Purges and Production:
Soviet Economic
Growth, 1928-1940
by Barbara G. Katz
Off-campus link for NYU students/faculty/staff
Abstract
Did preparations for the Second World War account for the precipitous
drop in the growth rate of Soviet industrial production from 10-12 percent per
annum in the period 1928-1937 to only 2-3 percent per annum in the period
1937-1940? According to some who study the Soviet economy the answer is
"yes." This view has been succinctly expressed by Stanley Cohn:
"After 1937, the rising spectre of Hitler forced the Soviet leadership to
shift resources into armaments on a massive scale. As a result, the growth rate
fell drastically to 3.6 percent per year between 1937 and 1940." Such a
sequence of events, however, has never been empirically demonstrated. The
purpose of this paper is to investigate formally the validity of this
explanation, via aggregate production functions, particularly of the CES
(constant elasticity of substitution) variety, as well as to explore an
alternative hypothesis, espoused, among others, by Naum Jasny, Alec Nove and
Warren Nutter. This hypothesis stresses a domestic factor as the major
contributor to the disruption in industrial production: namely, the impact of
Stalin's terror in the form of chaos-producing political purges.