africa was a disaster. Soviet Union and other Communist countries were fairly average.
What you’re saying is basically “Soviet Union was unsuccessful and I base it on my feelings about it and no metrics of any kind”.
The Soviet Union’s GDP was approximately half military spending. In other words, at least half of Soviet GDP was an almost complete dead-weight loss to the citizens. GDP is just an aggregation of total spending, if money is spent on pure dross, it still shows up as an improvement in GDP.
The Soviet Union killed tens of millions of its people through work camps, starvation and purges. How is that not a disaster?
This is a really good point. It kind of goes to the heart of the emptiness of GDP as a statistic. What was the death toll of a 5% increase in GDP? The Soviet economy also was infamous for overproducing big capital goods but failing to produce consumer goods people actually wanted to buy.
Similarly, Ceauşescu supposedly managed to clear Romania’s national debt, but, in doing so, impoverished the people and crushed their spirit. The socio-cultural damage he did to the country cannot be overstated. (btw I’m half-Romanian and lived there during his reign).
And GDP is not hard to game if you’re centrally planning the economy. And even that excludes simply lying about your figures.
But did they game GDP?
Your insinuation seems to predict that there was a dramatic drop after the fall of communism. It did fall by half, but that just brought it back to levels reported in 1985. Some communist countries, such as Poland and Hungary, barely had any dip.
Russia continued to tumble, which is consistent with what was going on. If you trust western GDP figures, the most skeptical position I can imagine is taking the 1997 figures as a proxy for the 1985 figures, and concluding a 1.5x fudging. Which is not much for taw’s purposes.
That accounts for deception, but not the difference between GDP and true economic value added, which is the whole reason GDP was raised as an example. Communist countries game GDP by getting people to produce large quantities of worthless goods (like gigantic nails). Those giant nails added to GDP, but they make anybody better off?
GDP is an approximate measure of material well being. If your economic success metric classifies a society with mass starvation and routine shortages of basic goods as being as successful as a society that doesn’t, then your metric is busted.
There are several points here. What I endorse is what I took to be TAW’s original point: people laugh at these stories and reinforce basically false beliefs about Soviet efficiency. The stories about tiny nails are true, but they are not representative. For these purposes, it is irrelevant if the goal of the efficiency was military production. The work camps are relevant if that is how they achieved efficiency, but I don’t think that’s a popular belief.
Also, people compiling GDP, like the CIA, try not to count worthless goods. They also compiled civilian consumption, if you’d like to try to exclude military spending, but I don’t know where the data is.
I’m not sure I endorse the use of GDP for general success of society. It is very convenient to talk about relative changes in GDP, though. No one is claiming that the USSR was a rich society, only that its GDP was multiplied by a reasonable number over the course of the century. But I am claiming that it didn’t suffer mass starvation after Stalin.
The story of the giant nail is a joke, appearing in Krokodil, c1960. I switched back to the tiny nails because it was pretty close to anecdotes I’ve heard that I’m pretty sure were not jokes. But those were oral, so I can’t cite them. Do you accept anecdotes from Alec Nove? I see quoted from p94 of his 1977 Soviet Economic System “It is notorious that Soviet sheet steel has been heavy and thick, for this sort of reason. Sheet glass was too heavy when it was planned in tons, and paper too thick.” On p355 of the his 1969 Economic History of the USSR (or p365 of the 1993 edition):
A large number of semi-anecdotal examples can readily be assembled to illustrate the resultant irrationalities. Steel sheet was made too heavy because the plan was in tons, and acceptance of orders from customers for thin sheet threatened plan fulfilment. Road transport vehicles made useless journeys to fulfil plans in ton-kilometres. Khrushchev himself quoted the examples of heavy chandeliers (plans in tons), and over-large sofas made by the furniture industry (the easiest way of fulfilling plans in roubles). [Pravda, 2 July 1959.]
Efficiency isn’t just the stuff you produce, in economics its allocative efficiency (roughly the value of the stuff you produce), not mere technical efficiency that matters. GDP data is collected at a pretty high level, and I’d be surprised if the CIA could adjust effectively for low-value production. Even just looking at civilian production won’t do because it doesn’t account for mismatches of supply and demand e.g. twice as many shirts and half as many shoes as people demand.
Its true that the USSR grew a lot in the 1950s and 1960s, and it would be implausible to suggest it was all wastage. But that can be explained by convergence, specifically the increase in capital stock over that period. Lots of countries managed to industrialise without communism, so I can’t really attribute this growth to communism per se. I’d be willing to accept this as evidence that communism wasn’t a total failure (since it did produce positive side effects), but not that it was a success.
Whether mass starvation happened after Stalin is besides the point. Stalin was part of the system. There’s no reason why the USSR should have had famine when western countries had no difficulty, so I think any starvation is attributable to communism.
Soviet Union did ok with other metrics like access to clean water, electricity etc.; life expectancy, child mortality, and pretty much everything else you can think of.
By the numbers, Russia fell off a cliff when the USSR dissolved; I’ve always wondered how much of that was genuinely due to transition troubles, kleptocracy etc. and how much was just poor USSR performance finally showing up in the statistics.
It was genuinely due to transition troubles. Many former Communist countries did reasonably well in transition—usually those that were close enough to the west that they could switch their trade patterns effectively and not be caught up in the mess; and you really have no way to fake life expectancy and such—which suffered a lot in the most transition-affected countries like Russia.
“That’s not even true, when you measure results Soviet Union was ran about as well as any other country. They were just ran differently.”
is revisionism of the worst kind. I think a simple but informative hypothesis is that Putin’s Russia is mostly the same place with the same institutions in charge, but sans the explicit communist ideology.
South America was a disaster. India was a disaster. Indonesia was a disaster. Africa was a disaster. Soviet Union and other Communist countries were fairly average.
If you just consider the endpoint, maybe. But why would you do that? What would you be trying to show?
IMHO, if we consider the time period 1918-1990, South America, India, Indonesia, and Africa—not to mention China, Japan, Mexico, and, gee, that’s pretty much the whole world, isn’t it? - all made more progress than the Soviet Union did. East Germany and large parts of eastern Europe probably made negative economic progress. It doesn’t impress me that they were still better-off than parts of Africa after 50 years of decline.
When discussing the Soviet Union, and more specifically Russia, you have to also consider the beginning point as well. It should be noted how far behind Russia was compared to the rest of Europe in 1918. Coming out of abject serfdom bordering on generalized slavery, they actually made tremendous progress in both abstract metrics and tangible result in quality of life up until the late 50′s or early 60′s. Over time that then declined. In any case, to an extent their G was “production”, measurable production, in the sample case: nails. Their G was not the market value of nails, their G was “progress through central planning”, but they didn’t know how to measure “progress” except through the early-capitalist metrics of “production”. Thus: produce more = progress, in their practice.
Our G is GDP. People seem so happy with our GDP, without reflecting on things like income disparity, striation of wealth, etc. If we allow it, we can G* ourselves into a mutant 3rd world nation, with great GDP performance but declining quality of life generally. G is quality of life. Economists, and lay people, generally equate the two, and the correlate generally, but they are not irrevocably entangled.
I’m far from an expert on economic history, but I don’t think you can reasonably say that South America in general did better economically. You say that the endpoint for the Soviet Union was better, lets say they were about equal. But South America at the beginning of the 20th century was reasonably well developed economically, Argentinia in particular was pretty much on the same level as western Europe, far ahead of Russia which was still rather backwards, even though it was rapidly developing (largely based on mostly French loans/investments). I’m not so sure about south America as a whole, probably slightly ahead or about even. And then Russia got thoroughly wrecked by two world wars while South America was untouched. I think the Soviet Union wins, even though by how much isn’t clear.
EDIT: Looked up some figures, seems like the Russian Empire had about 2.5 times the population and 2.5 times the GDP of Latin America, so about even was right.
Most people on this supposedly rationalist site don’t even bother looking at the data when it comes to Soviet Union—they get instant emotional reaction. In case you’re one of those who actually care about the data, here I made it easier for you.
Most people on this supposedly rationalist site don’t even bother looking at the data when it comes to Soviet Union—they get instant emotional reaction.
How exactly have you determined the instant emotional reaction of most of the people on this site in response to the Soviet Union? I haven’t seen most people even comment on the subject, much less display obvious evidence emotional involvement.
Did you actually think through your estimates of soviet-emotionalism in the population or is this a case of “the pot calling a non representative sample of kettles black”?
I’ll agree that “most people [...] don’t even bother looking at the data [...]”—I, in particular, am not sufficiently invested in this argument to go to the inconvenience of reading a PDF. The effect of modifiers “this site” and “Soviet Russia” I have no interesting opinion on.
(By the way: horrible format for Internet content. If you can read this, please don’t upload your information to the Internet in PDF format. Make an HTML file.)
I, in particular, am not sufficiently invested in this argument to go to the inconvenience of reading a PDF.
Here’s an HTMLized version, albeit one that still looks like a PDF (though one you don’t have to download, doesn’t use any browser plugins, and can’t give you a virus).
We have to learn to live with PDFs as virtually all research is formatted as PDFs. Sane (single column portrait-only) PDFs like the linked paper are not particularly worse than constant-width websites. You are exaggerating the inconvenience.
The problem are PDFs which do things that make sense only on paper—like double column / alternating portrait-landscape—these are really really bad for reading on screen. But—what stops PDF readers from having some hacks to make them bearable? I cannot think of any reason. And it would definitely be easier to hack PDF readers than to make all researchers and all research journals in the world switch to HTML.
Related problem of tables being in appendix as opposed to floating seems harder to solve, but it’s nowhere near as bad as double columns PDFs.
(1) is genuine (but then many websites assume constant width, so it’s not PDF-exclusive issue), but (2) and (3) sound totally made-up to me. Browsers have had far more security vulnerabilities, and use far more CPU/memory than PDF readers.
Indeed, I’ve been infected by PDF-based viruses more than once. Updating Acrobat and turning off JavaScript in PDFs isn’t enough to keep you safe, either; I finally added NoScript to Firefox in order to prevent any PDFs from being displayed without an extra enabling click, so that only PDFs I trust are ever downloaded.
Of course, this has little relevance to scientific papers: the PDFs that you need to worry about are the ones that you never intended to download in the first place, that are downloaded in the background via JavaScript or an iframe embedded in an ad on a random webpage. (I once caught one from Kaj Sotala’s LiveJournal page, for example… just visiting the page was enough to infect my machine.)
Nearly echoing FAWS, a browser alone will have less CPU/memory usage than a browser+a PDF reader. More importantly, there is no delay to load the PDF viewer when visiting an HTML page, where there is for PDFs.
I’m not particularly invested in the issue but it seems like you’re underestimating the importance of the Eastern and Western Germany diversion. That is about as close as we’re ever going to get to having actually experimental conditions to test this hypothesis. We have one nation, divided it in half, structured their economies in accordance with the leading theories of the time, let them develop, and found a clear winner. Of course there are possible sources of error and maybe there are reasons to think the lessons learned in Germany don’t apply to the rest of the Soviet bloc, but this is about as compelling as evidence gets in economics.
It’s very compelling evidence that common knowledge is wrong, as GDP per capita ratios of West and East Germany were virtually identical in 1950 and 1990.
All the difference happened during the war (East Germany suffered from incomparably more fighting and destruction than West Germany) and earliest years of occupation (Soviets plundered everything they could and destroyed the rest; while Western Allies gave massive levels of economic aid in form of the Marshal Plan).
German experience is a great proof that the difference in economic performance between Communism and Capitalism is minor.
I was going to raise two of the same points (Marshal plan and Soviet looting), but I would consider only managing to not fall even further behind a relative failure. And that’s with both the FRG (e. g. giving the GDR access to the EC market) and the Soviets ( can’t find a source right now but IIRC they tried to prove that the socialist system could allow a high standard of living) trying to prop up their economy towards the end of that period.
I would consider only managing to not fall even further behind a relative failure.
The paper I’ve linked to so many times deals with this converge question. There seems to be no evidence for any kind of global economic convergence—or any worldwide correlation between economic levels and economic growth—you seem to only converge to levels of your geographically close trading partners. East Germany mostly traded with countries even poorer than itself. West Germany traded mostly with very rich countries.
Of course you could ask question like “so why didn’t the trade more with the Western Europe and USA etc.”, but you could be asking the same question about Mexico, Argentina, Indonesia, New Zealand, and countless other countries which did worse than Communist average.
Overall, evidence for Communism being an economic failure is shockingly underwhelming relative to how widely and strongly it is believed.
I think recovery after war and plundering is a bit different than normal convergence. Wrecked developed nations don’t behave like developing nations of the same GDP. Since a main difference was East Germany being even more wrecked more of their GDP growth should have been of the easier rebuilding/recovery sort.
The Soviet Union’s GDP was approximately half military spending. In other words, at least half of Soviet GDP was an almost complete dead-weight loss to the citizens.
blogospheroid: When you pick a metric of success, countries will game it by doing well on that metric, yet not achieving what is really meant by success. A good example would be the Soviet Union, whose leaders constantly made sure they did well by the metrics, yet were actually far from successful.
taw: Not true—the Soviet Union did about average by those metrics, so they had about average success.
me: *falls out of chair*
Key question: are the metrics optimized by the Soviet Union identical to the metrics suggested to evaluate the success of the Soviet Union?
You misread me. GDP is one of those really-hard-to-game high-correlation-with-everything-meaningful metrics, and Soviet Union did ok with other metrics like access to clean water, electricity etc.; life expectancy, child mortality, and pretty much everything else you can think of.
People’s claim that Soviet Union was a disaster as if it was a well established fact, while it was not. South America was a disaster. India was a disaster. Indonesia was a disaster. Africa was a disaster. Soviet Union and other Communist countries were fairly average.
What you’re saying is basically “Soviet Union was unsuccessful and I base it on my feelings about it and no metrics of any kind”.
The Soviet Union’s GDP was approximately half military spending. In other words, at least half of Soviet GDP was an almost complete dead-weight loss to the citizens. GDP is just an aggregation of total spending, if money is spent on pure dross, it still shows up as an improvement in GDP.
The Soviet Union killed tens of millions of its people through work camps, starvation and purges. How is that not a disaster?
And GDP is not hard to game if you’re centrally planning the economy. And even that excludes simply lying about your figures.
This is a really good point. It kind of goes to the heart of the emptiness of GDP as a statistic. What was the death toll of a 5% increase in GDP? The Soviet economy also was infamous for overproducing big capital goods but failing to produce consumer goods people actually wanted to buy.
Similarly, Ceauşescu supposedly managed to clear Romania’s national debt, but, in doing so, impoverished the people and crushed their spirit. The socio-cultural damage he did to the country cannot be overstated. (btw I’m half-Romanian and lived there during his reign).
But did they game GDP?
Your insinuation seems to predict that there was a dramatic drop after the fall of communism. It did fall by half, but that just brought it back to levels reported in 1985. Some communist countries, such as Poland and Hungary, barely had any dip.
Russia continued to tumble, which is consistent with what was going on. If you trust western GDP figures, the most skeptical position I can imagine is taking the 1997 figures as a proxy for the 1985 figures, and concluding a 1.5x fudging. Which is not much for taw’s purposes.
That accounts for deception, but not the difference between GDP and true economic value added, which is the whole reason GDP was raised as an example. Communist countries game GDP by getting people to produce large quantities of worthless goods (like gigantic nails). Those giant nails added to GDP, but they make anybody better off?
GDP is an approximate measure of material well being. If your economic success metric classifies a society with mass starvation and routine shortages of basic goods as being as successful as a society that doesn’t, then your metric is busted.
At least, that is the cover story that Naily uses to hide his tracks. Clippy, start taking notes!
There are several points here. What I endorse is what I took to be TAW’s original point: people laugh at these stories and reinforce basically false beliefs about Soviet efficiency. The stories about tiny nails are true, but they are not representative. For these purposes, it is irrelevant if the goal of the efficiency was military production. The work camps are relevant if that is how they achieved efficiency, but I don’t think that’s a popular belief.
Also, people compiling GDP, like the CIA, try not to count worthless goods. They also compiled civilian consumption, if you’d like to try to exclude military spending, but I don’t know where the data is.
I’m not sure I endorse the use of GDP for general success of society. It is very convenient to talk about relative changes in GDP, though. No one is claiming that the USSR was a rich society, only that its GDP was multiplied by a reasonable number over the course of the century. But I am claiming that it didn’t suffer mass starvation after Stalin.
Do I have a source for this? Every thing I can find seems to point towards it being a joke.
The story of the giant nail is a joke, appearing in Krokodil, c1960. I switched back to the tiny nails because it was pretty close to anecdotes I’ve heard that I’m pretty sure were not jokes. But those were oral, so I can’t cite them. Do you accept anecdotes from Alec Nove? I see quoted from p94 of his 1977 Soviet Economic System “It is notorious that Soviet sheet steel has been heavy and thick, for this sort of reason. Sheet glass was too heavy when it was planned in tons, and paper too thick.” On p355 of the his 1969 Economic History of the USSR (or p365 of the 1993 edition):
Ok, that makes sense.
Here’s the original nail joke. bigger
– Кому нужен такой гвоздь?
– Это пустяки! Главное – мы сразу выполнили план по гвоздям...
Efficiency isn’t just the stuff you produce, in economics its allocative efficiency (roughly the value of the stuff you produce), not mere technical efficiency that matters. GDP data is collected at a pretty high level, and I’d be surprised if the CIA could adjust effectively for low-value production. Even just looking at civilian production won’t do because it doesn’t account for mismatches of supply and demand e.g. twice as many shirts and half as many shoes as people demand.
Its true that the USSR grew a lot in the 1950s and 1960s, and it would be implausible to suggest it was all wastage. But that can be explained by convergence, specifically the increase in capital stock over that period. Lots of countries managed to industrialise without communism, so I can’t really attribute this growth to communism per se. I’d be willing to accept this as evidence that communism wasn’t a total failure (since it did produce positive side effects), but not that it was a success.
Whether mass starvation happened after Stalin is besides the point. Stalin was part of the system. There’s no reason why the USSR should have had famine when western countries had no difficulty, so I think any starvation is attributable to communism.
Is that really true?
http://en.wikipedia.org/wiki/Suppressed_research_in_the_Soviet_Union#Statistics
By the numbers, Russia fell off a cliff when the USSR dissolved; I’ve always wondered how much of that was genuinely due to transition troubles, kleptocracy etc. and how much was just poor USSR performance finally showing up in the statistics.
It was genuinely due to transition troubles. Many former Communist countries did reasonably well in transition—usually those that were close enough to the west that they could switch their trade patterns effectively and not be caught up in the mess; and you really have no way to fake life expectancy and such—which suffered a lot in the most transition-affected countries like Russia.
citation needed
The USSR was a dump. Saying things like
“That’s not even true, when you measure results Soviet Union was ran about as well as any other country. They were just ran differently.”
is revisionism of the worst kind. I think a simple but informative hypothesis is that Putin’s Russia is mostly the same place with the same institutions in charge, but sans the explicit communist ideology.
If you just consider the endpoint, maybe. But why would you do that? What would you be trying to show?
IMHO, if we consider the time period 1918-1990, South America, India, Indonesia, and Africa—not to mention China, Japan, Mexico, and, gee, that’s pretty much the whole world, isn’t it? - all made more progress than the Soviet Union did. East Germany and large parts of eastern Europe probably made negative economic progress. It doesn’t impress me that they were still better-off than parts of Africa after 50 years of decline.
When discussing the Soviet Union, and more specifically Russia, you have to also consider the beginning point as well. It should be noted how far behind Russia was compared to the rest of Europe in 1918. Coming out of abject serfdom bordering on generalized slavery, they actually made tremendous progress in both abstract metrics and tangible result in quality of life up until the late 50′s or early 60′s. Over time that then declined.
In any case, to an extent their G was “production”, measurable production, in the sample case: nails. Their G was not the market value of nails, their G was “progress through central planning”, but they didn’t know how to measure “progress” except through the early-capitalist metrics of “production”. Thus: produce more = progress, in their practice. Our G is GDP. People seem so happy with our GDP, without reflecting on things like income disparity, striation of wealth, etc. If we allow it, we can G* ourselves into a mutant 3rd world nation, with great GDP performance but declining quality of life generally. G is quality of life. Economists, and lay people, generally equate the two, and the correlate generally, but they are not irrevocably entangled.
I’m far from an expert on economic history, but I don’t think you can reasonably say that South America in general did better economically. You say that the endpoint for the Soviet Union was better, lets say they were about equal. But South America at the beginning of the 20th century was reasonably well developed economically, Argentinia in particular was pretty much on the same level as western Europe, far ahead of Russia which was still rather backwards, even though it was rapidly developing (largely based on mostly French loans/investments). I’m not so sure about south America as a whole, probably slightly ahead or about even. And then Russia got thoroughly wrecked by two world wars while South America was untouched. I think the Soviet Union wins, even though by how much isn’t clear.
EDIT: Looked up some figures, seems like the Russian Empire had about 2.5 times the population and 2.5 times the GDP of Latin America, so about even was right.
Most people on this supposedly rationalist site don’t even bother looking at the data when it comes to Soviet Union—they get instant emotional reaction. In case you’re one of those who actually care about the data, here I made it easier for you.
How exactly have you determined the instant emotional reaction of most of the people on this site in response to the Soviet Union? I haven’t seen most people even comment on the subject, much less display obvious evidence emotional involvement.
Did you actually think through your estimates of soviet-emotionalism in the population or is this a case of “the pot calling a non representative sample of kettles black”?
I’ll agree that “most people [...] don’t even bother looking at the data [...]”—I, in particular, am not sufficiently invested in this argument to go to the inconvenience of reading a PDF. The effect of modifiers “this site” and “Soviet Russia” I have no interesting opinion on.
(By the way: horrible format for Internet content. If you can read this, please don’t upload your information to the Internet in PDF format. Make an HTML file.)
Here’s an HTMLized version, albeit one that still looks like a PDF (though one you don’t have to download, doesn’t use any browser plugins, and can’t give you a virus).
We have to learn to live with PDFs as virtually all research is formatted as PDFs. Sane (single column portrait-only) PDFs like the linked paper are not particularly worse than constant-width websites. You are exaggerating the inconvenience.
The problem are PDFs which do things that make sense only on paper—like double column / alternating portrait-landscape—these are really really bad for reading on screen. But—what stops PDF readers from having some hacks to make them bearable? I cannot think of any reason. And it would definitely be easier to hack PDF readers than to make all researchers and all research journals in the world switch to HTML.
Related problem of tables being in appendix as opposed to floating seems harder to solve, but it’s nowhere near as bad as double columns PDFs.
The biggest three problems with PDFs as a format for Internet content are:
The text display does not adapt to your window.
Viewing the content requires running additional processes, adding CPU and memory usage.
PDF viruses.
You pointed out (1), but (2) is no less annoying to me personally. That said: yeah, I got no control over this.
(1) is genuine (but then many websites assume constant width, so it’s not PDF-exclusive issue), but (2) and (3) sound totally made-up to me. Browsers have had far more security vulnerabilities, and use far more CPU/memory than PDF readers.
PDF viruses exist.
Indeed, I’ve been infected by PDF-based viruses more than once. Updating Acrobat and turning off JavaScript in PDFs isn’t enough to keep you safe, either; I finally added NoScript to Firefox in order to prevent any PDFs from being displayed without an extra enabling click, so that only PDFs I trust are ever downloaded.
Of course, this has little relevance to scientific papers: the PDFs that you need to worry about are the ones that you never intended to download in the first place, that are downloaded in the background via JavaScript or an iframe embedded in an ad on a random webpage. (I once caught one from Kaj Sotala’s LiveJournal page, for example… just visiting the page was enough to infect my machine.)
But a browser alone will have fewer vulnerabilities (and probably use less resources) than a browser + a PDF reader.
Nearly echoing FAWS, a browser alone will have less CPU/memory usage than a browser+a PDF reader. More importantly, there is no delay to load the PDF viewer when visiting an HTML page, where there is for PDFs.
I’m not particularly invested in the issue but it seems like you’re underestimating the importance of the Eastern and Western Germany diversion. That is about as close as we’re ever going to get to having actually experimental conditions to test this hypothesis. We have one nation, divided it in half, structured their economies in accordance with the leading theories of the time, let them develop, and found a clear winner. Of course there are possible sources of error and maybe there are reasons to think the lessons learned in Germany don’t apply to the rest of the Soviet bloc, but this is about as compelling as evidence gets in economics.
It’s very compelling evidence that common knowledge is wrong, as GDP per capita ratios of West and East Germany were virtually identical in 1950 and 1990.
All the difference happened during the war (East Germany suffered from incomparably more fighting and destruction than West Germany) and earliest years of occupation (Soviets plundered everything they could and destroyed the rest; while Western Allies gave massive levels of economic aid in form of the Marshal Plan).
German experience is a great proof that the difference in economic performance between Communism and Capitalism is minor.
I was going to raise two of the same points (Marshal plan and Soviet looting), but I would consider only managing to not fall even further behind a relative failure. And that’s with both the FRG (e. g. giving the GDR access to the EC market) and the Soviets ( can’t find a source right now but IIRC they tried to prove that the socialist system could allow a high standard of living) trying to prop up their economy towards the end of that period.
The paper I’ve linked to so many times deals with this converge question. There seems to be no evidence for any kind of global economic convergence—or any worldwide correlation between economic levels and economic growth—you seem to only converge to levels of your geographically close trading partners. East Germany mostly traded with countries even poorer than itself. West Germany traded mostly with very rich countries.
Of course you could ask question like “so why didn’t the trade more with the Western Europe and USA etc.”, but you could be asking the same question about Mexico, Argentina, Indonesia, New Zealand, and countless other countries which did worse than Communist average.
Overall, evidence for Communism being an economic failure is shockingly underwhelming relative to how widely and strongly it is believed.
I think recovery after war and plundering is a bit different than normal convergence. Wrecked developed nations don’t behave like developing nations of the same GDP. Since a main difference was East Germany being even more wrecked more of their GDP growth should have been of the easier rebuilding/recovery sort.
Heh, the third paragraph sounds rather familiar :).
The Soviet Union’s GDP was approximately half military spending. In other words, at least half of Soviet GDP was an almost complete dead-weight loss to the citizens.