Saturday, July 31, 2021

If they were so inefficient, why did the USSR in the 1930s and Yugoslavia in the 1960s grow at abnormal rates?

 (my answer on Quora)

Growth rates are meaningless unless you know the size of the base that you are growing from. Many economies have high growth rates if they are emerging from a period of prolonged recession or depression. This tends to plateau later (coming down to Earth effect). However if the base they are starting from is poor as was the case for both of these countries then the absolute standing may not be that spectacular.

Soviet growth in the 1930s was carried out by a series of five year plans whose human cost was unbelievably high. The policy of collectivization (liquidation of the Kulaks) and forced famines caused millions of deaths. I would urge you to read up on the genocide of the Holodomor. I hate viewing humans as economic commodities but any talk about efficiency is negated by the 3.5 million death number here alone. See

Holodomor | Facts, Definition, & Death Toll
Holodomor, man-made famine that claimed millions of lives in the Soviet republic of Ukraine in 1932–33. Because the famine was so damaging, and because it was covered up by Soviet authorities, it has played a large role in Ukrainian public memory, particularly since Ukraine gained independence in 1991.

Yugoslavia was no model of efficiency either. Far from it. Their economic policies were not sustainable. Debt increased at a rate of 17% per year from 1961 to 1980. Inflation was rampant and by the 1970s. Tito was forced to implement unpopular reforms to sustain an economy that at one point virtually required infinite growth to survive.

The Economy of Tito's Yugoslavia: Delaying the Inevitable Collapse
There seems to be a resurgence of nostalgia for the “good old days” among the citizens of countries that were once known under the common name of Socialist Federal Republic of Yugoslavia.  This article is dedicated to all of us former Yugoslavs, especially those who think that the Yugoslav economy during Tito’s rule was built […]

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