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Chapter 475 of 943 · Business Tides: The Newsweek Era of Henry Hazlitt by Henry Hazlitt

Communist Production

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July 30, 1956

Two articles by Harry Schwartz (in The New York Times of June 25 and 26) are disturbing both in themselves and as a symptom of a recent trend of thought in this country. The burden of the articles is this: “An economic race whose outcome could decide the fate of the world is in progress. The leaders of international Communism expect to win the contest by beating capitalism at its own game—production.” Particularly because Schwartz is usually a careful and judicious writer on Russian affairs, these articles call for critical analysis.

On close examination most of Schwartz’s statements are seen to be qualified and guarded. (The italics in the following quotations are my own.) “The Communists expect to overtake and surpass the West industrially,” etc. “It does not seem easy to raise industrial labor productivity 50 percent and collective farm productivity 100 percent in a mere five years, as the Soviet regime plans.”

Yet the articles as a whole take the Communist plans and boasts very seriously. They are illustrated with solemn charts which compare U.S. actual production last year, not merely with the U.S.S.R. 1960 goal, but even with the “possible U.S.S.R. 1965 goal.” And Schwartz’s qualifying words are faint: “That this [Communist overall production] program will make progress seem difficult to challenge. But that it will succeed in all its aspects seems open to question.” Perhaps the understatement of the year.

PROPAGANDA FIGURES

The net effect of the Schwartz articles, in short, is to scare the unwary Western reader into thinking that the Communists will soon surpass the free-enterprise U.S. and the whole West in overall productivity by Communist “planned” production methods.

It should be made clear that what Schwartz is discussing is not purely military production. In this respect everyone must agree that the Communists present a real menace. Conquest and war, and heavy industry expansion and similar preparations for conquest and war, have from the first been their primary and almost their sole objective. With us, military production has been only one among a very wide number of objectives.

Schwartz relies chiefly on studies of the official Soviet statistics of production. But there is no reason for supposing any of these statistics to be correct. They are published primarily for propaganda purposes. Until very recently, they consisted mainly of boasted percentages of increase, with no absolute figures that anyone could check against. When two Soviet statistics cannot be reconciled, it necessarily follows that one of them must be wrong. But even when two or more Soviet statistics can be reconciled with each other, it does not in the least follow that both or all of them must be right. They may be merely a set of matching fictions.

Then there is something which never gets into these statistics—the quality of the product. Millions of shoddy or ill-fitting shoes can look just as good in the statistics as the same number of first-rate shoes that fit. Square-footage of housing constructed can mean anything from shabby and jerry-built tenements to luxury apartments.

SOVIET REALITIES

If we start talking not of “plans” and daydreams but of actualities, then one of the things to talk about, as compared with the marvelous actual record of American free enterprise, would be the dismal failure of Khrushchev’s virgin lands program last year. “Excluding the Ukraine” (I quote Schwartz himself in The Times of Dec. 18 last), “. . . the Soviet Government apparently got at least 4 million tons less grain from Soviet farms this year than in 1954.” Next, one might consider the recent Poznan riots, desperate acts precipitated by a shortage of food. We might then examine the appalling condition of Russian housing. Finally, we might consider an article in a Polish weekly (probably printed at the risk of life) complaining, according to a New York Times report of July 15, of “mass unemployment, huge land waste, and food and housing shortage throughout Poland.”

It is a strange procedure to compare American actualities with Communist “plans,” boasts, or daydreams for the future.

Business Tides: The Newsweek Era of Henry Hazlitt

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