1. Alec, Nove, “Letter to the Editor” Slavic Review, 40, no. 2 (Winter 1981): 691–93Google Scholar.

2. Alec, Nove, An Economic History of the USSR (Baltimore: Penguin Books, 1969), p. 186 Google Scholar. The sources Nove relies on are Sotsialisticheskoe stroitel'stvo (1936), and Moshkov, , Zernovaia problema v godu sploshnoi kollektivizatsii (Moscow, 1966)Google Scholar.

3. The aggregate agricultural index in table 1, taken from Narodnoe khoziaistvo SSSR v 1958 godu, is also valued in 1926/7 prices. See Narodnoe khoziaistvo SSSR v 1959 godu, pp. 831-32. Nove does not object to valuing agriculture in 1926/7 prices: “However, since agricultural products are easy to define, and tend to have clear and relatively low 1926/7 prices none of the other distorting factors operate.” Alec Nove, “ ‘1926/7’ And All That,” Soviet Studies, 9, no. 2 (October 1957): 120.

4. Nove reproduces these statistics in chapter 9 and compares them with counterpart estimates for 1937 in assessing the achievements of the Second Five-Year Plan. See Nove, Economic History of the USSR, p. 225.

5. Nove argues that the Soviets used cost-inflated current prices for new equipment introduced after 1926/7 in their constant value series when early year analogue products could not be found. When analogues were available, even remote analogues, high prototype 1926/7 prices were employed with similar distortive effect. See note 26. Alexander Gerschenkron, “The Soviet Indices of Industrial Production,” Review of Economics and Statistics, 29, no. 4 (November 1947): 217-26; Richard, Moorsteen, Prices and Production of Machinery in the Soviet Union 1928-1958 (Cambridge, Mass.: Harvard University Press, 1962), p. 119 Google Scholar; Abram, Bergson, The Real National Income of Soviet Russia Since 1928 (Cambridge, Mass.: Harvard University Press, 1961), pp. 181–87Google Scholar. Nove denies that these distortions were deceitful. Compare Steven Rosefielde, “The First ‘Great Leap Forward’ Reconsidered,” Slavic Review, 39, no. 4 (December 1980): 572, where it is suggested that Soviet statisticians deliberately misemployed 1926/7 prices to exaggerate the value of the Belomor Canal.

6. “There is nothing ‘wrong’ in an index being computed in prices of 1926/7, but their continued use during a long period of drastic change in output and prices imparted a strong upward bias in the index of growth.” Alec, Nove, The Soviet Economic System (London: George Allen and Unwin, 1977), p. 356 Google Scholar. Elsewhere, however, Nove rejects 1926/7 prices more strongly: “As a measure of growth it seems evident that the published data in these prices are useless.” Nove, “'1926/7’ And All That,” p. 124. Gerschenkron reaches a similar conclusion, even though his dollar indexes do not support the view that high machinery growth is explained by the use of current high prices instead of constant 1926/7 prices. See Alexander, Gerschenkron, Economic Backwardness in Historical Perspective (Cambridge: Belknap Press, 1966), pp. 246 and 256Google Scholar. Compare Bergson, Real National Income, pp. 181-87, where Gerschenkron and Nove's arguments are rejected.

7. Moorsteen, Prices and Production of Machinery, p. 138. Moorsteen reports machinery input cost indexes during 1928-37 in 1928 and 1937 quantity weights. Since new products are at issue the latter series is employed. Input cost ‘inflation’ during 1926/7-32 is computed by compounding the rate during 1928-37, 9.3 percent, for five years.

8. Nove, “'1926/7’ And All That,” pp. 119-20. Compare Nove, Economic History of the USSR, p. 192. Also see note 5.

9. Assuming that ten percent of the machine types produced each year during 1926/7-32 had not existed previously, average input cost inflation for half the inventory would be 100[(1.093)25 - 1] = 25 percent. The discounted producer goods index is [.5(385) + .5(385/1.25)] = 347. Consumer durables valued in 1928 prices constituted 2 percent of total industrial consumer goods production in 1932, and grew 3.46-fold from 1928 to 1932. Assuming that the rate of introduction of new consumer durables was similar to that of new machines generally, the discounted consumer goods index is [.98(160.3) + .01(346/1.25) + .01(346)] = 163. These findings are confirmed by Moorsteen's independent calculation. See Moorsteen, Prices and Production of Machinery, p. 120.

10. Assuming that the new product price bias in agriculture is proportional to that observed for industrial consumer durables, and that the biases in construction and transportation are proportional to those for industrial producer goods, national income bias can be estimated as: x = [.314(385) + .686(164)] - [.314(347) + .686(163)] = 12.6 and adjusted national income can be set at 186 -13 = 173. The weights used above are taken from my table 1; the national income figure valued in 1926/7 prices are from the same table in which Nove reports his producer and consumer goods statistics.

11. Nove, “'1926/7’ And All That,” pp. 122-25. Compare Bergson, Real National Income, pp. 181-87.

12. Nove might object that his appraisal of Soviet economic performance during the First Five-Year Plan was determined primarily by miscellaneous physical indexes. This line of reasoning cannot be sustained, however, because the selective physical series published by the Soviets do not in their entirety diverge radically from the published value series. See, for example, Nutter, G. Warren, The Growth of Industrial Production in the Soviet Union (Princeton, N.J.: Princeton University Press, 1962), table D-2, p. 524 Google Scholar.

13. The adjusted version of the national income statistics Nove cites implies a compound growth rate in 1928-32 of 15.3 percent.

14. Nove, Economic History of the USSR, p. 193. He also argues that rapid urbanization caused an increase in measurable output much greater than any real increase in consumer welfare. This would only be true if industrial products were being substituted for home processed goods due to a general rise in standard of living, a possibility Nove rejects. Ibid., pp. 193-94.

15. N.B. Nove does not say that kustar production is omitted, only understated. Presumably he believes that the official Soviet series includes artisan production for the year 1928 but that the figure is too low. If he is correct, then the consumer goods index for 1932 is overstated, but there is no reason to suppose that the distortion is very large. For a discussion of the possibility that kustar production is omitted entirely from some consumer goods subseries, see Kaplan, Norman and Moorsteen, Richard, Indexes of Soviet Industrial Output, Research Memorandum RM-2495 (Santa Monica: The Rand Corporation, May 13, 1960), pp. 8–13 Google Scholar.

16. Nove, Economic History of the USSR, pp. 193-94.

17. See Labedz, Leopold's commentary in Nove, Economic Rationality and Soviet Politics, or Was Stalin Really Necessary? (New York: Praeger, 1964), pp. 33–36 Google Scholar.

18. These durables may have been allocated to State communal consumption

19. Nove does not seem to appreciate that this argument is inconsistent with his earlier contention: “I tried to demonstrate precisely that the situation in the years 1932-33 was ‘especially grim.’ If I may quote myself: ‘1933 was the culmination of the most precipitous peacetime decline in living standards known in recorded history.'” Nove, “Letter to the Editor,” pp. 691-92. Nove's rebuttal is unconvincing. Tukhta in the physical series is more apt to take the form of unacknowledged substandard production and misclassification of goods from lower to higher quality categories than of overstated “weight.“

20. Nove, Economic Rationality and Soviet Politics, pp. 24-28.

21. There is, of course, a great difference in their qualitative appraisals, Davies and Wheatcroft's being far more sanguine than Nove's.

22. Assuming as before that new products were introduced at a rate of ten percent per annum, all machinery is discounted for input cost inflation for the mean age. The adjusted industrial producer goods index for 1937 therefore is 920/(1.093)5 = 589, or 21.8 percent per annum. Consumer durables constituted 6.6 percent of industrial consumer goods in 1937, and grew 23.1-fold between 1928 and 1937. See Nutter, Growth of Industrial Production, p. 524. The adjusted consumer goods index thus is [.934(.188) + .066(2310/1.093)5] = 273, or 11.8 percent per annum. The ratio of adjusted to reported industrial producer goods is .64. Applying this ratio to construction and combining it with the consumer goods ratio implies that national income should be reduced .36(.107) + .36(0.90) + .16(.266) = .113 where the bracketed terms are industrial producer goods, construction, and industrial consumer goods shares of NMP valued in 1926/7 prices. Adjusted official national income thus can be estimated at .887(395) = 350, or 14.9 percent per annum. See Nove, Economic History of the USSR, pp. 191 and 225. Also see note 9. Compare Gerschenkron, Economic Backwardness, p. 255.

23. Nove, Economic History of the USSR, p. 225.

24. Ibid., p. 250.

25. This does not imply, however, that the standard of living of the peasants who shifted from agrarian to industrial occupations outside Gulag declined. See Janet, Chapman, Real Wages in Russia Since 1928 (Cambridge, Mass.: Harvard University Press, 1963), pp. 166–69Google Scholar. Compare Nove, Economic History of the USSR, p. 250.

26. Steven Rosefielde, “Knowledge and Socialism,” in Rosefielde, , ed., Economic Welfare and the Economics of Soviet Socialism (New York: Cambridge University Press, 1981), p. 19 CrossRefGoogle Scholar. The issue of 1926/7 prices is extremely tangled. Nove, Gerschenkron and Bergson fault the Soviet production index valued in 1926/7 prices because new goods are weighted with current prices. On this basis Nove and Gerschenkron sometimes reject the official index. This rejection is odd in Gerschenkron's case because his own dollar index of machinery confirms the official series. Bergson takes the opposite position, concluding with Maurice Dobb that new product pricing is of minor significance and that 1926/7 prices are not unacceptably flawed. Bergson relies on Moorsteen's machinery indexes in reaching this judgment. As a consequence, Bergson, who is best known for his estimates in 1937 prices, considers growth indexes computed in 1926/7 prices to be valid and useful, while others dismiss them. See notes 5 and 6. I concur with Bergson that new product pricing does not greatly distort the official industrial producer goods series, but I depart from his appraisal of the industrial consumer goods index and the underlying integrity of the physical series. Nutter's industrial consumer goods indexes are extraordinarily sensitive to index number relativity. Consumer goods grew at approximately one third the official rate valued in 1955 prices, suggesting that something may be seriously wrong with the official 1926/7 prices. See Rosefielde, “The First ‘Great Leap Forward’ Reconsidered,” tables 1 and 2, pp. 563 and 566. As explained in ibid., pp. 567-69,1 also believe the physical series are distorted by tukhta. For these reasons, and for those provided in “Knowledge and Socialism,” p. 19, I reject the official series in 1926/7 prices outright.

27. While I accept the principle of index number relativity, I doubt that the rate of growth 1928-37 valued in unbiased 1926/7 prices would exceed Bergson's estimate of 5.4 by more than one or two percent. Valued alternatively in 1887 and 1900 prices, Russian industry grew only .6 percent faster in early year prices during 1890-99: 7.9 as against 7.3 percent per annum. See Raymond Goldsmith, “The Economic Growth in Tsarist Russia, 1860-1913,” Economic Development and Cultural Change, 9, no. 3 (April 1961): 462-63.

28. From 1890 to 1899 industrial production grew 8.3 percent per annum (Kondratieff) compared to the 9.2 percent rate, undiscounted for tukhta, computed by Raymond Powell (valued in 1950 prices). See Alexander Gerschenkron, “The Rate of Growth in Russia Since 1885,” Journal of Economic History (supplement), 7 (1947): 146. Raymond Goldsmith, “Economic Growth in Tsarist Russia,” pp. 462-63; Raymond Powell, “Industrial Statistics,” in Kuznets, Bergson and, Economic Trends in the Soviet Union (Cambridge, Mass.: Harvard University Press, 1963), p. 155 Google Scholar. I acknowledge, however, that the Soviets placed extraordinary emphasis on heavy industry.

29. Chapman concludes that urban per capita houshold purchases of goods declined 6 percent during 1928-37 and that rural per capita purchases fell much more sharply calculated in 1937 prices. See Chapman, Real Wages in Russia, pp. 169-70. Allowance for tukhta would aggravate this deterioriation in the Soviet standard of living, and it must be remembered that the crop in 1937 was the best of the decade. D. Gale Johnson, “Agricultural Production,” in Bergson and Kuznets, Economic Trends in the Soviet Union, p. 208.

30. Nove's political-economic theories concerning the causes of industrialization and the objective necessity of Stalinism depend on both the validity of the mechanisms he specifies and the assessment of their outcomes. In my essay I reject his hypotheses by demonstrating first that industrialization was accomplished by transferring efficient peasants from agrarian to industrial pursuits in cities and concentration camps rather than by securing an agrarian surplus (which, it seems to me, Nove strongly implies was a precondition for rapid economic development), and second by establishing that per capita GNP fell during 1928-32. In extending my analysis to 1937,1 have had to substitute a weak immiseration criterion, the decline in per capita consumption during 1928-37, for the stronger GNP test, but the critique of Nove's causal specification remains unimpaired. See Nove, Economic Rationality and Soviet Politics, pp. 21-29, and Rosefielde, “First ‘Great Leap Forward’ Reconsidered,” pp. 580-87. Also compare Gerschenkron, Economic Backwardness, p. 169, where, in the manner of Nove, having rejected 1926/7 prices he then uses the official series to conclude that “the rate of industrial progress in the Russia of the thirties may well have been nearly double the rate of growth of the nineties.“