Soviet Subsidy & Voluntarism
The pillars of the socialism
This is a post more about viewpoints and the big picture, hence speculative.
Counter-intuitively, this small paper that revises the Soviet subsidies to Cuba and talks about the organization of the Cuban economy in passing is probably the best thing you can ever read about the historical evolution of Marxist-Leninist (or “classical” in the terminology of Kornai) socialism as the system because it neatly packs two important points about it together.
Soviet Subsidy and Voluntarism: The Economic Anomalies of Revolutionary Cuba
Soviet Aid to Cuba
The paper is closing the methodological gap in the literature about the Soviet subsidies to Cuba. Almost all prior literature had the problem of using official exchange rates in trying to qualify them, and there was a revisionist correction to them which indicated that one should use not world prices, but the preferential American ones for example, but all of them weren’t very economically meaningful because both sides of the trade were done in non-transferable rubles which were just accounting entities of the Soviet trade block and you need to correct for it.
This paper tries to value both Cuban exports to the Soviet Union (sugar & nickel) at world prices & preferential American ones, then tries to value Soviet imports to Cuba at world prices and get the differences which can be treated as implicit subsidies, as presented in Table 2.
The Table 4 does the same, but also tries to value all Soviet imports, not only competitive ones, by discounting their values by 20%.
Then it has a quite short tour that explains how Cuban economic organization has seen waves of badly organized mobilization campaigns with the government lashing out against “technocrats” in which the country was saved greatly by the Soviet efforts and pushed into more “revisionist” and market-oriented reforms.
Soviet Subsidy
Normally, when people are discussing socialism, they mean the system of extreme national autarky, but I think it’s wrong because it concentrates on Soviet Russia in it. Socialism as the economic system on the world scale is most and foremost a system of Russian subsidies.
It works both on the international level and, far too often missed, the Soviet federal level. The story is something akin to the resource curse in which your entire economy is transformed into a quite weird and often inefficient structure to service the needs of Soviet Russia and your failings are covered by the Russian subsidies.
The Socialist Republics of Central Asia and Transcaucasus have seen quite decent development not because of some amusing micro policies in the regions, but persistent transfers by the Soviet budget from Russia to them.
We have seen quite decent documentation of the international situation in The Triumph of Broken Promises.
International socialism ended when Russia broke its spine and was unable to fund it anymore.
Voluntarism
Normally, it’s rhetorically assumed that there is some magical Stalinist planning of total plans for the economy that got replaced by neoliberals, revisionists, and technocrats who didn’t want to plan the economy anymore after Stalin’s death in the 50s which lead to the reconstruction of capitalism in the Soviet Union and its consequent destruction.
The problem with this story is that it’s almost universally accepted in the relevant historiography there were far fewer plans (if they even existed in a real sense, outside of sketchy drafts as was often the case), they were badly followed, far fewer coherent statistics collected (for both ideological and pure capacity reasons) in the period of the construction of the communism in the initial years. It was a very volunteerist process full of amateurish decisions without that much scientific or ruled-based decision-making with outright bans on the research and the use of mathematical statistics and economic modeling for the process of decision-making.
There were far more plans, far better statistics, far more rule-based decision-making in the next years, far more mathematics, and far more vigorous debates among reformists of every stripe.
It’s a quite common point about how “economic planning” is actually used in almost any argument. It’s a very schizophrenic rhetorical trick in which people defend arbitrary discretionary decision-making by using the metaphors of scientific rule-based decision-making.
It ends with the idea that socialism has been having increasingly fewer and fewer practical policy contents outside of the spirit of the general etatism in the economy and the party-state in politics (one can look at the modern discourse related to China for the examples)
As a side thought, always ask yourself at which year the first competent Soviet census with more or less full coverage was conducted, and compare it to the state of Swedish population data. And what is more important than knowledge about your own population?
The Intermezzo About Belarus
In our Eastern European panopticon, the last country that can claim as being close to socialism (now normally market socialism in the discourse) is Belarus. One can have an educated guess about the path of the economic development of the said country.
Ideology & Human Development
This post can be thought about as a critique, but regional equalization was always a great part of the socialist ideology as such and it’s not really a failure of the ideology on its own terms, but then trying to prove that we have East Asia only due to American direct and implicit subsidies looks far weirder.
The entire idea that you had a great replicable economic model gets far weaker when it consists of fewer and fewer actual policies. These ideas are mostly dreaming about the violent mobilization you had in the past and the idea that burning the giant population and natural resources inherited by the Soviets from Tsars on the funeral pyre of the world revolution is the best thing that one can do, which is somewhat funky. It’s even more so when you normally have the demographic transition only once, as you have a country like Russia only once too, and we are in a dying world.