Has Soviet Growth Ceased?

My interest in index numbers began in the context of discussions on Soviet growth. Until 1950, this had been expressed in terms of so-called ‘1926/7 prices’, and official claims appeared to be both startling and exaggerated. Already by 1950 national income was alleged to be 17 times above 1913 levels, and industrial output was said to have soared since 1928 at rates which seemed (and were) incredible, though no one doubted that growth had been impressive.1 Critical literature on the subject in the West, beginning with Colin Clark’s pioneering Critique of Russian Statistics2 and Naum Jasny’s little volumes3 and a series of Western recomputations, e. g. by Bergson, Nutter, Seton and Hodgman,4 sought to arrive at more reliable and less exaggerated figures, using physical output data and/or price indices derived from such data. It is not the task of the present paper to analyze, let alone criticize, these computations. The point is that they drew attention to several distinct sources of possible distortion of the index numbers. The first was the use for too long of obsolete price-weights, at a time of rapid structural change. It is in connection with indices of Soviet machinery prices that we learnt of the ‘Gerschenkron effect’,5 that is, the fact that the use of early-year weights in an industrializing country will tend to yield a much higher rate of growth than would the weights of a later year.