Saturday, August 25, 2018

Soviet economic success, made in the USA?


Antony C. Sutton has written a number of books from a "conspiracy theory" perspective. His magnum opus, however, is a work on Soviet economic development in three volumes. It's more scholarly and was published by the Hoover Institution at Stanford University. This is the second volume, covering the period 1930-45. I haven't read the two other volumes, and the entire work is difficult to find these days, and usually very expensive as well.

Sutton doesn't deny that the Soviet Union *did* experience rapid economic growth during the period covered. There's just one problem. The Soviet economic growth was to a large extent made in the USA! This is an often overlooked fact, certainly in Soviet propaganda or Marxist urban legend, where it usually sounds as if the Soviets did it all by themselves...

"Western Technology and Soviet Economic Development 1930 to 1945" painstakingly documents how the Western, capitalist nations were responsible for almost *all* economic growth during the first five-year plans. The Soviets imported, copied or stole large amounts of Western technology, employed foreign engineers and workers, and even appointed foreigners to high-ranking posts within the planning bureaucracy. Most of the assistance came from the United States or Germany (before Hitler).

There were over 200 technical-assistance agreements between the Soviet Union and foreign companies during the period 1929-45. According to Soviet sources, about 6,800 foreign specialists worked in heavy industry in 1932. Of these, about 1,700 were American engineers. The number of foreign specialists at individual sites is sometimes staggering. In 1931, there were about 2000 foreign specialists in the Don coal mines, 80% of whom were Germans. More than 730 Americans worked at the Stalingrad Tractor Plant at one time or another. In 1932, there were 200 Germans at Magnitogorsk. The iron and steel works in this town were the pride of Soviet economic planning, but their construction seems to have been almost solely the work of American and German specialists. Indeed, the Magnitogorsk plant is actually a copy of the steel plant at Gary, Indiana! The Soviet Union also recruited guest workers during this period. 1,500 American miners are said to have worked at the Leninsk mines in Siberia.

Since Soviet engineers were often untrained or downright incompetent, the foreign specialists assumed most of the responsibility for the projects under construction. The Soviet agency responsible for designing all new industrial plants during the period in question, Gosproektstroi, was headed by an American, G.K. Scrymgeour from Albert Kahn Inc. Indeed, the entire agency was organized by the Kahn Company. Several other Soviet agencies responsible for construction were headed by American engineers, or employed them as "consultants". Gipromez, the bureau responsible for Soviet metallurgic industry (including Magnitogorsk) was heavily Americanized, with individual U.S. engineers heading various Gipromez departments. A certain John Calder, known as "Russia's miracle man" held official positions at the Stalingrad Tractor Plant, Magnitogorsk, Lake Balkash and other important industrial sites. He was eventually awarded the Order of Lenin.

Some other salient facts: the Soviet iron and steel technology, a favoured development sector, was wholly dependent on foreign design and engineering ability. No new blast furnaces were built between 1917 and 1928. From 1928 to 1932, all Soviet blast furnaces were designed and built under American supervision to U.S. designs. From 1933 to 1938, the Soviets duplicated the technology. The turbo-blowers to the blast furnaces at Magnitogorsk and Kuzbass were built in Switzerland and Germany, and installed in Russia by Swiss and German engineers. General Electric also had its fair share of the turbo-blower business. Sutton further mentions eight complete steel mills, made in the United States, shipped to the Soviet Union in 1945 under the Lend-Lease agreement.

The author has only managed to identify a handful of indigenous Soviet inventions during this period, most notably the Ramzin high-pressure boiler, which was soon discarded anyway. As for refineries, 77% were built with foreign design and construction, and 22% with Soviet construction using foreign design. The Soviet authorities were so dependent on foreign assistance in the oil sector, that they actually attempted to stop a number of American specialists from leaving the country! The mining sector wasn't much better: no indigenous Soviet development have been found in coal-mine development or mine equipment during the period under discussion. Two-thirds of the ships in the Soviet merchant fleet were built in foreign shipyards, mostly in Britain. The Soviet navy, by contrast, was "native" and therefore relatively inefficient. The Soviets were interested in German U-boat designs, and welcomed Roosevelt's Lend-Lease, which equipped their navy with 491 ships, most of them British-built.

And so it goes on and on...

Of course, not *everything* went according to plan (pun intended). Sutton's book contains a number of anecdotes about how incompetent Soviet engineers, planning bureaucrats or Communist propagandists delayed or almost destroyed various construction projects. A typical story comes from Werner Hofmann, Chief Engineer at the Max Miller plant in Baku: "After dismissing the Soviet Union with the statement that `the entire present regime is one big lie', he said that the Miller plant had cost $5 million but that only $25 worth of maintenance tools were available, adding that one shop had a half million dollars invested in one type of machine but that he couldn't get rags to wipe off the oil. Hofmann himself bought cloth in the foreigners' store to make wiping rags, but the workers took it to make children's clothes. These workers, he added, had neither protective clothing nor work clothes". In Magnitogorsk, the foreign engineers had to constantly battle the Communist propagandists who often insisted that construction be undertaken according to pictorial rather than engineering objectives: "According to Stuck, open-hearth stacks were built first, as these were very tall and made a nice picture. There is support for Stuck's assertions: a close examination of early propaganda photographs of the Magnitogorsk plant indicates the absence of certain major components". Another problem was a general thick-headedness and anti-foreigner suspicion on the part of many Russians, who simply refused to listen to the well-meaning advice of the foreign advisors.

Sutton is ready to give the USSR one commendation, however. Their military-industrial complex was, despite various problems, better planned and organized than the rest of the economy. Indeed, the author believes that the Soviets managed to turn the tide in World War II already before the effects of Lend-Lease were felt.

Well, always something.

I support the industrialization of Russia, but it can hardly be denied that Stalin's regime carried it out in an unnecessarily brutal manner. The economic system created by Stalin, based on purely artificial commands from above and forced collectivization, would probably have collapsed under its own weight, had it not been assisted by Western technology and expertise. It's almost as if the United States and Germany gave the Soviet Union artificial respiration. Nor did the problems go away after World War II or post-Stalin. Quite the contrary, with the possible exceptions of the military and the space industry, the Soviet economy remained permanently decrepit and did indeed collapse shortly after the fall of Communism in 1991. Compare this to China, another Communist regime which gradually replaced the Stalinist model with a home grown version of dirigisme, eventually becoming one of the world's leading economies!

Of course, the real point of Antony C. Sutton's book is to bemoan the fact that the Western powers aided the godless reds in Russia. In other books, Sutton spins various conspiracy scenarios around this fact. However, I believe that his book is nevertheless useful as a purely factual account of the Soviet industrialization.
For that reason, I give it five stars.

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