Some of the main reasons for low labor productivity in the Soviet Union were the lack of motivation of workers, widespread theft, and mass drunkenness. Together, these three factors caused serious damage to the USSR economy. The ordinary Soviet worker was often not interested in the results of his work when he saw that his colleagues, doing the same work carelessly, received the same salary as him.

“If you get it, steal it!”

The prestige of work (and, accordingly, high salaries) in the USSR directly depended on the social status of the citizen. Those who were not members of the CPSU could not count on a high position in any industry. The total shortage of consumer goods contributed to the differentiation of professions according to the degree of their prestige - sellers, store managers, butchers and everyone who had access to material benefits of this kind came to the fore. Those who got to the place were not particularly shy - widespread theft in production was recorded even under Stalin. Just one example: “In total for 1947-1949. in industrial cooperation cooperatives, embezzlement and theft amounted to more than 130 million rubles, half of which was written off as losses; in 1949, cases of embezzlement amounting to 15 million rubles were not transferred to the investigative authorities.” For comparison: the average monthly salary in the national economy in the Soviet Union in 1950 was 646 rubles. Numerous trials against the Soviet mafia, which often included the leaders of the national republics of the USSR, are well known. Ordinary people, if they didn’t know, then guessed about the thievery of their superiors, and they themselves were not at a loss. It was during the times of the USSR that the saying was born: “Take even a nail from the factory - you are the master here, not a guest!” Social responsibility for the effectiveness and efficiency of production in the USSR was nominally declared, but in fact did not exist.

How parasites and alcoholics were punished

The fight against parasites began under Lenin. Vladimir Ilyich in his article “How to organize a competition?” strongly recommended that those who did not want to work should be put in prison, forced to clean “outhouses” and even shot. From the early 60s to the 90s, parasites were evicted for up to 5 years. In just 2.5 years from the date of adoption of the corresponding decree (in 1961), such a fate was destined for 37 thousand people. Among the elements who do not want to join socially useful work is the future Nobel Prize winner, the famous poet Joseph Brodsky.

The widespread drunkenness in the USSR also did not contribute to the growth of labor productivity. During the existence of the Soviet Union, there were as many as 5 state anti-alcohol campaigns conducted throughout the country - from 1918 to 1990. In 1972, LTPs began operating - medical and labor dispensaries, where Soviet drunkards and alcoholics were forcibly sent for correction. The most famous anti-alcohol campaign was carried out during the time of “mineral secretary” Gorbachev - the scale of alcohol consumption in the USSR by the early 80s reached more than 10 liters per year per person (under Nicholas II and during the reign of Stalin, this figure did not exceed 5 liters) . Massive cases of industrial injuries, an exorbitant percentage of defective products - all this was often associated with rampant drunkenness. In general, this campaign, carried out from 1985 to 1990, was called a failure - despite Prohibition, Soviet citizens found other opportunities to drink, switching to using moonshine and surrogates. However, judging by the statistics, over these 5 years, 500 thousand more children were born in the USSR than in previous decades, and life expectancy among men increased by 2.6 years, and reached a maximum in the entire history of Russia.

Enslaved Village

A significant number of Soviet citizens lived in rural areas. Until 1953, peasants in the USSR were not issued passports - they could be given a certificate of permission to leave the village (for example, a guy or a girl to enter a university), and often they were refused. Most peasants simply had no choice - they knew that they would have to plow the land on collective and state farms until the end of their years, where “everything around is collective farm, everything around is mine.” In this regard, labor productivity in rural areas was corresponding.

In addition, throughout the years of Soviet power, peasants were subject to various types of taxes - both in monetary terms and in kind - collective farmers had to hand over to the state a certain amount of meat, milk and other products from their farmstead. A combine operator could thresh a record amount of grain and receive a substantial bonus for it. But he had nothing to spend it on - cars were sold by appointment, and there was also a shortage of other in-demand items.

Why was everything different here than abroad?

While Soviet economic growth steadily slowed, growth continued for decades in the United States, Japan, South Korea, Taiwan, Singapore, and Hong Kong. For example, if in the period 1980-87. The total productivity of the USSR “went into the negative” (-0.2%), while in Japan its growth averaged 2%. The difference in economic models - Soviet planned and Western market, of course, is fundamentally important for understanding the situation with low labor productivity in the USSR. But one should not discount the main factor in the difference between the approach to labor responsibilities of a Soviet citizen and a foreigner - in the USSR, a person has always been a dependent “cog” in the flywheel of the system, and abroad the individual characteristics and abilities of the employee have been and remain a priority.

From the community administration

You can, of course, list the symptoms of the disease that destroyed the USSR. But wouldn't it be better to call this disease?

Why did the growth rate of the Soviet economy decrease during the Brezhnev period?

The question formulated in the title seems simple, but the answer is not so simple. Really, why? If everything is explained by the nature of the planned economy, which, as they say, “does not work,” then it is not clear why it demonstrated exceptionally high, downright “Asian” growth rates in the 1950s. The growth rate of labor productivity in the USSR (not according to official statistics, but according to alternative estimates that correct official data towards underestimation) decreased from 6% in the 1950s to 3% in the 1960s, 2% in the 1970s and 1 % in the 1980s (Fig. 1).

Why did the planned economy “work” better in the 1950s than today’s Russian market economy, and no worse than the economy of the “Asian Tigers” in the 1950s-1970s, and then stopped “working”? References to oil prices do not help, since their radical decline occurred in 1986, while in 1973-1982 prices were very high, which, however, did not lead to an acceleration of growth.

Moreover, the nature of the slowdown in growth rates in the USSR in the 1960-1980s does not fit into the standard explanations offered by the theory of economic growth. The latter assumes that as the share of investment in gross domestic product (GDP) increases - from 15% in 1950 to more than 30% in 1985 - the return on this investment should decline, and the rate of economic growth may slow down accordingly . However, it remains unclear why Asian economies were able to maintain high growth rates, raising the share of investment in GDP to even higher levels. In China, for example, the share of investment in GDP rose from 30% in 1970-1975 to almost 50% in 2005, and the annual growth rate has remained at 10% for almost three decades. Why did growth rates in the Soviet Union systematically fall with a growing share of investment in GDP, so much so that, according to a common comparison, in the 1980s the USSR had a Japanese level of investment with completely un-Japanese results.

If, on the contrary, we assume that the overaccumulation of capital in a market economy should not lead to a significant drop in the return on it and a slowdown in growth rates, then in this case it is, therefore, a matter of the nature of the planned system itself, which makes new investments ineffective. But why then did this planned system demonstrate exceptionally high rates of productivity growth in the 1950s? Military spending was already high and rising (from 9% of GDP in 1950 to 10-13% by the end of the decade), and the share of investment in GDP, although increasing significantly, was still below 25% by 1960.

A very high share of military spending and a moderate level of investment should not, other things being equal, lead to rapid growth. But the fact remains that the 1950s were the "golden period" of Soviet and Russian economic growth - with the exception of the NEP period (1921-1929), neither the USSR nor Russia ever developed faster than the Soviet planned economy of the 1950s. It remains to conclude that in the Soviet planning system itself, which was in principle capable of rapid development, certain changes occurred in the 1960-1980s that undermined the previous growth potential.

Factors of economic growth in the USSR and East Asia

In the classical theory of economic growth, growth factors are divided into extensive (increasing investment of resources - labor, capital, land) and intensive (technical progress in the broad sense of the word - all innovations leading to an increase in the return on these investments). It is believed that an increase in the investments of one of the factors without a proportional increase in the investments of others will certainly lead to a decrease in returns. So, say, an increase in capital investment in machinery and equipment without a corresponding increase in employment will produce smaller and smaller increases in output. Therefore, speeding up investments - accumulating capital at an accelerated rate - is not very profitable: the efficiency of capital investments will decrease, so that if growth acceleration occurs, it will be very insignificant and temporary.

For many decades, the Soviet experience of economic growth was regarded in the West as a textbook example of the “disease of overinvestment” leading to a decline in total factor productivity. It has been called the best illustration of the findings of the classical Solow model, which predicts that the rate of growth in the long run does not depend on the share of investment in GDP, and the return on this investment falls as the capital-labor ratio increases. The USSR, as Alice in Wonderland said on another occasion, had to run twice as fast to stay in the same place. Estimates of total factor productivity showed its decreasing contribution to economic growth. In the 1970-1980s, this contribution even became negative, so that positive growth rates were achieved only through the expansion of the use of labor and, in particular, capital (fixed assets).

However, in East Asian countries (Japan, South Korea, Taiwan, Singapore, Hong Kong, and later China), rapid economic growth continued for several decades with a very high share of investment in GDP. It turned out that they used the Soviet recipe for accelerated economic growth with much greater success.

In 1994, Paul Krugman, one of the most famous American economists, based on new calculations of the factors of economic growth in East Asia produced by Alvin Young, concluded that there was no secret to East Asian growth. He proved that East Asian growth was largely extensive, as in the USSR, and that the contribution of technological progress (total factor productivity) to the overall result was much less than in developed countries.

It followed that there was no great secret in Asian growth - if you are willing to allocate more than a third of your GDP to investment, limiting consumption, then you too can grow that way, and there is no need to reinvent the wheel. In addition, Krugman predicted that this growth would soon end, as the Soviet one ended, because as labor reserves deplete due to the full involvement of women in production and the slowdown in the flow of peasants into the cities, increasing investment gives less and less returns, the efficiency of accumulation is increasingly falling . This growth slowdown has already occurred in Japan (since the 1970s), Korea and Taiwan (since the 1980s), despite the continued high share of investment in GDP, and is now set to occur in ASEAN countries and China.

The currency crises of 1997, immediately followed by East Asian growth rates slowing sharply, would seem to prove Krugman right. For China, however, the crisis was like grain for an elephant: GDP continued to grow, only the growth rate decreased from 9% in 1997 to 8% in 1998 and 7% in 1999, and again in 2000-2006 increased to 9-10%. But in the countries of Southeast Asia, GDP fell by 9% in 1998, and in the “four tigers” - Korea, Taiwan, Singapore, Hong Kong - by 3%.

However, there are at least three objections to this. First, what economists call extensive growth, for example, accelerated capital accumulation with weak labor force growth and lack of technological progress, may well lead to an increase in the level of economic development - GDP per capita. If South Korea increased its GDP per capita from less than 10% of the US level in 1960 to 50% in 1995, then, as they say, God bless everyone with such extensive development. Even if the efficiency of accumulation falls, even if the growth rate falls later, the job has already been done, the country has broken out of backwardness.

The fact is that labor productivity depends on two factors - capital-labor ratio (the amount of capital per employee) and the technical level of production. In developing countries, both indicators are lower than in developed ones, therefore, accelerated capital accumulation, leading to an increase in the capital-labor ratio, is the main path of catching-up development for such countries. So there is nothing shameful in the “extensive” accelerated accumulation of capital; on the contrary, there is a mystery - why some countries manage to maintain a high share of investment in GDP, while others do not.

Secondly, after the crises of 1997, East Asia again seems to have “returned to the old ways” - monetary and financial crises did not bury rapid growth once and for all, but turned out to be only “temporary growth difficulties”. It now appears, as some authors have predicted, that growth in ASEAN and China will continue and within a few decades will transform them into economically developed states, as happened previously with Japan, Korea and Taiwan.

But even if Asia's rapid growth ends tomorrow, the talking point will still not go away. The miracle has already happened, happened before our eyes, there were no such precedents in the world, no one grew as fast as Japan, Korea, Taiwan, the countries of Southeast Asia, China. And if growth stops tomorrow, we will have two riddles instead of one - it will be necessary to explain not only why there was growth before, but also why it has ended now. As Nobel laureate in economics Robert Lucas said, “...if we know what an economic miracle is, we should be able to create it”; Well, if we can’t create, then we don’t know.

And finally, thirdly, and most importantly. Alvin Young's statistical estimates of the weak contribution of technological progress to East Asian growth are not the only ones mentioned; there are others showing that the contribution was about the same as in Western countries and significantly higher than in all other developing countries. Then it turns out that East Asia knows not one, but two great secrets - not only how to maintain a high share of investment in GDP, but also how to ensure a higher rate of technological progress than in other catching up countries.

Not least for this reason, the classical growth model itself was subject to revision in the 1980s, mainly because East Asian rapid growth did not fit into the pattern of an inevitable decline in the efficiency of accumulation as the share of investment in GDP increases. In both the USSR and East Asia, the share of investment in GDP was high, but the results were different: in the Soviet Union, more and more investment was needed so that growth rates did not fall (and they still continued to fall), while in Eastern Asia In Asia, increased investment led to faster growth.

Therefore, models of so-called endogenous growth appeared, in which technical progress itself depends on the accumulation of physical capital (machines, structures) and human capital (stock of knowledge and professional skills). Endogenous growth models predicted that with high rates of accumulation (a high share of investment in GDP), high rates of economic growth could be maintained indefinitely. And if growth slows down, as in Japan, Korea, Taiwan and the USSR, then some special factors, mistakes in economic policy, are to blame.

The sad story of the slowdown in Soviet growth thus received a different interpretation, turning from the rule into the exception - it all comes down to the planned nature of the economy. In a market environment, such a slowdown in growth while increasing investment could not occur; market economies with a high rate of accumulation (Japan, Korea, Taiwan) proved their ability to grow rapidly - at least until they caught up with developed countries. But in the Soviet Union, growth slowed even before Soviet GDP per capita approached the level of advanced countries.

The question of to what extent the slowdown in growth in the Soviet planned economy in the 1960-1980s was caused by overaccumulation of capital (fixed assets), and to what extent it was a consequence of specific reasons rooted in the nature of the planned economy, does not have a clear answer in the literature. Some authors, analyzing the factors of Soviet economic growth using the Cobb-Douglas production function, come to the conclusion that the contribution of technological progress to economic growth was constantly declining due to overaccumulation of capital. Others, however, point out that there is an alternative explanation that does not contradict the basic stylized facts, namely, the low elasticity of the substitution of capital for labor, leading to a drop in the efficiency of accumulation even at constant rates of technical progress. Moreover, it is not possible to empirically verify which function should be used; everything depends on the accepted premises. An argument in favor of using the CES function, however, is the fact that the inconsistency in explaining the different results of economic growth in Japan, Korea and Taiwan, on the one hand, and in the USSR, on the other, disappears if we only assume that in the USSR the elasticity of substitution of labor for capital was less than one.

Easterly and Fisher, in one of the best articles on Soviet economic growth, show that the increase in capital intensity in the USSR during the 1960s-1980s was no greater than in Japan, Korea and Taiwan during their periods of rapid growth (Table 1), so explain

Table 1. Factors of economic growth in the USSR (alternative estimates) and in some fast-growing Asian economies in 1928-1990, average annual data, in %

Country/Period	Labor productivity	Capital ratio	Capital intensity	Total factor productivity (unit elasticity of substitution of capital for labor)	Total factor productivity (elasticity of substitution of labor with capital = 0.4)
USSR (1928-1939)
USSR (1940-1949)
USSR (1950-1959)
USSR (1960-1969)
USSR (1970-1979)
USSR (1980-1987)
Japan (1950/57/65/-1985/88/90)*
South Korea (1950/60/65-1985/88/90)*
Taiwan (1950/53/65-1985/88/90)*

* The range of values ​​for the growth rate of capital intensity and total factor productivity corresponds to different time intervals.

slowing down Soviet growth by simply overaccumulating capital is not possible. But under the assumption that the elasticity of substitution of labor for capital is lower than in market economies, everything falls into place. But, of course, in this case, as is usually the case, new questions arise: why is the elasticity of substitution lower in a planned economy than in a market economy, and why, at least in certain periods (1950s), is it the same as in market? Moreover, modern endogenous growth models assume that the accumulation of capital does not reduce its marginal productivity at all, so this raises a more general question about the nature of the economy, in which the efficiency of accumulation decreases in some periods and not in others.

Elasticity of substitution and disposal of fixed assets

The low elasticity of the replacement of labor with capital in a planned economy is in good agreement with the well-known stylized fact: the weakest point of the planned system is its inability to timely replace outdated equipment and other elements of fixed assets. A planned economy can build new capacities and expand existing ones, but when it comes to renovation, it cannot compete with a market economy. In the Soviet economy, the service life of fixed capital was very long, the retirement of elements of fixed assets was very slow, and the average age of machinery and equipment, buildings and structures was high and constantly growing.

Accumulated depreciation increased from 26% of the gross value of fixed assets in 1970 to 45% in 1989 throughout industry, and in some industries, in particular in the chemical, petrochemical, and ferrous metallurgy, it greatly exceeded 50%. The average age of industrial equipment increased from 8.3 to 10.3 years, and its average service life increased to 26 years by the end of the 1980s. The share of equipment with a service life of more than 10 years increased from 29% in 1970 to 35% in 1980 and to 40% in 1989, while the share of equipment with an age of more than 20 years increased from 8 to 14% (Table 2 ).

Table 2. Age characteristics of equipment in Soviet industry

Years	1970	1980	1985	1989
Share of equipment with age: Less than 5 years
Over 20 years
Average age of equipment, years
Average service life of equipment, years
Accumulated depreciation, as a percentage of the gross value of fixed assets

The rate of disposal of fixed assets in Soviet industry in the 1980s was at the level of 2-3% versus 4-5% in the US manufacturing industry, and for machinery and equipment it was only 3-4% versus 5-6% in the USA. In practice, this meant that Soviet cars lasted on average from 25 to 33 years, compared to 16-20 in the USA. Naturally, because the main investments were not used to compensate for disposal, but to expand fixed assets. If in the manufacturing industry of the United States 50-60% of all capital investments went to compensate for disposal, then in the industry of the USSR - only 30%, the remaining 70% went to expand fixed assets or increase unfinished construction. Of the 16 types of production facilities for which there is data on commissioning, in 15 cases the share of those commissioned as a result of reconstruction in 1971-1989 was below 50%; the unweighted average of the share of capacity growth due to reconstruction (rather than due to the construction of new ones and the expansion of old ones) was only 23%.

Official statistics show that the share of investments allocated to the reconstruction of existing facilities increased from 33% in 1980 to 39% in 1985 and to 50% in 1989, but many other data from the same official statistics contradict this. For example, the rate of disposal of all fixed assets in Soviet industry was less than 2% (and about 3% for the disposal of worn-out and obsolete equipment), and in 1967-1985 it was either stable or decreasing (Fig. 2). Only in 1965-1967 (immediately after the Kosygin economic reform, which created a production development fund that enterprises could use to finance investments at their own discretion) and in 1986-1987 (the period of “acceleration” and “structural restructuring”) a noticeable, but very short-term increase in the disposal rate.

Accordingly, the share of investments allocated to compensate for disposal in total capital investments was almost always at a level of less than 20%, rising above the 25% mark only in 1966-1967 and in 1986-1989 (Fig. 3).

The emphasis on the construction of new and expansion of existing capacities at the expense of the reconstruction of existing ones had the most negative consequences for the dynamics of capital productivity. Capacity utilization in Soviet industry was declining rapidly, although according to official statistics the drop in utilization was relatively small. The growing “labor shortage” was nothing more than the flip side of the falling load - new capacities were put into operation that were not provided with labor. According to Gosplan specialists, by the mid-1980s, “excess” capacity not provided with labor accounted for about a quarter of all fixed assets in industry and about one fifth in the entire economy. In the main (core) production of industrial enterprises, about 25% of jobs were empty, and in mechanical engineering the share of idle equipment reached 45%. For every 100 machine tools in mechanical engineering there were only 63 machine operators. The total number of machine tools in Soviet industry was two and a half times higher than the number of machine tools in US industry, but these machines worked for half as long as American ones. Meanwhile, the shift rate in Soviet industry decreased from 1.54 in 1960 to 1.42 in 1970, 1.37 in 1980 and 1.35 in 1985.

The life cycle of a planned economy after the “big push”

At first glance, it might seem that the whole problem of low capacity utilization, or the problem of “labor shortage”, as planners usually called it, had a simple and easily implementable solution, especially in a planned economy - it was simply necessary to reorient investments from the construction of new capacities to reconstruction old Moreover, it was precisely in a directively planned economy that such a maneuver was possible, because it was not about micro-proportions, in maintaining which the plan was inferior to the market, but about large-scale structural shifts, in the implementation of which the planned system has repeatedly proven its advantage.

However, this is exactly the case when the long-term goals of the planned system came into absolute conflict with the most important principle of its functioning - the planned target for production volumes (plan for nomenclature). The main criterion for assessing the activity of the enterprise was the implementation of the “plan for the shaft”, and it was absolutely impossible to abandon this principle without changing the very nature of the system.

Replacing outdated equipment required a temporary shutdown of the plant for reconstruction, which was associated with a decrease in output, that is, failure to fulfill the plan. Even if the reconstruction could be carried out instantly, the increase in output (due to the greater productivity of the new equipment) would be less in the short term than if all the new investment were aimed at building new plants or expanding existing facilities. In the latter case, there was hope that the old plant would somehow survive without reconstruction and continue producing products until new capacities came into operation, so decisions to replace equipment were constantly postponed. Outdated and worn-out equipment was therefore endlessly repaired; the cost of overhauls accounted for a good third of all capital investments.

The concentration of capital investments on the construction of new and expansion of existing facilities, therefore, was not a management mistake of the planners, but an integral principle of the functioning of the Soviet planning system, which prioritized the implementation of planned targets. Deficits in the planning system arose everywhere almost by definition (due to the physical impossibility of achieving inter-industry balance - achieving proportionality in the production of millions of different types of products), and investments were considered by planners as the main tool for “breaking up” bottlenecks. Investments were directed specifically at expanding production capacity, which made it possible to quickly increase the production of scarce products in a relatively short time. The entire planning process, therefore, looked like a continuous series of forced decisions to eliminate acute deficits that arose faster than the planners could cope with them. How, in such a situation, could a decision be made to shut down the plant for technical reconstruction?

It was a vicious circle, a continuous race in which investment allocation decisions were made to eliminate recurring deficits. Reduced investments in capacity expansion inevitably led to an exacerbation of shortages of certain products, a resulting decrease in capacity utilization and a drop in capital productivity. An increase in investment in capacity expansion due to savings on the reconstruction of outdated plants inevitably resulted in aging equipment, an increase in the gap between jobs and the available labor force, which also reduced capacity utilization and capital productivity. The third, unfortunately, was not given in the planned system.

Here we finally come to answer the central question of why productivity growth in the Soviet economy peaked in the 1950s and then began to fall. The answer is that the planned system, due to its inherent and inherent defect - the inability to timely update aging equipment - was doomed to survive a life cycle associated with the service life of fixed capital. If this period is, say, twenty years, then in the first two decades after the “big push” - a sharp expansion of investment in fixed assets (in new capacities or in the reconstruction of existing ones) - there is a rapid increase in productivity even with an increase in capital intensity (a fall in capital productivity). After twenty years, the retirement of fixed capital begins, but the planned system does not fully ensure its timely replacement, so growth begins to slow down and, in the end, as the growing volume of retirement begins to catch up with the volume of capital investment, it can completely come to naught.

Some calculation results using a simple model based on the Domar model are shown in Fig. 4 . If we assume that the “big push” occurred in 1930 (the share of capital investment in GDP increased from 5 to 10% and then remained at this level), that the increase in output is proportional to the volume of net investment (gross capital investment minus disposals) and the ratio of disposals to gross investments (the larger the share of capital investments allocated to compensate for disposal, the greater the increase in output), then it turns out to be possible to find the optimal level of disposal. It is equal to 10% of total investment and gives the best growth trajectory (top line in Fig. 2): the growth rate rises from 5% in 1930 to 9% in 1950, and then falls and stabilizes at around 8% in year. At lower levels of attrition (the bottom three lines in Figure 4, corresponding to attrition rates of 7%, 6%, and 5% of total investment), growth rates fall much more rapidly after 1950 and converge toward either a small positive value or , as in the case of the last trajectory, to zero.

These results should not be taken as definitive proof, but they demonstrate more rigorously an intuitively clear effect: under very simple assumptions about the limitations on the replacement of obsolete capital stock inherent in a planned system, the change in the rate of economic growth after the Big Push depends on the service life of elements of the capital stock and thus determines the life cycle of the planned system.

The fact that the decline in growth rates in the USSR actually began in the 1960s and not in the 1950s, as one might assume, that is, thirty rather than twenty years after the “big push,” can easily be explained by the influence of the Great Patriotic War, leading to the destruction of a significant part of fixed assets. For a whole decade (1940-1950), fixed assets did not actually increase (at first they were reduced due to war destruction, then restored to the pre-war level), so these ten years should be added to the natural twenty-year cycle. In addition, the average service life of fixed assets is a rather uncertain indicator: in the 1970-1980s, the average service life of machinery and equipment was 25 years (2-3 times longer for buildings and structures), and there is no data for an earlier period. If in the 1930s-1950s the service life of machinery and equipment was about 30 years, then even without the influence of the war, the peak of Soviet growth rates should have occurred in the 1950s.

It turns out, therefore, that the low elasticity of replacing labor with capital is an essential characteristic of the planned system, which is aimed at expanding fixed assets (commissioning new capacities) to the detriment of compensating for their retirement (reconstruction of old capacities). This investment strategy gives the best results after the “big push” - for a period approximately equal to the service life of the fixed assets, until large-scale retirement of equipment begins, but then the productivity of new investments inevitably declines and the growth rate falls. According to this approach, a planned economy, despite the imbalances and associated low investment efficiency, can maintain high growth rates for two to three decades after the “big push”, but then a slowdown inevitably sets in. In the Soviet Union, the planned economy established itself after the collapse of the NEP, during the first five-year plan (1928-1932), twenty years later it entered a period of very rapid growth, but then (1960-1980s) there was an aging of fixed assets, a drop in capital productivity and the rate of economic growth .

So, the planned system has its own life cycle, determined by the service life of fixed assets and the moment of the “big push”. In fact, the ability to mobilize domestic savings to provide this “push”, allowing poor countries to escape from the “trap of underdevelopment”, has always been considered the main advantage of a planned economy. It turns out, however, that due to the inability to ensure timely replacement of aging equipment, a planned system can only function more or less successfully for two or three decades after the “big push”, and then an inevitable slowdown in growth occurs. The inability of the planned economy to direct the necessary investments to replace disposals appears to be a key factor among the many reasons for the slowdown in growth rates in the 1960-1980s, which ended in “stagnation”. In any case, this “built-in defect” of the planned system is sufficient to explain the slowdown in growth rates that actually occurred.

From this, in particular, it follows that if there was a need to introduce a planned system in the early 1930s to achieve the “big push,” it had to be reformed in the 1960s, after its main advantages had already been exhausted. The Asian path (China and Vietnam, where a planned economy emerged only after the Second World War) also seems preferable in this area - for example, in China, market reforms began in 1979, in Vietnam - in 1986. The countries of Eastern Europe, where the planned economy existed for more than four decades (1945/50-1990), and especially the USSR, which had a planned economy the longest, more than sixty years (1929/30-1991), had to experience the negative consequences of the “aging” of the planned economy. systems to the fullest.

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Wang, Yan and Yao Yudong (2001). Sources of China's Economic Growth, 1952-99. The World Bank, World Bank Institute, Economic Policy and Poverty Reduction Division July 2001.

Weitzman, M. 1970. Soviet Postwar Economic Growth and Capital-Labor Substitution. – American Economic Review, Vol. 60, No.5 (December), pp. 676-92.

Young A. 1994. Lessons from the East Asian NICs: A Contrarian View. – European Economic Review, Vol. 38, No.4, pp. 964-73. Wang Yan, Yudong Yao.

Sources of China's Economic Growth, 1952-1999.

The World Bank. World Bank Institute. Economic Policy and Poverty Reduction Division. July 2001;

China Statistical Yearbook [contagious years]. Easterly W., Fisher S. The Soviet Economic Decline // The World Bank Economic Review. 1995. Vol. 9.No. 3. P. 341-371.// European Economic Review. 1994. Vol. 38.No. 4. P. 964-973.

See, for example: Gomulka S. Slowdown in Soviet Industrial Growth, 1947-1985 Reconsidered// European Economic Review. 1977. Vol. 10.No. 1. P. 37-49; Bergson A. Technological progress // Bergson A., Levine H. (Eds.). The Soviet Economy Towards the Year 2000. London: George Allen and Unwin, 1983; Ofer G. Soviet economic growth: 1928-1985// Journal of Economic Literature. 1987. Vol. 25.No. 4. P. 1767-1833.

The elasticity of the replacement of labor with capital is the ratio of the growth rates of capital and labor, on the one hand, and the values ​​of additional units of product that can be produced with the addition of each unit of labor or capital, on the other. If the elasticity of substitution is equal to one, as in the Cobb-Douglas function, then the faster growth of capital relative to labor leads to a fall in the marginal productivity of capital, which, however, is compensated by the increasing marginal productivity of labor. But if the elasticity of substitution is less than unity, then with faster growth of capital, its falling marginal productivity may not be fully compensated by the increasing marginal productivity of labor, so that a natural slowdown in growth occurs even at constant rates of technical progress. Using the CES function (CES-constantelasticitysubstitution-productionfunction) with a constant, but not unit, but lower (0.4) elasticity of substitution, they get good results without the premise of a slowdown in technical progress. See: Weitzman M. Soviet Postwar Economic Growth and Capital-Labor Substitution Production Capacity// Economic Issues. 1985. No. 3. P. 47; Waltuch K., Lavrovsky B. The country's production apparatus: use and reconstruction// IVF. 1986. No. 2. P. 17-32.

Shmelev N., Popov V. Decree. op. ;IMF, WB, OECD, EBRD. A Study of the Soviet Economy. 1991. February. Vol. 1, 2, 3.

Many authors draw attention to this “built-in defect” of the planned system. In particular, waterworks (Iacopetta M. Dissemination of Technology in Market and Planned Economies School of Economics. Georgia Institute of Technology, 2003) the gap inherent in the Soviet system between the high level of scientific development and the slow introduction of new technologies is explained by the fact that managers were not interested in reconstructing their enterprises for fear of not meeting planned targets. Other work (Ickes B., Ryterman R. Entry Without Exit: Economic Selection Under Socialism. Department of Economics. The Pennsylvania State University, 1997) offers a model showing that in the absence of mechanisms for the “exit” of firms (bankruptcy), two sectors arise in the economy - effective and ineffective, into which more resources are nevertheless directed.

The USSR economy demonstrated amazing growth rates in labor productivity, but in the 90s we experienced such a decline in production that we still cannot restore previous indicators. Pravda talks about what is being done now to develop the labor market. Ru Alexander Shcherbakov, professor of the Department of Labor and Social Policy of the Russian Academy of National Economy and Public Administration under the President of the Russian Federation.

How to increase labor productivity in Russia?

— Alexander Ivanovich, we have practically forgotten this good old term “labor productivity” until the President of the Russian Federation Vladimir Putin very substantively reminded about it in May. Please tell us how it happened, and why?

— It seems to me that labor productivity is an extremely important indicator of the economy, its importance is simply difficult to overestimate, no matter how hard we try to describe it, show how important it is and so on, it may turn out to be even more important. I think that life itself made us remember it, because without this integral, synthesizing indicator, it is simply incompetent and very illiterate to assess the progress of economic development. Ultimately, this does not give an adequate picture.

— I know about labor productivity that Russia lags behind developed countries countries, in particular the USA, by this indicator is 4-5 times. Is there any formula for calculating labor productivity?

There may be different approaches, different systems. You can count as we used to think. You know what the volume of products produced is in general, and you correlate this volume of products produced with the cost of working time. In ancient times, working time costs were determined by the payroll of workers, the so-called average payroll of workers or also the average annual composition. Such an indicator, of course, has a right to exist, but from the point of view of an economist, and especially in a market economy, it says little.

- Not very effective.

Yes. Because such an indicator, first of all, does not reflect what the effectiveness of this production was. You have produced a large number of products, but the main thing is not how much you produced, but how much you sold. That is, what is needed is a commercial component.

But, nevertheless, this indicator takes into account everything - both what the population has acquired, and how it happened before, what it has not acquired. This indicator takes into account labor productivity in our time, but it is not the most convenient indicator. There may be a sufficient number of other, more acceptable indicators.

— Is it true that the better the workplace is automated, the lower the share of human labor?

- This is a common point of view, but I would not agree with it for the reason that the better the workplace is automated, the more complex human labor is required. Of course, maybe not so much time is needed, but even then this is not absolutely certain. In any case, we need work of higher quality, more complex.

— Highly qualified.

- Yes, and most importantly, expensive. Automation of jobs is what is needed both from an economic and social development point of view. The more expensive the labor, the higher the wages. And therefore, the higher the wage, the greater the demand, and the flywheel of the economy spins faster.

— And such a factor as the shadow economy, salaries in envelopes, all this probably greatly distorts the statistics?

“Recently, one of the government leaders, Olga Golodets, reported that for about 30, or even more, millions of people, we don’t know where they are. These people are certainly busy, they receive some income, but the government knows nothing about this income, since they do not pay taxes. They do not pay social contributions. And this, of course, affects the economy, but I would not say in a negative way. It is not yet known what labor productivity is in the shadow economy.

- Yes, maybe higher.

- Maybe higher. Or maybe not higher, since unskilled labor is often used there, migrant labor, as a rule, is low-skilled. Therefore, our labor efficiency indicator may be even worse. It is impossible to judge here, since we do not have data.

— Was labor productivity in the USSR higher or lower than it is now?

— If at the beginning of its historical path the USSR lagged significantly behind the same economically developed countries, which were then economically more developed, but somewhere, if my memory serves me correctly, already in the 50s the distance began to shrink.

And then, closer to the 80s, this distance began to increase again. But what is remarkable, in my opinion, about the history of labor productivity in the USSR is its unprecedented growth rates. Moreover, here there is no need to even attribute the result to some purely financial tricks or some kind of financial twists, since very often in the USSR the results of labor were measured in physical terms. This was the case during the formative years of the USSR, in the first five-year plans, when everything was measured almost in the number of cities, factories, tractors, but such a comparison allowed us to conclude that indeed the growth rates, that is, the increase in the level of labor productivity in the USSR were unprecedented, which neither after nor to this day have any of the countries been repeated. That is, these were unique growth rates.

— In the 2000s, our growth rates were quite high, but productivity, nevertheless, was low, so it turns out that the indicator is not so synthetic?

— You know, in the 90s we received a very strong blow in the economic sense and we fell to an unprecedented low both in terms of labor productivity and in terms of wages. Moreover, in terms of wages we have fallen even lower than in terms of labor efficiency. In terms of labor efficiency, in 1995 we achieved approximately 47 to 50 percent of the 1990 level in terms of labor efficiency, and even less in terms of wages. And then, starting from 1999 and until 2000, we began to increase labor productivity and increased it quite rapidly, this continued until 2007.

And then in 2008-2009 we had a financial crisis, the consequences, then we again had a slight increase, up to 4 percent in 2012. 2013 - a little less, in 2014 we achieved a tenth of a share of growth, according to our calculations, this is about a 0.3 share increase in labor efficiency for 2014. And we are now barely reaching the level that was achieved in 1990. That is, we are growing, but growing very slowly.

— It’s no secret that we have disproportions in the level of salaries. I was surprised to learn that a neurosurgeon, for example, earns an order of magnitude less than a marketing director. But professional benefit and erudition cannot be compared. Is this a normal phenomenon, does it manifest itself with the same force in the West, and does something generally need to be done about it?

“I think it interferes in terms of social development, in terms of general cultural, human development, and, in the end, it also interferes with economic development. In the West or in the East, say, in Japan, this is not the case. Skilled labor is very expensive. Much more expensive than an unqualified one.

— Experts identify industries where labor is clearly overvalued and undervalued. Tell us about such industries.

— First of all, this is everything related to purely financial structures. Secondly, this is what is associated with such areas of activity as the service sector and especially what is associated with all kinds of shows, with all kinds of sports activities and the like. What offers spectacles is always rated quite highly.

— But if there is a demand for “bread and circuses,” then there is a high demand for spectacles. If there is high demand, then it is fair that salaries in this industry will be quite high. On what basis then is it concluded that the industry is overvalued?

- Yes, there is demand. If we take into account that, especially in the field of art, in the field of all kinds of spectacles, a person’s personal talent and personal abilities are of great importance, then it is probably difficult to speak here. These are quite unique abilities that are generally not common. Therefore, if the consumer is willing to pay, then it is probably fair.

But when we say that this is overestimated, we mean the average level of income in the country and even the importance that activity in other areas, say, producing some material values, has in relation to the values ​​​​that are produced by workers in the sphere of entertainment.

— That is, the problem of adjusting labor productivity and wages automatically entails the problem of social stratification. And now, in connection with the May decrees, it is necessary to translate these conversations into a practical plane. Do scientists and experts have any idea how to do this, or at least in what sequence?

— Last year, in June, a special plan was adopted. It is noteworthy, in my opinion, not so much for its content, but for the fact that for the first time in recent decades in Russia a plan has been adopted for government assistance in increasing labor productivity.

Measures to improve the skills of workers turned out to be the most effective in real life. That is, now our leadership has finally begun to accept certain standards associated with this very qualification. Then, in the form of intentions, there is an idea to create some kind of structures that would train employees in order to improve their skills.

There are other interesting directions. Let's say, such a thing as a special workplace assessment. Starting, in my opinion, from next year absolutely all workplaces are expected to be checked for a special workplace assessment. That is, to find out how adequate they are to current needs and, in general, to the modern technological level, since it is no secret that in technological terms we are also experiencing a failure. And it is assumed that after such an assessment of the workplace, some kind of tax pressure will be exerted on enterprises so that they replace outdated workplaces with more modern ones.

But I think, unfortunately, much of what was planned, including for this year, remained on paper due to this situation with the jumping exchange rate.

The planned economy of the Soviet Union did much to bring the country closer to world leaders in productivity standards, but it also contributed to the economic collapse of the late USSR.

Breaking with capitalism

High labor productivity at the dawn of the USSR was one of the decisive factors in building a society of general welfare and prosperity. It is no coincidence that back in 1919 Lenin put forward the thesis: “Labor productivity is, in the final analysis, the most important thing, the most important thing for the victory of the new social system.”

The task before the young Soviet state was extremely difficult: to restore the dilapidated industry inherited from Tsarist Russia, where economic productivity was noticeably inferior to developed Western countries. Thus, according to the energy supply of labor in 1916, per 100 workers in large-scale industry in Russia there were only 123 liters. With. installed power, while in the USA already in 1914 this figure was 319 hp. With. – 2.6 times more.

The October Revolution, which drew a line under the capitalist principles of economic management, according to the Bolsheviks, opened up completely unprecedented prospects for economic growth. “Capitalism can be and will be finally defeated by the fact that socialism creates a new, much higher productivity of labor,” noted the leader of the world proletariat.

The fruits of electrification

In December 1920, on the initiative of Lenin, a plan for the phased electrification of the USSR (GOELRO) was adopted. According to this plan, the authorities intended to build up to 30 regional power plants with a capacity of one and a half million kilowatts, thanks to which the country was supposed to increase industrial production by 80-100% in 10-15 years. However, the first results came much earlier.

Electrification, coupled with the harsh methods of war communism and unprecedented enthusiasm, bore fruit. From 1920 to 1927, the funds of Soviet industry grew from 8090 million to 9015 million rubles - by 11.4%. The volume of output during this period increased 9 times, and the production standards of workers increased 4 times.

If we compare labor productivity with pre-war times, then in 1927, despite the reduction of the working day from 10 to 7.8 hours, it increased by 21% compared to 1913, and the hourly work of the Soviet worker became approximately 50% more efficient. For many, this was clear evidence of the advantages of the planned economic system.

Shock five-year plans

Thanks to the implementation of the GOELRO program, the basis for future success in the industrialization of the country was created. During the years of the first (1928-1932) and second (1933-1937) five-year plans, a powerful industry was built and large-scale technical re-equipment of industry was carried out. The number of workers employed at heavy industry enterprises increased 3 times over 20 years (from 1917 to 1937), while the power of engines installed in production during the same period increased from 2970 thousand to 16750 thousand liters. With. – 5.64 times.

“Communism is completing reconstruction at a gigantic pace. In the competition with us, the Bolsheviks turned out to be the winners,” noted the French newspaper Tan. The English magazine "Round Table" was amazed at the success of the automobile giants of Kharkov and Stalingrad, and admired the grandiose steel plants of Magnitogorsk and Kuznetsk. “All this and other industrial achievements throughout the country indicate that, whatever the difficulties, Soviet industry, like a well-watered plant, grows and strengthens,” wrote the British.

During the first two five-year plans, a real economic miracle occurred in the USSR: the volume of output increased almost 7 times, the output of workers increased by 156%, production capacity increased by 355%, and the energy-to-labor ratio increased by 150%. Such rates of productivity growth have no examples in world history.

Couldn't catch up

In the post-war period, the USSR managed to overcome the consequences of devastation in a short period, and by 1960 it had reached third place in the world in terms of labor productivity, second only to the USA and France in this indicator. However, then the production rate began to decline. As a result of unsuccessful reforms in 1965, the growth rate of labor productivity fell from 8–10% per year to negative values.
The following table clearly shows how the productivity of the economies of some of the most developed countries in the world, including the USSR, has changed over the years in relation to the United States. The places occupied by states in different years in this unique productivity ranking are indicated in brackets.

Year	1950	1960	1970	1975	1980	1988
USA	100(I)	100(I)	100(I)	100(I)	100(I)	100(I)
France	47.7(II)	57.0(II)	75.7(II)	75.5(II)	93.3(II)	85.0(II)
Great Britain	38.5(III)	38.7(V)	37.6(VI)	37.7(VI)	42.1(VI)	65.3(V)
Germany	30.9(IV)	41.4(IV)	52.6(IV)	55.9(III)	65.9(III)	80.8(III)
USSR	30(V)	44.0(III)	53.0(III)	55.0(IV)	55.0(V)	55.0(VI)
Japan	13.1(VI)	22.0(VI)	46.6(V)	46.1(V)	61.2(IV)	69.2(IV)

If from 1951 to 1960 the rate of increase in labor productivity in Soviet industry averaged 7.3% per year, then from 1961 to 1970 it decreased to 5.6%. By 1975, although these figures had increased to 6%, this was not enough to maintain 3rd position, and the country safely dropped first to 5th and then to 6th place.

Calculations by Soviet economists showed that in order to reach the level of world leaders by the end of the 20th century, the USSR needed to have an average annual growth rate of labor productivity of 7–10%. For our country, these were real numbers, since some industries showed much more impressive results.

For example, at the Tbilisi Aviation Plant named after. Dimitrov, the increase in labor productivity by the early 80s amounted to over 20% per year, and some brigades of the Leningrad Positron association in 1984 achieved even more impressive figures - 50% per year. Unfortunately, these were isolated cases.

What prevented our country from increasing labor productivity on a larger scale? Economist Gennady Muravyov sees the reason for this in the different energy availability of workers in the USSR and the leading Western powers, and as a second factor he names the alignment of incentives, which was practically absent in the planned Soviet economy.

But there were opportunities to increase production productivity. Until the beginning of the 90s, the USSR had enormous scientific and technical potential. Suffice it to say that in terms of the number of inventions registered annually, since 1974, the USSR has firmly occupied the place of the world leader. However, as the Pravda newspaper admitted, only a third of registered technical innovations served the national economy.

There were other problems that hampered labor productivity in the USSR, which were repeatedly identified by the Soviet government. This is drunkenness, theft and parasitism. They tried to fight drunkenness with the help of five anti-alcohol campaigns, starting in 1918 and ending in 1990, but at best they had only temporary success.

There was a more active fight against theft. Numerous trials involving various mafia structures, which often included the leaders of the national republics of the USSR, received wide resonance. However, they stole not only big, but also small, and in large quantities. It’s not for nothing that there was a saying in the USSR: “Bring even a nail from the factory - you are the master here, not a guest!”

They began to fight parasites even under Lenin. The leader of the proletariat, for example, proposed that those who shirk work should be put in prison, and the most malicious violators of the labor regime should be shot. In the 60s, idle people were actively evicted to places not so remote. In 1961 alone, 37 thousand people suffered this fate.

While the growth of the Soviet economy was steadily declining, the opposite process was observed in many countries, including Southeast Asia. For example, if during the period 1980-87 total labor productivity in the USSR came to negative indicators (-0.2%), then in Japan, despite its own problems in the economy, its growth averaged 2%.

The efforts made by Andropov in 1983 made it possible to overcome the negative trend of declining labor productivity for a short time. However, with the beginning of perestroika, the rate of economic growth sharply decreased, leading to a drop in production volumes, and then to the complete collapse of the Soviet economy.