The Economic Growth of Soviet Russia; H. Sennholz

THE ECONOMIC GROWTH OF SOVIET RUSSIA t'l J./-an3 :J.. Senn~olz COMMUNIST LEADERS tirelessly proclaim that the economic and social superiority of their order is bound to lead to its triumph. To accept such claims as fact leads to de spair about the future of individual enterprise and free dom. To equate the alleged economic capacity of com munism with military power gives rise to hopelessness about the military position of the free nations. Impressed by Soviet "progress," some underdeveloped nations in Asia and Africa are imitating the communist system and accepting political and military integration with Russia, while we, in turn, may be tempted to imi tate communist techniques in order to compete with the Soviet statistics. In the name and for the sake of eco nomic growth, we may try more government regulation, more government spending, and currency expansion, thus hampering and mutilating our free market processes un til they are replaced by the kind of government control that is the essence of the Soviet system. It behooves us, therefore, to examine carefully the alleged statistics of Dr. Sennholz is Professor of Economics at Grove City College, Pennsylvania.

222 THE ECONOMIC GROWTH OF SOVIET RUSSIA 223 Soviet economic-growth in the light of the known goals and techniques of the communist regime. The communist world differs fundamentally from the democratic world in structure of state, economy, and so ciety, in spiritual, intellectual, and moral constitution. Communism means extreme centralization of society and regimentation of the individual. It sacrifices everything humane to the State, subjugates and corrupts human conscience, and resorts to cruelty, evil, and deceit in or der to attain its end. This is why Communists cannot be judged by our own standards of human relations and morality. On the Nature of Soviet Growth In an individual enterprise economy the consumers determine the structure, change, and growth of produc tion. Through buying or abstaining from buying, they determine what is to be produced, its quantity and qual ity. Profits and losses oblige the producers to cater to the wishes of the consumers. Economic growth, thus guided by consumer preference, depends upon managerial abil ity applied to the savings accumulated by producers and consumers.

Economic growth under socialism differs radically from free market growth. The government has taken over, Of ganized, and regulated practically every phase of eco nomic production. As the only employer, the socialist government can concentrate the entire energy of the system on strategic points. Without regard for expense, 224 HANS F. SENNHOLZ it can throw materials and manpower into projects that are considered most important. The expenses are borne by the masses of people who labor long hours at cut rate pay. The Soviet State controls every phase of economic pro duction including wage rates and working conditions. The remuneration and employment of labor, like that of land and capital goods, are determined in accordance with general Soviet objectives. Labor towards the con solidation and promotion of the communist order and state power is rewarded generously, while "unessential" labor must be satisfied with less. Certain industries deemed essential for Soviet objectives are supplied lav ishly with labor and resources, while the unessential industries are drained for the support and growth of the former. In other words, numerous economic sectors with millions of workers are exploited for the benefit of a few industries that are essential for communism.