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The Dangers of Forgetting the Legacy of Communism: Communism as Antidevelopment

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The Dangers of Forgetting the Legacy of Communism: Communism as Antidevelopment

Abstract and Figures

On November 17, 1917, a coup d’état in Russia led by Bolshevik leader Vladimir Lenin opened a dark communist era, marked by fear, death, economic chaos and a complete assault on individual freedoms. Communism was implemented in Russia 100 years ago and spread throughout much of the 20th century to Eastern and Central Europe, China, Vietnam, Cambodia, parts of Africa, Afghanistan, North Korea and Cuba. It is estimated that communism was responsible for over 100 million deaths– more casualties than those in World War I and II combined.
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AUTHORS
Romina Bandura
Brunilda Kosta
A Report of the
CSIS PROJECT ON PROSPERITY AND DEVELOPMENT and
CSIS PROJECT ON MILITARY AND DIPLOMATIC HISTORY
APRIL 2018
The Dangers of
Forgetting the Legacy
of Communism
Communism as Antidevelopment
Blank
APRIL 2018
The Dangers of Forgetting
the Legacy of Communism
Communism as Antidevelopment
AUTHORS
Romina Bandura
Brunilda Kosta
A Report of the
CSIS PROJECT ON PROSPERITY AND DEVELOPMENT and
CSIS PROJECT ON MILITARY AND DIPLOMATIC HISTORY
About CSIS
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© 2018 by the Center for Strategic and International Studies. All rights reserved.
Center for Strategic & International Studies
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| III
Contents
1 Introduction
4 CHAPTER 1 | The Communist Model
5 CHAPTER 2 | Soviet Economic Performance
13 CHAPTER 3 | Social Development and Civil and Political Rights
19 CHAPTER 4 | Environmental Performance
21 CHAPTER 5 | Countering Communism: Development Institutions
24 CHAPTER 6 | Aftermath
26 CHAPTER 7 | Why Does Communism Retain Its Attraction?
28 Conclusions
29 About the Authors
| 1
Introduction
On November 7, 1917, a coup d’état in Russia led by Bolshevik leader Vladimir Lenin opened the
communism era that was marked by fear, death, economic chaos, and a renunciation of individual
freedoms.1 The communists aimed to instill a classless society with total equality in income and
wealth distribution.
One hundred years after the implementation of this ideology, a double danger looms in our
societies: a nostalgia for communist dogma and the temptation to forget its consequences. This
double danger is evidenced by the media coverage in the United States on the 100th anniversary of
communism (which some major media outlets downplayed), the resurgence of communist ideals
displayed by political figures even in the United States and Europe, and most alarmingly, the scant
knowledge that young generations have about this era.
Communism began in Russia in 1917 and spread throughout Eastern and Central Europe, China,
Vietnam, Cambodia, parts of Africa, Afghanistan, North Korea, and Cuba. In all, it is estimated that
communism killed around 100 million people (Figure 1), which is four times those killed by Adolf
Hitler and more deaths than in World War I and II combined.2 It is important to note that people
died not as a result of wars but of killings from the system itself. The largest number of deaths
stemmed from manmade famines that could have been avoided.3 As David Satter aptly explained
in the Wall Street Journal, communism is “the greatest catastrophe in human history.”4
A great deal of attentionand rightly sohas been given to a number of contemporary human
tragedies such as World War II, the Holocaust, and the Vietnam War to name a few, yet the
magnitude of communism’s legacy in terms of human, economic, social, governance, and
environmental destruction is not prominently communicated.5 For example, few know that during
19321933 Stalin committed genocide in Ukraine—the Holodomorthat killed between 510
million people in this manmade famine.6
1 October 25, 1917, in the old Julian calendar.
2 See Marc A. Thiessen, “The New York Times keeps whitewashing communism’s crimes,” Washington Post, November
10, 2017, https://www.washingtonpost.com/opinions/the-new-york-times-keeps-whitewashing-communisms-
crimes/2017/11/10/129f28e0-c5c3-11e7-84bc-5e285c7f4512_story.html?utm_term=.598e9b767e66.
3 Stéphane Courtois et al., The Black Book of Communism: Crimes, Terror, and Repression (Cambridge, MA: Harvard
University Press, 1999).
4 See David Satter, “100 Years of Communismand 100 Million Dead,” Wall Street Journal, November 6, 2017,
https://www.wsj.com/articles/100-years-of-communismand-100-million-dead-1510011810.
5 Paul Hollander, “Reflections on Communism Twenty Years after the Fall of the Berlin Wall,” Development Policy
Analysis, No. 11, Cato Institute, November 2, 2009, https://object.cato.org/sites/cato.org/files/pubs/pdf/dpa11.pdf.
6 Holodomor, “Holodomor: The famine-genocide of Ukraine, 19321933,” http://www.holodomorct.org/.
2 | The Dangers of Forgetting the Legacy of Communism
Figure 1: Communism Killed Some 100 Million People
Data source: Stéphane Courtois et al., The Black Book of Communism: Crimes, Terror, and Repression (Cambridge, MA:
Harvard University Press, 1999).
Two polls conducted in the United States by the Victims of Communism Memorial Foundation
display some disturbing figures on the overall level of misinformation:7
Approximately one in four Americans (26 percent) and one-third of millennials (32 percent)
believe more people were killed under George W. Bush than Joseph Stalin.
Nearly 70 percent of all Americans and nearly 60 percent of Generation Z (ages 1620)
falsely believe that more people were killed under Hitler than Stalin.
Many millennials are unfamiliar with communist leadersMao, 42 percent; Guevara, 40
percent; Stalin, 18 percent; Lenin, 33 percent and of those millennials familiar with Vladimir
Lenin, 25 percent have a favorable view of him.
Coupled with the misinformation, there is a wave of nostalgia and romanticism associated with
communism. In Russia, 58 percent regret the collapse of the Soviet Union and 52 percent think it
could have been avoided.8 Stalin is regarded as the most outstanding figure of all time in a recent
Russian poll.9 Moreover, communist parties still rule in China, Vietnam, North Korea, and Cuba.
7 Victims of Communism Memorial Foundation, “Annual Poll Release Shows Americans Still Have a Lot to Learn about
Communism,” November 2, 2017, https://www.victimsofcommunism.org/survey/.
8 Levada Center, “Nostalgia for USSR,” December 25, 2017, https://www.levada.ru/en/2017/12/25/nostalgia-for-the-
ussr/.
9 Levada Center, “Выдающиеся люди,” June 26, 2017, http://www.levada.ru/2017/06/26/vydayushhiesya-lyudi/.
Romina Bandura and Brunilda Kosta | 3
This paper offers an account of the economic, social, and environmental outcomes of
communism, principally from the Soviet Union experience. The aim of the paper is to educate the
current and future generations about the dangers of forgetting or fantasizing with this ideology.10
This paper presents communism as an ideology that goes against all forms of economic
development and human progress, and that is “antidevelopment” (Box 1). The paper first takes
stock of the main outcomes of communism, mainly centered in the Soviet Union, and then
analyzes the institutions, programs, and plans that emerged to counter it.
Leading scholars have written a plethora of books and academic articles about this regime. The
information presented in this paper draws mainly from the Soviet experience and by no means
covers all the details that the literature contains. Separate papers would have to be written for
other communist regimes in China, Vietnam, North Korea, Cuba, and others.11 Our hope is to offer
a succinct account of the most important economic and human development consequences of
this system so that future generations avoid making the same mistake again.
10 See Laura Nicolae, “100 Years. 100 Million Lives. Think Twice,” Harvard Crimson, November 20, 2017,
http://www.thecrimson.com/article/2017/11/20/nicolae-one-hundred-million/.
11 Venezuela has all the features of other communist countries, which has created political, economic, and social
consequences. An unprecedented humanitarian crisis is taking place in the country. During the last two years, 1.2 million
people have emigrated because of famine, inaccessibility of medicine, crime, and lack of work, among other reasons.
This humanitarian crisis is the result of the failed 19 years of Chavismo in “twenty-first century socialism.” Moreover, the
current dictatorial regime headed by Nicolás Maduro has made the situation worse. See Juan Forero, “Venezuela’s Misery
Fuels Migration on Epic Scale,” Wall Street Journal, February 13, 2018, https://www.wsj.com/articles/venezuelas-misery-
fuels-migration-on-epic-scale-1518517800; and Moises Rendon, "Venezuela’s Crisis Is Now a Regional Humanitarian
Disaster," CSIS, March 23, 2018, https://www.csis.org/analysis/venezuelas-crisis-now-regional-humanitarian-disaster.
Definitions
In Communism: A History, Richard Pipes (ixx) describes communism relating to three phenomena: an
ideal, a program, and a regime to set up the ideal:
Ideal: Full social equality that in its most extreme form calls for the dissolution of the individual in the
community.
A program/plan (Marx and Engels): Abolition of private property and the inevitable collapse of societies
based on class distinctions.
Regime: First attempt was in Russia 1917–1991, founded by Lenin who saw a property-less and
egalitarian society emerging from the “dictatorship of the proletariat.
In Development as Freedom, Amartya Sen argues that human development is not only about economic
factors, but that it should include political freedoms, access to social institutions, and economic opportunity
that “expand citizens’ capabilities.”
Development denotes domestically driven economic and social progress encompassing economic growth,
political freedom, human rights, improvements in health, literacy, education, and other quality-of-life
measures.
Sources: Richard Pipes, Communism: A History, reprint ed. (New York: Modern Library, 2003); Amartya Sen,
Development as Freedom (New York: Anchor, 2000).
4 | The Dangers of Forgetting the Legacy of Communism
1 | The Communist Model
The dream appealed to the critics and victims of capitalism, admittedly a most imperfect
systembut as it turned out, far better than the alternatives. Hence the Marxist economies
long enjoyed a willfully credulous favor among radicals, liberals, and progressives in the
advanced industrial nations; and a passionate, almost religious endorsement by the militant
anti-imperialistleaders of the world's poor countries. Many colonies, now independent,
turned to the socialist paradigm with a hunger and passion that defied reality.David S.
Landes, The Wealth and Poverty of Nations, 495
Since 1917, there have been 35 communist regimes across the world and many other attempts to
instill these regimes. All these experiences eventually failed. In the end, communism collapsed in
Russia too, and today survives in only a few countriesChina (see Box 1), North Korea, Vietnam,
and Cuba (and perhaps Venezuela).
Communism emerged in countries in two ways: either it was imposed by the Soviet army, or with
Soviet assistance. Moscow generously provided financial support, weapons, and guidance.
Although Marx and Engels had envisioned communism taking off in advanced industrial societies, it
got hold in underdeveloped agrarian societies.
Every country that had a communist regime retained its own specific characteristics but the
essential model features were derived from Moscow.12 According to Richard Pipes (2003), the
Marxism-Leninism model had the following characteristics: (1) one monopolistic party organized
along military lines; (2) no limitation on power; (3) seizure of private property and nationalization of
human and material resources; and (4) disrespect of religious and human rights. Gregory et al.
single out the repression the system put in the workplace, personal life, and political life as another
feature of this regime. He illustrates this systemic repression by noting Stalin’s three repressions:
the “dekulakization, the “mass operations” of the Great Terror, and “national operations” toward
the ethnic minorities.13
In nearly all cases, the Communist Party had a strong leader who embodied the cause and came to
be idolized, often in a cult of personality. Shortly after succumbing to communist control, all
countries experienced a sharp decline in living standards, often accompanied by famine and tragic
loss of life. A supreme leader with concentrated power emerged and civil rights and freedoms
were lost, all in the name of equality. Government posts were considered a way to gain personal
benefits and enrichment, not as a service to the citizens.14
12 Courtois et al., The Black Book of Communism, 754.
13 Paul R. Gregory, Philipp J.H. Schroder, and Konstantin Sonin, Dictators, Repression and the Median Citizen: An
“Eliminations Model” of Stalin’s Terror (Data from the NKVD Archives), Working Paper No. 91 (Moscow: Centre for
Economic and Financial Research, November 2006), http://www.cefir.org/papers/WP91GregorySoninShroeder.pdf.
14 Richard Pipes, Communism: A History, reprint ed. (New York: Modern Library, 2003).
Romina Bandura and Brunilda Kosta | 5
2 | Soviet Economic Performance
The theory of Communism may be summed up in one sentence: Abolish all private
property.Karl Marx and Friedrich Engels, The Communist Manifesto, 1848
There were two revolutions in 1917: the first revolution in March overthrew the monarchy of Czar
Nicholas II and a provisional government led by Alexander Kerensky was formed. The second
revolution of October was a coup d’état organized by the Bolsheviks led by V.I. Lenin,
overthrowing Kerensky’s government.15
Communists did not gain power easily in Russia: during 1917 and 1921 was a period of civil war that
ended with the formation of the Union of Soviet Socialist Republics (USSR) in 1922. Lenin
introduced War Communism (which lasted until 1921), when the state took control of the whole
economy. This period was characterized by a nationalization of industry and handcraft enterprises
and the criminalization of private trade. However, this experiment suffered from major problems
and in March 1921, the New Economic Policy (NEP) was introduced. The NEP was a partial return
to the market economy, comprising a mixture of a market and command system. Lenin’s
successor, Joseph Stalin, replaced the NEP with the administrative command economy in 1928.
This era was marked by the nationalization of all private property, the system of central planning,
and the collectivization of agriculture.16 After Stalin, Khrushchev (19551964) followed by Brezhnev
(19641982), Andropov (19821984), and Chernenko (19841985) had variants of the system but
the key characteristics remained.
Under the leadership of Mikhail Gorbachev, the most profound structural changes were introduced
in 1985. “Perestroika” (or restructuring) focused on important changes in the management of the
economy, the functioning of foreign trade, and the opening of political participation (“glasnost”) to
improve the motivations and participation of citizens in the economy. While there were temporary
performance improvements, a partial reform of the Soviet system proved to be impossible and the
Soviet Union collapsed on December 31, 1991.
Gregory argues that the socialist economic regime of state ownership and scientific planning was
flawed at its core. The exigency of balancing the supply of goods with their demand, or “material
balance planning,” and the lax incentives firms faced in terms of profitability ultimately led to
economic stagnation and collapse.17
Economic Growth in the USSR
Analyzing the economic performance of the USSR has many challenges since the official Soviet
statistics were usually inaccurate and inflated. The official data shows a different picture to the one
15 Paul R. Gregory and Robert C. Stuart, Russian and Soviet Economic Performance and Structure, 6th ed. (Reading, MA:
Addison-Wesley, 1998).
16 Ibid.
17 Paul R. Gregory, Why Socialism Fails? January 10, 2018, https://www.hoover.org/research/why-socialism-fails.
6 | The Dangers of Forgetting the Legacy of Communism
depicted by other sources. The official data was falsified to show better performance. Economic
growth by Soviet sources was almost twice the rates shown by American sources (Table 1). What is
common about both sets of data is that they show lower levels of growth starting in the 1970s.
Table 1: Economic Growth in the USSR (average annual growth of real GNP, in percent)
Period
American
Estimates
Official Soviet Estimates
19281940
5.4
a
14.6
c
19501960
6.0
b
10.1
19601970
5.1b 7.0
19701980
3.7
b
5.3
19801984
2.0b 3.2
a1950 prices, b1970 weights, c19261927 prices.
Data source: Paul R. Gregory and Robert C. Stuart, Russian and Soviet Economic Performance and Structure, 6th ed.
(Reading, MA: Addison-Wesley, 1998), 225.
Figure 2: Alternative Measures of Soviet Economic Growth (average annual growth, in percent)
Data source: CIA, Revisiting Soviet Economic Performance under Glasnost: Implications for CIA estimates, 1988, 11.
https://www.cia.gov/library/readingroom/docs/CIA-RDP89T01451R000600690001-4.pdf.
Figure 2 presents three assessments of the Soviet record of economic growth for the postWorld
War II era: official Soviet estimates, estimates by other Soviet economists, and CIA estimates.18 The
significant downward trend in the Soviet economy is evident in all three estimates, confirming
what the numbers in Table 1 show. The unofficial estimates indicate a lower growth rate and
stagnation in the 1980s. Needless to say, the official data is again vastly exaggerated.
18 The true figures on Soviet economic performance were far worse than even the CIA’s low numbers. The internal bad
reporting, the exaggerations, the deliberate inflations and padding of data, and the communist bureaucracy, made it
impossible to know the depth of the economic troubles in the USSR.
0
2
4
6
8
10
12
1951-1960 1961-1965 1966-1970 1971-1975 1976-1980 1981-1985
Official Soviet Statistics CIA estimates Unofficial Soviet
Romina Bandura and Brunilda Kosta | 7
Other economists have also painted the unrealistic picture of the official Soviet data. In his analysis
of Soviet planning during 19271933, historian Alec Nove argues that the formation of the planned
economy required an immense amount of detailed work; it was unprecedented and overly
optimistic.19 He argues that there is a paradox between the simultaneous increases of investment
and consumption. The USSR planned a tremendous increase in the output of industry, agriculture,
and labor productivity. As an example, Soviets planned to achieve a 335 percent increase in the
production of electricity from 19321933 compared with 19271928.
Gregory and Stuart (1998) display a comparison of plan fulfillment provided by official estimates
and Western estimates to show how realistic the plans were and the truth of their fulfillment with
considerable variability in plan fulfillment by sector (Table 2).
Table 2: Soviet Percentage of Plan Fulfillment in the 1930s
Objective
First Five-Year Plan (1928
1932)
Second Five-Year Plan (1933
1937)
National income
Official estimate
92
96
Western estimate
70
67
Industrial output
Official estimate
101
103
Western estimate
6070
7693
Producer goods
Official estimate
128
121
Western estimate
72
97
Consumer goods
Official estimate
81
85
Western estimate
46
68
Agricultural production
Official estimate
58
6367
Western estimate
5052
6678
Data source: Gregory and Stuart, Russian and Soviet Economic Performance and Structure, 77.
Davies (1998) argues that the Soviet rate of growth was exaggerated because of hidden inflation in
the prices used.20 When the Soviet Union prepared indexes, respective authorities did not consider
(for new products) the prices of the initial year, but the prices of the year in which they were
introduced. Moreover, several scholars argue that the Soviet Union deliberately falsified several
economic performance indexes, for example on the harvest of grains. From 1933 onward, grain
output was measured in terms of the “biologicalyieldthat is, the maximum possible yield of the
crop standing in the field at the time of maximum ripeness, without any allowance for losses in
harvesting and transport. The official statistics in 1939 showed grain output at 106.5 million tons.
Wheatcroft’s revision shows a harvest of 73 million tons, and he suspects that even this figure
19 Alec Nove, An Economic History of the USSR: 1917-1991, 3rd ed. (New York: Penguin, 1993).
20 R.W. Davies, Soviet Economic Development from Lenin to Khrushchev (Cambridge, UK: Cambridge University Press,
1998).
8 | The Dangers of Forgetting the Legacy of Communism
might be too high.21 The Soviet index for foodstuffs and consumer goods was greatly exaggerated
and these distortions impacted the official index preparation, which showed a greater rate of GNP
growth compared to the Western economists’ recalculations.22
Khanin is another Russian economist who has written on the reliability of USSR data. He argues
that over the 19281987 period, Soviet national income expanded 6.9 times, not the 89.5 times
found in official data.23
The USSR used additional maneuvers to exaggerate economic performance. Gregory and Stuart
(1998) argue that the Soviet Union used arbitrary exchange rates so that exchange rate conversions
would be impossible. To overcome this problem, various calculations of the purchasing power of
rubles (Soviet currency) were undertaken.
Agricultural Production
Stalin’s development strategies in the 1930s heavily targeted the agriculture sector, mainly to feed
the urban areas that were growing and industrializing, gain foreign exchange from agricultural
exports, and increase the government’s control over the large rural population. The organizational
arrangements and policy incentives employed in Soviet agriculture were different from Western
practices. There was a heavy dependence on socialized agriculture with major state involvement.
Despite constant attempts to improve performance, the Soviet Union’s agricultural performance
was a perennial problem.
The agriculture production fluctuated during 19281958 (Figure 3). The lowest level of production
was reached during World War II, followed by a positive trend. After Stalin’s demise, agricultural
policy remained unstable and went through many transitions. Nonetheless, there was continuity
under the Khrushchev period (19561964) where agriculture was a high-priority sector. This was
accompanied with an increase in production, as illustrated in Figure 3 and Table 3.
Brezhnev (19641982) reaffirmed a high priority for agriculture and related industries. He
continued the policy of pressing ahead with the expansion of this sector along with other sectors.
During Gorbachev’s leadership 19861990, agriculture production experienced a significant
decline. In 1990, USSR official sources revealed a 2.3 percent decrease in agricultural production.
Critics alleged that large Soviet investments had been wasted. S. Vikulov explained why peasants
had become alienated: “In the old days the peasants reasoned: why should we work? We will not
be paid. Now they reason: why should we work? We will be paid anyway.”24
21 R.W. Davies, Mark Harrison, and S.G. Wheatcroft, eds., The Economic Transformation of the Soviet Union, 19131945
(Cambridge, UK: Cambridge University Press, 1994), 28687.
22 Ibid., 140.
23 Mark Harrison, “Soviet Economic Growth since 1928: The Alterative Statistics of G.I. Khanian,” Europe-Asia Studies 45,
no. 1 (1993): 14167; G.I. Khanin, “The 1950sThe Triumph of the Soviet Economy,” Europe-Asia Studies 55, no. 8
(2003): 11871212.
24 Alec Nove, Glasnost in Action: Cultural Renaissance in Russia (Boston, MA: Unwin Hyman, 1989).
Romina Bandura and Brunilda Kosta | 9
The productivity of Soviet agriculture was always a matter of concern. There was a significant and
continuing decline in the average annual rate of growth of output (Table 3) from a respectable 2.1
percent in the 1950s to a very poor 0.2 percent in the 1970s.
Figure 3: Gross Agricultural Production (million tons)
Data source: Gregory and Stuart, Russian and Soviet Economic Performance and Structure, 8081.
Table 3: Factor Productivity in Soviet Agriculture (19511979)
19511960
19611970
19711979
Output
4.8
3.0
1.8
Input
2.7
2.1
1.6
Factor productivity
2.1
1.0
0.2
Data source: Gregory and Stuart, Russian and Soviet Economic Performance and Structure, 167.
Industrial Output
In terms of industrial output, during Lenin’s War Communism period (19171921) gross industrial
output plummeted and the economy fell into utter chaos.25 The NEP of 19211928 was supposed
to rebuild the country after the civil war. Lenin nationalized industry but left farming to private
producers, and a private sector of capitalist manufacturers remained. In the early NEP period, the
Soviet economy was still in a bad condition, with output far worse than in 1913. The First Five-Year
Plan (19281932) brought the implementation of planned economy, industrialization, and the
collectivization of agriculture. All sectors of the economy grew during this time, particularly
industry, but also food production, consumer goods production, and military spending. The
25 Nove, An Economic History of the USSR.
0
20
40
60
80
100
120
140
160
1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1940 1945 1950 1953 1954 1955 1956 1957 1958
million tons
10 | The Dangers of Forgetting the Legacy of Communism
Second Five-Year Plan (19331938) was accompanied by a consolidation of collective farming, the
completion of the vast industrial projects of the first plan, and a massive increase in military
spending.
For the 19511987 period the Soviet system saw a pattern of declining growth over time. Data for
industrial output differ (Figure 4). Similar to other data, Soviet statistics claimed much higher
numbers than Western analysts and Soviet economists’ calculations.26 The focus on industrial
output came at the expense of personal consumption. The availability of consumer goods was
constrained, the quality of goods was poor, and the supply of goods was scant. Queues and
shortages were characteristic features of the Soviet economy.27
Figure 4: Industrial Output in USSR (average annual growth, in percent)
Data source: CIA, Revisiting Soviet Economic Performance under Glasnost: Implications for CIA estimates, 1988, 9,
https://www.cia.gov/library/readingroom/docs/CIA-RDP89T01451R000600690001-4.pdf.
26 Raymond E. Zickel, ed., Soviet Union: A Country Study (Washington, DC: Federal Research Division, Library of
Congress, May 1989), https://cdn.loc.gov/master/frd/frdcstdy/so/sovietunioncount00zick/sovietunioncount00zick.pdf.
27 Michael Ellman, Planning Problems in the USSR: The Contribution of Mathematical Economics to Their Solution,
1960–1971 (Cambridge, UK: Cambridge University Press, 1973).
0
2
4
6
8
10
12
1951-1960 1961-1965 1966-1970 1971-1975 1976-1980 1981-1985 1986-1987
Official Soviet S tatistics
CIA estimates
Romina Bandura and Brunilda Kosta | 11
Box 1: The Case of China
In 1921, the Chinese Communist Party was established and in 1927, Mao Zedong took over its leadership.
After prolonged civil war with Chinese Nationalists, Mao took control of all of China in 1949 and imposed the
Soviet pattern of development, founding the People’s Republic of China (PRC). This was reflected in the
development of heavy industry with surpluses extracted from peasants. In the 1950s, Mao broke from Soviet
communism and developed a new model called Maoism. 28 His model started with the institution of the
Great Leap Forward, aiming to convert China into a heavily industrialized society. Frank Dikötter in his book,
Mao's Great Famine (2010), considered the Great Leap Forward “one of the worst catastrophes the world has
ever known.” During 19581962, more than 45 million people starved or died.29
New ideas of communism came into place after Mao's death in 1976 when the country moved from
communism to a “market socialism” under the run of Deng Xiaoping.30 Deng established fundamental
changes into the economic system and came up with features of the system called socialism with Chinese
characteristics. He followed less the ideologies of the earlier leaders and decided to put in practise policies
not strictly under communism’s principles. For instance, he established the “Four Modernizations,” describing
agriculture, industry, science, and technology. Deng is well-known as the person who helped to make China
the economic world power that it is today. He did this by creating opportunities and openness to the outside
world and industrialized successfully.
China adhered to communist economics until 1978, when it adopted a blended system, retaining the
autocratic rule of communism while transitioning toward a market economy with gradual economic
reforms. Under the state enterprise reform, the government seized control only of the large enterprises,
while withdrawing from control of and ownership of small to medium-sized enterprises (SMEs). In addition, it
began to promote the foreign trade and foreign investment and deregulated prices so that they could be
determined by market forces.31 These reforms have allowed China’s economic system to flourish.
The current constitution of China was written in 1982 and has been continuously revised since.32 The
constitution includes many theoretical civil rights: freedom of speech, freedom of the press, freedom of
religion, the right to trial, and the right to private property. Nevertheless, this constitution has not been widely
put into practice. China continues to maintain political primacy of the Communist Party although having
reformed the economic side.
Defense Spending
The state budget played a key role in the administrative command economy.33 Indeed major
allocation decisions were reflected in the annual budget, which determined the total output for
private consumption, public consumption, investment, defense, and administration. Defense was
28 Xiaobing Li, China at War: An Encyclopedia (Santa Barbara, CA: ABC-CLIO, 2012).
29 Frank Dikötter, Mao's Great Famine: The History of China's Most Devastating Catastrophe, 1958-1962 (New York:
Walker, 2010).
30 Peter Nolan, “The China Puzzle: Touching Stones to Cross the River,” Challenge (January-February1994),
https://public.wsu.edu/~hallagan/EconS391/weeks/week4/chinapuzzle.pdf.
31 Gregory C. Chow, “Economic Reform and Growth in China,” Annals of Economics and Finance 5 (2004): 12752,
http://www.aeconf.com/Articles/May2004/aef050107.pdf.
32 William C. Jones, “The Constitution of the People’s Republic of China,” Washington University Law Review 63, no. 4
(1985): 70735, https://openscholarship.wustl.edu/cgi/viewcontent.cgi?article=2203&context=law_lawreview.
33 M.V. Condoide, The Soviet Financial System (Columbus: Bureau of Business Research of Ohio State University, 1951).
12 | The Dangers of Forgetting the Legacy of Communism
critical to the USSR (Figure 5). It comes as no surprise that defense spending reached its peak
during World War II.
Specialists on the Soviet economy have argued that the USSR understated the total defense
expenditures for several reasons.34 According to Mark Harrison, in 1930 Stalin’s Politburo published
an inaccurate Soviet military budget.35 Half a century later in 1985, entering talks to limit strategic
and “theater nuclear weapons,” the Soviet Union faced the same problem.36 Soviet official statistics
had not disclosed the true size of the military budget. The figure the Soviet Union reported
around 20 billion rubles in the mid-1980swas only a fraction of the truth. In 1989, Gorbachev laid
out another figure for defense outlays: 77 billion rubles for 1989, which was almost four times
larger than the previously reported figure.37
Figure 5: Government Expenditures (% of total)
Data source: Gregory and Stuart, Russian and Soviet Economic Performance and Structure, 113.
34 Lawrence R. Robertson, Russia and Eurasia Facts and Figures Annual, vol. 25 (Gulf Breeze, FL: Academic International
Press, 1999).
35 Mark Harrison, “How Much Did the Soviets Really Spend on Defense? New Evidence from the Close of the Brezhnev
Era,” Warwick Economic Research Papers, No. 662 University of Warwick, Coventry, UK, 2003,
https://warwick.ac.uk/fac/soc/economics/research/workingpapers/2008/twerp662.pdf.
36 Unlike nuclear weapons, theater nuclear weapons are smaller.
37 Mark Harrison, “Secrets, Lies, and Half Truths: The Decision to Disclose Soviet Defense Outlays,” Political Economic
Research in Soviet Archives Working Paper, No. 55, University of Warwick, Coventry, UK, 2008,
https://warwick.ac.uk/fac/soc/economics/staff/mharrison/archive/persa/055.pdf.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1931 1934 1937 1940 1950 1960 1970 1978 1984 1988
Other expenditures
Administration and justice
Social/cultural undertakings
National economy
Defense
Romina Bandura and Brunilda Kosta | 13
3 | Social Development and Civil and
Political Rights
Comrade! . . . Hang (and I mean hang so that the people can see) not less than 100 known
kulaks, rich men, bloodsuckers. . . . Do this so that for hundreds of miles around the people can
see, tremble, know and cry: they are killing and will go on killing the bloodsucking kulaks. . . .
Yours, Lenin. P.S. Find tougher people.Letter from Lenin to a provincial commissar, August
1918
If we were to add up all the landlords, rich peasants, counterrevolutionaries, bad elements and
rightists, their number would reach thirty million. . . . Of our total population of six hundred
million people, these thirty million are only one out of twenty. So, what is there to be afraid of?.
. . . We have so many people. We can afford to lose a few. Now we have identified all of these
people, and we are going to attack them.—Mao Zedong, The Private Life of Chairman Mao, Li
ZhiSui, 1994
Terror, Dekulakization, and the Gulag System: A High Cost
to Human Life
The assault on the peasant population along with mass deportations, imprisonment, and death of
so-called “traitors” of the system became an underlying feature of many communist regimes. In his
statement to the “agrarian Marxistsat the end of December 1929, Stalin explained, Now we are
able to carry on a determined offensive against the kulaks, eliminate them as a class. . . . Now
dekulakization is being carried out by the masses of poor and middle peasants themselves. . . .
Now it is an integral part of the formation and development of collective farms.38 Similarly in
Maoist China, the Great Leap Forward (19581962) aimed at transforming China from an agrarian
society to a social state via forced industrialization and collectivization at very high human cost.
Mao’s Cultural Revolution (19661976) also perpetrated massive violence in the name of social
revolution.
Kulak (the so-called better-off peasants) deportation did in fact begin in some regions by the end
of 1929, and reached its peak in 19301931. According to Ivnitsky (1972) a total of about 300,000
kulak households with roughly 1.5 million people were deported. Other Soviet estimates range
from 240,757 households (in the official party history) to 381,026.39 However, some estimates of
deportations are much higher. For instance, Bestuzhev-Lada (1988) speaks of the deportations as
38 Joseph Stalin, Joseph Stalin Works, vol. 12 (Moscow: Foreign Languages Publishing House, 1954), 176–77,
http://www.marx2mao.com/PDFs/StWorks12.pdf.
39 N.A. Ivnitsky, Klassovaya bor’ba v derevnye I likvidatsiya kulachestva kak klasa (Moscow: Nauka, 1972), 298–9.
14 | The Dangers of Forgetting the Legacy of Communism
between an eighth and sixth of the 25 million peasant households.”40 The majority of deportees
were highly educated individuals.41
The Ukrainian Famine-Genocide, known as Holodomor (death by hunger), took place between
1932–1933.42 Estimates of Holodomor deaths range from 5 to 10 million. Timothy Snyder in his
book Bloodlands mentions that the 1937 Soviet census had a shortfall of 8 million people.43 Most
of them were victims of famine, mainly in Ukraine, but also in Russia and Kazakhstan. In Ukraine
alone, Snyder estimates that roughly 4 million of the rural population died as the result of Stalin’s
Five-Year Plan, which took place during 19281932 (Snyder, 2010). Anne Applebaum (2017) places
a tally of 5 million killed during 19311933. These were not accidental deaths as the result of bad
policies but a deliberate attack of the Soviet state against the Ukrainian peasantry.44
The events of 19291934 constitute one of the great dramas of history. Stalin deprived the
population of freedom of speech. Criticism of the regime was forbidden, and written articles
increasingly became the vehicle for strident assertions of brilliant successes and denunciations of
real or alleged deviationists as agents of foreign power.45
One of the most powerful institutions under the Soviet regime was the secret police. Established in
December 1917, the KGB underwent many name changes and was one of the most feared police
agency in the history of the world.
Along the secret police, the USSR had a brutal prison camp system (Gulag) with millions of
innocents serving sentences of 525 years of hard labor.46 The prison camp system arose in the
Soviet Union after 1929. More people passed through the Gulag for a much longer period of time
than through Nazi concentration camps. Prisoners in camps worked outdoors in mines and they
lived without adequate clothing, clean water, and other essentials. A large number of inmates
died.47
40 Igor Bestuzhev-Lada, “Return to the Truth,” Nedelya, no. 15 (1988).
41 Walter Scheidel, The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First
Century (Princeton, NJ: Princeton University Press, 2017).
42 See, for example, Wsevolod W. Isajiw, Famine-Genocide in Ukraine: 19321933 (Toronto, ON: Ukrainian Canadian
Research and Documentation Centre, 2003); Roman Serbyn and Bohdan Krawchenko, eds., Famine in Ukraine 1932
1933 (Edmonton, AB: Canadian Institute of Ukrainian Studies, 1986); Anatoliy Dimarov, Yevhen Hutsalo, and Olena
Zvychayno, A Hunger Most Cruel: The Human Face of the 19321933 Terror-Famine in Soviet Ukraine (Toronto, ON:
Language Lantern Publications, 2002); and Robert Conquest, Harvest of Sorrow: Soviet Collectivization and the Terror-
Famine (New York: Oxford University Press, 1986).
43 Timothy Snyder, Bloodlands: Europe between Hitler and Stalin (New York: Basic Books, 2010).
44 Anne Applebaum, Red Famine: Stalin’s War on Ukraine (New York: Doubleday, 2017).
45 Nove, An Economic History of the USSR, 1559. See also Robert Conquest, The Great Terror: A Reassessment (New
York: Oxford University Press, 1990).
46 See, among others, Aleksandr Solzhenitsyn, The Gulag Archipelago, 19181956 (New York: Harper & Row, 1985); and
Anne Applebaum, Gulag: A History (New York: Doubleday, 2003).
47 David Hosford, Pamela Kachurin, and Thomas Lamont, Gulag: Soviet Prison Camps and their Legacy (Cambridge, MA:
National Resource Center for Russian, East European and Central Asian Studies, Harvard University, 2006),
http://gulaghistory.org/nps/downloads/gulag-curriculum.pdf. See also Paul R. Gregory, Terror by Quota: State Security
from Lenin to Stalin (an Archival Study) (New Haven, CT: Yale University Press, 2009).
Romina Bandura and Brunilda Kosta | 15
Inequality and Poverty
One of the key aspects that communists sought to pursue was equality of outcomes in income
and wealth. How did the Soviet system fare in this regard? There are several ways that inequality
can be measured. Traditional measures of wage and income inequality (such as the Gini
coefficient) were difficult to establish during most of the Soviet era. The available data shows that
there were important wage and income differentials among Soviet republics during the communist
system. Moreover, the USSR had not freed itself of poverty. According to official figures, 14 percent
of the population or 40 million were poor in 1989.48
Scheidel (2017) observes that in 19041905 the market income Gini was about 0.362 but there are
no accounts how it fared during the 19171941 period.49 Scheidel concludes that the Gini
coefficients during the Soviet era were lower than during the Tsarist period, with an “estimate of a
market Gini for non-farm households of 0.27 to 0.28 for the entire country between 1968 and
1991.”50
Analyzing income distribution data, Michael Alexeev and Clifford Gaddy (Table 4) conclude that
“wage inequality in the Soviet Union as a whole has remained relatively stable since 1969, with a
slight increase in inequality in the 1980s.”51 Official USSR sources have long heralded the
preponderance of its economic system, sometimes comparing it with Western and European
countries. Nevertheless, the living standard of the USSR was far below Western and East European
levels: in 1976 it was one-third of American levels and about one-half of that of France and West
Germany.52
Alexeev and Gaddy (1991) imply a sharp increase in the inequality of wage earnings over a 30-year
period: the Gini coefficient in 1986 was over 30 percent greater than in 1956 (Figure 6). However, a
closer inspection of the underlying data cautions against such a conclusion. In the wage
distribution data for 1956 (Table 4), over 70 percent of wage-earners fall into the “under 80 rubles”
category. Due to the lack of further information related to the distribution of a very large
percentage of wage-earners in the first interval, no argument can be made about 1956. After 1968,
the data started becoming more reliable and some tentative conclusions could be derived. During
19761981 wage inequality dropped slightly and in the first half of the 1980s, there was an
increased trend of inequality.53
48 Gregory and Stuart, Russian and Soviet Economic Performance and Structure, 158.
49 A higher Gini coefficient reflects a relatively higher degree of inequality with “0” representing exact quality while “1”
represents total inequality.
50 Scheidel, The Great Leveler, 221.
51 M.V. Alexeev and C.G. Gaddy, Trends in Wage and Income Distribution under Gorbachev: Analysis of New Soviet Data,
Berkeley-Duke Occasional Papers No. 25 (Durham, NC: Duke University Department of Economics, February 1991),
http://www.dtic.mil/dtic/tr/fulltext/u2/a274458.pdf.
52 Bradford P. Johnson and Evan A. Raynes, Quality of Life in the Soviet Union: A Conference Report (Cambridge, MA:
National Council for Soviet and East European Research, November 1984), 11, https://www.ucis.pitt.edu/nceeer/1984-
629-2-Johnson.pdf.
53 Alexeev and Gaddy, Trends in Wage and Income Distribution under Gorbachev.
16 | The Dangers of Forgetting the Legacy of Communism
Table 4: Distribution of Soviet Workers and Employees, by Wage and Salary Levels (in percentage)
Rubles earned
per month
1956
1968
1972
1976
1981
1986
Under 80 71 32.7 23.6 15.2 6.4 4.9
80–100 13.2 21.2 18.5* 14.6 13.6 11.3
100120 6.6 15.1 14.7 13.2 12.3 10.3
120140 3.6 10.7 12.1 12.9 12.5 11
140160 2.0 7.3 9.5 11.6 11.7 11.4
160200 1.9 7.4 11.9 16.2 19.2 18.4
200250 1.2 3.1 5.6 9 12.5 15.3
250300 0 1.3 2.1 3.8 5.6 7.7
Over 300 0.4 1.1 2 3.4 6.2 9.6
Data source: M.V. Alexeev and C.G. Gaddy, Trends in Wage and Income Distribution under Gorbachev: Analysis of New
Soviet Data, Berkeley-Duke Occasional Papers No. 25 (Durham, NC: Duke University Department of Economics, February
1991), 3, http://www.dtic.mil/dtic/tr/fulltext/u2/a274458.pdf.
Figure 6: Gini Coefficients Based on Wage Size Distribution, USSR, 19561986
Data source: Alexeev and Gaddy, Trends in Wage and Income Distribution under Gorbachev, 9.
A study conducted by Anthony Atkinson and John Micklewright (1992) confirms the analysis thus
far related to the Gini coefficient. They examine the Family Budget Survey data and conclude that
after 1980, there was an apparent widening of income inequality.54
54 A.B. Atkinson and J. Micklewright, Economic Transformation in Eastern Europe and the Distribution of Income
(Cambridge, UK: Cambridge University Press, 1992).
0.00
0.05
0.10
0.15
0.20
0.25
1956 1968 1972 1976 1981 1986
Romina Bandura and Brunilda Kosta | 17
Education and Labor Policies
The Soviet education system was designed to serve the needs of the planned economy within a
Marxist-Leninist framework. The Ministry of Education developed long-term plans where required
skills and general educational attainment had to align with the national economic objectives. The
completion of secondary education was compulsory.55 Education aimed at developing the new
Soviet person,” on which the communist morality and beliefs were planted.
Education was oriented toward fields that aligned with the Soviet economic needs and the central
plans.56 During 19451956, the fields of philosophy, history, linguistics, and biology were special
objects of supervision by Stalin. If there were deviations from the philosophy of the party, severe
punishments were used. In regard to the art field, Socialist realism” was the standard, while
“cosmopolitanism” and “formalism” were prohibited. In the sciences, the regime exercised
dictatorial powers over scholarship.57 In the context of the Soviet Union, there was a significant
increase in the stock of human capital due to the high education enrollment.58 However, the type
of education received and the way it was later employed in the labor market are questionable.
Since 1930, the Soviet Union officially had zero unemployment. Studies of the Soviet labor market
in the 1960s and 1970s suggested very low levels of unemployment.59 However, labor turnover
was an issue. The problem with labor planning was that the Communist Party placed employees in
positions without taking into account comparable skills and knowledge. This strategy resulted in
extensive turnover and efficiency losses.
In terms of women’s role in the Soviet economy, by 1945 women accounted for 56 percent of the
total employed labor force as compared with 39 percent in 1940; the figure remained as high as
50 percent in 1966.60 Women now played a key role in some professions that were historically
male-dominated: in 1965 women made up 30 percent of all graduate engineers compared with 15
percent in 1940.61 However, within each trade and profession, women occupied positions that
required lower skills and less responsibility, so women’s average earnings remained substantially
lower than men’s throughout the Soviet era.62
Political Rights, Religious Freedoms, and Labor Unions
In the Soviet Union there was no acceptance of political pluralism. Pluralism was against the
foundations of Soviet ideology and organization. The concept of socialist pluralism became visible
55 Gregory and Stuart, Russian and Soviet Economic Performance and Structure, 130.
56 Ibid.
57 John T. Zepper and William W. Brickman, Russian and Soviet Education 17311989: A Multilingual Annotated
Bibliography (New York: Garland, 1992).
58 Gregory and Stuart, Russian and Soviet Economic Performance and Structure, 130.
59 P.J.D. Wiles, “A Note on Soviet Unemployment in U.S. Definitions,” Soviet Studies 23, no. 2 (April 1972): 61928.
60 See Davies, Soviet Economic Development from Lenin to Khrushchev, 6869. Data from USSR, Trud v SSSR:
statisticheskii spravochnik (Moscow: TsUNKhU, 1968), 73.
61 Davies, Soviet Economic Development from Lenin to Khrushchev, 6869. Estimated data from USSR, Trud v SSSR:
statisticheskii spravochnik (Moscow: TsUNKhU, 1968), 26869, 274-75.
62 Davies, Soviet Economic Development from Lenin to Khrushchev.
18 | The Dangers of Forgetting the Legacy of Communism
and acceptable during Gorbachev’s “glasnost” reform but it started to be politically institutionalized
only after the fall of communism.63
The Communist Party used the “nomenklatura” system, that is, a selected class of party
bureaucrats, to control personnel appointments and placements throughout the economy.
Through this method, the party filled the most important positions by favoritism and loyalty over
skills.64 It led to a system of privilege and corruption, betraying the ideals of economic and social
equality.
Alongside the suppression of political plurality, there were no free and independent trade unions
for workers. After Lenin seized power, he brought trade unions under firm party control. Even in
those cases where trade unions seemed to have increased their authority to protect workers, union
leaders were party officials so this put their interest in dilemma.65 The Marxist slogan, “Workers of
the World unite!” was a mirage.
Moreover, following Marx and Engels’ views that religion was the opiate of the masses, the Soviet
Union was openly hostile to religion and officially an atheist stateit took the position that there
was no God. This atheism meant a systematic, often brutal campaign to eliminate belief. As Mikhail
Gorbachev stated, the Soviet communist state carried out a comprehensive “war on religion.”66
Bolsheviks tore down churches, arrested clergymen, and destroyed any sign of religious freedom.67
What began in the Soviet communist state persists today in different patterns of other communist
countries, from China to North Korea to Cuba.
63 Richard Sakwa, Soviet Politics in Perspective, 2nd ed. (London: Routledge, 1989).
64 Paul R. Gregory and Robert C. Stuart, Comparative Economic Systems, 6th ed. (Boston, MA: Houghton Mifflin, 1999).
65 Nove, An Economic History of the USSR.
66 Mikhail Gorbachev, Memoirs (New York: Doubleday, 1996), 328.
67 Mikhail Gorbachev, On My Country and the World (New York: Columbia University Press, 2000), 2021.
Romina Bandura and Brunilda Kosta | 19
4 | Environmental Performance
Although no reliable statistics on environmental performance exist, two major disasters during the
Gorbachev era are worth highlighting: the Chernobyl nuclear disaster and the desiccation of the
Aral Sea. Western societies have also had their share of environment disasters, but they did not
attempt to conceal the events as the communists did.
The Chernobyl nuclear disaster of 1986 (Pripyat, Ukraine100km North of Kyiv) released more
than one hundred times the radiation of the nuclear bombs in Hiroshima and Nagasaki combined.
Due to a series of operational failures, mismanagement, and internal flaws of the power plant itself,
reactor No. 4 sustained a meltdown on the night of April 25. The fire burned out of control for five
days, spreading more than 50 tons of radioactive poison across Belarus, the Baltic states, and parts
of Scandinavia.68 According to United Nations Scientific Committee on the Effects of Atomic
Radiation (2000), 134 liquidators received radiation doses high enough to be diagnosed with acute
radiation sickness (ARS). Out of this, 28 persons died in 1986 due to ARS. Chernobyl yielded health
issues that still have an impact even today.69 In Belarus, the Russian Federation, and Ukraine,
roughly 5,000 children are diagnosed with thyroid cancer. Experts assess that the increased
incidence of thyroid cancer from Chernobyl will continue for many years. In 2017, 30 years after
the disaster, the reactor was finally contained through a structure—the Chernobyl New Safe
Confinement (NSC)that would last 100 years.70
Another environmental disaster was that of the Aral Sea, which was the result of human
mismanagement. The Aral Sea, the fourth-largest lake in the world, was reduced to 10 percent of
its size by 1997 as a result of Soviet irrigation projects. The Aral Sea disaster caused environmental
damage as well as economic and health impacts. People living in the ecological disaster zone had
health problems such as respiratory and digestive afflictions, cancer as a result of ingestion of
blowing salt and dust, and poorer diets due to the loss of Aral fish as a major food source.71 The
worst part of this disaster was manifested in the population of Karakalpak Republic in Uzbekistan.
To evaluate the rates of diseases and health issues, several surveys were conducted in the mid- to
late 1980s. The results reveal that the rates of diseases rose compared to a decade earlier.72
Moreover, the infant mortality rate rose from an average of 45 per 1,000 live births in 1965 to 72
per 1,000 live births in 1986, with the rate in several districts adjacent to the former seashore
68 David S. Landes, The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor (New York: Norton,
1999).
69 World Health Organization, “Health effects of the Chernobyl accident: an overview,” April 2006,
http://www.who.int/ionizing_radiation/chernobyl/backgrounder/en/.
70 See European Bank for Reconstruction and Development (EBRD), “Chernobyl’s New Safe Confinement,” n.d.,
http://www.ebrd.com/what-we-do/sectors/nuclear-safety/chernobyl-new-safe-confinement.html; and World Nuclear
Association, “Chernobyl Accident 1986,” November 2016, http://www.world-nuclear.org/information-library/safety-and-
security/safety-of-plants/chernobyl-accident.aspx.
71 Philip Micklin, “The Aral Crisis: Introduction to the Special Issue,” Post Soviet Geography XXXIII, no. 5 (May 1992): 269
83; Medicins sans Frontieres, “Uzbekistan and Turkmenistan: ‘DOTS’ for two million,” December 13, 2001,
http://www.msf.org/en/article/uzbekistan-and-turkmenistan-dots-two-million.
72 Y.A. Anokhin et al., “The concept and results of implementation of regional monitoring,” in Monitoring the Natural
Environment in Basin of the Aral Sea, ed. L.L. Lentovskaya (Leningrad: Gidrometeoizdat, 1991), 20814.
20 | The Dangers of Forgetting the Legacy of Communism
ranging from 80 to over 100/1000. This was largely due to the so-called ecological disasters (Aral
Sea) and environmental pollution associated with the heavy use of toxic chemicals.
In terms of pollution, the system demonstrated failure of its principles. The early pro-socialist
argument claimed that the planned economy would prevent pollution because central planners
consider negative externalities.73 Nonetheless, this was not the case as managers were inclined to
be rewarded for output rather than the efficient use of resources.74
73 Oskar Lange and Fred M. Taylor, On the Economic Theory of Socialism (Minneapolis: University of Minnesota Press,
1938).
74 Ann-Mari Sätre Ahlander, Environmental Problems in the Shortage Economy: The Legacy of Soviet Environmental
Policy (Aldershot, UK: Edward Elgar, 1994).
Romina Bandura and Brunilda Kosta | 21
5 | Countering Communism: Development
Institutions
Immediately after World War II, the USSR sought to gain allies among countries that were breaking
free of European colonialism. At the beginning of the Cold War (19471991), the USSR attempted
to export the Marxist-Leninist model to the Third World. The United States started shoring up
governments that appeared willing to resist the spread of communism. At the same time, the
United States and its Western allies began establishing development institutions to further “fight”
the expansion of communism.75
The Soviet Union used the United Nations and its agencies as a means to gain allies, gather
intelligence, and spread Soviet propaganda and influence across the globe. It penetrated UN
agencies through its detailed plans to use the United Nations to achieve Soviet foreign policy and
intelligence objectives. In 1984, around 800 Soviets assigned to the United Nations as international
civil servants reported directly to the Soviet missions.76
To counter the further spread of communism, the United States and its allies launched several
initiatives and programs and established a set of institutions in order to win the hearts and minds of
the developing world. The first key initiative was the Marshall Plan. By the end of World War II, most
of Europe was devastated, along with its economy. In June 1947, the United States announced the
European Recovery Program, known as the Marshall Plan, which provided $13 billion in the U.S
assistance for the economic recovery of war-torn Europe. Underlying the program was the belief
that the economic recovery of war-torn Europe would insulate the peoples of the continent
against the appeal of international communism. The Marshall Plan was offered to the Soviet Union
and its Eastern European satellite states, but Soviet leaders viewed the offer as a devious capitalist
plot and refused to participate.77 The Marshall Plan allocated between $10.3 and 13.6 billion.78 The
aid mostly went to the United Kingdom (25 percent), France (21 percent), West Germany (11
percent), Italy (12 percent) and the Netherlands (8 percent).79 In terms of the accomplishments of
the Marshall Plan, industrial production of the participating countries by the end of 1951 was 64
75 In fact, the Center for Strategic and Interactional Studies (CSIS) was founded during the Cold War period (1962) by
David M. Abshire and Admiral Arleigh Burke. Abshire saw that the world was becoming more complex, with the
communist order splitting not only into Chinese and Soviet camps but into smaller factions as well. The views of Abshire
and Burke gave shape to CSIS’s programs, above all focusing in the security issue. See James Allen Smith, Strategic
Calling: The Center for Strategic and International Studies, 1962–1992 (Washington, DC: CSIS, 1993).
76 Senate Select Committee on Intelligence, “Soviet Presence in the U.N. Secretariat,” May 1985,
https://www.intelligence.senate.gov/sites/default/files/publications/9952.pdf
77 William J. Duiker and Jackson J. Spielvogel, World History, 8th ed. (Boston, MA: Cengage, 2016).
78 Imanuel Wexler, The Marshall Plan Revisited: The European Recovery Program in Economic Perspective (Westport, CT:
Greenwood Press, 1983), 249, offers a figure at the lower end. At the higher end is Susan M. Hartmann, The Marshall Plan
(Columbus, OH: Merrill, 1968), 58.
79 [Author redacted], The Marshall Plan: Design, Accomplishments, and Significance (Washington, DC: Congressional
Research Service, January 2018),
https://www.everycrsreport.com/files/20180118_R45079_1edc1d2cf84f1c10306e766d85135b21a568459c.pdf.
22 | The Dangers of Forgetting the Legacy of Communism
percent higher than four years earlier, agricultural production increased by 24 percent, and the
overall GNP increased by 25 percent.80
Parallel to the Marshall Plan, the United States championed the Bretton Woods Institutions in order
to help rebuild Europe after the war and promote international economic cooperation. The
International Bank for Reconstruction and Development (IBRD), now known as the World Bank,
was set up to finance reconstruction after World War II, mainly in the form of infrastructure
projects. France became the first recipient of an IBRD loan in 1947.81 The International Monetary
Fund’s (IMF) purpose was to promote global economic growth through international trade and
financial stability. It made funding available to countries having balance-of-payments difficulties.82
Both the IBRD and IMF were set up at a meeting of 43 countries in Bretton Woods, New
Hampshire, USA in July 1944. The Soviet Union participated in the conference, but it decided not
to join the fund.83 The Bretton Woods institutions became virtual arms of U.S. foreign policy and
played a major role in the strategy of the Cold War.
The World Bank was most successful at postwar reconstruction in Europe and Japan. On the basis
of this success, it set out to promote economic development in the world’s poorer nations, many
of them just emerging from colonial rule. When the IBRD merged with the International
Development Association (IDA) in 1960 to form the World Bank, its mission morphed toward the
eradication of poverty.84 The poorer nations, described at the time as the Third World, were often
attracted by the promises of socialism and communism. Hence, the United States used the IMF
and the World Bank to counter what it saw as the advance of communism in the Third World.85
After the Second World War, many countries were economically depressed and the U.S.-led Allied
countries considered that it vital to promote the spread of liberal capitalism, economic
cooperation, and increased world trade as a means of preventing future global conflict and the
spread of communism. Hence, the General Agreement on Tariffs and Trade (GATT) was established
in 1944 as a mechanism for managing trade disputes so as to prevent the escalation of trade wars.
GATT moved the world gradually toward freer trade through periodic roundsof negotiations. In
1995 GATT was folded into the World Trade Organization (WTO).86
Successive American administrations waged proxy wars against the Soviet Union in Asia, Africa, and
Latin America. In 1961, President John F. Kennedy initiated the Alliance for Progress with the
purpose to establish economic cooperation between the United States and Latin America. Alliance
80 Curt Tarnoff, The Marshall Plan: Design, Accomplishments, and Relevance to the Present (Washington, DC:
Congressional Research Service, January 1997), https://fas.org/sgp/crs/row/97-62.pdf.
81 Edward S. Mason and Robert E. Asher, The World Bank since Bretton Woods: The Origins, Policies, Operations, and
Impact of the International Bank for Reconstruction and Development and the Other Members of the World Bank Group
(Washington, DC: Brookings Institution, 1973).
82 Ibid.
83 Kamran Dadkhah, The Evolution of Macroeconomic Theory and Policy (New York: Springer, 2009).
84 World Bank, “History,” http://www.worldbank.org/en/about/history.
85 Ivette Perfecto, John Vandermeer, and Angus Wright, Nature’s Matrix: Linking Agriculture, Conservation and Food
Sovereignty (London: Earthscan, 2009).
86 Cynthia Clark Northrup, ed., The American Economy: A Historical Encyclopedia, rev. ed. (Santa Barbara, CA: ABC-
CLIO, 2011).
Romina Bandura and Brunilda Kosta | 23
funds were also used to create counterinsurgency programs and to train paramilitary forces to
counter the spread of communist influence in Latin America.87
On September 4, 1961, the United States Congress passed the Foreign Assistance Act, which
created an agency for economic assistance, the U.S. Agency for International Development
(USAID). The agency was intended to promote economic growth and democratic political stability
in the developing world. It also strove to counter the spread of ideological threats such as
communism and the threat of instability arising from poverty.88
The 1960s also witnessed the formation of regional development banks. They included the Inter-
American Development Bank (IADB), the African Development Bank (AfDB), and the Asian
Development Bank (ADB). These banks were founded to respond to specific policy preferences
and regional circumstances.89
87 John F. Kennedy Presidential Library and Museum, “Alliance for Progress,” https://www.jfklibrary.org/JFK/JFK-in-
History/Alliance-for-Progress.aspx.
88 USAID, “USAID History,” https://www.usaid.gov/who-we-are/usaid-history.
89 Devesh Kapur, John P. Lewis, and Richard Webb, The World Bank: Its First Half Century (Washington, DC: Brookings
Institution, 1997).
24 | The Dangers of Forgetting the Legacy of Communism
6 | Aftermath
After the fall of the Soviet Union its 292 million people had a GDP per capita of $5,474, compared
to that of $23,285 in the United States (1992; Figure 7). It is interesting to note that Japan, which
had a similar GDP per capita ($1,384) as Russia in 1914, exhibited a GDP per capita of $19,440 in
1992.90 In terms of inequality, in 1993 the Gini index stood at 0.305 for the former USSR and at
0.454 for the United States.91 Moreover, labor productivity in the USSR remained at 20–28 percent
of the U.S. level during the 19501992 period.92
Figure 7: GDP per capita (1990 Int. GK$)
Source: Maddison Project Database 2018,
https://www.rug.nl/ggdc/historicaldevelopment/maddison/releases/maddison-project-database-2018.
90 University of Groningen Growth and Development Centre, “Angus Maddison 19262010,”
https://www.rug.nl/ggdc/historicaldevelopment/maddison/original-maddison.
91 Areppim AG, “The complete Gini Coefficients, 19602012,” http://stats.areppim.com/listes/list_gini_1960x2012.htm.
92 University of Groningen Growth and Development Centre, “Angus Maddison 19262010.”
0
5,000
10,000
15,000
20,000
25,000
1912
1929
1931
1933
1935
1937
1950
1952
1954
1956
1958
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
USA F. USSR China
Romina Bandura and Brunilda Kosta | 25
When the Soviet Union was dissolved in 1991, Russia and the other countries of the former Soviet
Union began transitions to new political and economic systems, with varying degrees of success.
There are a number of success stories and a bigger number of failures. The three transition success
stories were Poland, Czech Republic, and Hungary, which avoided large setbacks during the early
years of transition.93 Most other countries started the transition period with a decline in output due
to the breakdown of the economic system.
93 Gregory and Stuart, Russian and Soviet Economic Performance and Structure.
26 | The Dangers of Forgetting the Legacy of Communism
7 | Why Does Communism Retain Its
Attraction?
Communism and communist leaders like Lenin, Mao, Ho Chi Minh, and Che Guevara were widely
romanticized in the West. Communists and their sympathizers claimed that communist societies
had eliminated both inequality and poverty. The collapse of the Soviet empire caused most of the
romanticism to evaporate, but admiration for communism has returned in recent years. There has
been a resurgence of the view that communism can remedy the shortcomings of capitalism,
particularly income inequality and poverty.94
A recent study conducted by the Victims of Communism Memorial Foundation in the United States
revealed that millennials like communism more than their parents.95 Moreover, more millennials
would prefer to live in a socialist country (44 percent) than in a capitalist one (42 percent).96 Why
are people still attracted to communism?
First, there is a lack of awareness
among youth in the United States about the horrors and
deceptions of communism. In a recent survey conducted by YouGov, only 33 percent of U.S.
millennials knew who Lenin was. The same survey found that 32 percent of millennials believe
more people were killed by the George W. Bush administration than Joseph Stalin’s regime.97
Second, there is distortion of history
at American high schools and universities, where students
are often not taught about the evils, death, and terror caused by communism. Professors and other
intellectuals tout the advantages of communism while downplaying its adverse consequences. The
Australian writer Helen Razer, in her book Propaganda: Basic Marxist Brainwashing for the Angry
and the Young, tries to persuade readers that Marxism contains the solutions to their economic
and social woes.98 In the book Communism for Kids, German writer Bini Adamczak seeks to
convey the virtues of communism in a simpler way than economists, political scientists, and policy
experts.99
Third, people remain dissatisfied with capitalist market economy.
The credibility of market
economies sustained damage in 2008 with the global financial meltdown. This downturn
encouraged doubts about the healthy continuation of capitalism. According to a recent survey, 51
percent of people between the ages of 18 and 29 claim to oppose capitalism.100 Statistics suggest
94 For a good account of this topic, see Hollander, “Reflections on Communism Twenty Years after the Fall of the Berlin
Wall.”
95 Victims of Communism Memorial Foundation, “Annual Poll Release Shows Americans Still Have a Lot to Learn about
Communism.”
96 Ibid.
97 Nicole Russell, “Survey Finds High Support for Communism among Millennials,”
http://thefederalist.com/2016/10/17/survey-finds-high-support-communism-among-millennials/.
98 Helen Razer, Total Propaganda: Basic Marxist Brainwashing for the Angry and the Young (Sidney: Allen & Unwin, 2017).
99 Bini Adamczak., Communism for Kids (Cambridge, MA: MIT Press, 2017).
100 Victims of Communism Memorial Foundation, “Annual Report on US Attitudes Towards Socialism,” October 2017,
https://www.victimsofcommunism.org/survey/.
Romina Bandura and Brunilda Kosta | 27
that younger populations in the United States value equality more than democracy, and care
deeply about the welfare state, even if it undermines democratic processes.101
Finally, some people still think that it was a “good cause”; they argue that the problem was
the implementation.
As Paul Gregory argues, the appeal to socialism can be explained through
the analogy of the jockey and the horse: supporters of socialism believe that these regimes chose
the wrong jockeys and the socialist horse deserved victory. However, the planned economic
system that socialists tried to instill had innate problems. As Gregory describes, it was not the
jockey but the horse itself that was the problem.102 People have not read the theory of Marx and
Engels, which goes against human nature and basic economic principles. Communism has been
tried in about 35 countries, all with disastrous consequences. Doesn’t that say something about the
theory itself?
101 Marion Smith, “100 Years of Communism’s Bloody Legacy,” Daily Beast, April 23, 2017,
https://www.thedailybeast.com/100-years-of-communisms-bloody-legacy.
102 Paul R. Gregory, Why Socialism Fails? January 10, 2018, https://www.hoover.org/research/why-socialism-fails.
28 | The Dangers of Forgetting the Legacy of Communism
Conclusions
The Soviet regime was characterized by economic underperformance, human rights violations,
massive human tragedies, and attacks on individual freedoms. The worst irony of the system is its
track record on inequality: the classless society that Karl Marx argued in theory that communism
would achieve, and Lenin and others put in practice, never came to fruition. The masses were
equally poor, while communist party officials became rich.
The main conclusions from this account are the following:
There is a lot of misinformation about communism and a recent wave of romanticizing it is
very dangerous.
Communist systems are antidevelopment:
o The produced massive human casualties and suffering.
o Soviet data was inaccurate and fabricated at times.
o The USSR’s economy performed far worse than capitalist countries.
o The USSR did not achieve income or social equality and the experiment of equality
for all and a classless society was not worth the human cost.
o The USSR deprived its people of political, religious, and labor freedoms.
o Education did not encourage critical thinking, but instead promoted ideological
indoctrination.
Many of the development institutions that function today were set up to counter
communism.
Communism still has a dangerous appeal because people are not informed of its negative aspects
or know but choose to ignore it. Some individuals who are cognizant of the horrors and failures of
the system believe that the “cause” was nonetheless a good one, and blame the problems on
inadequate implementation. For them, communism had “unintended” consequences.
Finally, although the Soviet system collapsed, and other satellites followed suit there are still
communist regimes out there that keep this nostalgia alive. Some regimes are opening and
reforming their economies to make them more “capitalist” like China, but others are still
entrenched and totalitarian (like Cuba and North Korea). Nevertheless, the information and data
that these systems disclose are limited and faulty at best. Communism’s track record in human
rights, political freedoms, and social development is far worse than that of capitalist systems.
Romina Bandura and Brunilda Kosta | 29
About the Authors
Romina Bandura is a senior fellow with the Project on Prosperity and Development and the
Project on U.S. Leadership in Development at CSIS. Before joining CSIS in September 2017, she was
a senior consultant on the Economist Intelligence Unit (EIU) consulting team. She worked closely
with clients to design research and manage projects that include index building, quantifying
qualitative variables, policy analysis, and strategies for investment and growth. EIU flagship projects
include the Global Microscope on Financial Inclusion and the Latin America and Caribbean
Infrascope project. Ms. Bandura is an economist with 18 years of experience in international
development research, policy analysis, and project management. Before joining EIU, she was an
economist at the International Labour Organization's Washington office. And in her previous
capacity as a business manager at DAI’s Economic Growth Sector, she managed a $90 million
private-sector development portfolio of projects in Africa, Asia, and Eastern Europe. She has also
served as a policy analyst for the UN Development Programme. Earlier in her career, she worked in
the banking sector in Argentina. Ms. Bandura holds an M.P.A. in international development from
Harvard University’s Kennedy School of Government and a B.A. in economics from the Universidad
Católica Argentina, Buenos Aires.
Brunilda Kosta is a lecturer in the Faculty of Economics at the University of Tirana in Albania.
Previously, she was a researcher with the CSIS Project on Prosperity and Development in
Washington, D.C. Ms. Kosta is involved in applied research projects funded by national and
international donors with focus on business environment, hidden economy, informal employment,
corruption and good governance, public-private dialogue, etc. She holds an M.Sc. in business
administration from the University of Tirana and is currently pursuing her Ph.D. at the same
university.
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AUTHORS
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Communism as Antidevelopment
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