Did the Soviet Union EVER Recover from WW2?

Did the Soviet Union EVER Recover from WW2?


Did the Soviet ‘Economy’ EVER Recover
from WW2? That’s the question we’re asking today, and it was prompted by a question from
one of my Patrons, Mitchell Line, who asked – “Hi! I was wondering what was the state
of the soviet union after the end of the war and what did they do to begin repairing it?
They were desperately low on man power after the war and much of their supplies were in
the Urals. Did they move the factories back west as soon as possible and etc?” I’m going to go a bit further than this though,
because what’s interesting is that I recently read a couple of books where the authors stated
that the Soviet economy in the 1960s still hadn’t fully recovered from the Second World
War. I forget which book the first one was, because when I read it, I was like: ‘that
can’t be true’. But then one of the opening chapters of the book “One Minute to Midnight”
by Dobbs (which I have on audiobook), says that Khrushchev knew that the Soviet Union
still hadn’t recovered from the Second World War. So now it’s come up twice with two different
historians saying it. And now I’m wondering, is there something to this? Did the Soviet
economy not recover from the Second World War until the 1960s? Because let’s not forget, the Soviet economy
started going into decline in the 1970s – if not the 1960s. So, if they hadn’t recovered
from the Second World War by the 1960s, and they went into decline not long after that,
this would mean that the average person in the Soviet Union was economically no better
off in the 1980s than they had been in the 1930s. Surely, that can’t be the case. As many
of you know, I’m not fan of socialism, but even I’m saying that this is a bit of a
stretch. Yes, we know that socialism doesn’t create wealth – it can only consume it…
Oh wait, yeah that would actually make sense. Maybe there is something to this. So let’s dive
in and find out. Estimates vary, but the Soviets lost roughly
28 million people during World War Two. One in eight Soviet subjects of the regime lost
their lives, and an additional 25 million lost their homes. And, despite the relocation
of industry during the war, by the end of 1945, the official statistics show that capital
stock was down by more than 20% compared to 1940. To clarify for those who may not know, by
‘capital stock’ we’re talking about the ‘producer goods’ industries; industries
making things that aren’t sold directly to the consumer, but things that go into other
production. So, for example, a wheat farm would make wheat and give that wheat to the
mill, the mill would process the wheat into flour, and then give that flour to the bakery,
who turns flour into bread and sells the bread to a consumer. In this simple scenario, the
wheat farm and the mill are production goods – or ‘capital goods’ – industries, because
they’re not necessarily selling things directly to the consumer, but mainly to other production
industries. The bakery would be the consumer goods industry. Well, in the Soviet Union, the capital goods
industries were down by more than 20% compared to 1940, assuming the official statistics
are anywhere near correct, which they weren’t. And I’m not saying that because I don’t
trust ‘Russians’ or something (like the enemies of reason will claim); no, it’s
known as the ‘Socialist Economic Calculation Problem’. Because the capital goods industries
were owned collectively by the State, and resources were redistributed and allocated
by the State (Socialism), there was no natural price mechanism. The way we generate prices
is by trading millions of goods back and forth between millions of individuals. The buyer
and the seller both agree on the price of a good before a transaction is made, and when
millions of people do this, we get a general price across society. Well, in the Soviet
system: “Production was controlled by the state.
This control was exercised through a layered hierarchy.” And – “…the state production establishment was
the sole supplier, and it fixed both prices and the quantities of each item supplied.” It had to fix prices because the system prevented
the buying and selling of goods and services in the capital goods industries. Well, without
the buying and selling of goods, you do not have prices. Without prices, you do not have
economic calculation. All of the economic statistics that we would normally use to say
whether an economy is being efficient or not are all meaningless, because there are no
natural prices. Consumer goods – like bread – had prices on them, but they weren’t the
actual market prices of the goods. We know this because prices were fixed lower than
their market value by some price commissar, meaning: people were receiving a lot of currency,
which allowed them to consume more goods and services than they produced. Since society
as a whole was consuming more goods and services than it produced, this led to severe shortages.
The first people in the queue would get everything – the last people in the queue got nothing,
or had to wait until the next shipment of scarce goods arrived. Since prices were low,
they could literally buy anything and everything they could get their hands on. But there wasn’t
enough to buy – “Having money in your pocket but nothing
to spend it on was a common experience. People carried string bags with them wherever they
went [in the 1960s onwards], just in case they happened across some item in short supply.
Hours each week were spent queuing. Roubles were, even then, routinely referred to as
‘Monopoly money’.” The reason we can’t trust Soviet statistics
is not because the ‘Russians lied’ or we think they’re ‘propaganda’, or something
like that. The reason why is because: it was impossible for them to generate those statistics.
Whether it was for propaganda purposes or not, at a base level, ultimately they were
just making it all up. So, when historians or economists use Soviet prices or GDP figures
to measure economic growth, they’re playing with made-up statistics. In Davies’s “Soviet
Economic Development from Lenin to Khrushchev”, the author does just that, which is why he
concludes that Soviet economic growth was really impressive in the Stalin era… during
a period where people were starving to death. Because when I think about ‘economic growth’,
I think ‘starving people’. “This was the apogee of the Stalin despotism
and of statistical suppression… One cannot imagine any Soviet statistician daring to
challenge index numbers as being too high…” Now yes, we can look at outputs – like, how
many tons of coal they produced in a given year. But we can’t say how efficient they
were being, or if the production of coal was undersupplied or oversupplied, because we
have no price mechanism. In a market economy, if coal was undersupplied or was inefficiently
produced, prices would increase. The consumer would then not be able to buy as much as they
could before, forcing them to spend their currency elsewhere on alternative goods and
services. A well known example – when the price of coffee goes up, people switch to
tea. When the price of tea goes up, people switch back to coffee. There’s still a scarcity
– that’s true. However, the consumer doesn’t over-consume because prices prevent them from
doing so. A truly unmanipulated market economy prevents
an individual from consuming more goods and services than they had produced for society
in the first place. So, you are rewarded for the value you’ve put in. (Value is subjective.)
If you’re not being rewarded for the value of goods and services you’ve put into it,
then check and see if your central bank is inflating the currency supply. If they are,
then you’re being robbed by them. That’s where your work is going to – the State. So yes, we can use things like outputs – how
much coal was produced. But it’s not going to tell us much because we don’t know how
much of that was going to the consumer. And even then, the official total output figures
were manipulated – even the population statistics were manipulated (just look at the way they
hid the population numbers after the Holodomor in the 1930s). So nothing can be trusted,
official or not. Of course, some economists and historians
don’t think the figures were manipulated at all, because the Soviets really used them
for planning… bearing in mind that Soviet planning was terrible at best and there were
massive shortages. “…the physical output figures were actually
used in planning and, with one conspicuous exception, have been regarded as reliable
by virtually all scholars.” The exception he’s referring to is the grain
figure, which we’ll discuss shortly. But no, the output figures aren’t reliable
– Nove even admits that one of them was manipulated. So why would the others not be? Oh, because
they used them for planning? They used the grain statistics for planning! If they lied
about that, why wouldn’t they lie about the others? And why on earth would you trust
a blatant liar? It’s not like they messed up; they decided to deliberately tell a lie.
So, we cannot trust them at all. Now, of course, we have to use something.
So we are going to use the official statistics, and others, and anecdotal evidence too, to
try and get a convergence of evidence that paints us a rough picture of what it was like
during the Soviet Union for the average guy on the street. But, even though the statistics
are essentially worthless, they still don’t paint a good picture – even though some people
think they do. According to official Soviet statistics, if
industrial output in 1940 was 100, by 1945 it had declined to 92, and recovered to 173
by 1950. And again, if agricultural production was 100 in 1940, it had declined to 60 in
1945, and recovered to 99 by 1950. So we can see that the Soviet Union favoured industry
over consumer goods during and after the war. And, at face value, it does seem like food
production had recovered to their pre-war level by 1950. The problem is that: we know these statistics
are manipulated. If we compare agricultural output to tons of grain, this becomes obvious.
The Soviet Union supposedly produced 95.6 million tons of grain in 1940, which declined
to 47.3 million tons in 1945 (further evidence of food shortages during the war which I’ve
touched upon in other videos). But then it ‘recovered’ to 81.2 million tons in 1950.
Well, that’s not 99%. If agriculture was 100 in 1940 and 99 in 1950, then the amount
of grain produced in 1950 should have been 94.64 million tons (99%). And it wasn’t.
Yes, they were producing other food stuffs, so perhaps they shifted production to something
else. However we have to bear in mind that grain was the main output of Soviet agriculture,
so this is a good indicator of the overall agriculture production. The fact that it is
down, suggests that other areas were down as well – especially meat production, since
(unlike other countries) animals in the Soviet Union relied upon grain for feed. Plus, Khrushchev
himself accused Stalin of inflating the harvest statistics to make the figures look better
than they actually were. And if he did that for agriculture, what’s to stop him from
doing the same with the industrial output, or anything else? But even with these inflated numbers the average
person was only getting 45.1 kilograms of grain in 1950, which was less than the 48.7
kilograms per person in 1940. So, as a rough indicator, even if we took these statistics
at face value, the Soviet Union hadn’t recovered in from the Second World War in terms of agricultural
production and consumer consumption of food by 1950, five years after the war had ended.
And as we’ve said, these figures are too high. “Soviet industrial output figures were for
gross output – the sum of each reporting unit’s turnover, without netting out the double counting:
deliveries from the flour mill to the bakery or from the steelworks to the truck factory.
They were not industrial value added or industrial sales to final demand (consumption, investment,
government and exports). Therefore [the capital goods production industries were] bound to
be a much larger part of industry than [the consumer-goods production sector].” Basically: some guy made some flour, which
they counted as output; then another guy took that same flour and delivered it to the bakery,
which they then counted as output again. Well, that’s not output: that’s double-counting!
So yes, the industrial output stats were definitely manipulated higher than they actually were.
And as Hanson says, they weren’t just doing that for the grain, they were doing it for
other industries, like the steel industry. So again, the statistics are worthless – they’re
inflated. And that’s before Stalin got his hands on them! Nove mentions that Dr Jasny discovered that
the grain statistics were inflated before the war, and even more so after the war. Therefore,
the other economic output statistics could also have been inflated before the war too.
And yet Nove concludes that these statistics are ‘reliable’. Because… insanity!? So the average guy wasn’t getting the same
amount of food as he had been in 1940 (even going off these inflated statistics), and
the reality was that he was probably getting a lot less than that. But what’s worse is
that, during the war, large parts of civilian consumption goods production was switched
to military production. We can see that in the stats for food, which was reduced in order
to keep industry, coal and steel production high. But as a consequence, not only was there
a reduction of food and consumer goods during the war (which Hanson describes as, quote:
“drastic”) but this had big implications after the war. The economy was geared towards
arms production and heavy industry, rather than consumer consumption. Like other economists and historians have
pointed out for other countries in the post-war era, it’s not easy to convert machinery
that produces guns into producing butter. Most of this equipment was highly specialized
military assets like tanks, planes and guns – none of which had any value after the war.
As Higgs describes for the post-war USA – “In the workaday world, there’s just not
much call for phosgene-filled mortar shells, mustard gas-filled bombs, and white phosphorus-filled
munitions, not to mention the specialized equipment for producing atomic bombs.” And even if you could convert a newly made
tank factory into, say, a tractor factory, it may not be in a suitable location, or be
costly to operate. A CIA report in 1948 says that the vast majority of the Soviet industries
that had been relocated during the war (to, for example, the Urals), remained where they
were. Why they didn’t move them back, I’m not sure. But the question we need to ask
is: were they still profitable to run in their new locations? Yes, even in a socialist economy,
there’s still profit and loss. Just because you abolish money doesn’t mean the costs
disappear. It just means you can’t calculate the profit and loss, or know how efficient
your industries are being. In a free market economy, you’d know if it was too costly
to operate because prices would tell you – you’d make a loss instead of a profit. In a socialist
economy, there are no prices. So you cannot have economic calculation. This was why, for the USA, many wartime investments
during the war had little or no value after the war. Higgs gives the example of naval
dockyards, which few were willing to buy after the war, and only then on substantial discounts.
There were also thousands of propeller aircraft just parked in the desert – forever more.
In addition, the US government invested in many different things across the globe – from
army camps to storage facilities, ammunition dumps and runways, gunnery ranges and repair
yards, hospitals and laundries, 770 national cemeteries and Japanese relocation centers
– most of which had little use after the war. Essentially (in terms of improving the lives
of US citizens) most of the economic output of World War Two was completely wasted. Well, the same thing applied to the USSR.
The result was that, it was easier for the Soviets (and the US) to keep pumping out military
equipment and machinery for the military-industrial complex of their respective countries than
it was to convert those sectors back to consumer consumption. “There was a rapid recovery in total production…
[but] Consumption levels moved back only slowly to 1940 levels, while military priorities
stayed high.” So, when we look at the chart and see that
industrial production had increased from 100 in 1940 to 173 in 1950, that does not mean
that the average guy on the street saw an increase in living standards. They’re producing
things – a lot of things – but the resources of society are being consumed by the State,
not by the people. Now you might argue – ‘okay TIK, but production
did recover, right? So this counts as an economic recovery, right?’ Well, yes production did
recover… or maybe it did (depending if we can trust the stats). But, if it doesn’t
help the people – which is what an economy is meant to do – what’s the point? ‘Oh
yeah, we produced a million tanks, but the people starved to death.’ I mean, to me,
that doesn’t count as an economic recovery. Maybe if you are a heartless communist who
doesn’t care about the people, then yeah, this might count as an economic recovery.
But it doesn’t to me. And it’s hard to claim the people benefited
from this ‘recovery’ at all. Going off these untrustworthy figures – “…targets for producer goods in general
and investment items in particular were usually over-fulfilled; targets for consumer-goods
and agriculture were usually under-fulfilled.” So basically, the capital goods industries
were in a bubble – which is what causes recessions. “If steel, say, was in shorter supply than
originally planned, it was the production of bicycles that would lose out, not that
of tanks or machine-tools.” And this is despite the fact that the workforce
had (supposedly) increased. In 1940 there were 31.2 million labourers, and by 1950 this
had shot up to 39.2 million, which was several more million than planned. The reason for
this wasn’t because the population was increasing, or that agricultural production efficiency
had increased, so people could move to the cities. And it wasn’t even because of roughly
3 million German prisoners of war, some of whom were kept in the USSR until 1956, and
were put to work. No, it was actually because Soviet peasants were fleeing the countryside,
where another State-induced famine claimed the lives of about 1.5 million people – if
not more. And it was State-induced. “Under Stalin, the food supply available
to the Soviet population depended entirely on the Soviet farm sector. Food was not imported
until Khrushchev’s time.” They had the option of importing food for
the starving people, or opening up the market for free trade, but once again they refused.
And the problem was that farm output was extracted by coercion – a huge tax. Prices also remained
unchanged for them as other goods rose steeply. So the income of the peasants was either small
or non-existent. And this was entirely the State’s fault. The State, run by greedy
socialists, weren’t paying the peasants properly for the work they were doing. They
wanted to steal all the wealth for themselves and exploit the peasants, in the name of the
workers. Well, they did just that. In order to purchase 1 kilogram of butter, a peasant
would need to work for 60 ‘work-days’. And a bottle of Vodka took 20 days to earn.
A poor quality suit would take over a year for a peasant to earn in this system. And, since the worker-class were gripped in
a class war against the peasant-class, the Stalinist regime continued to strip the land
of food like they had in the 1910s, 1920s, and 1930s (under Lenin, and then Stalin).
They then redistributed that food to the cities. So much so that food was less available in
the farming areas than in the cities, and if there was a poor harvest, the peasants
were the ones who suffered, not the workers. “Priorities for taking large quantities
of grain away from the countryside at very low prices were maintained, the saving of
lives had a low priority, the population was not allowed to retain substantial food reserves
of their own and private trade was tightly restricted…” Khrushchev writes about starvation and cannibalism
during this time. So, since stealing from someone else does not grow an economy, and
the fact that there was widespread famine, I’m going to conclude and confirm that the
Soviet socialist economy definitely hadn’t recovered from the Second World War during
the 1940s or early 1950s. And, in fact, the overall consumption of food by 1953 (the year
of Stalin’s death) still hadn’t recovered to the 1940 level. And that’s going off
the official statistics – which we know are manipulated higher than they should have been.
Between 1916 and 1949, people starved in every year. If you do not include Gulag prisoners,
then people starved it almost every year – there were only three years where people in the
main population didn’t starve. There are many jokes about this sort of thing
– “A man walks into a shop and asks, “You
don’t have any meat?” “No,” replies the sales clerk, “We don’t have any fish.
It’s the store across the street that doesn’t have any meat.”” It was only the end of food rationing in 1947,
and then Khrushchev’s decision to prioritize food over pretty much anything else, which
prevented starvation from reappearing after 1949. But that doesn’t mean that people
weren’t going hungry, or facing food shortages – it just means they weren’t starving any
more. It’s no wonder that – “Preparations for each year’s harvest,
and estimates of its size, were headline items in the Soviet media almost throughout Soviet
history…” Seriously, on a typical day in a market economy,
most people do not pay attention to whether the farmers have prepared their harvests or
not. We just assume that they’re getting on with their jobs, and they just assume we’re
getting on with ours. Unless it was some sort of big emergency – like a crop disease, or
a factory burning down – most people don’t pay attention to what other people are doing
in their jobs. So the fact that the Soviet population really did care about the harvest
and how it was going, and the fact that it was headlines on the news throughout most
of Soviet history, is an indication that they were worried if there was even going to be
food in the shops or not. Will there be enough food around for me to feed my family? Horrifying.
And yet, there will still be state-miseducated Marxist Romancers in the comment section defending
socialism. Stop. Just stop. This wasn’t paradise, this was a humanitarian disaster. 1917 to 1991
– disaster. And the people – Russians, Ukranians, Baltics, all the others – suffered horribly.
In a lot of cases: they didn’t even get the basics to sustain life. And it happens
every time. China, Cambodia, Venezuela. ‘But it’s not real socialism!’ ‘Stick
to tanks!’ Unbelievable. If we compare the USSR to the United States
during this period, there’s no way to justify this – “In 1913 meat production per head of population
[in Russia] had been 58.1 per cent of the US level. As late as 1958 it was only 48.0
per cent. Milk production per head of population had been 72.8 per cent of the US level in
1913. In 1950 it was only 51.6 per cent of the contemporary US level, and in 1953, 52.1
per cent.” Not that the US economy was a free market
during this period – especially during the reigns of Hoover and Roosevelt where they
basically tried to seize control of the economy. But the fact was that the USA was pulling
ahead from the Soviet Union on most accounts – from 1913 onwards. And why would this be?
Well, despite being half the size of the US economy in the early 1950s, based on estimates
from the USA, the USSR’s defence budget was 75-94% of the US defense budget (depending
on which flawed statistics you use). This explains why the consumer sector was neglected
– the State took resources away from the people and redistributed those resources to itself
for its own consumption. “As a matter of fact, any increase of taxes
and government spending will discourage saving and investment and stimulate consumption,
since government spending is all consumption.” “…in the Stalin period… housing construction
and maintenance, textiles, clothing, food-processing and agriculture were at the bottom of the
priority list.” Worse, because the regime was making the prices
up as they went along, and they set the price of things like food at super-low prices, there
were shortages (as we explained earlier). The reason they lowered the prices was to
make the people think that they were more wealthy than they actually were. If you have
lots of currency in your bank account, and prices are low, then you’ll think you’re
well-off. But it’s not true – because wealth isn’t how much currency you have, it’s
how much goods and services you can purchase with that currency. If you have lots of currency,
but there’s nothing to buy with it, you’re not wealthy – you’re in poverty. So, when
a socialist promises you lots of free currency, they’re not promising you an increase in
living standards. “When the Bolsheviks took power, there were
less than 20 billion rubles in circulation. By the end of 1919, the money supply had grown
to 225 billion rubles, and by the middle of 1921, it reached a whopping 2.3 trillion.
The following year, the money supply was counted in quadrillions.” “Inflation was rampant. With the near-collapse
of the taxation system, the government sought to finance its activities through currency
issue. By the 1st of January 1921, currency in circulation amounted to 1,168,597 million
rubles as compared with 1,530 million rubles on the 1st of July 1914. But its purchasing
power had declined to a mere 70 million pre-war rubles. Prices are estimated to have reached
16,800 times the 1914 level.” Yes, so printing currency actually leads to
declining living standards. “The goal of inflation was the abolition
of money, and the ruling elite was proud of their success. The peasantry, struggling to
survive, resorted to using salt and bread as media of exchange.” “Shockingly, the destruction of money failed
to bring about the rational economic order that the communists believed to be inevitable.
Instead of orderly production, the result was mass starvation and peasant uprisings.” You’d think they would learn after their
first failed experiment with the printing press. And they did – for themselves, not
the people. From the 1930s onwards, Gulags were created to extract actual money from
the ground – gold, silver, and platinum… And unlike paper currency which can be printed
forever, these metals couldn’t be inflated. So, they’re immune to government manipulation,
and thus retain their value. And even though gold and silver are supposedly ‘relics of
the past’, and not ‘good enough’ for the main population, the regime sent their
slaves into the mines and forced them to dig out these ‘unwanted’ materials – for the
members of the regime. “In 1947, there were fifty-two gold mines
operating in Dalstroi, along with five gold pits [and] five gold-extraction plants…” “The winter of 1946-47 was harsh and long,
but the gold mining continued without a break, which was unprecedented.” They even went as far as to import gold-mining
equipment from the USA, although the Cold War prevented them from getting all of the
equipment that they needed. Here’s a table from Hanson showing gold
reserves declining throughout the early 1960s as Khrushchev spent away the Soviet hard money. Here’s another chart from another source
showing gold for the period from 1945 to 1977. The numbers are slightly different, but the
trend is the same. Declining gold reserves during the Khrushchev era, all the way to
the low in 1966. Khrushchev was ousted in late 1964, so the turnabout in this gold-spending
only happened later, and might explain why the Soviet Union went into decline in the
late 1960s onwards. They were running out of money! But the main point is that, while the masters
of the regime did learn their lesson, and they went about extracting gold (actual money)
for themselves, they didn’t care about the people. The people didn’t have access to
actual money (gold or silver). The people had to exist on paper currency, which the
regime could manipulate and use to steal wealth off of the people. So, they continued to fix prices and print
currency. Well, as we explained, artificially low prices led to shortages. And because there
were shortages, the people couldn’t spend their currency. We call this “Repressed
Inflation”. If there had been items in the shops and the people had been allowed to spend
their currency freely, then this would have led to increased prices – inflation. But it
was repressed because prices were fixed and they simply couldn’t spend the currency
they had. Well, this might work in the short-term, but
people will soon catch-on to what’s happening when they feel like they’ve got more currency
coming in every month than they can spend. They’re actually getting pay rises all the
time, yet they’re worse off than they were before. And they can’t seem to put their
finger on the problem – they just know it’s happening. They’re contributing so much
to society, and yet society isn’t rewarding them equal to the amount they’ve put into
it. What they don’t realise is that the central
bank is printing more and more bank notes (currency), which steals wealth off of everyone
else in society and gives it to the central state. This only becomes obvious to most people
in extreme circumstances – such as during hyperinflation, which is exactly what happened
in the Soviet Union. It wasn’t hyperinflation in the sense that prices were going up and
up (because prices were controlled); it was hyperinflation in the sense that your bank
balance was going up and up, but you couldn’t spend it. And if the state didn’t do something
about this problem, people would realise that it was pointless working – since they weren’t
getting rewarded for the work they were doing, and technically they had enough money to last
them for years if prices stayed as they were. So, on the 14th of December 1947, the Soviet
regime simply confiscated a large chunk of currency from the people. And this wasn’t
a re-denomination – this was outright confiscation of people’s wealth. It actually had a profound
psychological impact on everyone in the Soviet Union. Fears of another currency reform like
that again caused panic buying in later years, and increased inflationary pressure further.
Worse, the socialists in power didn’t learn from their mistake, or think that anything
was wrong with their view of economics, and decided to appease the people by reducing
retail prices every year between 1948 and 1954. This, they thought, would make the people
think they were better off than they were before. Which is insanity because this was the exact
thing that caused the problem in the first place. They fixed prices lower than the market
price, so people consumed more than they produced. This created a shortage of consumer goods,
which meant people couldn’t spend their currency. They therefore had tons of currency
and nothing to do with it – starving millionaires. So, the state took most of their currency
away from them, but then decided to appease them by artificially fixing prices even lower
than the market price, which then caused people to consume even more than they produced, resulting
in a greater shortage of consumer goods. And the currency – the original problem they had
tried to fix – was once again accumulating inside people’s bank accounts in unprecedented
amounts. This was why the Soviet people had a saying
– “They pretend to pay us, we pretend to work.” Currency is not wealth. Currency is a means
of exchange. There’s no point having money and/or currency if you can’t purchase anything
with it. What’s actually happening in an economy is that, you produce a good – let’s
say a loaf of bread – and you give it to someone else. The guy then gives you an IOU – I owe
you one-loaf of bread’s worth of goods in exchange. Later, you go out and buy a loaf
or bread-worth of goods back from him, collecting the wealth that he previously owed you. But
with money, this happens on a larger scale – so you don’t have to go and buy goods
off the guy you sold to previously. You can buy off others in the economy. But when a Central-State’s Central bank
prints tons of currency, it devalues the IOUs in society. So, you produce bread, give it
to the guy who gives you an IOU. But when you go to buy the bread-worth of goods from
him later, you can’t collect a bread-worth of goods – you can only collect a portion
of the bread-worth of goods, because the central State bank has purchased the other portion
of the goods in the meantime through the power of inflation. This is, essentially, what happened
in the Soviet Union – and is what’s currently happening in every country which has a central
State bank. That’s why you hear people say: ‘What’s the point of working if they’re
going to take it off us anyway?’ or ‘Why do prices keep going up in the shops?’ Well, inflation: caused by one thing and one
thing only, whoever controls the currency supply. It’s not your local shop owner or
your local builder who controls the currency supply. It’s the Public Sector State. And, in the Soviet Union, it wasn’t just
food and goods that suffered. The State built millions of houses – for example, 1 million
apartments in 1950. Yes, rent was cheap. But that didn’t matter because, again, there
wasn’t enough apartments to go around – because prices were too low, and there was no private
building trade to meet demand. So there were shortages! Throughout the post-war period,
most people lived in ‘communal’ apartments. And while the regime struggled to provide
for the people, the black market flourished during this time. “It is likely that the Stalinist regime
constrained second-economy activities more tightly than did later, softer Soviet regimes.
The risk premium in black market prices must have been higher in 1950 than in 1975.” But the reason people turned to the black
market – the free market – wasn’t because it was evil. Just because some people refer
to it as the “black” market, which implies it’s dark and evil, doesn’t mean it was.
A black market is a free market, because it is outside of state control. Given the fact
that people were struggling to survive, and they had all this useless currency that they
couldn’t spend, they may as well abandon the official economy and go trade with the
market traders who operated outside the state. In a lot of cases, they couldn’t actually
get certain items in the State ‘economy’, and had to use the black market. From things
like: illegal music records (like American Jazz records), to antibiotics (because there
were shortages in the hospitals), to many other items, the black market provided what
the official system could not. And it’s not like the State didn’t have
extra help or anything. There were German (and other) prisoners of war who were put
to work in the economy. And there were reparations from former Axis countries, especially Germany
(estimated to have boosted the Soviet economy by about 1.5% during the late 40s). And they
continued to exploit a huge number of slaves who’s labour output was simply taken from
them under the Gulag system of slave labour camps: “Stalin, Beria, and Malenkov, along with
many leaders of the major industrial facilities and branches of heavy industry, supported
a return to the model of economic development of the 1930s, which meant a continued low
living standard for the population and a continuing escalation of state-sponsored exploitation
under the cover of propagandistic slogans and appeals.” “As of January 1st 1949, the MVD system
included 67 independent corrective-labor camps with some 10,000 camp divisions and facilities
(lagpunkty) and 1,734 colonies containing 2,356,685 prisoners, of whom 1,963,679 were
able-bodied workers.” Now, at this point, some people will be saying
that: ‘okay, the Soviet Union didn’t recover from the Second World War by the time of Stalin’s
death in 1953. But it did recover in the Khrushchev era, because he prioritized food and stuff.’ And yes, Khrushchev did prioritize the consumer
more than Stalin did. He shifted policies towards agriculture, housing, and labour-relations.
And between 1953 and 1964, Khrushchev brought an increase in prosperity and an increase
in total output (compared to the Stalin-era). “The major changes in economic policy that
Khrushchev pushed through were the following: drastically improved incentives for agriculture;
the extension of cultivated land in ploughing up the ‘Virgin Lands’ of northern Kazakhstan
and southern Siberia; campaigns to change cropping patterns; the territorial decentralisation
of economic management; the initiation of large-scale imports of machinery and know-how…
the development of foreign trade more generally; the first large-scale importation of food;
a wage reform, with the introduction of a minimum wage and a shortening of the working
week; the start of a major programme of housing construction; the publication of official
economic statistics; and freer public discussion of economic matters…” Given the fact that people in the Stalin-era
had starved… the priority now was food production and distribution. People tend to prioritize:
water, food, and shelter – probably in that order. Now, when you have a poor economy,
or poor impoverished people in general, they will spend a much bigger proportion of their
income or wealth on water, food and shelter. And in the Soviet case, food production was
about 30% of the economy. (In comparison, food production is about 7% of the current
UK economy.) Well, based on contemporary CIA guesstimates, people in the USSR were spending
about three-fifths of their income on household spending. Fearing an uprising of the Soviet people against
the regime, Khrushchev raised prices for the food taken from farms, and reduced the compulsory
deliveries (taxation) from peasant’s household plots. In 1958, he abolished the compulsory
deliveries from household plots altogether, and he allowed peasants to pasture their own
livestock on collect-farm land. In addition, 42 million hectares of Virgin Land (in Kazakhstan
and Siberia) were ploughed and sowed for the first time. Again, we can’t fully trust
the statistics, but – “The gains for the farm sector were, from
an abysmal starting point, substantial.” “…the CIA estimate is that per capita
consumption for the whole population grew by 26.5 per cent from 1953 to 1958…” According to the official statistics, grain
output increased by 40% between 1949-53 and 1954-58. The state procurement of that grain
increased by 33%. Meat and poultry procurement increased by 87% and dairy products increased
by 84%. In addition, Khrushchev allowed imports and exports – growing trade with the outside
world by 257% between 1950 and 1958. This allowed food to come into the Soviet Union,
but also fertiliser, which improved domestic agricultural output as well. This might be
why nobody starved to death after Khrushchev took over. He also substantially increased house building
projects between 1954 and 1964. And while this did ease the pressure on the people,
it didn’t fully alleviate the shortage. Apartments designed for one family would often be occupied by two or more, and personal advertisements for apartment exchanges were common on the
street lamps and telegraph poles around the country. But it was definitely an improvement
from the Stalin era. However, looking at the consumption levels,
it’s really hard to judge if the people were much better off. The statistics are just
all over the place! One economist says per capita household consumption in 1950 had risen
by almost 11 per cent above the 1928 level, with another substantial increase later after
Stalin’s death. But another economist says that the increase between 1928 and 1952 was
just 3.7 per cent. Which contradicts the first. The CIA estimated that per capita consumption
from 1953 to 1964 had increased by 44.6%, with an annual increase of 3.8%. But, this
is contradicted by the fact that the same old problems from the Stalin era were here
again the Khrushchev era – “Even in the 1960s, 1970s and 1980s, the
first-time foreign visitor to Moscow was apt to be puzzled by the attention given in the
media to harvest preparations and harvest progress. Was this not an industrial country?
Why would Muscovites care what was going on down on the farm?” Throughout the 1960s, the United Kingdom had
an inequality gap between the top and bottom of society which was half that of the USSR.
And, like all fractional-reserve banking bubbles, a slowdown was beginning to emerge in the
last years of Khrushchev’s reign which would be exposed in the 1970s, when the Soviet Union
entered a period of prolonged deceleration. Growth was (supposedly) stronger in 1953 to
1958 than in the second half of Khrushchev’s rule, indicating that things were slowing
down. This might have something to do with the fact that Khrushchev cut the amount of
work-hours in a work-week, meaning that production of goods declined even more, causing more
shortages. And while the peasants were enjoying a better
life than they had under Stalin, they were still in poverty, even before the bad harvests.
Because yes, in the year 1962, and especially in 1963, there were severe droughts that led
to harvest failure. In addition, the ‘Virgin Lands’ which had been made, had turned into
a dustbowl. Because Siberia and Kazakhstan aren’t exactly the best climates for growing
crops. Kazakhstan especially was arid and suffered from soil erosion. So, the drought in 1963 caused living standards
to drop – “On the official gross output figures, 1963
grain output (less net exports) was slightly less per head of population than it had been
in Tsarist Russia in 1913: 462 against 483 kilograms.” Yes, in 1963, food consumption (or, at least
bread consumption) was less than it had been in 1913! The grain harvest in 1913 was 80.1
million tons. In 1950 it was (an inflated figure of) 81.2 million tons. And, as you
can see on the graph from Hanson, the drop in 1963 took it to not much higher than it’s
1950’s level. But this was with an increasing population. There was something like 220 million
people in the USSR during the early to mid 1960s, compared to 170 million in 1913. Yes,
the Russian Empire did include places like Finland and Poland, which weren’t part of
the Soviet Union in the 1960s, so the figure is probably less than that again. This might
be where the idea has come from that, during the 1960s, the Soviet Union still hadn’t
recovered from the Second World War… or even the First World War. And you might say, okay but it was just a
bad harvest. It was a one off, and it wasn’t like this afterwards – food must have become
available again. Well, I’m not so sure. Speaking of the Soviet Union during the 1980s,
Moran says – “To understand just how bad the food shortage
was, state zoos made their animals become vegetarians.” “At noontime one day last week the meat
counter was down to pitiful cuts of beef and mutton, mostly fat and bone. After a few weeks
late last year when it disappeared from Moscow shops, butter was on sale again, but with
a limit of 1.1 pounds per shopper. The vegetable counter boasted symmetrically arranged displays
of carrots, beetroot and cabbage, but much of it was rotten.” “Children could not purchase milk without
a doctor’s prescription… [and] The infant mortality rate was so bad that the government
did not count children as being born until they survived their first month.” “At the end of the socialist experiment,
the official infant-mortality rate in Russia was more than 2.5 times as high as in the
United States and more than 5 times that of Japan. The rate of 24.5 deaths per 1,000 live
births was questioned recently by several deputies to the Russian Parliament, who claim
that it is 7 times higher than in the United States. This would make the Russian death
rate 55 compared to the US rate of 8.1 per 1,000 live births.” Alright fine, they sucked at food production.
But what about other production? Surely they did well with other production? Right? Well, in terms of coal, steel and cotton – yes,
the regime was producing way more than they had been in 1913. (In fact, coal production
in 1913 was 29.2 million tons, and in 1955 was 389.9 million tons. Steel went from 4.3
million tons, to 45.3 million in the same period.) But how much steel do you consume
each day? Yes, cotton and coal are probably consumption goods, but how much of that was
shifted to capital industrial production rather than consumer goods production? I suspect
that the majority of the coal wasn’t going to the people, and a good portion of the cotton
was going to the military. As Harrison states – “Through the 1920s, the Bolshevik leaders
struggled to get the economy back to square one – the level of 1913. In this sense,
the Soviet Union was itself a project of postwar reconstruction. In 1929, when Stalin launched his Great Breakthrough to forced-march industrialization and the all-out collectivization of peasant
farms, the Soviet economy was probably still lagging behind the [pre-First World War] benchmark
of output per head of the population.” He then says that the Soviet recovery after
1945 was more rapid, but Harrison is using the GDP figures to come to this conclusion
– which are impossible to use because of the socialist economic calculation problem. However,
even if you use the GDP figures, it doesn’t paint a very good picture. The small black dot on the left side of this
chart represents the GDP figure for 1913. If we put a line on the chart from that black
dot across the chart, you can see that for most of the period before 1950, the Soviet
Union was barely producing more than it had prior to the First World War. This is worse
when you consider that the priority wasn’t consumer consumption, but the military-industrial
complex. And there’s a good chance that these statistics are inflated. However, the
chart does show that, post-1950, that the GDP did exceed the pre-war levels, and went
up all the way to 1973. But again, we can tell that most of this was not food or consumer
items. Just look at the little dip in 1963 representing the bad harvest in that year
– a harvest that resulted in a drop of agricultural production lower than that of the 1950s level.
Well, apparently this terrible harvest barely had an impact on GDP, despite the fact that
food production was a significant 30% of the economy. Also, this GDP figure does not show
where all this production was going. If a worker produces 50 loaves of bread, but 49
of them go to Stalin and the worker gets one, then it doesn’t matter that he produced
50 loaves of bread. Real GDP would be one loaf of bread. And we have evidence that contradicts this
rapid growth in GDP. Hanson says that, in terms of non-food, consumption levels and
material welfare began to slow down during the 1960s. Real per capita household consumption
growth was 1.9% a year for 1960-64 (again, if you believe the statistics). And yes, compared
to post-2008 Keynesian economic standards, this wasn’t bad, but it was a slowdown.
And, the regime did what it had done before – fixed prices whilst continuing to print
currency, causing shortages, queues, bank accounts overflowing with ‘monopoly money’,
and an increasing black market. Even worse, GDP figures also hide the fact
that the consumer goods they were producing were utter rubbish, and the fact that the
quality of their services were poor. Such as the national health service of the Soviet
Union – “After 70 years of socialism, 57 percent
of all Russian hospitals did not have running hot water, and 36 percent of hospitals located
in rural areas of Russia did not have water or sewage at all.” Yuri Maltsev was a member of a senior economics
team that worked on President Gorbachev’s reforms package of perestroika. He actually
confirmed these statistics in 1990 while the Soviet Union was still running. “There are no disposable syringes in rural
hospitals, so they are re-used an average of 1,000 times. They are sterilized by boiling,
which is fine provided they are boiled for 40 minutes. But they are often not, because
the workers have no real incentive to do so. That’s why there is an epidemic of hepatitis
in the Soviet Union (716,000 cases were reported in 1988, over 30 times the number of cases
reported in the U.S.).” “More than 85% of Soviet AIDS patients were
given the disease through dirty government needles or the AIDS-infected public blood
supply. The medical authorities dump the blood into a common pool, separated only by blood
type. If 599 donors are healthy, and one has AIDS, the blood is potentially deadly for
everyone who receives it. More recently, they have adopted a supposed system for screening
the blood, but because of negligence, it doesn’t work.” So, I think the GDP figures – which are made
up anyway – are hiding the fact that the average person in the Soviet Union wasn’t receiving
the benefits of their labour. I don’t know if materially the people of the Soviet Union
were or were not better off in the 1960s than they had been in the 1930s, or even the 1910s, or if
they had recovered from the Second World War in the 1960s… or ever did recover from the
Second World War. Again, it’s impossible to actually calculate
anything due to there being no prices. Looking at the official inflated statistics (which
we can’t trust), as well as anecdotal evidence, it’s hard to come to any definite conclusions.
I can neither deny, nor confirm, the claim that the Soviet Union had recovered from the
Second World War… by the 1960s… or even ever. In fact, I can’t even be sure if living
standards for the average guy improved at all since 1913. I’m assuming that they did.
I’m hoping that they did. For the sake of the people within it, I’m hoping that they
did. But I cannot prove it. And with the official statistics, it doesn’t look like they did
– or if they did, not much. The fact is, the Soviet people were still half-starved in the
1980s like they were in the 1920s and 30s. Okay, people didn’t actually starve post-1949.
And yes, some of them got TVs, and other imports from the west. But they’re still watching
the news and hoping that the harvest didn’t fail every year. They were queuing up for
hours every day just hoping that the store didn’t run out of bread. Multiple families
were sharing apartments designed for one family. And we’ve not mentioned anything about the
NKVD, or the state-suppression of information, or other non-material impacts that the regime
had on the lives of everyday people. So, did the Soviet Union ever recover from
the Second World War? Maybe. It’s hard to say. The only thing we can really conclude
is this: at least the Socialist State provided people with roads. “Even when they had appliances and TVs most
country people in 1980 still lived without paved roads, indoor plumbing, central heat,
or telephones.” Oh. Well, I guess then, it wasn’t real socialism.
And they should have just ‘stuck to tanks’. Thanks for watching, bye for now.

100 Comments on “Did the Soviet Union EVER Recover from WW2?”

  1. The next Battlestorm Stalingrad video will be out next Monday!

    Hanson’s “The Rise and Fall of the Soviet Economy: An Economic History of the USSR 1945 – 1991 (The Postwar World).” is a great book on this topic. I come to slightly different conclusions from Hanson, but he’s still a recommended source.

    Another great source is Higg’s “Depression, War, and Cold War”, which discusses the USA during the aftermath of WW2, showing why the Great Depression only came to a halt in 1945.

  2. So again the economic illiterate makes a video with an even greater gish gallope? lol

    I just picked a random point on the video and I already heard unfounded accusations and projection right in less than 5 secs.

    And I thought, after clicking 2 more segments, I see mises.org sources all over the place. Nothing to see here, done that already.

  3. Sorry to break this to you but Socialism will always have supporters because it still embodies the voice of protest of plenty of those who capitalism oppresses, exploits and expels.
    Also the attrocities you try to attribute to socialism are non sequitur fallacies. Your argument is like saying that capitalism dropped 2 atomic bombs on japan. Dumb arguments.
    And its paradoxical that a country like Vietnam is doing well today. Which proves you are wrong about it. Attrocities dont necessarely come along with socialism.
    You should be less bias if you expect to reach any truth.
    Also, not everybody is interested in competing with eachother, with exploiting other people for profit or becoming a slave robot part of a corporate company full of bullshit.

  4. Are you sure it counts for technological progress (i.e air conditioning, better cars etc.) I know you mentioned TV

  5. I look at present day Russia and it looks more like a third world country. I do not think that the country will prosper until the government changes and that will probably never happen.

  6. Somebody remind me to tell the story of the russian hospital with aids hookers and a dead bodies covered entirely in flies.

  7. "Did the Soviet Union EVER Recover from WW2?" No, absolutely they did not. If you lose 28 million people which was 1 out of every 8 of your population you forever lose their production, their potential for innovation and producing future generation's production and potential. If the next Edison or Einstein was among them or would have been a child or grandchild of one of them, you now never will know. When a nation loses such a high percentage of their population they will not recover for an extremely long time. In the case of the USSR's backwards government and system it only makes it all worse.

  8. The US has seen massive economic growth over the last 20 years.

    But the average American has seen a decline in their wealth, and a decline in stability.

    Economic growth, doesn't always mean more wealth for everyone in society. In the USSR, there was economic growth, but only the government itself and the management class who ran it, saw the benefits of said growth, the people didn't.

  9. Shortly. I lived Soviet Union 70s and 80s. It was not a bad life at all. So it was definitely better than wartime.

  10. Recall a story from the early eighties that Soviet farmers often fed their farm animals bread, surely a luxury. The reason was that bread was a subsidised consumer item, but grain was not. One example of the distortions caused due to a command economy.

  11. No. Soviet men have life expectancies of about 58 years, not breeding to replacement. As John Mosier put it, it was a death ride. They never really recovered. There's an interesting graph showing the population pyramids following the second world war. You rock, TIK!

  12. Or, to put it differently, Socialized Economies suffer from Economic Parkinsonism. It's a feedback loop dysfunction.

  13. if the food received per individual is less, as these stats show, in 1950 than in 1940 that shows far worse than it may seem from the outset. Not only was each individual receiving less food there are also 20 million less members of the population to feed in these areas. This means that the gross numbers cant possibly be accurate for if they were with the subsequent reduction in population numbers even with a slightly reduced output in 1950 when compared to 1940 each person still should have been receiving more food than they would have in 1940 due to the reduction in population.

  14. This Graphic is a stunning look at their loss and there can be no way they were no effected by this Tragedy . Stalins hands were very bloody
    https://youtu.be/DwKPFT-RioU

  15. Prices decided by supply and demand? Or by those controlling the means of production? Like large shareholders, financial institutions, lawmakers, unions, etc.

    Or a combination of both?

  16. There is a list I saw in one of my schools history, which basically ran down what kind of losses the SU sustained in the war. It was a master list of things like, homes, apartments, farms, schools, libraries factories, farms, stores, how many KM of railway etc, were completely destroyed during the war. It gave the numbers in a point by point style. The sheer amount of destruction in that list was shocking. Try reading that list and then try to make ideological hay about 'socialism'. I think it is to their credit they were able to rebuild to the extent they did. Remember, the Russians, being godless heath commies received little to no help in rebuilding their country and Eastern Europe from the 'allies'.

    Btw, I love all the talking points, but, never forget here in the free-world order, markets are totally rigged and suffer from all sorts of distortions, inefficiencies to numerous to list, corruption off the charts, perverse subsides, corporate welfare, and a permanent war economy on top of all that.

    Long story short. The war did immerse physical damage and it all had to rebuilt with millions of citizens dead, and little outside help. I hope I am not the only one surprised it took decades and no doubt, had a lasting impact that is probably still being felt even now in various ways. Try this, invite several million German soldiers highly skilled in the science of laying waste to everything in sight into your country for 3 years and see how fast YOU recover…

  17. The Soviets had a brilliant, innovative and gifted rocket scientist, who was a superb designer, beat the yanks, hands down, until he died, after a long stint, before fame, in a Stalin Gulag.

  18. Anyone who imagines that the Communist system works is either mentally retarded or making a brazen attempt to manipulate the political situation. Try reading Anne Applebaums "Red Famine" Stalins war on Ukraine. It' will sicken you but it will also give you an insight into the workings of the "Demshevik state" and their organised control and violence over and to the workers and farmers. The scary bit is it totally mirrors a lot of what the left are attempting to do right now. Think "Antifa" and the left's apparent indifference to their behaviors.

  19. The Soviets never recovered from getting into the driver's seat, after killing the chauffer and mechanic, and smashing the car, maiming the family travelling with them,…….. out in the sticks, ……..with no ambulance service.

  20. Dear TIK im really sorry to bring this on but can you please move Reference from the bottom to the top on the video? I dont know for others but I use subtitles i have to pause or move subtitles before they reset and see the ref. (i know its weird to ask for editing changes)

  21. I am writing from Malaysia and let me say that the Soviet Union did recover from WW2 but it took them like perhaps 20 years till the mid-60s. The USSR luckily had huge amounts of natural resources like coal, aluminium, iron ore, gold, titanium, uranium, oil, timber, etc. to exploit. How long then did our colonial masters, the British, recover with but much of all that stolen or diverted from their colonies? Perhaps 15 years? The demographics of losing 27,000,000 of your young population was a tremendous body blow coupled with the destruction of thousands of cities and towns by the Nazis all the way west of Moscow until Ukraine's borders with Poland ! Then now, Russia has hardly any debt and with huge gold reserves ! Compare this with the US of USD1.2 TRILLION in debt, claiming to be rich and the dollar to be toast when gold is back in favor as the yardstick very soon. Yes, people say Russia now is nothing but an oil & gas giant.They forget that Russia produces the most wheat, barley, cotton, agro products, a variety of military equipment, aerospace, nuclear power stations and yes, millions of bpd of oil, etc. They also produce their own cars (Lada), trucks (Kamaz) and a big exporter of agro products. If Russia is poor, how could it finance the wars in the Middle East and the Donbass(Ukraine) and develop Crimea at the cost of billions ?

  22. Considering half or more of Soviet industrial production gone by 1942 compare with 1940 levels they did a pretty nice jobe with armament industry compare with Germans.But we must not forget American Lend-Lease and financial aid.

  23. in fact as far as i remember, the true decline didn't arrive until mid to late 80s, or even 90s, before that the economy just slowed down

    that said, it is just hillarious how much better the management was here in czechoslovakia when i hear about the shitfuckery in ussr

  24. Hi TIK, that’s an interesting point of view on the Soviet reality over the decades. My parents and me have a lot of 1st hand evidence of long lines for food and actually anything under the red rule. I’d say that life standards improved from 45 to 91. A lot of people got there true personal, non-shared apartments, some stuff and no famine. But otherwise the soviet reality sucked

  25. Really good and interesting subject, but the presenter is so biased that his presentation is worthless. The conclusion is that he doesn't know. A waste of time, I'm afraid.

  26. How much did the UK and Russia's economies get hit by the Lend lease program and how much did the US profit from it? I imagine it was quite a burden on both but this doesn't really get much attention anywhere.

  27. Britain had problems recovering, though ironically because they were on the winning side and expected to pay their debt whilst Germany got the Marshall Plan. Britain also had to shift from the old empire model of economic development. Before WWII countries had to establish colonies and fleets to convoy goods. With the allied victory, the US bribed up an alliance by providing US security of the oceans, contra communism. Thus a small place like Singapore could safely import raw materials and safely export them to markets without having to convoy them, thus Britain was just another player in a free trading market. They adjusted, and the baby boom of the 50s fuelled growth in the 60s; Keith Richards in his memoirs noted rationing during his childhood which drove the excesses of Swinging London in the 60s . Would be interesting to know if the Soviet Union experienced population growth after the war, more people means growth generally.

  28. I somehow had the opinion that the Soviets tanked their own economy by focusing on their military, and I still think that was some part of the problem, but the loss of humanpower for the workforce was probably more devastating by far.

  29. The Soviet Union did "stick to tanks". It never switched away from a war economy and this was ultimately its undoing.

  30. TIK this video is brilliant, I don’t know enough about Economics but I deeply love your analysis it’s very insightful, keep up the good work king!

  31. Seems to me that the 20th Century has been a demographic disaster for Russia.
    In 1900, the population was around 140 million, and the population of the world was 1.6 Billion.
    In 1900, 8.75% of the worlds population was Russian, China's was 400M for 23.5%, and US was 76M for 4.5%.
    Today, out of 7.8 Billion, Russia has 146 M for 1.87%, China has 1,439M for 18.7%, and US has 331M for 4.24%.
    Interestingly, only America and India (17%) have maintained their percentages of world population.
    This fall of Russia from having lots of people to having much fewer is a major issue for Russia.
    I would like to see more discussion and analysis of this.

  32. At the start of the Cold War, Soviet Union had a larger population.
    Now, Russia has a population 44% the size of America. With a worse economy, and a shrinking population, how can Putin hope to challenge the US?? Why challenge the US?? What does Russia get from challenging the US???
    What did Russia get from occupying Crimea and having a war in Ukraine??
    What is Russia getting from Syria? (Or, US get from our ME wars, for that matter??)
    Seems to me, Putin is incompetent and foolish — if judging benefits to Russia from his rule.
    (Judging by his immense wealth – Putin has been very successful. The scale you use is important. )

  33. Chrushchovs low in weat production
    happened after he visited USA and decided all would start to grow corn everywhere. A failure of centralized economy and decision making.

  34. Even if the economy never recovered it was covered up by the fact that soviet leaders shifted towards the consumer goods industry during the 50,s 60,s and 70,s.

  35. everyone lost from wwii except america. the russkis had their particur dogma. an endgame of misery for all, never trust a communist; but equally understand that univeral health care is common sense.

  36. Hum. What about more history and less political agenda? I mean, nobody is trying to implement a Marxis-Leninist system and/or a planned economy, now or anytime soon. – This is a highly interesting topic, shedding some light on the Cold War era and its basis in economy and actual potential, which usually is not covered that well.

    Also, there's a real risk in overselling the virtues of capitalist economy. E.g., statistics rely mostly on self reported figures (compare the current US president, either, according to reported net worth, he made billions, or, according to tax reports, he was the worst performer in the entire market for over a decade,– obviously, not both things can be true at the same time). Or, players are insentivized to manipulate prices without oversight (compare various antitrust cases), or, in totally deregulated, markets are intensivized to lie (compare ENRON). Nor do prices necessarily tell anything about actual costs and total profit/loss (compare the automotive sector, where the prices of cars do not include costs of infrastructure, health and environment related costs, etc, and manufacturers are still making profit on what are actually deficient prices). There is no such a thing as absolute truth in statistics and/or prices, regardless of the system.
    Moreover, do not forget that the system of planned economy and dictated prices, you describe, originated in a conservative society, namely the Wilhelmenian empire during WW I, and was just copied by the USSR (ironically, for its high efficiency). This is not connected intimately to the political system, nor was there a special political preference for this.

    What is the worth of burying history in such showdown fights? The Cold War is over, more than 30 years by now.

  37. Taking your argument as a given I think you have to take the story back further than the Great Patriotic War. Considering the parallel history of the USA and Russia/The Soviet Union in the 20th century the contrast could not have been greater.
    In 1900 the US had a thriving economy whilst Russia was still basically medieval. Then came the disaster of 1905, the catastrophes of 1914-1918 and 1918 to 1922.

    The US was able to establish a thriving arms industry catering for the entente allies in the Great War effectively finishing up with everyone else’s money whist the Russian Empire was engulfed in a bitter civil war.

    Again from 1941-1945, The Soviet Union suffered invasion with much of its infostructure destroyed by was and the economy incurring a massive war debt. The US, by contrast, waged a second highly profitable war emerging as the worlds premier superpower so it would not be surprising to find big problems in the Soviet economy.

  38. Most of the comments to this video are not characterized by ignorance, although they betray distressing ignorance. They are properly characterized as a display of religious fervor. Anti-Soviet, anti-socialist (in an ignorant and unholy conflation with "communism") and economic posturing is present in an identical manner to the dissemination of religious attitudes: doctrine received at a young age, inculcated by those who were likewise inculcated in their own youth, in an unbroken line leading backwards to the "original ignorance." There is no point trying to correct the errors of true believers. Some are fascists, some are sincerely but haplessly confused, the greatest number just seem to be terminally mentally lazy. In any event, most of the commenters here are simply wrong and those who taught them such wrongness should be ashamed. But of course they're not. And it doesn't really matter, the opinions of those commenting here don't matter. It's all a virtual reality funhouse anyway…until the virus spirits off granny, and "fake news" collides with real tears.

  39. Ronald Reagan was reportedly surprised and shocked in January 1981 when getting his first briefing on the Soviets and the Soviet economy and remarked “I had no idea they were doing so badly”. This of course 10 years before the collapse.

  40. We let their vile police state regime take over half of Europe and called it a victory for democracy – lol, everything we learn about that war is BS

  41. What you wrote, is a bold British propaganda based on lies. Living standards in USSR significantly increased after WW2. Yes, there was a deficit, but almost all people have necessary goods. Often these good were distributed through work-place. One should see documentary videos of USSR after WW2 and in the 1970s. And there is another intentionally mistake, that you make: You compare USSR with Core Countries (Immanuel Wallerstein terminology), but USSR was a semi-peripheral country, which had neither colonies like UK or France , nor neocolonies like US or Germany.
    So you made a very low quality video.
    P.S. What USSR did not recover from even until now are human losses. One can take a look at demographic pyramid on territories of former USSR.

  42. Austrian school is good only for feudal money systems not worth any good since private banks started printing money and started capitalism. Austrian school is 300 years out of date.
    It asks good questions about money and state but not a single good answer.
    It will never tell you that private banks print money as the state does, not a Central Bank, unless you check out SHostak's definition of money, That is the only place that you can find the truth but Shostack himselfwill never admit nor deny it no matter how much i disscused that with him in public.
    Austrian school is 3 centuries out of date and if you understand it it does not mean that anything there is truth.
    Truth is that in capitalism state (by debt) prints money and private banks print it to lend to public and to state to go into debt. Yes, state's debts are private bank printed money.
    In communism only state is allowed to print money.
    YOur idiocy about inflation bad and deflation good is astounding and it says that you learned nothing from 2008 deflation because of which millions of people lost jobs and houses while nobody looses anything in inflation. Savings are inflation protected (interest rate=risk+inflation rate) which when there is no inflation interest rate is only risk percentage. But austrian propagandist desperately hide that fact. Only mattress money looses, everyone else is protected from inflation not hyperinflation as everyone assumes it is the same thing. Inflation protection is up tp 30% inflation. Hyperinflation is above 100% by definition. But how would you know that when you follow outdated Austrian school.
    On the other hand millions lost jobs in deflation, milions of firms had to close and homes foreclosed. Right, they were worning you about dangers of deflation. How little do you know about the world when you follow Austrians or mainstream. Ha ha ha

  43. The Soviet Union was the third most populous nation in the world before WW2. They are now ninth. Have they recovered?

  44. You are an ignorant fuck when it comes to socialism. Stick to autistically detailed documentaries about the Eastern Front. Social democracy does not equate to a centrally planned economy. If you really believe your bullshit, be sure to pay for your cost out of pocket when you get COVID19

  45. On the practicalities of rebuilding the Soviet Union after WW2 they kept the captured German POWs for 10 years after as work teams. Only one in ten German POWs returned home.

  46. The self delusion of Stalinist-Communists in the UK in my youth was summed up by a statement by one I knew well "I was in Moscow recently and the people are so well off they have to queue outside shops in order to spend their money".

  47. As a Finn, my dad always remembers fondly the time the Soviet Union was our neighbour instead of modern Russia. After the war, trade between Finland and the Soviet Union was really beneficial for Finland. We would trade them by Western standards mediocre heavy industry goods which for the Soviets was a major source of foreign technology. After the Soviet collapse, there was no good market for Finnish goods that were only okay by say Swedish or German standards which created a pretty heavy shock for our economy. I always found my dad's opinion about the matter fairly odd, given how the Soviet Union was the biggest threat for our independence and existence.

  48. A good question to make is in how much the original economic wound was caused by the second world war or the quality of state management. If WW2 didn't happen, how big would the problems be? And if USSR state management was improved over its entire life, how would the problems be then? I think WW2 is the scapegoat for the problems caused by the regime during its first half of existence, roughly.

  49. A communist disaster – yes I recall seeing the echoing of the 5 year plans and the farm production data publication.

  50. I think you need to separate the market from production. You’re also ascribing socialism to what is actually state owned capitalism. Socialism means the workers own and control the means of production and no matter what anyone tells you, this was not the case in the Soviet Union or frankly any “communist” nation. In the Soviet Union, the state owned all the industries and essentially performed the function of the capital investor in western capitalism economies. This is the production side of things – after that you have the market, which can either be a free market where demand determines production or you have a command market where the state decides what will be produced. Everything exists on a scale of course – in the USA, subsidies for dairy production function where they state keep production of milk high but also making sure dairy producers can profit at the lower price level that comes with the increased supply. The Soviet Union had a state capitalist production system with a command market.. which like unregulated western capitalism basically is a recipe for disaster. China retained the essential functions of a state capitalist economy but eliminated central micromanaging so that production could meet the needs of a free market economy.. they call it socialism with Chinese characteristics. They now focus on macro goals in their five year plans.. if they want to increase production of something, they direct investment to that area. The west has been more practical: basically employing a hybrid of the system to regulate capitalism’s inherent instability, also employing state investment in unprofitable industries, and at the same time ensuring overall a free market for the best delivery of goods and services.

  51. Statistics from 1940 includes Eastern Poland and Baltic States. Soviets would steal everything, crops, butter, even planks.

  52. Socialism is alive and well,living comfortably in England. And no,we don't have roads or clean hospitals either.Job done Stalin!

  53. One way to get around the statistics is to gauge food, healthcare, education, entertainment, and housing with the people around you. Shouldn't be that hard. "Economics" is often just a way to mystify and sanctify the inequality. You may be living below an underpass in the richest country in the world but can relax in confidence because the GDP is forever rising!

  54. I’m not really impressed about statics of 1940.Some Soviet administrators and Stalin claimed they would overtake US by 1950s while they were even behind of Germany in many areas such as steel,pig iron,coal,machine tools and electricity in 1940.
    Probably that was just a propaganda…

  55. I know that this will not be taken in a good way: How about fixing price the other way around: Take your costs, add taxes, and add a resonable margin for proft – like 15%. Then sell you stuff for that sum. This can be done in a sozialist system. So you CAN put a price on the products.

  56. The Soviets used quality of life with the basics of life covered more as metric of how they were progressing. Trinkets like consumer items were dismissed largely by the Soviet hierarchy.

    Once a society has the basics covered the population want quality consumer trinket items. This is where the Soviets failed in not proving them.

    A Romania neighbour says that her parents looked back at the communist time as the "good times". All were housed with modern plumbing & hygiene and fed without any worries with excellent public transport – no overburdened mortgages to cope with. The social aspect of life was very good, with social clubs set up, etc, etc.

  57. If the price of coal goes up, then the poor will freeze to death. I really like you history stuff. You have very high standards. And the videos are very well made. But often when you discuss politics your bias is so strong and your meandering from the real question. The question in this video could be answered relativly simple: How much stuff was produced before, in, after the war. And no it does not matter a bit what the prices are. The totals in tonnes or litres or such are the point. The calories the people get are the point.

  58. Tik: yeah we may have produced a million tanks, but what does that matter if a million people starved to death.
    Stalin: I see this as an absolute win

  59. Excellent, TIK! This should at last shut the 'Stick to Tanks' party! There's no way one could've made things clearer and better explained so that everybody understood the meaningn and could grasp the view on economics. Even though (it is) stealing, for example, might make some viewers immediately feel uncomfortable or suspicious of anything you say due to not understanding nor willing to understand; by now the terms and expressions you use made even a friend of mine who stood in the tanks-fraction was reformed by this..
    Once again – nice work & keep safe. Cheers,
    KV

  60. I remember when I was a kid, the Soviets had a really bad wheat harvest, and Richard Nixon agreed to sell them all the Wheat they needed, got congress to lend them the money to buy the wheat and the only condition was that they would have to allow American Ships to deliver it. They agreed to it, and then the Debt for the food was forgiven. It just was not the losses in the Second World War that damaged them, It was how the Soviets operated and all the out and out Murder that when on from the time of the Revolution to well into the late 1940s at least. And when you look at the country today, the main problem they have is that they are too few. Not enough young people, So I would say no, they have not recovered from the Second World War, heck the 20th century as a whole was not kind to Russia or it's people. There is a lot there that they do very very well and there are lots of things to admire about them. It's a hard place to live being as far North as they are, and it's a bear just getting around even to this very day. And given there history, you can understand why they do the things they do.

  61. I can recommend 'Red Plenty' by Francis Spufford as an original read on the subject of Soviet economics. Rather than looking at statistics, it explains how the system worked (or didn't work) & the consequences of not having market prices by telling stories. it's a great read…

  62. The biggest issue I see from right wing analysts is that they always look for cherry picked points that promote or support their ideological values and beliefs.

    Stalin was a brutal tyrant, but from what he saw in the civil war, it was inevitable that the USSR would be invaded by a foreign power to crush Bolshevism. He understood that due to ideology, the USSR is bound to fight a war of survival.

    This is the reason why his desperation for industrialization was so costly in human lives. He realized that the USSR only had a few decades at most to catch up to the Western/ European powers, otherwise a war would destroy the USSR .

    Please let me know your thoughts on this.

  63. This sounds eerily close to where we're headed in the US (and the rest of the western world, I presume) with this corona hysteria and draconian political responses. Millennials in particular have some romanticized idea about socialism, which is why they cheer on relics like Bernie "the American Trotsky" Sanders. The corona hysteria is a cover for an economic coup to replace the traditional western economic system with a socialist economy whereby all economic activity will be controlled by the state. There's even talk of banning paper currency, like the Bolsheviks tried to do. Too many scary parallels between what's going on today and what went on in the Soviet Union. Excellent essay!

  64. This same issue of lacking a realistic pricing mechanism is a problem with determining economic output in modern China. The methods used generally revolve around looking for indicators that can't be faked or where external pricing systems (foreign trade) forces an actual value that can be reliable. Things like capital goods orders, imports and exports, foreign financial transactions, and commodity prices are some ways used to estimate a Socialist economy, but even using these methods and others, it's still just an estimate. Soviet and Chinese economic statics cannot be trusted because they can assign any value to the economic activity they are measuring. So, they are essentially meaningless. For example, modern China maintains arbitrarily low prices on consumer goods to make it appear that things are cheap. Things ARE cheap to buy in China because the government manipulates the pricing system, but doing so completely obscures the real cost of those goods and services. That's why China's real GDP is estimated to be about 10 – 14 Trillion dollars, but the Purchasing Power Parity or PPP GDP is 27 Trillion !!!!!

  65. Note about cotton production – most of that was ear-marked for export. They needed the injection of foreign capital….

  66. They didn't recover all the good land for agriculture was fought for so they still starved stallin though and army at good forget the peasant that built for the war

  67. What Communism is. The communist's hand is in another's pocket. Sometimes he/she change colour red to green to get power.

  68. Of course one should consider what percentage of the GDP was spent on the military and weapons. No matter what economic format a country has; if it has crushing military spending percentage wise of its GDP, it'll hamper all other development……..especially if trying to recover from a disaster like war.
    It's like when Reagan told Gorbachev "We'll outspend you on nuclear missile development".
    At that point Gorbachev knew the USSR couldn't keep up the expensive pace due to a lower GDP than the US and sought out a negotiated arms settlement.

  69. This video is awesome not only for a historical reference but also as yet another analysis of why Communism doesn't work.👍🏼

    More Americans need to hear stuff like this especially from people outside of America because Americans never had to live through something like this so they have no experience or reference other than what the Democrats and the Left are telling them.

    Good Job👍🏼

  70. WW2 was so gigantic, especially to those (like Russia) who were invaded and occupied, that many never recovered. Heck, America was not conquered or occupied and we still have scars from WW2. Having said all that, it was Chernobyl and Afghanistan which finally broke the back of the Soviets, both cases stinging defeats of the Soviet response to real problems, as well as cover-ups about the real situation(s). The USSR couldn't deal with both internal, Europe-wide criticism as well as the constant veiled threat from America…

  71. It's easy to see how it was so easy to convince national socialists Germany that the jews were the bad guys when you have banking overlords like Goldman Sachs in the US, but at the end of the day it's all the same shit. Socilism, Communism, Democratic Socialism, Marxist Socialism, Jewish Cabal, bourgeoisie etc., it's all the same; a group of people will convince you to give up your individual rights for "the greater good" and then essentially make you slaves to the state or even if you don't do it your neighbors will force you to. It's a system created by losers who have gotten sympathy from better people to do something that's been done on and off throughout history. It doesn't raise everyone to the highest man, but takes everyone to the lowest common denominator. I'm not a libertarian, I think some government should be instituted and that the federal governments job should ONLY be to protect its people and then from there let people decide what they want. Let the government be like Crom. Crom gives everyone who lives the strength needed to live, then lets them be. Crom is not prayed to and to draw the attention of Crom is likely to only invite ruin. But he lets his people be free to live the lives they wish, there are no offerings and the only act of devotion you can give to Crom is making something of yourself. That's how it should be, if you fail or succeed, the only person who can take blame or credit is you

  72. Even though most of the Western world's politicians were so busy snatching defeat from the jaws of victory at the fall of the Soviet Union, a few examples of the true failure of Socialism were actually allowed to be recorded.
    The best, for me, were when a former Soviet citizen visiting even the crappiest grocery store anywhere in the West. Just seeing the amount of plenty our poorest had access to would bring them to tears, when the full weight of the Socialist's lies were laid bare.

  73. Nooo. Don’t say tea prices will rise. We will have to forcibly trade opium or something for it. And make sure to not let any Americans get near the cargo vessels

  74. There was even a joke:

    ,,Why did the Soviet Union start importing grain in the 1980s?

    Because the last of the Tsars left the stocks "only" for 70 years."

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