Knocking the Stuffings Out

Western economists have looked with suspicion on Nikita Khrushchev's juggling of statistics to prove that the Soviet economy is fast overhauling the U.S. Last week their suspicions were confirmed by an unexpected source: Soviet Economist Stanislav Gustavovich Strumilin.

At 83, Strumilin is the dean of Soviet economists. He wrote the first drafts of the first of all Five-Year Plans and was a leading spokesman in the Communist campaign that launched Soviet Russia on the path to rapid industrialization in 1928. Of all the pioneer planners, Strumilin alone lived through all purges and party-line changes, and in his old age he enjoys an eminence that within limits enables him sometimes to take a relatively independent course.

How to Count. Last week a newly published volume of Strumilin's collected essays arrived in Washington. In one hitherto unprinted essay on the technical topic of "Investment Effectiveness." Strumilin admits what Western experts have long suspected: official Soviet figures on industrial growth are unreliable because of "double counting." That is to say, in computing overall industrial output the Russians count the value of sheet steel, for instance, over and over--first when it emerges from the steel mill and again in computing the total value of the truck or other product made from it. "Growth of gross output purposely exaggerates the real rate of growth," says Strumilin. The only reliable way to determine the effectiveness of investment is in terms of net industrial growth--i.e., by counting the steel plate for the truck just once. This, though Strumilin did not say so, is how total output is computed in the U.S.

The old scholar then proceeds to drop all the double counting out of Soviet output from 1928 on and after somewhat sketchy calculations sets his own revised growth figures. The Soviet habit of multiple counting, he finds, has grown rather than abated over the years. By Academician Strumilin's tables, Soviet industrial output grew threefold between 1945 and 1956, not fourfold as official figures state. And net growth from 1955 to 1956 was not 11% but 8%.

Double Purpose. While most Western specialists were happy to have a Russian confirmation of their suspicions, Harvard's Professor Abram Bergson did not think Strumilin went far enough and called his calculations "dubious." A new set of production tables compiled by the Rand Corp. show that from 1928 to 1956 the Soviet economy grew by 633%, or less than half as much as even Strumilin's revised figure.

How did Strumilin get away with as much as he did? Perhaps the censor nodded or was in over his head. But Washington specialists think that Russian economists may be at last facing up to a hard reality: doctored statistics can serve Khrushchev's propaganda bragging only up to a point; then they must be corrected, or they will lead Khrushchev's planners into costly errors in allocating scarce resources.

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