0.4
Employment
1.4
3.9
0.3
1.6
1.8
1.4
0.7
0.1
Capital
5.7*
0.4
8.0
7.4
6.2
. Total Factor Productivity (TFP)
0.5*
1.7
2
0.4
0.5
– 1.2 -1.0 . Consumption
3.2
3.5
3.3
5.2
5.2
3.4
1.9
2.2
Consumption per Capita
2.1
1.4
2.5
3.3
3.9
2.5
1.0
1.3
SOURCE: Ofer, 1987; Laurie Kurtzweg, “Trends in Soviet Gross National Product” in United States Congress, Joint Economic Committee. Gorbachev’s Economic Plans, Vol. 1, Washington D.C., pp. 126-165; James Noren and Laurie Kurtzweg, “The Soviet Economy Unravels: 1985-91” in United States Congress, Joint Economic Committee. The Former Soviet Union in Transition, Vol. 1, Washington D.C. pp. 8-33, 1993; Angus Maddison. Monitoring the World Economy 1820-1992, OECD, Paris, 1995; Angus Maddison, The World Economy : A Millennial Perspective, OECD, Paris, 2000.
The growth record of the Soviet Union-its initial success and eventual failure-is a joint outcome of the selected growth strategy and the system of central planning, including almost full state ownership of the means of production. The centrally planned system was more effective at the start in mobilizing all needed resources, and directing them to the goals of industrialization and growth. The system is also characterized by using commands instead of incentives and decentralized initiatives: emphasis on fulfillment of quantitative production targets rather than on improvements in quality, technology, and efficiency, routine expansion instead of creativity, and rigidity and “more of the same” instead of flexibility-a very high cost for any change. Some of the above characteristics, while advantageous at the start, turned out to be obstacles when the economy developed and became more complex. Other features, such as difficulties in creating indigenous technological innovations, were less harmful initially, when technology could be transferred from abroad, but more of a hindrance later when more domestic efforts were needed.
The Soviet communist growth strategy, following Marxian doctrine, was based on high rates of investment
