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Economic Performance and the Military Burden in the Soviet Union

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Economic Performance and the Military Burden in the Soviet Union 91st Congress } JOINT COXMITTEE PRINT 2d Session I ECONOMIC PERFORMANCE AND THE MILITARY BURDEN IN THE SOVIET UNION A COMPENDIUM OF PAPERS SUBMITTED TO THE SUBCOMMITTEE ON FOREIGN ECONOMIC POLICY OF THE JOINT ECONOMIC COMMITTEE CONGRESS OF THE UNITED STATES Printed for the use of the Joint Economic Committee U.S. GOVERNMENT PRINTING OFFICE 47-475 WASHINGTON: 1970 -- ---- For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C. 20402 - Price $1.25 (3N V%' 4411 -'\ .i JOINT ECONOMIC COMMITTEE [Created pursuant to sec. 5(a) of Public Law 304, 79th Cong.] WRIGHT PATMAN, Texas, Chairman WILLIAM PROXMIRE, Wisconsin, Vice Chairman HOUSE OF REPRESENTATIVES SENATE RICHARD BOLLING, Missouri JOHN SPARKMAN, Alabama HALE BOGGS, Louisiana J. W. FULBRIGHT, Arkansas HENRY S. REUSS, Wisconsin HERMAN E. TALMADGE, Georgia MARTHA W. GRIFFITHS, Michigan STUART SYMINGTON, Missouri WILLIAM S. MOORHEAD, Pennsylvania ABRAHAM RIBICOFF, Connecticut WILLIAM B. WIDNALL, New Jersey JACOB K. JAVITS, New York W. E. BROCK 3D, Tennessee JACK MILLER, Iowa BARBER B. CONABLE, Ja., New York LEN B. JO RDAN, Idaho CLARENCE J. BROWN, Ohio CHARLES H. PERCY, Illinois JOHN R. STARK, Execustive Director JA31ES W. KNOWLES, Director of Research ECONOMISTS LouELsIN F. McHuGo JOHN R. KARLIK , RICHARD F. KAUFMAN COURTENAY M. SLATER Minority: GEORGE D. KRUMBHAAR SUBCOMMITTEE ON FOREIGN ECONOMIC POLICY HALE BOGGS, Louisiana, Chairman HOUSE OF REPRESENTATIVES SENATE HENRY S. REUSS, Wisconsin JOHN SPARKMAN, Alabama WILLIAM S. MOO RHEAD, Pennsylvania J. W. FULB RIGHT, Arkansas WILLIAM B. WIDNALL, New Jersey HERMAN E. TALMADGE, Georgia W. E. BROCK 3D, Tennessee STUART SYMINGTON, Missouri BARBER B. CONABLE, JR., New York ABRAHAM RIBICOFF, Connecticut JACOB K. JAVITS, New York JACK MILLER, Iowa (II) LETTERS OF TRANSMITTAL SEPTEMBER iS, 1970. To the Members of the Joint Economic Committee: Transmitted herewith for the use of the Joint Economic Committee, and other Members of Congress, is a study of current economic developments in the U.S.S.R. entitled "Economic Performance and the Military Burden in the Soviet Union." This is the latest in a series of studies of the Soviet economy supplemented by hearings Which the committee has published periodically since 1955. T1he present comprehensive research study is designed to provide the committee and the Congress with factual data and authoritative interpretative comment on the economic performance of the Soviet Union. The committee is indebted to the many contributors and agencies, listed in the letter of Representative Hale Boggs, chairman of the Foreign Economic Policy Subcommittee, Joint Economic Committee, who have given so generously of their time and abilities to complete this outstanding project. Of course, the views expressed in these materials are those of the individual contributors and do not necessarily represent the views of the agencies with which they are connected, this committee, its individual members, or the committee staff. Sincerely, WRIGHT PATMAN, Chairman, Joint Economic Committee. SEPTEMBER 17, 1970. Hon. WRIGHT PATMAN Chairman, Joint Economic Committee, U.S. Congress, Washington, D.C. DEAR MR. CHAIRMAN: Transmitted herewith is a study of current economic developments in the U.S.S.R. entitled "Economic Perfor- mance and the Military Burden in the Soviet Union." This compre- hensive research study is designed to be responsive to the continuing interest of the committee and the Congress in objective factual data and relevant interpretive comment on the economic performance of the Soviet Union in comparison with other industrially developed na- tions of the world. This is the latest in a series of hearings and studies of the Soviet economy published periodically by the committee since 1955. The present study has been prepared in the form of a compendium embodying a selected range of professional papers contributed by invited specialists in their respective fields drawn from the agencies of the Federal Government in Washington, universities and a private research organization. The committee is indebted to these contributors (III) IV who have given generously of their time and expertise to provide the latest available information and competent analytical perspective on this important subject. They are the following: Michael Boretsky John P. Hardt David W. Bronson I. S. Koropeckyj Scot Butler Robert S. Kovach Terence E. Byrne Richard J. Lee David W. Carev Earl L. Michell Stanley H. Cohn Priscilla Painter Orah Cooper Stephen Rapaw-v Robert A. Dockstader J. T. Reitz John T. Farrell Barbara S. Severin Murray Feshbach Andrew Sheren Ann S. Goodman Rodney E. Steele The committee wishes to avail itself of this opportunity to express its appreciation of the wholehearted cooperation it has received from the following agencies of Government and other institutions' Bureau of the Census State University of New York Central Intelligence Agency (Binghamton, N.Y.) Department of Commerce Temple University Library of Congress Rand Analysis Corporation Of course, the views expressed in these materials are those of the contributors and do not necessarily represent the views of the agencies, institutions, the committee, individual members thereof, or the com- mittee staff. It is clear that some of these studies present different estimates for what apparently represents the same phenomenon- such as Soviet defense activities. For the most part, this is due to the high degree of secrecy surrounding such activities. It is hoped that publication of these data will permit fuller exploration of the subject matter by the experts with a view to minimizing discrepancies and arriving at closer approximations to the truth. This subcommittee plans to examine the more prominent areas of controversy through public hearings to aid in this process of achieving a fuller understanding of events. A particular expression of thanks is hereby extended to the Legisla- tive Reference Service of the Library of Congress for assigning to this project the services of the late Leon M. Herman who planned the scope of research and assembled the services of the authors. Also we take this opportunity to thank Vladimir N. Pregelj also of the Library of Congress for his valuable work in coordinating and editing the various chapters of the study. The study was supervised at the committee level by John R. Stark. Sincerely, HALE BOGGS, Chairman, Subcommittee on Foreign Economic Policy. CONTENTS Page Letters of Transmittal --- Introduction - 1 COMPENDIUM ARTICLES Recent Trends in the Soviet Economy By Terence E. Byrne ---------------- 3 General Growth Performance of the Soviet Economy By Stanley 11. Cohn- 9 l)evelopjments in Soviet Industry By Robert A. IDockstader -1---- is Soviet Agriculture By David W. Carey - ---------------------------- 26 The Fuels Industries By J. Richard Lee -33 Freight Transportation in the U.S.S.R. By Earl L. Michell and Priscilla Painter -38 The Soviet Capital Investment Program By Scot Butler -43 The State Budget for 1970 By Rodney E. Steele---------- 54 Population By Murray Feshbach -60 Labor and Wages By Murray Feshbach and Stephen Rapawy -71 Education By Ann S. Goodman- 85 Consumer Welfare By David W. Bronson and Barbara S. Severin -93 Foreign Trade of the U.S.S.R. By Robert S. Kovach and John T. Farrell -100 Soviet Economic Assistance to the Less Developed Countries of the Free World By Orah Cooper -117 Structure and Organization of Defense-Related Industries By Andrew Sheren -123 Soviet Defense-Associated Activities Outside the Ministry of Defense By J. T. Reitz -133 The Economic Burden of Soviet Defense Outlays By Stanley 11. Cohn -166 The Technological Base of Soviet Military Power By Michael Boretsky -189 Industrial Location Policy in the U.S.S.R. During the Postwar Period By I. S. Koropeckyj -232 (V) VI COMPENDIUM AUTHORS [Alphabetical listing] Page Boretsky, Michael --------------------------- 189 Bronson, David W., and Barbara S. Severin - --- 93 Butler, Scot- Byrne, Terence E- 3 Carey, David W - -26 Cohn, Stanley H --------- 9 Cooper, Orah ----------------------------------- 117 Dockstader, Robert A --- 18 Farrell, John T., and Robert S. Kovach - -100 Feshbach, Murray ----------------------------------- ---- 60 Feshbach, Murray, and Stephen Rapawy - -71 Goodman, Ann S - - 85 Koropeckyj, I. S -- 232 Kovach, Robert S., and John T. Farrell - -100 Lee, J. Richard -___ ------------------------------------------- Michell, Earl L., and Priscilla Painter -- 38 Painter, Priscilla, and Earl L. Michell -- 38 Rapawy, Stephen, and Murray Feshbach - -71 Reitz, J. T -- 133 Severin, Barbara S., and David W. Bronson - -93 Sheren, Andrew ---------------- 123 Steele, Rodney E -- 54 INTRODUCTION The Soviet leadership is preparing a blueprint for their next Five Year Plan for 1971-1975 to be aired at the Twxenty-Fourth Party Congress. Such occasions in the past have often been used for an- nouncing major economic decisions. This time may be such an oc- casion, with the formulation of those sections of the Ninth Five Year Plan on economic growth and military expenditures likely to be the focal points for interest. Therefore, it is timely for the Joint Economic Committee to take a look at the factors influencing these decisions and the possible impacts of alternative decisions among mili- tary and civil programs. It is thus appropriate that this volume rep- resents not only an updating of previous anmual indicators on the performance of the Soviet economy but also takes a special look at the economic implications of
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